Any other MLM or Network Marketing guys?

[Captain Obvious]

gobig that was one of the best explanations of MLM i have ever seen. Thanks

Capt.O

[crankbait]

Hey guys just wanted to check in and let you know I'm involved with Amway Global and I haven't been scammed or ripped off. They don't make you do anything or buy anything.

Your basically paid on the volume you move in product like any other business. You recruit other people to duplicate your efforts and get paid on a percentage of volume moved as a team.

The IRS has reviewed Amway Global and they agree it is a business as well as the FTC has agreed.

If I bring in people to the business they can make more than me or sell more than me it doesn't matter. In other words they can earn as much as the are willing to do to earn it.

You already buy most of the products Amway Global sells and you don't get a check every month from the shoprite or A&P or Walmart with a note that says thanks for shopping heres your check. Toilet paper, paper towels, soap, cleaners, laundry, toothpaste, shampoo, energy drinks, energy bars, vitamins, the list goes on and on. They even have Partner Stores like Bass Pro Shops, Bestbuy, Sears, Barnes and Noble...So every time I buy my fishing gear or anything else from these stores I get paid...

Your right it's not for everyone. We choose who we want to work with and mentor. If you haven't seen Amway Global in the past 6 months it is different. If you watch TV they have exposure on commercials now which gives us brand awareness.

I like the fact that you can leave a legecy to your family if anything happens to you, You can will it to them. I'm also using it to pay some of my bills and mortgage and getting a chance to save some money. Also, I plan on using it to retire early and the ongoing income will be there to still pay the bills.

Use you minds and be open to things. I want each of you to look around you tomorrow morning at rush hour at the other sheep next to you on the highway and ask yourself a question. Do you really want to do this everyday...work to home, work to home, work to home, work to home...etc.etc.etc...or would you rather be with your family or maybe out fishing.

I do,  I decided to do something about it...

Maybe before it's too late you can make a choice...

I wish everyone here the best of luck and hope the economy doesn't sneak up and bite you...Sorry Bill or Jim but we had a cut in budget and your name was choosen.

My last statement is...

Dig the Well, Before the Water is Gone.............

[South FLA]

Listen to this guy:

http://clarkhoward.com/shownotes/category/12/115/276/

[Root beer]

From the link above

Forbes magazine recently did an analysis of a hot MLM of the moment called Team Leadership Development. It turns out that only 1 out of every 100 people could recoup their expenses. So you have a 99% chance of losing money if you get involved!

Interesting....Would I like to work from home losing 99% of my money? Nah.  ;D

[Grey Wolf]

From the link above

Forbes magazine recently did an analysis of a hot MLM of the moment called Team Leadership Development. It turns out that only 1 out of every 100 people could recoup their expenses. So you have a 99% chance of losing money if you get involved!

Interesting....Would I like to work from home losing 99% of my money? Nah. ;D

It's definately set up for the biggest fish in the tank to feed off the smaller ones.

[Olebiker]

I'm a little late to the discussion, but I would like to give you one bit of advice.  If you choose to get into MLM the only friends you will have left after a little while are the people in your upline or downline.  Everyone else will avoid you and run when they see you coming.

I'm an old guy who has seen this happen time and time again.

[Captain Obvious]

It's definately set up for the biggest fish in the tank to feed off the smaller ones

Actual if an MLM company could only keep 1 out of a 100 people they go out of business fast

Lets be fair why did these people not make their money back? THEY STOP TRYING

Think about it this way. Lets say that you start a small tackle shop and are trying to make a living off of it. Well think of what it would cost to do that, lets be nice and say it is a $20000 start up.

OK so your trying hard to make money but it just isn't working and final one day you wake up and decide your not doing it any more.

You gonna get that $20000 back? Nope but whose fault is it that your not going to get that money back? YOURS

Funny isn't it that those who succeed are those who never stop trying. so in reality 1 out of 100 MLMers never stops trying.

Everyone else will avoid you and run when they see you coming.

I've seen this happen too, when you try to force feed your friends your business.

I have kept all my friends because when they said "no" I said  " thats cool, how about them Rangers......" 

I don't care because I'm still going to work my business and sponsor other people. If you can't accept a no you shouldn't be a MLMer

And if they ask how my business is going I tell them and ask them how their work is going.

No reason to run away or stop being friends

[gobig]

Forbes magazine recently did an analysis of a hot MLM of the moment called Team Leadership Development. It turns out that only 1 out of every 100 people could recoup their expenses. So you have a 99% chance of losing money if you get involved!

Team leadership development looks like its monavie. I personally know several people that make six figure incomes in monavie. When you become a distributor in a MLM company its just as it sounds. Your a distributor of product or services. You are your own business. No different than the guy who drives the Little Debbies truck. You have to sell the product or you do not get paid. Most do not require you to pre-purchase product. So if you invest in product and do not move it you will have a loss. The reality is 50% of all businesses will fail in the first year and 95% will fail in 5 years. Most business people are the cause of their own demise.

http://www.businessknowhow.com/startup/business-failure.htm

[Fishing Rhino]

First, let me state that I am a cynical person, but better that than a sucker.

So, here's my take on multi level marketing.

It appears that the manufacturer who charges a person for the right to sell their product is actually selling franchises, though they may not be called that.

If only one or two percent actually make decent money with their franchises through selling and recruiting, they need to thank their lucky stars that not everyone is equal, or they'd all fail.

Take it to the extreme. We all (everyone, not just forum members) join the program. None of us give up, and we all have equal results.

That leaves no one to purchase since we are all salesmen.

But, the company who franchises us still gets rich without selling a single product. I cannot cite any documentation, but I'd hazard guess that many of these MLMs make as much from selling the rights to market their product as they do the actual sales.

Nobody, I repeat, nobody in their right mind will buy a legitimate franchise without being granted a "protected" area, meaning that you have the exclusive franchise to that area. Can you day McDonalds, Dunkin Donuts, etc. This assures the franchise purcaser that they will not have competition from someone being able to open another franchise of that company within their territory.

If you get in on the ground floor, and are a good salesman, and get to be a "distributor" who gets a share not only from those they recruit, but subsequently a share of the sales from those their recruits recruit you can do fantastically well.

It is easy to see that there cannot be many "distributors", simply because it is a pyramid. Those joining the party, once it has reached a certain level have no one left to recruit.

These things cannot multiply indefinitely.

I can recruit a hundred people. Each of them can recruit a hundred people. At this point, with me at the top. there are 10,101 people. If each of those recruit a hundred people, the pyramid now has over one million people in it with just four levels.

The fifth level alone will need more than 100,000.000 people, or one third the population of the U.S.

A hundred per member is probably very high. I used it because the math is easy to understand.

I doubt anyone who understands this would sign on to the plan.

The company would be in fat city, just from selling the right to sell their product, without having sold a single one of their products.

It's a great game for those at the top. For the rest, not good at all.

Saw a documentary which followed a few folks who signed onto the "plan" and would not give up. They met with people, bought them lunch, while they gave their sales pitch. Others had cookouts and invited several friends and acquaintances in a recruiting attempt.

One poor guy had been grinding away for over a year, was still hopeful and optimistic, but was still in the red. Seems they spent much more time "recruiting" than they did selling.

I say this as a sincere compliment. If you can sell this idea to others, you could sell ice to an Eskimo.

As for me, just looking at the numbers, I could not do it.

[Grey Wolf]

First, let me state that I am a cynical person, but better that than a sucker.

So, here's my take on multi level marketing.

It appears that the manufacturer who charges a person for the right to sell their product is actually selling franchises, though they may not be called that.

If only one or two percent actually make decent money with their franchises through selling and recruiting, they need to thank their lucky stars that not everyone is equal, or they'd all fail.

Take it to the extreme. We all (everyone, not just forum members) join the program. None of us give up, and we all have equal results.

That leaves no one to purchase since we are all salesmen.

But, the company who franchises us still gets rich without selling a single product. I cannot cite any documentation, but I'd hazard guess that many of these MLMs make as much from selling the rights to market their product as they do the actual sales.

Nobody, I repeat, nobody in their right mind will buy a legitimate franchise without being granted a "protected" area, meaning that you have the exclusive franchise to that area. Can you day McDonalds, Dunkin Donuts, etc. This assures the franchise purcaser that they will not have competition from someone being able to open another franchise of that company within their territory.

If you get in on the ground floor, and are a good salesman, and get to be a "distributor" who gets a share not only from those they recruit, but subsequently a share of the sales from those their recruits recruit you can do fantastically well.

It is easy to see that there cannot be many "distributors", simply because it is a pyramid. Those joining the party, once it has reached a certain level have no one left to recruit.

These things cannot multiply indefinitely.

I can recruit a hundred people. Each of them can recruit a hundred people. At this point, with me at the top. there are 10,101 people. If each of those recruit a hundred people, the pyramid now has over one million people in it with just four levels.

The fifth level alone will need more than 100,000.000 people, or one third the population of the U.S.

A hundred per member is probably very high. I used it because the math is easy to understand.

I doubt anyone who understands this would sign on to the plan.

The company would be in fat city, just from selling the right to sell their product, without having sold a single one of their products.

It's a great game for those at the top. For the rest, not good at all.

Saw a documentary which followed a few folks who signed onto the "plan" and would not give up. They met with people, bought them lunch, while they gave their sales pitch. Others had cookouts and invited several friends and acquaintances in a recruiting attempt.

One poor guy had been grinding away for over a year, was still hopeful and optimistic, but was still in the red. Seems they spent much more time "recruiting" than they did selling.

I say this as a sincere compliment. If you can sell this idea to others, you could sell ice to an Eskimo.

As for me, just looking at the numbers, I could not do it.

Excellent input.

[Captain Obvious]

Ok guys lets compare MLM against Corporate America and lets see a real where the real pyramid scheme is.

Lets look at the structure of a traditional business in Corporate American

Owner

Mangers

Employees

Now let me ask you a question. Is it ever possible that in a profitable business that an employee will make more than a manger?

Would a manger make more than the owner?

The answer is NO! the owner is always going to make more than the mangers who are going to make more money than the employees.

Employees and a manager are hired to make the company more profitable. They are assets that the owner can leverage to make him more money.So if he wants to grow he needs people to work for him.

So employees and mangers are only getting paid based off of how much money they can be paid will still being profitable to the company.

No matter how hard they work they will never make more than the owner. Even if their work makes the company millions of dollars they will never get more than what they were hired for.

So all the money goes to the top where it is then distributed to the people according to how much the company thinks they are worth.

Sounds like a pyramid scheme to me. The money goes up and only a small portion comes down.

Now lets look at MLM.

In MLM we are all business owners. Not only that but no matter where you are in the line you have the possibility to make just as much or more money as the guy above you.

I mean if I have only sponsored two people but one of them has sponsor four then guess what, he is making more money than me!

But the cool thing is that I'm also making money because he is making money. If he keeps sponsoring people and I don't do anything I will keep making money from his work, but this will not be half as much as he's making.

He also will make money off of the people he sponsors and they will make money off of the people they sponsor and the chain goes on.

So does some of the money go up. A portion does but the majority stays down for the people that worked for it.

The guy above me doesn't write the check he just receives a small portion of what I make just like I do from the people below me.

So the money doesn't go up and then comes down. Instead a small portion goes up and the rest stays down.

Also only a certain amount of money can go up. They guy above me only makes money off of my people to a certain level and its the same way with me.

I'm not going to go into more detail because each company is structured differently but that is the basics.

So where is the real pyramid scheme?

[Pond Hopper]

Ok guys lets compare MLM against Corporate America and lets see a real where the real pyramid scheme is.

Lets look at the structure of a traditional business in Corporate American

Owner

Mangers

Employees

Now let me ask you a question. Is it ever possible that in a profitable business that an employee will make more than a manger?

Would a manger make more than the owner?

The answer is NO! the owner is always going to make more than the mangers who are going to make more money than the employees.

Employees and a manager are hired to make the company more profitable. They are assets that the owner can leverage to make him more money.So if he wants to grow he needs people to work for him.

So employees and mangers are only getting paid based off of how much money they can be paid will still being profitable to the company.

No matter how hard they work they will never make more than the owner. Even if their work makes the company millions of dollars they will never get more than what they were hired for.

So all the money goes to the top where it is then distributed to the people according to how much the company thinks they are worth.

Sounds like a pyramid scheme to me. The money goes up and only a small portion comes down.

Now lets look at MLM.

In MLM we are all business owners. Not only that but no matter where you are in the line you have the possibility to make just as much or more money as the guy above you.

I mean if I have only sponsored two people but one of them has sponsor four then guess what, he is making more money than me!

But the cool thing is that I'm also making money because he is making money. If he keeps sponsoring people and I don't do anything I will keep making money from his work, but this will not be half as much as he's making.

He also will make money off of the people he sponsors and they will make money off of the people they sponsor and the chain goes on.

So does some of the money go up. A portion does but the majority stays down for the people that worked for it.

The guy above me doesn't write the check he just receives a small portion of what I make just like I do from the people below me.

So the money doesn't go up and then comes down. Instead a small portion goes up and the rest stays down.

Also only a certain amount of money can go up. They guy above me only makes money off of my people to a certain level and its the same way with me.

I'm not going to go into more detail because each company is structured differently but that is the basics.

So where is the real pyramid scheme?

You just showed where the pyramid scheme is.

[OHIO]

                    Owner

                   Manager

                  Employees

Looks a little like a pyramid. ;D

[Grey Wolf]

A shark is a shark.

[Captain Obvious]

You just showed where the pyramid scheme is.

How is that a pyramid scheme if he is under me?

This is what it looks like

                                          MLM Company

                                                     Me

                            Person A                         Person B

               Person D            Person C

  Person E    Person F   Person G  Person H                        

Remember I sponsored Person A and B. Let's say that in this is MLM company compensation plan looks like this.

- First level: Max 2 people, I'll get $1 for each person you sponsor

  So I have Person A and Person B

- Second level: Max 4 people, I get $ .25 for them.

  (These are the people That A sponsored so they are D and C: Remember I'm getting $.25, A   is getting $1 for D and C)

- Third level: Max 8 people, I get $.10 for them

  (These are the people sponsored by D and C, so that means E, F, G, and H)

OK so all these rules work the same for everyone. Person A makes only a dollar off of his first level and so on.

Let's do the math

Me = A+B+C+D+E+F+G+H

Me = 1+1+.25+.25+.10+.10+.10+.10 = $2.90

Now let's look at Person A

A= C+D+E+F+G+H

A= 1+1+.25+.25.+.25+.25 = $3.00

How is that a pyramid scheme? If it was I would be making the most money because I'm at the top right?

Now if Person B did the same thing that Person A, it's true that I would be making more than both of them. But that would be because I had more people than both of them.

This is a very very very very basic set up but I think it shows what I'm talking about.

Now let's look at Corporate America

                                              Tackle Shop

                                                     Owner

                             Manger A                               Manger B

                 Employee C     Employee D   Employee E     Employee F

Ok let's say that this tackle shop makes 1M in revenue

Let's look at everyone's yearly salary.

-      Owner: Unknown

-      Mangers: 50K each

-      Employees: 30K          

Now this company made 1M this year. Salary expense without any over time is $220k

So after everyone gets paid the Owner has 780K left to spend as he wishes. I'm not going to get in to calculating taxes and liabilities he has to pay for the company but let's just call net profit 300k.

So at the end of the day the Owner makes $300k. He paid 220K for the asset of having people work for him so he made 780k off a 220k investment.

It would take a manger making 250K in working over and bonuses to equal what the owner is making.

It wouldn't matter if the owner ever came to the shop or talked to a signal customer he still is going to make $300k.

So as you can see both these methods look like a pyramid.

But only one has all the money going to the top.

[Fishing Rhino]

You obviously do not understand what a pyramid scheme is. It is not a business structure that looks like a pyramid.

Pyramid Schemes

In the classic "pyramid" scheme, participants attempt to make money solely by recruiting new participants into the program. The hallmark of these schemes is the promise of sky-high returns in a short period of time for doing nothing other than handing over your money and getting others to do the same.

The fraudsters behind a pyramid scheme may go to great lengths to make the program look like a legitimate multi-level marketing program. But despite their claims to have legitimate products or services to sell, these fraudsters simply use money coming in from new recruits to pay off early stage investors. But eventually the pyramid will collapse. At some point the schemes get too big, the promoter cannot raise enough money from new investors to pay earlier investors, and many people lose their money. The chart below shows how pyramid schemes can become impossible to sustain:

From the SEC. To see the pyramid click on the link below.

http://www.sec.gov/answers/pyramid.htm

[Root beer]

The difference is, in MLM new recruits are handing over money to person above them. In corporate world the revenue is not guaranteed to flow to the top. The owners are the last people to get paid. (hence, owners' equity is the RESIDUAL interest in the business) Where in MLM the new recruits helps pay for the guys that already in program.....I'm not saying all MLM are illegitimate, but saying MLM and corporations are the same is hogwash.

[Captain Obvious]

look like a legitimate multi-level marketing program

I'm not the one who doesn't know what pyramid scheme looks like. I'm showing how a legit MLM company works.

Just because a pyramid scheme looks like MLM doesn't mean all that MLM is a pyramid scheme.

[Root beer]

Another thought, in corporations employees are paid to perform an activity, where in MLM you get paid for recruiting more people. Totally two different ways of getting paid. There lies pyramid scheme. It similar to a Ponzi Scheme, the more people the more money that flows until it can no longer achieve sustainability. It not like that in corporations.

[Captain Obvious]

Why are you saying the same thing in different ways.

If you're saying that there will be a point when sales starts going down. Well guess what, that happens in Corporate America.

It's called the point of diminishing returns, when sales of a product are increasing at a decreasing rate. That's one of the first things you learn in Business school. The company ether introduces a new product or goes out of business.

If you are saying that there will come a time when there are too many distributors well guess what that happens in Corporate America to.

Why do you think it's so hard to start a successful restaurant? Because it there are thousands of them. Why do you think companies go out of business? Because they get beat by the competition.

But guess what people still start businesses and restaurants.

Plus the work force always has people entering and leaving. If no one retired then there are no jobs for the kids coming of college.

MLM is still subject to the rules of economics and business.

And last time I checked the biggest companies have the most people working for them. So yeah the more people involved the more money made.

I just believe that MLM has a better way of distributing the money. Everyone has the same opportunity to make money. Its only limited to how hard you are willing to work

I'm getting paid to market and sell the company's products. Just like a car salesman is paid to sell cars.

We both are preforming activities for a company.

[SPEEDBEAD.]

In my experience speaking with MLM guys (two sit-down meetings and one large group meeting), I felt slimy after talking with them. "Used Car Salesman" is the feeling I got...

I went with my gut after talking to them and I don't regret it one bit.

Good luck to you and your endeavors.  I hope you become rich beyond your wildest dreams. In the event you don't, make sure you have some marketable skills in another area and a contingency plan to feed your family.

[Grey Wolf]

Hey capt , sometimes it's best to drop something that most people consider a scam or worse.

It's your chosen profession so why are you trying to justify it , just go about your business and expect most people to be leery of it.

[Captain Obvious]

lol I've only keep talking about it because you guys did. I started it so I guess I'll finish it

I have no hard feelings and I hope that its the same for everyone else.

Everyone is entitled to their own opinion, I'll keep mine and you'll keep yours end of story.

Thanks Speedbead

I'm still in school getting my degree so I will have marketable skills.

Good Night Irene

[SPEEDBEAD.]

Good deal.

I hope you didnt take it as sarcastic. I know quite a few of my posts are.  LOL

[Captain Obvious]

You good

Why don't we end this on a funny note I don't know why but this thread reminded me of this skit

http://www.youtube.com/watch?v=teMlv3ripSM