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Isnt MLM just a ponzi scheme but with some tweaking to make it legal?
My opionion is: A ponzi scheme is when money is being exchange for nothing. People just recruit and money is being made from the membership fees and not selling a service or product. In other words, people are getting paid for not selling anything. Membership fees is not consider a product or service.
People tend to throw the word ponzi scheme and MLM/Network Marketing together but they are not the same. It's not even close. MLM is a pyramid structure based on COMMISSION & SALES. Remember these two words: COMMISSION & SALES. The Corporate World is a pyramid structure as well but it is based on HOURLY PAY & SALARIED.
That is why Amway, Avon, Mary Kay, World Financial Group, Primerica, and all those health drinks, vitamins, and skin care company are still in business and not shut down by the government. Because they are exchanging money for service or a product.
You don't have to like it but that is good enough to be called a business because money is made when a service or product is sold.
People do get sucked into the hype of easy money and feel bitter because of the hype but really, who's fault is it? Did those company pointed a gun to their heads? Most people who joined have no business joining in the first place. They don't have the skills or the will to cut it.
As stated in my earlier post, these people who failed in MLM, they are just as likely would have failed if they ran a mom & pop business anyway. If they ran a franchise, chances they would have failed too. 9 out of 10 business ventures fails.
For awhile, I was very anti MLM but as I am out on my own now and being self employ, I see things a little differently. I may not like it, I may not agree with it....but I can see the difference between a MLM and a ponzi scheme.
[quote=calnbs;46323681]People do get sucked into the hype of easy money and feel bitter because of the hype but really, who's fault is it? Did those company pointed a gun to their heads? Most people who joined have no business joining in the first place. They don't have the skills or the will to cut it.
There can be worse ways to threaten people then with a gun to their heads.
Quote:
Originally Posted by calnbs
As stated in my earlier post, these people who failed in MLM, they are just as likely would have failed if they ran a mom & pop business anyway. If they ran a franchise, chances they would have failed too. [b]9 out of 10 business ventures fails.
At least with a mom and pop business, they would've learned a "real" business as opposed to managing an MLM business. And if they had no business in MLM, they literally could've used their time and money for many other things. The people at Amway were quite predatory and aggressive in getting recruits. No... those "ambots" are just awful people.
Are there any decent MLM companies? Not that I know of. I think they trick people into buying in and for the most part, their products are low quality and over-priced.
Avon at least sells a decent product and the prices aren't too outrageous, but I've never known anyone to stick with it for very long. At least with this one, people don't sic the dogs on you when you come around. You'd have to like doing make-overs and be somewhat talented with makeup to do well.
I actually knew someone who supported his family selling Fuller Brush. The Fuller Brush Man wasn't considered to be a nuisance, but I don't think that company is in business any more and I have no idea whether or not it was MLM. It might not have been because The Fuller Brush Man was never trying to recruit new sales associates.
MLM business puzzle me, the fact that they exist in this day and age of Amazon & online shopping impresses me. I actually visited Amway corporation & it is massive. It seems no different than any other consumer company. They have scientist and production, engineers and everything J&J or other company would have. I still could not believe why anyone would buy a product from booklet or friends instead of going online directly.
Same with Avon, I don't understand the need to buy from friends unless one is doing so to support a friends business. But then a lady who doesn't even work in my company anymore contacted few admin to leave her Avon book in our lunchroom & I have found myself many days looking thru the book & have ordered few things just because its there.
Location: Was Midvalley Oregon; Now Eastside Seattle area
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All companies are MLM in some form. Even Amazon.
Think on all the ways that Amazon gets your business. The more channels it has> the more eyeballs>the more sales>reduced overhead>more profit.
Substitute "channels" with distributorships or storefronts or outlets
MLMs are all about recruiting, but more than that, they are about turning these recruits into clients, not sales reps. First you pay a sign-up fee, then are induced to either buy a product/service yourself, or load up on inventory (to prove your willingness to follow the system "like all the successful reps did"). Next comes a monthly fee for online access or membership dues, followed closely by the purchasing of training materials (cds/dvds/booklets). Next, there's always a bigger hitter coming to host a seminar (for a small entrance fee x 1000 or so attendees). Maybe it will be suggested you attend a Landmark Forum weekend for $600, or buy a Robert Kiyosaki book. Then there's always plenty of media available from corporate typically produced by the "big hitters". Souvenirs anyone? How bout one of those company football jerseys? Then finally there is the annual/bi-annual convention for like $80-$125 (plus travel and accommodations), and while you're there, why not book one of those specialty "side seminars" at additional cost, or shop at the "company store" set up in plain site. Add to that the travel and time attending weekly office meetings, or if you're lucky, a sales appointment where your trainer can show you how to close a deal by selling to your friends and family (and cutting you out of the commission). Add those all up and realize you'll need to close about 50x the company average in annual sales to break even at best. And the icing on the cake is your friends alienate you and your family disowns you. And the final humiliation is your upline could care less if you leave, because you've already lined his pockets from the above, and they'll just recruit 10 more to replace the 10 than quit last week. Google Vemma, WakeUpNow, Fortune Hi Tech, and most recently Herbalife, to see what direction this industry is headed. For a comical, tho truthful introspective on MLMs, view John Oliver's MLM You-Tube thats currently burning up the charts!
[b][quote=calnbs;46323681] As stated in my earlier post, these people who failed in MLM, they are just as likely would have failed if they ran a mom & pop business anyway. If they ran a franchise, chances they would have failed too. 9 out of 10 business ventures fails.
How convenient of you to omit the fact that the MLM industry fought tooth and nail to be omitted from the FTC's Business Opportunity Rules, the rules that franchises must abide to and offer full disclosure of their opportunity to prospective buyers. Where MLMs offer a single "average rep commission" figure (which is highly skewed by the few huge earners), franchises must provide detailed info based on location, store size, demographics, etc etc etc. Comparing the two is like night and day. By the way, franchises have 5 yr survival rates in the 95% range, whereas MLM reps typically have 70+% ANNUAL failure rates, and even those that "dont fail", many break even at best.
MLMs are 50% hype and 50% damage control, including manipulation of web search engines, and employing the use of paid professional shills to sugar coat the industry on sites such as this. Typically they are easy to spot, using words like all corporations are pyramids, universities and gyms are pyramids, only failed reps badmouth them, and those who fail didnt try hard enough. Using Herbalife as an example, the FTC rules will be kicking in soon, and the transparency required will cast a huge shadow on the entire industry.
MLM is a Ponz scheme all dressed up, but a few can spot that the emperor has no clothes.
Better to work at a fast food chain that work for a MLM
Yes for 98% of them, and a fact the other 2% or corporate doesn't want others to know about. Smoke and mirrors, cloak and dagger is more their style. Keep an eye out on Herbalife when the new FTC rules kick in. People will be shocked at the real income disclosures, and they are no different than the rest. MLM will be something people read about in history books in the not so distant future.
As stated in my earlier post, these people who failed in MLM, they are just as likely would have failed if they ran a mom & pop business anyway. If they ran a franchise, chances they would have failed too. 9 out of 10 business ventures fails.
How convenient of you to omit the fact that the MLM industry fought tooth and nail to be omitted from the FTC's Business Opportunity Rules, the rules that franchises must abide to and offer full disclosure of their opportunity to prospective buyers. Where MLMs offer a single "average rep commission" figure (which is highly skewed by the few huge earners), franchises must provide detailed info based on location, store size, demographics, etc etc etc. Comparing the two is like night and day. By the way, franchises have 5 yr survival rates in the 95% range, whereas MLM reps typically have 70+% ANNUAL failure rates, and even those that "dont fail", many break even at best.
MLMs are 50% hype and 50% damage control, including manipulation of web search engines, and employing the use of paid professional shills to sugar coat the industry on sites such as this. Typically they are easy to spot, using words like all corporations are pyramids, universities and gyms are pyramids, only failed reps badmouth them, and those who fail didn't try hard enough. Using Herbalife as an example, the FTC rules will be kicking in soon, and the transparency required will cast a huge shadow on the entire industry.
I didn't omit anything. I have no idea and I don't really care. I was just stating my .02 cents. I didn't know I was suppose to disclose every single damn thing in the world when it comes to MLM. I'm not an expert in MLM or Franchise. I was just speaking in basic general terms.
I don't really care if people join MLM or not because I don't get any benefit if people do it or not. My advice is 90% of the world's population should stay away from it unless they have the smarts to make it. It's a free country, people can do whatever they want. But you seem to really be butt hurt about it. Did MLM kick your cat and pissed in your mouth? I've been burn by MLM before in college but I don't get all butt hurt about it.
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