Forums: Discussions for entrepreneurs and small business.

I recently made my first post, one that mentioned MLM.  The responses I received kind of surprised me, not because of the opinions but because of the tone.  One person suggested that maybe someone should start a topic about this and so I am.

I know there is alot of resistance out there toward network marketing, but I`m really not sure why.  Oh sure, I know that there are a number of questionable MLM products and companies out there, but that`s true of ANY industry.  That is our system of free enterprise, warts and all.  As I prospect, I hear this disinterest and even disdain all the time, and I can`t figure it out. 

Prior to getting involved in MLM I had the same attitude.  Oh, that`s one of those "pyramid" deals, I`m not interested.  As I looked int other ways to create residual income, I slowly eliminated so many things that I came back around to MLM and decided I needed to take an objective look at the industry and business model. As I did so, I became more and more impressed with the concept, and eventually decided to get involved. I have not been sorry, but I sure do hear a ton of skepticism.  Let me know your thoughts, I think it`s a topic worth discussing.

 

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Hi Dal.  First of all, you need to realize that you will always find that people are resistant to network marketing, because there is a HUGE lack of training in that industry.  Companies claim they train their distributors, but in essence, all they do is parade around some guru making $40,000 per month and then tell you to "do more."  But "more" what?

Oftentimes, networkers are simply told to tell everyone they come in contact with, whether or not they are qualified prospects.

This is why network marketing has such a bad reputation...because people are sick and tired of being bugged about doing something they have no interest in.

Now, why do people not have interest in it?  Because they don`t believe they can really be successful in it.  Do you blame them?  All they see is networkers going around bugging everyone, and not getting paid.  The few they do see getting paid they chalk up to pure luck.

Inherently, network marketing can be a GREAT way to make money and build a residual income.  However, it is NOT a lottery ticket, as so many people view it.

In fact 97% of people FAIL in network marketing.

Why?  Because they think it`s a lottery ticket...and when they find out it is a BUSINESS, and must be treated as such (needs money, time, and effort), they give up.

If someone treats network marketing as a business, that is, funds it properly, devotes the proper amount of time to it, invests in the proper training...not the garbage most companies put out, and learns how to effectively prospect, then most people can earn a six-figure income in 2-4 years...as long as they have been consistent in their efforts.

If you have a good company you are representing, and you prospect effectively, then network marketing can be a great way to make a living.

I personally love when people refer to it as a "pyramid."  They obviously have not looked at the organizational structure of a corporation, which is also a pyramid.  There was a picture of this right in my textbook for business!

There are reputable companies out there who use network marketing as their marketing model.  Such as Pampered Chef (owned by Warren Buffet now), Citi Group, Mary Kay, Avon (been around for 100 years), etc.

Don`t let other people`s misinformed opinions get you discouraged, Dal.  Just move on to a qualified and interested prospect.  This is where you`ll find success.

Now, on to the replies that are sure to come about now network marketing is evil and a scam.


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Hi Dal,

Everything I have read, and I read alot, you can make money and succeed in network marketing.  It does have to be treated as a real business, not like a lottery ticket as bmwsmity eloquently put it.  I know lots of people who sign up with a mlm company and just wait for something to happen and then they badmouth it because it isn`t making them any money.  Well, duh...you have to work it.  Not just work it for a couple of months either...this is a business you have to advertise, practice with, pay taxes with and eventually yes, the rewards will be great!!!  If direct person to person sales isn`t for you, approach it differently, with just catalog sales or website sales.  Don`t quit your day job though until it becomes profitable enough to do so. 

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Any business can generate money. The problem is people who want to "get rich quick." So many of them are attracted to the MLMs, pyramids, mail order, "e-commerce," and on and on, that the concept attracts an "attitude."

eBay is a superb idea, and began as a standard way to offer used products, flea-market finds, antiques, and weird things. That type of market`s been around for centures. But over time, eBay also attracted people ALWAYS looking for a deal, or cheap, or what-have-you. And so the attitude begins to permeate the business, regardless of what they`re actually about.

Wal-Mart is having the problem nowadays. They want to pretend they`re "upscale," when "everybody knows" they`re blue-collar, low prices.

As for me, the problem I have with MLMs mostly has to do with the way people involved come across as single-track "cult-like" fanatics. Of course not everyone is like that, but it`s a matter of general perception.

We have a number of MLM people here in the community, who also are reasonable, intelligent, and can make sense in a conversation without always being on 1,000% overdrive to push their "stream," or whatever it`s called. They`re "just plain businesspeople," as far as I`m concerned. They`re not fanatics.

Another objection I have is that these MLM people come to a community like this, of startups and bootstrappers, asking what might even be legitimate questions. But their product, marketing, Web site, and so on, all blast out that they can make $2,000 per day without exerting any effort at all. It`s simple hypocrisy, and that`s a turn-off.

I remember going through the envelope-licking phase, the Amway phase, the selling seeds or greeting cards phase, and so on, and so forth. People made lots of money in those, just as I know people making great money in Mary Kay (cosmetics).

It`s come down to growing up, and learning that there`s no such thing as a free lunch. To make money requires work, dedication, persistence, skill, a belief in the product, and some luck. None of those SEEM to be included in the overall "perception" of MLMs and network marketing hype.

And after all, so often in marketing perception is everything. :-)

IMO, MLMs are "businesses for the masses".  They come up with a business formula and then tell you to stick to it in order to be successful.  You are encouraged to stick right to the formula and even follow the scripts.  Much of the time, that formula includes annoying everyone you come in contact with.  I`ve had my share of people cornering me in the parking lot at church and asking me STUPID questions like, "Do you like to drink clean water?"  The smart aleck in me always sees what`s coming and wants to say, "No, I prefer brown cloudy water with swimmy things in it."  But, then, they are often just following a script that someone promised them would make them a success. 

It`s like pre-packaged and fast food in America - it`s pretty bland and tasteless for the most part because, as someone once told me, it`s made to appeal to the MOST people.  Anytime you get too adventurous with flavors, you start knocking out large numbers of potential consumers.  I believe the same is true with MLM`s.  You want EVERYONE to think they can do it. 

I think the people who are successful with MLM`s are so because they have enough business sense to go about it another way.

~Kim

Maybe that`s the thing I was thinking of....what Kim`s talking about, that script. Any entrepreneur has already decided, long ago, that they want to be unique, different, and stand out on the basis of merit. They`ve decided to take a huge *personal* risk in offering a talent or creative skill to the open market.

But there are also people who have little talent or no original ideas, and want that script in order to get rich. They can`t adapt a conversation, much less a business idea to individual circumstances. When the two types of people meet, there`s almost instant ignition.

When a true entrepreneur chooses to adapt an MLM system to their own personality, that`s when we get rational conversation. It doesn`t happen very often though, as Kim points out. :-)

I am for anyone who strives to do well in business. The encounter i have had with MLM business have left me feeling invaded.I am a very busy women and when i am approached to go to a seminar or a party and i kindly say no can do...these folks have also kept coming at me non stop. I will say, i don`t do parties, but i`ll buy something...have a book? That never seems to be good enough. In November my husband was approached by an old friend. He asked to come over at 7:30 to talk with us about buisness. We agreed thinking it was someone wanting to partner with us or to listen to an idea or throw around ideas with us. NOOOOOOOOOOOOO.....it was not that, it was a pull to join I-Team. I said right upfront NO. I told him that i already put 18 hours a day into my companies and can not do this, especially something i am not passionate about. Well...he threw at me the cashflow quandrant and asked me if i wanted to be an E/s/b or I (think that is how it goes) ...anyway he said that if i did not use his method and pay the 400.00 i would never be an b or an i, that i would always stay an s. Oh poor me...doing what i want to do, call me an S then..i`ll take it! :) I asked about a million times to see the actual product and was refused...he refused to show me the online portal but told me that i needed to build points in my life to make money...C/mom...You need me to pay you to make money...Ain`t gonna happen.... His line was "do you shop at walmart?"...no, no one does... Well i finally left upstairs about 2 hours later. he was relentless. My husband grabbed a drink or two from the bar and remained under his power... He left his cd with us and brochure for me to look over and make the right choice. I put it in a walmart bag the next day and left it on my driveway gate...locking him out and told him to pick up his stuff. I remain going to wally world for my goods, and i am not accumulating points. I feel good.

That is just one story. I am really an open person and am approachable and get alot of folks asking me to join this, join that , have a party here, go to one there, order this, listen to me about that..... It definately is a turn off.

I order from mary kay, from shaklee...great cleaning products, arbonne, taste of home entertaining...but these folks know how i operate, i order....i do not do parties.

One mlm that i really do like is one that keycon has...sendoutcards.com, he gave me a free trial, and it is a perfect fit for me, so i will sign up as a buyer not a seller.

That is my 2 cents.

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Our Goal Is Your Success!
Founder Girls with Goals

During my successful career as an Amway rep - I did manage to sell a box of concrete cleaner once, I learned a couple of things that truly had value.

Anyone can become a success if they do three things:

1. Have a dream and work at making the dream a reality.
2. Associate with others that have been successful in their choosen field.
3. Read everything they can concerning their particular business endeavor.

As it turned out.... buying my own product, at non-competetive prices so I could get a tax break because I owned my own business, was NOT MY DREAM

My biggest complaint about MLM is that most programs are about recruiting downline, not selling product.  I`ve got mangosteen juice in my fridge... not because I bought it but because a relative got involved with an MLM and they have to buy so much of it just to maintain their status as a distributor that they are giving the stuff away.

Avon and Mary Kay are examples of MLM networks where the product is the focus, not the recruitment of downlines.  The recruitment becomes secondary as satisified customers look to the MLM as a convenient second source of income and then become involved.

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Stonesledge,

You have made displayed some gleaming examples of why so many people fail in network marketing!

How did these people expend most of their energy in these examples?  They focused on THEMSELVES!  It was all about serving THEIR WANTS, not yours.

When you had a choice, how many times have you purchased something from someone who only focused on their own wants instead of yours?  Probably never.

Yet so many networkers approach people in this manner!  It makes no sense.

One exorbitantly funny method in marketing that I`ve heard preached is the "Three Foot Rule."   This method is simply pitching your opportunity to anyone that comes within 3 feet of you!    What idiot contrived this preposterous idea?  And how idiotic of people to use such an idea!

These sorts of marketing tactics bring people down to the level of a maniacal street evangelist, screaming at everyone within audible distance why you will surely burn in eternity if you don`t do what they believe.


Now, despite all I`ve said, and my dismal views of network marketers, I am involved in 2 network marketing companies myself, in addition to my traditional business. 

What separates me from the masses that I so freely condemn?  The fact that I take the time to get TRAINING from a third-party.  I have stopped going to meetings with my "up-line", because it is always the same garbage that doesn`t build a sustainable business.  I have turned to a training company that bases it`s educational content on actual real-life statistical data of what works, as well as actual marketing knowledge that you will find in a marketing course in college.  WHAT A CONCEPT!

Guess what the number one thing they teach is?

NOT SELLING HYPE TO EVERYONE YOU COME IN CONTACT WITH!

Go figure!


It is confusing to me that networkers use hype to market their opportunities.  The whole concept of building wealth with network marketing is based on the premise of longevity of the business.

Signing up recruits using hype results in a disappointed "downline", and in the end, a downline that is constantly eroding.  How can a constantly eroding downline build wealth?  IT CAN`T!

So, if someone wants to actually leverage the network marketing model, what do they have to do?  Build a SOLID organization, based on TRUTH, INTEGRITY, AND HONESTY.

Telling everyone that they will earn $10,000/month in only 2 months may get people to sign up, but once they get in and only make $100 after 2 months, they are going to promptly leave and probably never try network marketing again.

If someone wants to do network marketing right, they must:

-Concentrate their efforts on qualified (read, interested) prospects

-Be consistent.  Spend at least 8-10 hours/week on real action

-Have a budget.  It takes around $300-$500/month, including leads, phone, and internet costs to run a successful network marketing business.  This is on top of any product costs.

-Be truthful.  Don`t tell people they don`t have to sell.  Don`t make it sound like a get rich quick scheme.

-Have realistic expectations.  Networkers CAN earn a six-figure income.  However, it will take approximately 2-4 years of CONSISTENT action, day in, day out, to get there.  Buying product and sticking it in your closet will not get you there.

-Get into a business that has a sustainable market and unique market.  Discounts on commodity items that can be purchased at Wal-Mart is NOT UNIQUE!  Hacking inferior products is NOT SUSTAINABLE!

-Invest in training.  You wouldn`t let a nurse come near you with a needle if she was untrained.

-Get a source of prospects.  You will not build a business without prospects.  Period.  Why people don`t understand this is perplexing.

These are just a few tips.  The training company I use has over 350 HOURS of training audio.  As well as coaching, articles, forums, and live call sessions. 

It is this type of information that will help networkers become a long-term success.

NOT listening to a $40,000/month guru earner rant and rave on stage as though he`s possessed! 



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Sales Training www.leadersclub.com/33003 This Drink Helped Me www.mymonavie.com/justinsmith

My beef with MLMs on sites like Startup Nation is that I feel like I`m being solicited. This is supposed to be a site for entrepreneurs. I see MLM people as salespeople, and I feel that the only reason they are on SuN and other sites is to try to get "leads" or get more people into their pool. Unless a person has started (or is planning to start) an MLM company from scratch, taking on the full risk of doing so, and/or is selling his/her own concept or product that was created by them, then I don`t consider that person to be an entrepreneur or a real start up and therefore don`t appreciate them being here. I am tired of hearing about the "proven systems" and "success guides" and I hate all of the links that some litter their posts with. It`s a waste of bandwidth, and my time.

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Chris

The Dippy Chick Company, Inc.