What do you all think about network marketing/MLM? (Merged)

Discussion in 'After Hours Lounge (Off Topic)' started by Van Patton, Jun 25, 2003.

  1. Van Patton

    Van Patton Second Unit

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    I've got a buddy who is obsessed with network marketing right now. He's hardcore into his Usana vitamin products. I tell him network marketing is just a big pyramid scam that's legalized and he argues with me and talks in circles. I tell him all these logical reasons and explain that their goal isn't even to sell vitamins but just keep hiring people under them and the process goes on!! Anybody have any experience? BTW I am not putting my foot in the water or anything like that with it.
     
  2. Jack Briggs

    Jack Briggs Executive Producer

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    I was a promotional writer in the marketing departments at two of the largest of these "multi-level marketing" outfits (two of the very best known). The level of cynicism at the very top of these companies pretty much put the lie on what they are all about: separating people from their money and pushing a cult of personality. (Remember the blowdried but now deceased Mark Hughes and his "Lose Weight Now! Ask Me How!" mantra?)

    They're ersatz religions for people who are seeking to fill the voids in their lives.

    In researching the statistics on MLM "distributor" income (as an assignment for the first such outfit for whom I was writing), I discovered that out of all the millions of people suckered into these schemes, only 3 percent make anything like a livable income from their endeavors.

    A very fine legal line separates an "MLM" from an outright pyramid scheme. No matter, though: The money mostly flows from the "downlines" to the "uplines." Charter "distributors" make most of the money; newcomers make very little.

    Your friend will lose interest in pretty short order, especially after he takes stock of all the money he has sunk into inventory he cannot sell.
     
  3. Van Patton

    Van Patton Second Unit

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    He says that his Usana "business" is not multi level marketing but network marketing. I say it's the same thing.
     
  4. Tyler Ellis

    Tyler Ellis Auditioning

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    I have done a little research in the marketing business and am wondering what the difference between these two types are. A good friend of mine has just started network marketing and I said that only three percent succeed in (MLM) and he said it was not (MLM) but (NWM). Anyway I told him it was too risky but he sounds motivated but I do not think he knows what he is getting himself into...
     
  5. Matthew Todd

    Matthew Todd Second Unit

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    I'm not sure there is a difference. As far as whether or not he can make it work or not, I know that most people don't succeed, but it usually seems to be (at least from my experience) that they quit because it was harder than they thought it would be. I think those who are determined to succeed are MUCH more likely to make it.
     
  6. Ryan Wright

    Ryan Wright Screenwriter

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    They're all scams in one form or another. A guy I know came by my house once telling me how he's "retired" (he was in his late 20's at the time), and oh, would I like to buy an air filter?

    The air filter people told him after signing up that he was retired, and he believed them. He bought a bunch of air filters at "discount" price and tried to sell them to everyone he knew. That's a funny definition of retirement.

    Last I heard he still owned a dozen air filters at $600 a pop that he couldn't unload, and he finally quit telling people he was retired.
     
  7. Holadem

    Holadem Lead Actor

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    Not sure if this qualifies, but some guy at work has been trying to enroll me into this Prepaid Legal Services thing. It's a big legit company it seems, but the whole things seems quite fishy, mainly due to the somewhat oily nature of the gentleman in question.

    --
    Holadem
     
  8. Matt Gordon

    Matt Gordon Supporting Actor

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    My wife is currently being recruited by Mary Kay. Well, they're trying...

    I'm trying to not discourage her, but give her some facts about this and let her make her own decision. If anyone has any information specifically about this company, I'd like to hear it.
     
  9. Steven K

    Steven K Supporting Actor

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    Hmm... back where I come from, we refer to them as "pyramid schemes" [​IMG] All of them, no matter what fancy moniker is appended to each.

    Oops! I didn't say that word! Pyramid schemes are illegal!

    The good folks at scAmWay are in the business of making people rich!
     
  10. Chris Lockwood

    Chris Lockwood Producer

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    Different terms for the same thing. Perfectly legal, as long as they're set up properly; one of the key things is that there are actual products being sold, rather than just sending money around. I think a person's chances of success at it depend a lot on how good a salesperson they are. You have to be good at persuading others to become dealers, or sell a ton of product yourself, to make a living at it.
     
  11. ThomasC

    ThomasC Lead Actor

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    My mom used to be involved with Melaleuca and Nu Skin when I was a kid. I'm not sure exactly when and why she stopped, and I'm not really happy or sad about it either. I didn't think much of it because the products worked, but I wondered sometimes why I couldn't find these "brand name" products at the local supermarket and such. It seemed harmless to me then, but now as a college student, I'm suspicious of everything. [​IMG]
     
  12. Yee-Ming

    Yee-Ming Producer

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    Yes, MLM or NWM are the same thing, and the more cynical amnogst us would say they are merely euphemisms for pyramid scheme.

    Someone tried to recruit me for NuSkin. They of course paint this picture of how you get to "set up your own business", which once built runs itself and provides a steady continuing stream of income with little or no effort.

    In reality, when I pushed hard about how it all works, they conceded that it was necessary to recruit a lot of people to build that network below you that will generate the income. In reality, whilst it's legit because real products are sold, they admit that to make big bucks, you can't be a "shampoo salesman" but have to recruit newbies, in effect to do the actual shampoo selling that makes you, further up the chain, the money.

    If you want to be bugging everyone you know to sign up, go ahead. But don't be surprised if everyone gets pissed off with you.

    Here's a website on these things:
    http://www.pyramidschemealert.org/
    Quite informative,IMHO.

    (BTW, the guy who tried to recruit me stopped his activities some time ago, purportedly because he was too busy with his job. I wonder; I've never asked him whether he actually made any money or not...)
     
  13. Edwin-S

    Edwin-S Producer
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    So what is the fundamental difference between MLM, MWN, and the traditional corporate structure? As far as I'm concerned there is zero difference. Everyone of them is designed to steal the production of the majority for the benefit of the few. The top people in any of these types of organizations are all liars, cheats, and thieves, who try to squeeze the most out of their workers for the least amount of reward, and then discard them like so much garbage when it appears that they (top "managers") cannot squeeze them for one penny more.
     
  14. MickeS

    MickeS Producer

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    I actually agree with you Edwin-S (even though you put it a little harsher than I would've... not much though [​IMG]). I don't see a whole lot difference between MLM and a regular sales business. To be successful, you have to be a good salesman, work hard and look at it long term.

    The main difference I guess is that the MLM people are trying to sell it as a "get rich quick" scheme, and make it out to be easy so they can steal money from suckers.

    /Mike
     
  15. Todd Hochard

    Todd Hochard Cinematographer

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  16. Jonathan Burk

    Jonathan Burk Second Unit

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    I always enjoy bringing up the points in this site to my MLM friends:

    http://www.vandruff.com/mlm.html

    Also, when anyone tries to recruit me, I ask them to tell me exactly how much $$$ they made from their MLM "business" last month. Then ask how many hours they spent. If they won't answer both questions, the conversation is over. And if they do answer both questions, the conversation is usually over as well [​IMG].

    I also say that I'll listen to them until they tell two lies. They usually can't make a pitch without using some variation of these four lies (that were told to them by others)

    http://www.mlmwatch.org/01General/mlmlies.html

    Of course, check out the whole MLM Watch site:

    http://www.mlmwatch.org/

    And since your friend is involved with the double whammy of a MLM vitamin company, make sure he's aware of the following facts on vitamins and nutrition:

    http://www.quackwatch.org/01Quackery...spotquack.html

    In my experience, MLM companies are closer to religions than businesses, and people are discouraged from thinking critically. It's great that you are smart enough to stay away, but I hope it doesn't hurt your friendship when you reject his new business.
     
  17. Paul_Medenwaldt

    Paul_Medenwaldt Supporting Actor

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    About 5 years ago I had a coworker who was doing the Excel long distance MLM. I decided to try it out. I probably got about 20 friends and family members to switch their long distance. But to try and sell other people who you know into actually selling the product is another thing. The line was pushed that it would only be about 5 hours a week, but once you joined you found out the was a lie and if you wanted to really make money, the time you spent would be much more substantial. There were meetings all the time, once I maxed out the friends and family end there was going door to door.

    After about 6 months I lost interest and stopped. Also I didn't want to be that 'guy' to my friends who always bugged them about joining and selling Excel. The product itself was good.

    I'm the first person to admit that i'm not a sales person. I'm not a slick fast talking person who has an answer for every question. A person who does this type of scheme has to be quick on their feet and already know what a person will ask and have answers ready. You have to have sales in your blood.

    Before we met my wife got into Mary Kay, that didn't last too long for her. She said it was a time issue. She was told it would only be a few hours a week. She was tired of working all day at her regular job then spending 3 hours a nite or half a weekend day going to somebody's house and setting up displays and then selling the product.

    My wife will host Pampered Chef, Candle Light party's. She invites all her friends over and they go wild and purchase a minimum of $500 worth of product. My wife will then get deals for hosting the party and the Rep will make her money and everyone is happy. I don't mind these, as long as she doesn't start selling the products.

    My time is so much better used waiting for the original Star Wars trilogy on DVD.

    Paul
     
  18. Tony Whalen

    Tony Whalen Producer

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    NWM and MLM are the same thing. If there is a difference, I'd love to see it (and without any of the usual MLM/NWM double-speak.)

    I was briefly part of one of the major MLM/NWM firms. My wife and I went so far as to register, get a starter kit, and attend several meetings.

    The sales meetings were empowering as hell. The occasional weekend (larger-scale) meets were amazing. (That's where the local business brings in a successful person to talk.)

    However, I was starting to see things I didn't like, so I went researching.

    No two ways about it, it was a "Cult of Personality", as it's been said. And I was starting to give in to it.

    So, I examined the sales figures and success rates. 3% is about right. I also found that the successful people were spending just as much (if not more) time working on and promoting their "business". So much for the "free time" element that is so pervasive. "Oh, I could spend the free time if I chose to, but I like working my business and helping others succeed". Uh huh. Tell me another one.

    I don't doubt that MLM/NWM's work for some people. But I'm not one of them.

    Several other things I observed turned me off as well.

    1. Women seemed to be second class. Just an observation by me, but husband & wife teams really seemed to place the wife in a "support" role, and it was her duty to network with all the other wives. Hello? 21st century here folks.

    2. There was a decided leaning towards Christianity. Don't get me wrong, I don't have a problem with Christians. However, as a non-religious person, I didn't like that. I was looking for a business, not an Introduction to Religion.

    3. I could not get DIRECT answers. From anyone. I'd ask "how much did you make last year" and didn't get a number. I'd ask questions that would be prudent to ask in any business venture, about expenses, revenue etc. Couldn't get straight answers.

    The entire sales pitch of most MLM/NWM's is EMOTIONALLY based. There are no concrete facts & figures, just sweeping promises about free time, money, early retirement and so forth. No hard facts. Not in my experience.

    After a brief involvment, we were gone. Interestingly, the folks that recruited us have since disappeared. Pity. Really. We viewed them as good people and even friends, but I guess they don't have time for people who aren't in the biz. Doesn't really surprise me. Again, welcome to the "Cult of Personality". (I do wish them well, however, as they ARE good people.)

    Like I said...I'm sure these things work for SOME people. But it wasn't my cup o' tea. And I couldn't logically see how it would eventually allow me to have all the free time they keep harping about.

    Van, I hope you can help your friend see the light...

     
  19. Todd Hochard

    Todd Hochard Cinematographer

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  20. D. Scott MacDonald

    D. Scott MacDonald Supporting Actor

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    I tried Amway for a while about 20 years ago, and here are my imressions:

    1) They tell you that anybody can become a great salesperson - all you need is training and practice. I came to learn that this is not true. Very few people are cut out to be salespeople, and training has vey little to do with it.

    2) In my experience, you can only recruit/sponsor people who are at an equal or lower social status than yourself (usually lower). It is impossible to sponsor "up". The triple diamond in our organization was previously a VP, so he had lots of people that he could sponsor. I was a young kid with no education and no status, so I had a very small pool of people that I could sponsor (and of course people in that pool were not apt to make it big).

    3) Given #2, why did they bother sponsoring me in the first place? They knew that I was essentailly a "dead end" and that I'd eventaully quite. The answer is that they were able to nickel and dime me enough to make it worth their while. I didn't generate much money, but they certainly didn't lose any money on me (I lost all the money).

    4) The final big lie is that once you sponsor your six friends, you can pretty much retire. The fact that the triple diamond was constantly inviting me to his house was evidience that this was NOT the the case. All of your six friends will quit, so you need to constantly be in the trenches recruiting/motiviating new people.
     

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