“Where do you complaint about the complaint department?” (Leopold Fechtner)
If In 2018 You Are Doing #Direct Sales, #MLM Or #Network_Marketing I Have Something IMPORTANT To Tell You: There Are Good News And Bad News.
The Good News Are Actually REALLY GOOD, And The Bad News Are HORRIFYING: So You Better Pay Attention (Do Not Say I Didn’t Warn You).
A Bit Of Background
As Many Of My Students Are Aware, I Begun My #Business Career Doing Network Marketing And Upgraded From There.
The Truth Of The Matter Is That, If You Want To Be A Business Person And/Or An #Investor, You Need To Be Good At #Communication (Of Which #Sales Is One Aspect, But Not The Only One).
Now, On Average, Network Marketing Companies Have Acceptable Training Program To Teach Communication To Their Sales Reps. I Do Not Say “Good” Training Program, Because I Have Yet To Meet One MLM Company That Does Have A ‘Good Training Program’ – So Far None Qualified, For My Standards. The Best Programs Got A “Pass”… Barely!
However To Learn Business And #Investing MLM Companies Are As Good A Starting Place As Any.
If You Don’t Know What Network Marketing (or MLM – #Multi_Level_Marketing) Is… You Must Have Been Living Under A Rock: AMWAY And MARY KAY Have Been Around For At Least 50 Years, And Other Companies Like SHAKLEE, HERBALIFE, POLA, And More Recently JEUNESSE And #USANA Have Grown To Such Sizes That Makes The Envy Of Giants Like Wall-Mart And Amazon.
By Leveraging On #Direct_Selling, MLM Companies Can Afford Better Manufacturing, More Product Research, Higher Quality Ingredients, Lower Prices And Massive Payouts For Their Sales Representatives.
“The MLM Industry Has Come Of Age” Say Their Slogan(s) For The Past 20 Years; Considering That They Cater To The Needs Of The Wealthiest Chunk Of The Economic Population (The Baby-Boomers)… Business Is Good, And It Is Still Growing.
The Question That Many Critics Of MLM Keep On Asking Is: “If Business Is This Good, Why Is It Not Better?”
Indeed Sales For These Companies Have Been Creeping Upwards… Pretty Much Without Hitches! Even During The 2008-2010 Financial Crisis.
Yet MLM Does Not See The Troves Of Investment And Growth That Penetrate All Other Industries When They Are Leaving The Developing Stage And Begin To Scale Upwards.
To Put It Bluntly, Manufacturing, Services and Franchising Have Much More Investment, Legal Support And People Entering The Market Than MLM Ever Did. Despite The Fact That The Entering Ticket For Those Businesses Is Tens, If Not Hundreds Of Times Higher Than The MLM One.
And Here’s The Enigma: If Beginning A Business In Manufacturing, Service Or Franchising Is So Expensive, Why Is The MLM Industry Still Not Growing As It Should? Why Do So Many Entrepreneurs Choose to Avoid The MLM Sector?
The Simple Answer to That Is That The MLM Industry Has A Horrible Reputation. And I Am Being Generous. Reality Is Much Less Kind.
From A Businessman Point Of View (Mine, But I Am Not The Only One Holding This Opinion), MLM Is Not Better Nor Worse Than Any Other Industry… If Nothing Else It requires Less Investment Of Time And Money, And Offers Better Support To Beginning Entrepreneurs.
Yet The Image That This Industry Has Is Appalling: Sales People Are Seen As
- Sharks, Barely Above The Level Of Con-Artists
- Cows To Be Milked (By The MLM Company) Before And After The Sales Process Begins
- Acceptable Victims Of The Cost Of Doing Business (And Even This Perception Is Incorrect Because More often than Not They Fail At It…)
Depending From Which Side Of The Industry You Look At.
And To Make Matter Worse Companies (Even Highly Reputable Ones) Do very Little To Change The Image of This Industry. They May Think That They Are “Honest And Straightforward”, But As Much As They Demand Good Communication Skills From They Sales Reps…They Themselves Have Very Poor Communication Abilities.
And The Problem Rotates Around One Fundamental Issue:
The #Training Of Their Distributors
To Be Fair: MLM Company Takes Care Of The Product, The Legal Aspects, The Accounting And Reporting, And The Distribution. They Therefore Demand From Distributor To Take Care Of Sales And Communication In Exchange For Hefty Compensation Bonuses.
And This Would Be An Acceptable Scenario, Except For The Fact That MLM Companies Start Business With A Deceptive Attitude, As Much Toward Themselves As Toward Distributors And Customers.
Let Me Illustrate What I Mean With An Hypothetical Example.
Let’s Say That ALPHA Corp. (An Hypothetical Corporation) Has A Product. It Did R&D, Set Up The Proper Legal Incorporation, Registered Copyrights And Patents, Arranged Accounting Department And Production Department, And Decided To Market Its Product Through MLM.
At This Point Of The Business Process ALPHA Corp. Had Pretty Much Only Expenses, And (With All Probability) Cash Is Running Low, Investors Are Fretting For Returns On their Investment And ALPHA’s CEO Is In Charge Of Making This Happen.
So ALPHA Corp. Looks For A Leading Salesperson.
If You Do not Know What That Is: A Leading Salesperson Is The Top Of The Pyramid in Any Network Marketing Business, He (Or She) Is The One That Brings In The First Sales And Trains The First Distributors.
And Here Is Also Where The Disaster Happens, As Much By Design As Because Of Ignorance.
Leading Salespersons Usually Are Good At One Thing Only: Selling. This Means That They Sell The Products Of ALPHA Corp., And Then Sell The Idea To Other Sales People That selling ALPHA Products Is Good For Them.
These Leading Salespersons Are Not Hired, Nor Trained, They Are Headhunted. They Are So Good At Sales That ALPHA Corp. Finds Itself Suddenly Flushed With Cash, And Do Not Bother Too Much About Asking HOW Those Sales Got Accomplished.
But It Should Ask.
Because ALPHA Corp. Has Just Entered The ‘Descending Spiral Of Abilities’.
What Is The Descending Spiral Of Abilities?
Let’s say That I am 100% Good At Doing Something. I Find Two People Working For Me, And Since I Want Them To Model As Close As Possible What I Do, Then They Will Be Quite Similar To Myself, But They Will Be Good At Their Job Only 90%. They Then Repeat The Process Finding 4 People That Are Good Only 80%.
At The Next Iteration We Have 8 people That Are Good Only 70%, Then 16 People At 60%, Then 32 People At 50%… And So On.
The Whole Structure (Simplified Here) Looks Something Like This:
1 Person = 100%
2 Persons = 90%
4 Persons = 80%
8 Persons = 70%
16 Persons = 60%
32 Persons = 50%
64 Persons = 40%
128 Persons = 30%
… And Let’s Stop Here For The Sake Of Being Brief, At the Total Of 255 Sales People
In Short The Sales/Communication Of ALPHA Corp. Is Left In The Hands Of 255 Sales people, Of Which:
- 224 Are Below 50% Proficient In Their Job
- 24 Are Proficient Between 60% And 80%
- 7 Are Above The 80% Level.
Does This Sound A Clever Way To Build Your Reputation And/Or Your Business?
Believe Me When I Say That Sadly This Is Common Practice Even Among The Best MLM Companies.
So For The Past 30-40 Years What Have We Got?
- Customers, Victims Of Shark Sales People, Complain About Barely Honest Sales Tactics And Therefore Distrust Toward The MLM Industry.
- The Companies Keep Looking Only At Results (I.e.: Sales) And Ask The Shark Sellers To Be ‘Less Aggressive’ By Offering Money Incentives To Sellers That Sell The Most (Yes, I know, It Doesn’t Make Sense To Me either).
- Less Aggressive Sales People, Who Honestly Want To Serve The Customer, Are Left Behind And Find Themselves Penalised By The System.
- The Vast Majority Of Beginning Reps In The MLM Industry, Attracted By The Potential Success Of More Experienced Sales People, Find Themselves Without Training, And In Most Cases FAIL, Abandoning The Industry With A Very SOUR TASTE In Their Mouth (Again, I am Being Kind. Some Former Reps Have Become Advocates AGAINST The MLM Industry).
I Mean, Is It Really A Surprise That Network Marketing Has Such Horrible Reputation?
Let Me Repeat Here A Point I Made At The Beginning: MLM Companies Products Cost Less And Are Of Much Higher Quality! The Industry Image Should Be Stellar… But It’s Not.
And It Is Only Due To The Continued Increasing In Sales For The Past 50 Years.
Yes, Because While The MLM Industry My Have A Bad Reputation… Its Share Of The Business Keeps Increasing.
Now, As I Said In the Beginning, There are VERY GOOD News And HORRIFYING News.
First The Bad News
The USA Congress, In Its Enlightened State And With Its Decades Of Experience About Business (I Do Hope That My Sarcastic Tone Is Clear…) Has Decided To Regulate the MLM Industry, By Proposing A Legislation That Recognises MLM Pyramid Structures ONLY When The Participating Members Are Customers, Not Reps Themselves.
Here’s The Link About This:
https://www.congress.gov/bill/115th-congress/house-bill/3409/text
In Other Words They Are Going to Force A Successful Industry In Limiting Drastically The Number Of People That Do Business As MLM Reps, Without Realising That Becoming a Rep Is One Of The Major Driver Of Sales In The Industry.
If This Sounds Stupid To You, It’s Because It Is Stupid. The Government Way To Promote Business Is To Make Illegal The Enrolling Of Sales Reps…
It’s Like Squeezing The Chicken To Death In Order To get More Eggs Out Of It…
Government Thinking At Its best. I Mean, Where Do politicians Get These Moronic Ideas? I Really Wonder, Because It Takes Effort To Be So Bad At Managing A Country’s Economy… Even A Retarded Monkey Would Do better.
At Least Now That Marijuana Is Becoming Legal We Do Not Need Asking Any Longer “What Are They Smoking?”
In Short: Expect More Stringent Regulation On Enrolling Business Distributors/Associates. If This Is Your Core Business You Better Mend Your Ways… You Have Been Warned.
***There’s One Funny Aspect About This Legislation That Few Have Actually Thought About… But I Will Talk About That At The End.
End Of The Bad News. Now The Good
Government Is Of Course Completely Oblivious That Times Are Changing (Are We Really Surprised About That?). I Am Especially referring To The Fact That #Internet_Marketing (Especially Network Marketing Driven By #Internet_Sales) Is Becoming More And More The Tool Of Choice Of Successful Distributors.
Case In Point: As I Am Writing This I Just Finished Reading A Commentary About Monica Lewinsky, Media Shaming, And Clinton-Bashing.
Personally I Am not In Favour Of Old-Bill, Nor Against. I Was Not There, I Am Not Him, So I will Abstain From Judging Or Giving My Opinion On The Players Of The Lewinsky-Clinton Soap Opera. But Two Things Are Clear:
- 30 Years Ago Monica Would Have Never Been Able To Say Her Version Of The Story. 20 Years Ago, 10 Years Ago… The Same. Because Of The Influence That The Clinton Foundation Has Over The Media. But Now, Thanks To TWITTER… Things Have Changed Dramatically.
- For Now At Least, The Government Is Quite Late In Controlling The Flow Of News, Which Are Not Coming Any Longer From TV Or Newspapers. And That Is A Good Thing. TAKE ADVANTAGE OF THIS!
If You Have Not Considered Yet About Learning How Internet And #Social_Media Can Help Develop And Scale Up Your Business And Ensure Your #Freedom (Financial And Not Financial)… This Is The Time.
Not Only You Have The Incentive (#Internet_Skills Will Be As Important In the Next 100 Years As Learning How To Drive Has Been In The 20th Century => If You Want To Get Anywhere, You Better Learn!), But You Will Also Have The Pitchfork Behind Your Back Pushing You Forward (The Government Is Going To Penalise You For Being Good At What You Are Currently Doing! That Is: NOT USING #ONLINE_MEDIA!)
#Internet_ Business Is About To Come Of Age. Not Only More And More Way To Develop-Your-Business-For-Dummies Are Coming Out, But The Kinks That Plagued #Online_Entrepreneurship In The Early 2000~2010 Are Finally Gone And Forgotten!
So Grab A Seat For Our Internet Bootcamp, To Understand What You Can Really Accomplish By Spreading Your Wings Online. The Link’s Below.
http://bit.ly/FREE_InternetBootcamp
And If You Want To Really Dig Deeper And Get THE BEST That The Industry Has To Offer, Join HERE ⇒ #The_REVENUE_MACHINE_Pro. ⇐ You Will Never Need A Second Look!
Finally, To Reply To Our Initial Question:
Is #MLM/Network_Marketing Still A Valid #Business_Model For #Entrepreneurs?
Answer: Yes, But You’ll Need To Upload Version 2.1
***The Funny Thing (I Actually Believe This To Be So Tragic That It Is Hilarious):
- Congress Wants To ‘Outlaw’ Pyramid Schemes.
- What’s The Definition Of A Pyramid Scheme?
- A Pyramid Scheme Is A System Where A Large Base Of People Shifts Money Systematically And Regularly Toward The Top Of The Pyramid, Without Buying Any Product. People At The Top Have The Privilege Of Enjoying More And More Money Without Having To Work For It.
- If The New Laws Passes, It Will Outlaw Such Systems.
- So…What About The Pension System?
Yes, Because The Pension System Is Designed EXACTLY Like A Pyramid Scheme…
- They Do Not Have A Product
- People At The Bottom Shuffle Money Toward The Top
- People At The Top Do Not Work For It
- And It Is Fundamentally Unsustainable
At Which Point Will Pensions Become Illegal? Or, Will MLM Companies Cover Themselves By Declaring That Their Compensation Is Actually A Private Pension System?
…Weird.
Once Again Shakespeare Was Proven Right: No Matter What the MARVEL Studios, Or STAR TREK Writers May Concoct… Reality Will Always Be Weirder!
“There are more things in heaven and hearth, Horatio, than are dreamt in your philosophy”