Oh No! Not Another MLM Business!
Why do businesses which operate solely on the idea of rewarding those who share product information with friends and loved ones have such a bad wrap, when anyone in marketing agrees that word-of-mouth advertising is the most powerful advertising out there?
Well, those who have been in the industry over the last twenty years, including yours truly, have observed a trend that very well may be the cause, if not at least a major contributing factor, to this disgust.
We’ll call it DEFAULT
This is something that has been experienced by us all in the industry. We get into a program and set it all up just right. What a blessing it is! We have money coming in that we never knew possible. The birds are chirping and the blooms of the day fill us with awe and wonder. The, suddenly and without warning, everything diverts back to DEFAULT. Storm clouds close in. Appointments are missed, all decisions are delayed, hours are lost, emotions run on high, and a ton of other things go wrong. Simply because of DEFAULT.
Nearly all businesses run on the pyramid plan-not just MLM types. At the top is the CEO, the president, the great leader. He or she has a few trusted associates who help run the show. These operate at the second level of operation, and usually receive a slightly lower pay. They, in turn, have others who report to them. And on it goes until at the very bottom, and at the lowest pay scale, rests the largest group, the factory workers, laborers, cleaner-uppers. To get from the bottom to the top of the pyramid is very rare in conventional business. But everyone knows that this is just the way businesses are run.
But then a neat network marketing businesses comes and changes everything up, at least that’s what they say.
“We will show you a better way to do business, one where you don’t have to remain at the bottom all your life. You too can enjoy the lifestyle of the CEO, vacation when you want, travel where you want (and in style), have time with your family…” and on and on they croon. Then they draw circles and explain how it all works (on paper).
All goes well… for awhile. Then one dark, dreary day you realize your American Dream, with all the fine-tuned settings you have struggled so hard to make, has gone into DEFAULT. And you find yourself again on the bottom of the pyramid, just like in conventional businesses.
Most people don’t realize that nearly every network marketing plan is designed with a DEFUALT button. This causes it to go back to the old pyramid style of big CEO at the top racking in the cash and little guys on the bottom scrounging around for whatever little money they can make. This DEFAULT system works with various methods. They’re called by a variety of names, but we’ll list only four here. I think you’ll recognize them.
1. Jump-Start: Knowing full well that most people will never get beyond the initial “buy-in”, these companies push you to “tell all your friends and family” about the opportunity. This gives the company free advertising and quick profits from the “packet” that you had to buy.
2. Breakage: if you don’t meet your monthly quota then you have to forfeit your “bonuses” or “points” and then the company keeps the money.
3. Break Away: when you “graduate” to a new level, some of your earnings that you worked hard to get is left behind. The company gets to keep that money
4. Exhaustion: The company wears you out by requiring constant new “enrollees”. They know you won’t stay long because you’ll get so tired of finding new people to sign on. When you leave, they keep all those enrollees and make money off them, without having to pay it to you!
This is a short description of some of the ways network marketing companies make the big profits. They are designed to cause your own businesses that had lots of earning potential to DEFAULT back to you being the little guy on the bottom of the conventional business pyramid.
But the good news is that not all MLM opportunities do this! Look for those who specialize in helping the “little guy”, who don’t use the mechanisms mentioned above.
Filed under: Home Based Business