In your silly example you merely transfered the hours worked to your downline without changing the total hours worked. Suddenly we are to believe that you are still making the same amount of money working no hours yet your downline makes money as well? So because you merely spread the hours worked out among more people the company is paying out more money? Right. Do the math.
This is my EXACT point. MLM is set up with the mentality that its better to make money by recruiting people than it is to work hard.
You are delusional if you suggest that is about sales first. You have said in prior answers that no one sells enough personal volume to make a living without a downline and that is precisely why MLM is flawed. Its about making money recruiting (a pyramid) not about sales. The fact that some product is sold doesn’t negate that fact.
Sunny, saying MLM is part franchising is merely MLM tag lines, aka propaganda to justify to the naive.
Think about what you are suggesting. Most people are not sales driven, yet you are telling them its the same as a franchise.
Can you actually imagine a franchise operation that didn’t first sell product? Gee, your new franchise is not moving any product, here is the answer, just open up more franchises! Brilliant.
Only in MLM are foolish principals like this accepted as intelligent.
Curt
You are a spam artist spamming about Melaleuca!!!
Is there a worse MLM company out there than Melaleuca? Oh please.
I love how in one of your answers you profess it involved “no selling”. Priceless! No selling, so what, you just are a pure pyramid or its just morons like you buying?
No sales…please. LOL. That is the problem with MLM you dolt…no one is good enough to sell the product on their own so you need to sign up others to get paid. Man, I pity your mentality.
Gil
If MLMers were required to actually sell the equivalent of even the minimum wage sales people they would quit in droves.
So essentially MLMers are doing less personal sales than minimum wage salespeople yet they will tell you MLM is about sales and not making money by recruiting people. Well, if they are not doing real sales volumes, then they are making money recruiting. HMMM.
How do those in MLM justify this?
Brad H - the question was clearly addressing the money made by recruiting versus sales. Thanks for completely avoiding the heart of the question.
What could I have expected though, this is normal MLM mentality; when confronted with a question you don’t like, change the subject. Nice work.
Laura J - A+ for your long and seemingly educated answer. However, a few points I want to bring up. A good portion of your answer describes the benefits of building a customer base. If you have a large customer base providing you residual income that is terrific, but if that was the norm in MLM than this question would not need to be asked.
The clear point is directed to bulk of people making (or trying to make) money by building a downline. Surely if everyone built a massive customer base first, then it would indeed be about sales, not recruiting. But the fact that nearly all MLM compensation plans reward recruiting over sales speaks volumes.
If you are making more money from your customers than you represent an extremely low percentage of MLMers. If you want to suggest that everyone be like that, then bravo, but we know the reality is people try to make money on recruiting instead of sales in MLM.
Thanks for your answer though.
Edi - Thank, but you clearly missed the point. If you are recruiting and not selling, what value do you offer to the company?
You admittedly don’t know how to sell, so your value is not in teaching anyone. The difference between a bank or any other company that recruits sales people is that the people being paid to recruit and train them have clear value else they would be out of a job.
Merely making money recruiting is the very definition of a ponzi scheme.
Sorry to be harsh, but what you described IS the exact problem with MLM.
Artis
For instance, last year I bought an apartment building and my investigation of whether it was a good financial opportunity consisted of looking at the gross and net incomes for the prior 3 years (verifying income and expenses) , looking at the market rents and occupancy rates, and calculating the average sales prices (on a per unit base) over the past 6-12 months within a 1 mile radius. All that information was used in my financial assessment of the deal and to help me decide whether it was worthwhile.
Looking at financial statements is key in buying any business, but I have never heard of this in MLM. Other than statements made at a meeting or from their sponsor, what financial criteria is being used to decide whether the MLM “business opportunity” makes sense financially and is it ever verified?
Mexico4me, so your research was merely looking at a COMPENSATION PLAN! Oh my, how sad.
What exactly did you verify? That the plan would pay a particular compensation percentage? So, you are telling me your upline number’s, someone who is supposedly making money running this MLM business, was of no interest to you?
Yes, you are delusional. Thanks for proving my point!
Krista
I am sure there are those who will respond with their company being the best and wanting to get my email etc…or those who are making big bucks but won’t show me a financial statement despite calling this a business opportunity (who would start a business without seeing operating statements?). But I want to hear from those who are actually convinced about network marketing/mlm without having to sort through the above mentioned replies.
So, is anyone out there, or is is this industry dead?
ibofightback - thanks for the answer, but going over your numbers I had to comment.
You say Network Marketing Firms distribute over $100 billion a year in goods and services and there are 8-10 million distributors…well simple division means that is $10,000-$12,000 annual sales/distributor!!! Even at 50% commission you could earn more with minimum wage in a year!
With all due respect, your numbers give more credence to the belief that network marketing/mlm is a pure ponzi scheme than anything I have heard.
It seems to me more than ever that the issue with network marketing/mlm is that its all about recruiting others to do the work, and not selling the products themselves. Of those 8-10 million distributors, how many can possibly be distributing enough on their own merit to make a living? Its all about making money off the efforts of others isn’t it?
Chris
