Multilevel Marketing
We're being recruited by some people to participate in a multilevel marketing company. What's the deal with these people/companies? I mean, they always present themselves as the answer to all you problems.
I have a very thick wall built around myself. I don't let many people into my inner circle as I've been burned by so-called friends in the past too often to allow just anyone in anymore. In the same sense, I don't allow myself to "fall" for get quick rich plans. I don't believe in them. Yes, it can happen, but it usually is a mixture of luck and a lot of hard work that you never hear about.
The only people who "get rich quick" in multilevel marketing are those at the higher levels of the pyramid. At least, that's my opinion.
Some of these companies are just saturated in America already. Mary Kay and Avon being 2 prime examples. How is a person supposed to break into a market that is already saturated with representatives of these 2 companies?
The newest one, and not the one we're being recruited for, is Arbonne. Our neighbor tried to do Arbonne. She even worked at it full time. She just recently gave up. It was too time consuming and wasn't producing enough. Now she is stuck with about $500 in product that she bought to have on stock.
This is something close to what is called a "Negative Sum Game." A Negative Sum Game is one in which the participants (risk takers, game players) take home less than what the brought with them. Lotteries, casinos, and racetracks are all examples of negative sum games.
In the case of multi-level marketing, representatives usually have to either have product on hand to offer to people (Mary Kay, Avon, ect...), or, such in the case of Amway and other companies, buy the merchandise themselves to make their monthly goals.
Yes, selling to other people is the goal with companies such as Amway, but how hard is this? I mean, where is the demand for Amway products? When is the last time you heard someone say, "I really want to get that TV from Amway!"?
So, instead, the representative usually ends up buying products for themselves to make their monthly goals, which feeds the people that are higher up in the pyramid. This is the main goal of these companies. "Just buy for yourself!"
Yet, when you break down the numbers, it doesn't work to your advantage. What they fail to mention to you when recruiting you is what their overhead is costing them. The motivational tapes they "should" buy and the tickets and travel to the "leadership" conferences and seminars they "should" attend. These are where the people higher in the pyramid really make their money. From tapes, books, and seminars.
Anyways, here is an example of the numbers:
"If each distributor consumed 100 points/month of personal volume, or $200/month there would need to be 75 people in the business (game) to make 7,500 points. This would almost represent a 6-4-2 so often quoted by people showing the "plan". 6+24+48=78 distributors to make a direct distributorship.
The rebates to the direct distributor are at the 25% level so there would be $45,000=(180,000*.25) available as gross profit to the "Direct Distributor Group" business. There is also a bonus called the Q-12 bonus of $10,000. The 75 game participants will somehow split up the $55,000 in gross profit their purchases generated. On average each distributor is generating $733 in gross profit/year."
But wait... You're spending $200 a month on personal volume? That equals $2400 a year. And your gross profit is only $733 a year? And that is just gross! Subtract your overhead which they say averages appx. $56 a month = $672 a year. Subtract that from your gross and you are making a whopping $61 net profit. Now, subtract what you spent on personal volume: $2400-$61 = -$2339. Negative profit.
Anways, enough about this. In the end, we aren't doing it. Hell, I didn't even cover the time commitment, the difficulties of recruiting friends and family, and facing rejection 4 out of 5 times from the people you are trying to recruit.
I'm sure some people are successful in their ventures, but It just isn't worth it in my book.
Enjoy a few Vids:
Laundry Room Girl
[youtube]http://www.youtube.com/watch?v=63BF-KQ5weU[/youtube]
Robot Chicken - Calvin and Hobbes
[google]http://video.google.com/videoplay?docid=8102736728087654659[/google]
Hypnotizing Comedian
[google]http://video.google.com/videoplay?docid=8185882971127826299&q=genre%3Acomedy[/google]
OOOPS!
[google]http://video.google.com/videoplay?docid=-7602831690764165917&q=genre%3Acomedy[/google]
The Myth Busters Episode You've Never Seen
[google]http://video.google.com/videoplay?docid=-7308246594327434369&q=genre%3Acomedy[/google]