Network Marketing

TheFlashyOne

Canada450 Posts

February 09 2009 09:02 GMT

Last week we were starting to have a nice discussion in a thread about Network Marketing until dear Mr.EvilTeletubby, armed with his legendary objectivity, decided to close it on the grounds that ...well..i guess he doesn't like network marketing.

Thread

Anyhow, i felt inspired to continue it here;

There was not too many comments about people here who actually tried this. Most of it was just 'i heard someone say'. Please contribute ^_^ ... network marketing pretty much consumed my entire mind for more than a year.

29 fps

United States5724 Posts

February 09 2009 10:41 GMT

someone will always lose in this "network marketing". otherwise, nobody will make any money.

TheFlashyOne

Canada450 Posts

February 09 2009 10:47 GMT

If that was the case, don't you think that network marketing would have been outlawed? When you understand the system, you realize that the more money those at the bottom make, the more money those at the top make. The inverse is true, the less money those at the bottom make, the less money those at the top make. It's not a zero sum game. But that hardly means anything because, like i said, the general population is not open to the idea of network marketing. And to be honest, i don't think it ever will.

Manifesto7

Osaka27140 Posts

February 09 2009 10:48 GMT

So why don't you explain the "system" and how everyone can make money? All your posts on the topic are rather cryptic.

TheFlashyOne

Canada450 Posts

February 09 2009 11:15 GMT

My posts are not cryptic. I never attempted to explain the functioning of network marketing. I simply wanted to discuss 1.the report card of the industry. The end result. Its viability as a side business for the general population. and 2. The distinction between theory and practice in this area of the business world.

Going back to your question; how everyone can make money.

Well, when you have some experience in the real world practice of network marketing, this question is ludicrous. The real question to ask is ; how come everyone, except the very very very top performers, is not making any money?

In theory, however, yes it's possible for everyone to make money. Network marketing is extremely simple. You pay a license to become a distributor. You then distribute a few services or products to your entourage. Then you build your own distribution network, and you get a percentage in the monthly sales of everyone that you directly or indirectly brought into the business. What most people fail to realize is that each new distributor is not a slave to the system. he is by no means limited in his income potential by anyone or anything. He can talk to as many people as he wants to in his recruiting quest. To illustrate this point, while i have failed to make any decent income with my network marketing company, i can guarantee you that some people will join the exact same company in 2010 or later, and go on to become millionaires. The markets in which good network marketing companies operate in are immense.

Basically, to succeed in network marketing you need two things;
1. you need to be open to the idea. Which already cuts off the masses.
2. You need to be a truly exceptional salesman. Just being a really really good salesman won't cut it. You need to be A+

Experience tells me that 1 out of every 10 to 15 person will pass the first test.
Around 3 persons out of every 1000 people who passed the first test will pass the second test and go on to live an extraordinary life.

stenole

Norway868 Posts

February 09 2009 11:34 GMT

The wiki site about MLM seems to exactly explain what a pyramid scheme is. Salesmen recruit other salesmen and take percentages of their income. Even if there are real quality products/services involved, it still remains a pyramid scheme.

TheFlashyOne

Canada450 Posts

February 09 2009 11:38 GMT

Actually let me quote wiki;

"It is sometimes difficult to distinguish legal and reputable MLMs from illegal pyramid or Ponzi schemes. MLM businesses operate in the United States in all 50 states and in more than 100 other countries, and new businesses may use terms like "affiliate marketing" or "home-based business franchising". However, many pyramid schemes try to present themselves as legitimate MLM businesses."

End of quote.

Pyramid schemes have such a strong negative connotation attached to them that people often times forget why they are inherently a bad thing. Now, when you try to promote a legitimate concept that shares a few of their attributes, it becomes virtually impossible to so.

Manifesto7

Osaka27140 Posts

February 09 2009 11:43 GMT

Going back to your question; how everyone can make money.

Well, when you have some experience in the real world practice of network marketing, this question is ludicrous. The real question to ask is ; how come everyone, except the very very very top performers, is not making any money?

Answer my question.

Until you are willing to explain to the people who do not practice what network marketing is, it will be seen as a pyramid scheme. It is nobody's fault but the industry's, if it is legit, to be perceived otherwise. You are just talking around a rather simple question.

Ganfei

Taiwan1439 Posts

February 09 2009 11:46 GMT

Are you FlashyFinancier?

TheFlashyOne

Canada450 Posts

February 09 2009 11:57 GMT

#10

Mani, i briefly explained the concept in the fourth paragraph of my 3rd post. But again, i don't want to get technical here as there are many variations and we could easily get lost. Wiki gives a fair description; Multi-level_marketing

I believe that most people are familiar with the concept anyway. My goal with this blog was to discuss issues concerning the industry as a whole rather than to lose my breath by trying to explain the intricacies of its functioning and to highlight the differences between this and you know what...

MamiyaOtaru

United States1687 Posts

February 09 2009 11:58 GMT

#11

On February 09 2009 19:48 Manifesto7 wrote:
So why don't you explain the "system" and how everyone can make money?

On February 09 2009 20:15 TheFlashyOne wrote:
The real question to ask is ; how come everyone, except the very very very top performers, is not making any money?

So they don't all make money. Thanks for clearing that up.

brain@me:~$ urPyramidScheme > /dev/null

Manifesto7

Osaka27140 Posts

February 09 2009 12:18 GMT

#12

On February 09 2009 20:57 TheFlashyOne wrote:
Mani, i briefly explained the concept in the fourth paragraph of my 3rd post. But again, i don't want to get technical here as there are many variations and we could easily get lost. Wiki gives a fair description; Multi-level_marketing

I believe that most people are familiar with the concept anyway. My goal with this blog was to discuss issues concerning the industry as a whole rather than to lose my breath by trying to explain the intricacies of its functioning and to highlight the differences between this and you know what...

Your third post in that topic does not have four paragraphs.

I see. You want to talk about the issues of the industry, yet you have not brought up any of your own concerns about it.

I find it hard to imagine that you could have a discussion about this topic without having to clarify the difference between legitimate and illegitimate businesses, since they are so closely related.

stenole

Norway868 Posts

February 09 2009 12:36 GMT

#13

One problem with pyramid schemes (I will continue to call it that) is that the further down the chain you go, the salesmen will have to pay more and more to the higher-ups. Essentially it becomes harder and harder to sell the product at a profit the lower down you are in the chain. So being at the bottom level is crap. And anyone with any kind of sense will not want to be recruited by you as a salesman because of the the poor prospects of being at the bottom.

Another bad part about the system is that you are "spending" your social connections in order to sell a product. And you will also be using your social connections as your base of recruitment material. It ends up with all your friends hating you or pitying you.

Too_MuchZerg

Finland2818 Posts

February 09 2009 13:51 GMT

#14

Okay so I put 50,000 dollars to this and they promise 400% (200-300% is good range too) profit per year. Wonder how much money I have in 10 year period (if 200%, next year I put 150,000 and 200% for that). Sounds scam to me :D

Schnake

Germany2819 Posts

February 09 2009 13:53 GMT

#15

Well, network marketing is comparable to affiliate marketing on the internet. Let's take Project Wodnerful as an example. You can sell your ad space via them but you can also have potential marketers sign up via your referral link and you will get a small percentage of their revenues as well.

The difference between a pyramid scheme and network marketing is that in a pyramid scheme, you cannot make money by yourself,i.e. you have to recruit other people in order to make money. This is not the case in NM, because you can sell stuff on your own. Sometimes, as a new affiliate you are indirectly forced to buy a starter's kit to start your business but this practice is highly questionable. Consequently, if you'd bought a starter kit for $500 and you were unsuccessful, you lost money but your referrer did actually get paid.

There are a couple of very successful network marketing companies and they work absolutely legit. On top of my mind, Avon should be a good example. They are a very successful cosmetics and beauty products company, selling mainly their products via door-to-door business but you can also recruit friends.

The main problem I have experienced is that the products itself are oftentimes too expensive/overpriced (all consumer goods), you do not have the authority or competency to sell it (financial products), the companies DO NOT have a sustainable business plan, i.e. they go out of business or last but not least that they are lying throught their teeth about important things (products/hierarchy/minimum sales requirements etc.).

Personally, I checked out a couple of those network companies myself in the financial services and nutritional supplements but I was not successful. Recruiting friends for a business is not my style and I am not a good saleman either, so I guess I don't have the core skills to be successful in this industry.

edit: there is also the Direct Selling Association, where you can find direct marketing companies which have agreed to a certain code of conduct.

IntoTheWow

is awesome32274 Posts

February 09 2009 15:17 GMT

#16

Herbalife works like Avon too.

TheFlashyOne

Canada450 Posts

February 09 2009 22:07 GMT

#17

On February 09 2009 21:36 stenole wrote:
One problem with pyramid schemes (I will continue to call it that) is that the further down the chain you go, the salesmen will have to pay more and more to the higher-ups. Essentially it becomes harder and harder to sell the product at a profit the lower down you are in the chain. So being at the bottom level is crap. And anyone with any kind of sense will not want to be recruited by you as a salesman because of the the poor prospects of being at the bottom.

Another bad part about the system is that you are "spending" your social connections in order to sell a product. And you will also be using your social connections as your base of recruitment material. It ends up with all your friends hating you or pitying you.

I completely disagree with your first paragraph.
I completely agree with your second.

and Schnake from Germany. Very good description. However, my company was offering everyday services and i would never ever imagine them going out of business.

You don't have the required salesmanship skills? Well, welcome to the club. I guess we're both part of the 997 out of 1000.

Insane Lane

United States397 Posts

February 10 2009 00:18 GMT

#18

My mom spent years doing network marketing, going to all these conferences and meeting with all these people. Though we still get the occasional check, I don't believe it was worth it at all. Like many other methods, network marketing really manipulates some people and their desire for a get-rich-quick scheme. I've seen first-hand all the types of bull these companies throw at you and I am frankly sick of those people. It feels almost like Scientology to me.

With that being said, I am probably exaggerating it all and it was a great way for my mom to meet new friends. I'm just saying she put in waaaay too much effort to be worth the money.

29 fps

United States5724 Posts

February 10 2009 01:43 GMT

#19

You have to put in a WHOLE lot of money to all these functions, trainings and stuff, and you're not even guaranteed to make a lot. It's all based on commission, so if you cant sell anything for whatever reason, you'll be down a lot of money. If you have to pay a lot of money in order to make money, it's probably a scam.

And the friends pitying you/hating you - that's terrible, too. And it'll happen. Sometimes people you know might buy your product only because they pity you that you can't get a real job.

TheFlashyOne

Canada450 Posts

February 15 2009 04:58 GMT

#20

@Insane Lane, is your mom out of the business by now? i know it's hard to get out of this when you really are hooked to 'the dream' ...you really need a reality check but it's really really really hard to accept this. it took me more than a year.

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