Why combining MLM and collectibles will never work
Collectible (noun) – things considered to be worth
Collectibles can often be a subject of discussion that lends itself to confusion. With virtually anything able to be defined as a collectible these days, value, as mentioned above, is largely subjective.
Value can be measured in the form of personal attachment, scarcity of the collected item, the personal interests of the collector themselves, popularity of an item and the list goes on.
What’s common with each of these factors however is the subjectivity of each. One collector might love collecting a certain type of comic for example, primarily because they enjoy reading them.
On a secondary level these comics might have a dollar worth, but to another collector the comics might still be worthless. Without the pleasure of enjoyment from reading the comics, the dollar value simply doesn’t make the comics desirable as collectibles for the second collector.
In a business sense, specifically MLM, we can strip down the factors that make up the collectibleness of an item down to pure dollar value.
In MLM the ultimate goal is of course to earn money and if we’re going to combine collectibles with MLM then it’s these collectibles that need to be worth something, and have an appreciable value.
If the value of the item stays the same or appreciates at a negligible rate, then combining with an MLM business opportunity doesn’t make much sense, does it.
This requirement of appreciability (the item being collected going up in value) to make the MLM business viable is a fundamental flaw in combining collectibles with MLM.
The flaw in logic of combining collectibles and MLM comes in two parts;
Scarcity is quite important when it comes to assessing the dollar value of collectible. Take for example the art world. If you took a Da Vinci masterpiece, photocopied it a million times and then burnt the original, would those copies have anywhere near the dollar value on them that the original had?
And further more, would they even be collectible?
The answer is most likely a ‘no’. Save for the limited potential profit in acquiring one of the million copies and waiting for the rest to be naturally lost or destroyed over time, and even then, something tells me you’d be waiting an extremely long time.
The reason the copies aren’t collectible is because they’re not scarce. An original painting is just that, an original. One of a kind, never to be repeated – and that’s why originals from famous artists get sold for incredible amounts of money.
Of course when we’re talking art originals, you’re never going to get as scarce as a once off, and that’s often why paintings are described as ‘priceless’.
Being a bit more realistic though, as a priceless art piece based MLM would hardly be realistic or viable, when we talk about not so priceless collectibles a lot of the same rules still apply.
In MLM we want to earn money and when we’re talking collectibles, the most important contributing factor to the raw dollar amount value places on a collectible is scarcity.
The problem with combining MLM and collectibles is that scarcity itself takes a nosedive.
For example, a new MLM startup decided to market it’s primary product which, up until now, is pretty collectible and holds a decent track record in value appreciation over the years.
The first problem is supply. An MLM company needs to have products to survive and in this case the product has to be the collectible. Already there’s the problem of the MLM company attempting to create the illusion of scarcity based of a collectible it needs to have a readily available and continuing reliable source of.
Then there’s the problem of success. As the MLM company itself grows, so does the amount of people purchasing the collectible they are retailing. As such, the marketplace becomes flooded with this collectible, decreasing it’s scarcity.
The end result? What once might have been a collectible is now available at your fingertips from MLM marketers – thus losing it’s collectibility and perceived market value altogether.
The raw materials that make up the collectible might keep their market value (hell they might even slowly continue to appreciate in value), but the ‘perceived collectible value’ of the item, which is often makes up the bulk of the collectibles dollar value is lost.
The self-sustainability of the marketer
When we’re talking collectibles, the general idea is that you collect something, wait a while and then watch as the value of the collected item appreciates.
The problem with this in regard to MLM network marketing?
What is the MLM marketer supposed to do in the meantime?!
Running an MLM business requires an ongoing investment, no matter how small it might be. Now, in the terms of a collectible based MLM, you’ve also got to invest in the product yourself, market your business (advertising, generating leads, following up leads, etc.), and most importantly, live your day to day life.
All of these are unavoidable expenses which, when we’re talking investing into collectibles for the long term, simply aren’t payable.
You could focus your business around retailing more collectibles from the company to either new recruits or retail customers, but as mentioned in the scarcity flaw, this is counter productive.
More people acquiring your precious collectible means less return on your own investment into the company’s product.
Unfortunately though, while you wait for your collectibles to appreciate in value this is the only way to generate any income and in turn cover your day to day business expenses.
As you can see, both from a scarcity ‘perceived value’ viewpoint and the dilemma of the MLM marketer trying to cover his or her own expenses, the idea of marketing collectibles via MLM simply doesn’t make sense.
If you’re still skeptical though, here’s two simply questions you can ask yourself;
- Why is the item the company is selling collectible, and more importantly valuable in the first place? If it’s because of it’s scarcity, will you retailing the item reduce it’s scarcity and thus lower its collectible value?
- Is the only way to generate an income while I wait for my invested in collectibles to appreciate in value, to distribute the collectible item to either other marketers or retail customers thus again lowering the value of my own collectible investment?
If the answer is yes to either question, then you’ll probably want to give this particular MLM opportunity a pass.
Just out of curiousity, is there any mlm that you would recommend?
I try not to reccommend specific MLMs. There’s plenty of websites on the internet already that will sing the praises of any MLM currently on the market.
Instead I try to analyse MLMs on information and objectivity that you might not normally find elsewhere. This is to counterbalance all the marketing mumbo jumbo on the internet and to provide somewhat of a realistic view of the many opportunities available.
I can see your point. However, I am here to say MLM is alive and well and NUMIS Network is one of the best MLM’s I’ve ever seen.
I was ‘sold’ because of the fact that I would rather have a closet full of coins vs. all the lotions, potions, pills, cleaning supplies…etc in my quest to create a long term residual income than all those other things and it has a binary pay plan…spillover is inevitable…(I already have 10 reps below me and I haven’t recruited anyone yet)…
Any business takes time to build and there is always a cost to it.
In the grand scheme of things this business is relatively cheap compared to other businesses out there that you will work your whole life being tied to and probably not make much money with…
I know I own a laundromat and even tho it’s one of the lesser hands on businesses – I am still tied to it and trusting others with your business and your cash is incredibly difficult as the years go by.
If I can build this Numis Network downline over the next few years and create a livable income this will mean complete Freedom for me.
I know a couple who are millionaires from Amway – they got in and worked it for a few years when it started and now they are set for life…and Amway is alive and well with overpriced toilet paper and the like…
As far as saturation…hmmmm…Amway has what 2.5 mil reps?
how about Mary Kay? they are both global… And this is Numis Networks future – their plan is to go global. So, if after all these years Amway and Mary Kay can make it who is to say Numis can’t make it?
There are millions of reps in Amway and MaryKay but do they still have room for more? Can’t people go find make-up and toilet paper cheaper at wal-mart?
but why would you if you can see the value of earning a residual income by spending your dollars on something you need or like elsewhere? Such as coins.
Not everyone is into collectible coins – but something like 2 billion in sales on TV Shopping network says a lot of people are and why wouldn’t they buy from a business where they can actually earn a long term residual income by collecting what they were already buying?
hmmmmm…just the way I see it… thanks for letting me post…
Candace Smolich: Thanks for your honest opinion. I think you point out the main problem in the MLM industry:
If people are going to buy coins from Numis Network instead of anywhere else, they need an excuse.
Normally the excuse for running to another shop is to get a better price. However, if the only excuse to start buying coins from Numis is to earn money, the company will be left with distributors only, no retail customers. To be able to earn a residual income, recruiting will be required, and eventually just a few will succeed.
If the excuse to buy coins from Numis is good quality and low prices, then it will be possible to attract retail customers without any interest on earning money by signing up as a distributor.
A successful MLM-company not only has a large number of distributors, the number of retail customers must also be at least 10 times higher (depending on the average consume).
MLM-companies without retail customers aren’t necessarily meant to operate as pyramid schemed, but they will definately behave like a pyramid scheme as recruiting is the only focus.
The MLM company I have most knowledge about is Wealth Masters International. I have found 1200 Norwegian distributors, but so far none of them has provided the name of one single retail customers.
The only excuse to buy the extremely overprized products is to earn money by getting the right to recruit new distributors. It is absolutely impossible to sell these products as retail, and this is what trigs the pyramid effect.
Lena Bjorna claims that “only about 10% of people who use my system will ever make a dime. My guess is that most people are too lazy, inconsistent, or just plain unintelligent to apply my techniques.”
Guessing is just not Lena’s thing. The real reason that only about 10 % ever make a dime is the simple math that makes the majority of all pyramid scheme participants loose money. No matter how good the system is or how motivated her downline is, this percentage will never change.
She also claims that “I’m very committed to training and mentoring my own team members to success”. If this is the case, the application process is useless when it comes to filtering out the lazy people, or Lena must be a very bad mentor if we should believe Lena’s own words.
But again the math works; even if the lazy 90 % were filtered out, only 10 % of the hard working people would ever make a dime.
Candace, I wish you all luck with Numis, and the only way to find out if this business can bring you success is this test:
Is it easier getting ten new retail customers (not intending to join your business) then getting one new distributor? If the answer is yes, then your MLM company is a solid one. As you claim to have 10 reps in your downline you should have at least 100 customers to serve through your network.
If these 10 people are your only customers, then it works like a pyramid scheme, and it is only a question of time before your downline disappears.
Amway and Mary Kay are selling consumables not collectibles.
The “problem” with “collectible MLM” is it sounds suspiciously like one of those “non-retail MLM” described by Robert L. Fitzpatrick (author of the book “False Profit”, highlighted on the show Penn & Teller’s Bull****!)
Think about it… In a collectible market, the idea is you buy and hope the price goes UP so you can tell them much later and turn a profit. So you don’t actually SELL anything…
And if you recruit people, get paid for it, and NOT SELL ANYTHING, what you got is a pyramid scheme, not a MLM.
Furthermore, if those are REAL collectibles, they could easily advertise in relevant magazines or periodicals with not through MLM at all. It must be really niche or unusual to resort to MLM. So you are taking TREMENDOUS RISK in buying them and hoping they will appreciate. Thus, the stuff must be really cheap to be commensurate with the risk you’re taking.
If they are NOT that cheap, then they are overpriced as heck, which is YET another sign of a pyramid scheme.
BTW, Candace Smolich, your blog (http://candace4numis.blogspot.com/) is a big red flag. It only mentions the business opportunity, and the only way to find out what you actually sell, is by clicking a link in the end of the page.
All focus is on recruiting, and if all Numis representatives do the same, most of you are about to loose money in a pyramid scheme.
Re. Amway et al, as Boris pointed out, they are selling consumables. Customers buy these, use them and then (hopefully) place a reorder from you.
With collectables, customers purchase off you and then have to wait for their investment to appreciate. The product doesn’t go anywhere unless they sell it at which point it makes no sense to re-purchase the same coin from yourself at the now higher price (zero sum gain, they might as well have held onto their original coin(s)).
And as for Numis in particular, I haven’t researched them yet for a writeup. But on the theory of collectables, surely you can see the dilemma in having to sell collectable coins to others that you yourself have invested in. The more coins there are the less collectible they become. And if you’re just relying on the silver content of the coin well then you’re not really trading collectibles, you’re trading silver – a commodity.
Investing in collectibles for the future makes sense but combining it with an MLM opportunity (considering there’s no immediate repeatable business other than a possible recruitment commission), doesn’t.
The problem with recommendation is it can change. There were a LOT of morons who recommended TVI Express. They cite only the information company provided on their website, and only found later it’s all BULL****.
(Then their recommendation gets reprinted and revived as “zombie content”)
Numis is dead
Both customers and reps were nearly impossible to find.
@pokem….they are merging with world ventures.