You’re aware of what kind of forum this is, yet you seem to expect us to say some MLMs aren’t bad. That’s like going into an AA meeting and asking, “What kind of beer do you think is safe?”
We’ve all been burned by MLMs, in one way or another, and in many cases hurt deeply or lost loved ones to the brainwashing that occurs. We regularly see people that come in and say they’ve found the perfect MLM, yet not one has met Paine Webber’s challenge of proving that they’re making good money in their MLM. All it takes is the *business* part of the tax form — no personal financial information, just the business info. We’ve had people come in, at least several every month (and more that Paine doesn’t approve for posting) that keep saying they’ve found the real thing. Yet not one has ever come back to prove they’re making a profit.
Now, think about it. Look at it and think about what people have said here. If, in 6-12 months you’re doing well, and could prove it with just the business part of a tax return (I think it’s Schedule C, but I don’t remember), wouldn’t you want to come back in here and say, “I told you so!” — wouldn’t you want to prove us wrong and see if some of us join you?
Yet not one of the many, many people who have come in here to brag about their MLM has ever done that.
In the words of Led Zepplin, “Oh, it makes you wonder.”
I’m not trying to attack you. My point, in many of my posts, is to jar people to think about things from another point of view. Think of it this way: if I can be super critical of a situation and point out all the flaws of it, and it still stands up, then you figure it is likely valid. I’m poking holes in the MLM structure. If I can actually poke holes, then it should be avoided in terms of investment (in time and money) and should be examined much more closely.
Think of it this way: do you just go out and buy the first car you see, or do you research it? Do you compare prices and packages at different dealers? Do you look at both sides of the story, or just run out and spend $20,000 or more on whatever someone says is good without looking into it? When most people get married, do they just grab the first person they can find who says they’re a good partner and marry them for life, without taking time to figure out if that person is telling the truth? Both of these are serious decisions, and so is picking a company that one hopes to be affiliated with for years or more.
Now, one more point about MLMs in general — and just one for now, but trust me, I’ve got many more.
MLMs say they have good prices because they cut out the middleman. They sell straight to you. Step back and look at that. Let me use the local grocery chain as an example. A farmer grows the tomatoes, then sells them to a distributor, who ships them across the country, where they’re stored at distribution centers, and from there, trucked to the store. The farmer creates the product in the first place, which means he adds value to what you’re buying. Without him, it’d be just a seed, dirt, sunlight, and water. His work changes the raw materials into a plump, juicy and tasty treat. He has earned that money he gets when I buy a tomato. Why? Because without him, there’d be no tomato.
Next, look at the “middle man”, or the distributor (and remember there could be more than one middle man). What does he do? He takes it from the farmer and gets it to the store. That costs money. The truck driver has to be paid, the truck has to be maintained, the gas and oil have to be paid for. Without him, that luscious tomato would be sitting in the farmer’s field or in baskets waiting to be shipped.
The “middle man” does a good job of taking a tomato that was grown miles and miles from me and making sure it is available at my local grocer, two miles down the road from me. As a consumer, I am paying him money because he has added value to the product. Without him, I’d have to drive to a farmer’s market, far away from me, and buy tomatoes.
It would cost me much more to have to drive all over town or out of town to get all my produce than it does if it is shipped in bulk to my store. The middle man adds value to the product by making it easily available.
Then there’s the grocer. I don’t need to go through the details, but the grocer provides, in one place, everything I need, cleaned, verified (in general, unless it’s spinach!) as safe and presented so I can examine the produce and take what looks good. Again, by providing a place where I can shop in my neighborhood, the grocer is adding value to the product.
Now look at an MLM. I’ll take the example I know: Quackstar and my ex-girlfriend (called “Dawn” for convenience). Dawn had her friend’s sister and husband above her, and the husband’s father above him, then an Emerald, then a Diamond named Bundy, then another stoned person, er, Diamond named Winters above him. I don’t know for sure, but have reason to suspect there was at least one person between the Emerald and the first Diamond. I don’t know if there were any other levels involved. I do know Winters was under Bill Britt. That means when if I bought something from Dawn, and I pay her, then, even without any levels I haven’t named, the profit is shared by her, her friend’s sister and husband, the father, the Emerald, two Diamonds and one guy high up. Counting partners as one person, that means *SEVEN* people get paid on that one product.
If I went to Dawn to buy, say a laser printer, first, I can’t dicker (last time I bought printers, I took in the ad from the competitor and did some other fast talking and on 2 printers, I saved, literally, about $100 on what should have cost me $385), which means I’m paying list price, and SEVEN people split the profit. Not one of them ads value to the product. I could have just gone to the Office Max or Office Depot (or even Staples) website and ordered it. I would have gained no benefit by having to order it through Quackstar and I would have lost about $100 on both printers.
The dickering, by the way, will be a big factor when it comes to bigger items. For instance, I know you can get cars through Quackstar. While there are those that can dicker better than I can, in the past, I’ve been able to save from 1/10 to 1/6 on a car price by dickering. Can’t do that with Quackstar and the extra cost is not made up in what I get back. My business is starting to do really well, but I’m still not going to spend an extra grand that I don’t need to. I can use that same money on CDs, DVDs, or several new bikes. Better that it stays with me than someone else.
In this case I’m talking about a general retail product that they make available. If you’re dealing with a product specific to an MLM, then instead of adding a profit for the manufacturer, some profit for the middle man, and some for the retailer, that same profit is split, in this case, seven ways — and not one of them does a damned thing to add value to what I’m buying. Not one is doing anything to benefit me that makes it worth my time or money to buy from them and not from a local store or on the web.
Studies have shown that in most cases MLM products cost something like 30% than comparable products else where. Why? Because in a real business (yes, real, as in legit), only people or companies that add to the value make money on the product. In an MLM, anywhere from 3 to 10 or more people are making a profit for doing nothing that helps the customer in the long run. True, there is no middleman. Instead there are a number of people who are getting money for doing nothing. I’d rather have a middleman. At least he earns his profit.