Why I hate multi-level marketing
Every time I go to an event (or check my email inbox) I have someone approach me regarding a "new ground level opportunity"
that I need to get in on before "it explodes." It is, of course, just another network marketing pitch and I instantly dismiss the person pitching it to me.
Why would I do this? Is network marketing evil? No, it is not, and there are a lot of great people in MLM selling great products.
As business model, however, it is very, very flawed. In the history of MLM, there have only been seven companies that have survived, most collapsing within months of opening. Why is this?
It has to do with the whole premise of MLM--recruit one person, they recruit one who recruits another, and so on, until your downline is so big you get very rich, very fast on override commissions while everyone else in your downline does all the work.
The problem with this is, your income is dependent on other people doing something, a very dangerous place to be. See, each person you recruit is NOT going to go out and recruit someone else, who recruits someone else, and so forth. While this may piss some MLMer's off, the true numbers are, you must recruit 16 people on average for someone you recruited to go get someone else. That's why so few people succeed in MLM.
MLM is also very "manual labor intensive." You must call people individually to sell them on your "opportunity" or worse yet, get them to come to a meeting. From all my years in marketing, the hardest thing to do is to get someone to attend a seminar, yet MLM is based on getting people to events.
Also, many MLM's prevent their members from using leveraged marketing like direct mail, space ads, and so on. For example, the newspaper owner is prohibited from advertising in his own newspaper because that would give him an "unfair advantage" over other members. Even if the company doesn't prohibit the use of media, the small commissions that are paid out (2%-15%) and the small transaction size financially prohibits you from using leveraged media effectively.
With all that being said, is there any use whatsoever for MLM?
Yes, there is: if you, or a teenage or college age child wants to learn how to sell very effectively and get experience speaking from the stage, many MLM's (like Amway) provide very good sales training. You will learn some very useful skills, but the probability of you making serious money via MLM is not very good.
Information marketing is a much better way to do that--I'd recommend staying away from MLM, unless you have the skills necessary to make it work, and you truly love the process. Some people do, and it's the right thing for them to be involved in--I just think there are better opportunities out there.
Let's get to it...
Mr. X.
Group M Marketing
Kimble and Kennedy Publishing
that I need to get in on before "it explodes." It is, of course, just another network marketing pitch and I instantly dismiss the person pitching it to me.
Why would I do this? Is network marketing evil? No, it is not, and there are a lot of great people in MLM selling great products.
As business model, however, it is very, very flawed. In the history of MLM, there have only been seven companies that have survived, most collapsing within months of opening. Why is this?
It has to do with the whole premise of MLM--recruit one person, they recruit one who recruits another, and so on, until your downline is so big you get very rich, very fast on override commissions while everyone else in your downline does all the work.
The problem with this is, your income is dependent on other people doing something, a very dangerous place to be. See, each person you recruit is NOT going to go out and recruit someone else, who recruits someone else, and so forth. While this may piss some MLMer's off, the true numbers are, you must recruit 16 people on average for someone you recruited to go get someone else. That's why so few people succeed in MLM.
MLM is also very "manual labor intensive." You must call people individually to sell them on your "opportunity" or worse yet, get them to come to a meeting. From all my years in marketing, the hardest thing to do is to get someone to attend a seminar, yet MLM is based on getting people to events.
Also, many MLM's prevent their members from using leveraged marketing like direct mail, space ads, and so on. For example, the newspaper owner is prohibited from advertising in his own newspaper because that would give him an "unfair advantage" over other members. Even if the company doesn't prohibit the use of media, the small commissions that are paid out (2%-15%) and the small transaction size financially prohibits you from using leveraged media effectively.
With all that being said, is there any use whatsoever for MLM?
Yes, there is: if you, or a teenage or college age child wants to learn how to sell very effectively and get experience speaking from the stage, many MLM's (like Amway) provide very good sales training. You will learn some very useful skills, but the probability of you making serious money via MLM is not very good.
Information marketing is a much better way to do that--I'd recommend staying away from MLM, unless you have the skills necessary to make it work, and you truly love the process. Some people do, and it's the right thing for them to be involved in--I just think there are better opportunities out there.
Let's get to it...
Mr. X.
Group M Marketing
Kimble and Kennedy Publishing
