In an earlier post I started to look at whether or not MLM worked. As I had mentioned. . .
If the answer you are looking for is a resounding ‘NO’, then you have come to the right place!
To read the first part of this post, go HERE.
After you read my initial thoughts, read on to see the journey I took that allowed me to find the answers to whether MLM really works.
With Herbal Life, it really started, just before the all the bad publicity began and it fell apart, a condition that lasted for a couple of years before it got back on it’s feet with new distributors, myself not included.
I joined NuSkin a few months before it took a nose dive and my entire up-line and down-line disappeared over night.
Omni-Trition, the oatmeal raisin diet cookie, worked great, I lost 20 pounds in a month, just before the company went belly up because they couldn’t afford to produce the product.
And, quite a few more that lasted a few months, more and less, before going out of business for one reason or another. The list of failures is long and way too tedious to continue, if the truth be told, I would rather not remember. By the end of this train wreck I was devastated and many thousands of dollars lighter in the wallet and a number of my former friends and many, many people I met along the way were done with me and my ‘pyramid schemes’.
Have you ever spoken to someone you know would be a real asset to your business, as well as being super successful in their own business, only to have them tell you they don’t want to be involved with one of your ‘pyramid schemes’, that never work anyway. Did you feel like an idiot? I did. I am forbidden for life by my wife, at the threat of divorce, to talk to friends or relatives about any business opportunity I am involved with, no matter how great it may be, it is Verboten. I don’t really believe she would divorce me for that, but I don’t want to push the envelope.
So that being said, chances are you are not currently a friend or relative of mine, so I am free to continue with my story. No, I am not going to try and sell you something, I am a lousy salesman, I just tell my story and you are of course, free to do whatever it is you care to do. Fair enough? Good, here goes.
As you can see I had an unbelievable run of ‘Bad Luck’, I seemed to get involved just in time to watch and unfortunately participate in the collapse of so many MLM businesses, it was surreal. But, actually no, if you think about it, my story really isn’t so unique, if it were I would certainly be looking for the black cloud following me around and raining on my parade. My story sounds like so many other people’s stories that I have listened to over the years, that you come to realize that this is MLM. An unreasonable 95% of the people that get involved in MLM businesses will never collect a check, no not one check, even a larger percentage will never make a profit. Time after time I listened to my story being told by someone else, oh there were variations on the theme, but basically they all sounded like the same broken record playing over and over again. Are you seeing the pattern here, it wasn’t a run of ‘Bad Luck’ for me, any more than it was a run of ‘Bad Luck’ for anyone else who has experienced the same results. With MLM or Network marketing the deck is stacked against you.
It is my opinion that MLM or Network Marketing ‘Programs’ should never be considered or promoted as a business.
A common definition of a business is;
“A commercial activity engaged in as a means of livelihood or profit, or an entity which engages in such activities.”
Technically speaking, this may sound like a definition that might be applied to an MLM program, but what is not stated but rather inferred, is that there are people participating in this commercial activity as customers, the life blood of any business is ‘customers’, in other words, someone, hopefully many someone’s who are buying and consuming or using the product or service in which the ‘business’ is engaged.
Where do MLM’s and Network Marketing organizations miss the mark?
Let me start at my beginning with Amway. I was spending three nights a week, more if I could arrange it, drawing circles on a whiteboard, which by the way, Amway sold to me, and describing 3 x 3 matrix organizations to a largely disinterested, small, very small group of people. Actually, most of the time it was only one person, and I felt fortunate to have found one person who was interested enough to see my ‘napkin’ presentation. To my knowledge, Amway, was the first to ingeniously use the 3 x 3 matrix, in fact, maybe they invented it as well, if this isn’t true I stand corrected as I don’t know for sure. In my presentation, you of course, are the first circle, and you recruit 3 and each of those 3 recruit 3 and so on to infinity. Has anyone ever said to you, ‘You only need to recruit 3 people, certainly you know 3 people who want to earn extra money, don’t you’? Again, the first time I heard this was from my Amway sponsor, I believe this was also invented by Amway. What was missing from that presentation then and is still missing in MLM and Network Marketing companies of today; is the hundreds of little circles that should be surrounding each of the larger circles. Can you guess what those hundreds of missing little circles represent? If your answer was Customers! You are absolutely correct.
Customers, remember the life’s blood of any commercial enterprise. If your only customers are your fellow ‘business owners’ that you or your downline recruited, please explain to me, exactly how that ‘business’ is going to be sustained over the long haul. If only people in business with you are your customers, exactly how many customers are you going to have to recruit? What happens when one or two of your business associates decide to try something different. Since they are one and the same, your customer left you when you and your business associate parted ways, which depletes your customer base by a significant revenue share. Anyone is easily disillusioned when they are continually spending more money per month standing in for your missing customer, then they are realizing as revenue. They started a business because they expected to benefit financially, not to be your customer. Yes, every business owner should be a consumer of their own products, it just makes sense. How else can you explain the benefits of your products to your customer if you have not first experienced these supposed benefits, without personal experience it is only hearsay and advertising, and your customer can get that 25 to 30 times an hour from their favorite TV show.
So, in large part, MLM and Network Marketing ‘business’ fail because they lack the cornerstone of any commercial enterprise, that being, enough customers to sustain and allow the business to prosper. Put simply, no one is making money, except for the few fortunate people at the very top of the matrix, and if you look closely and have been around the industry long enough, it is usually the same individuals, known industry wide as ‘Heavy Hitters’ making the lions share of the money.
These ‘Heavy Hitters’ move from program to program and have a ‘following’ or ‘downline’ that largely moves from program to program when they move. They are usually greeted into the new program with a lot of fanfare and are almost instantly successful, moving up the ranks in days or weeks where someone else would most assuredly take months or even years to accomplish. This is largely due to the fact that many of their previous business associates follow them into the new business which gives them instant success and credibility. Everyone wants to recruit a ‘Heavy Hitter’. Even with this addition to any business, you still should be asking yourself, where are the customers? The ‘Heavy Hitter’ you just were fortunate enough to recruit, will move again and a large part of your income will disappear with them, and you will be left with no customers, again. Have you ever heard the very true and wise saying, ‘History repeats itself’, well, it most certainly does, you can count on it.
How depressing was that, you are now almost prepared to deal with the realities of MLM / Network Marketing, free of the hype spewed by the almost everyone on the other end of that email or telephone who want to offer you the opportunity to get in on the ground floor of their shinny new business opportunity. This brings me to the last point I want to cover. The ‘shinny new business opportunity, it comes with a 98% failure rate. The 98% was not a typo, I have been involved with more than one ground floor opportunity and they all ended in disaster. My last ground floor opportunity lasted almost two years, I thought I had a 2 percenter, I was on the verge of success, or so I thought, and than, suddenly, it went from full steam ahead to gone in less than a week. It always seems to happen fast and without warning. A shinny new business sounds like the right way to go, be the first on your block and all that, the trouble with a startup is the 98% factor. You can only hope it will last longer then the last shinny new business opportunity you joined, who knows, maybe this one is in the 2% category. Do you really want to roll those dice and just see what happens? The better idea is to minimize risk, cut down on the chance that the business you decided to do will go belly up in a month or a year, look for a business that has been around and successful for at least a five year period. Most business savvy entrepreneurs won’t even consider anything with less than a five year track record.
I finally got it, if I was really serious about being successful in my own home based business I had to get serious about what I did, how I did it and where I put my resources. I had to find a business that had been established for at least 5 years, one with a proven track record, one that was customer based and not just an organization of distributors buying products and collecting commissions from each other and last but not least, a business that was capable of replacing my six figure plus income. Quite the tall order, right? As if my requirements weren’t tough enough, I decided that this had to be my last attempt to build a successful home business. I was getting too close to the end of my career to risk much more capital chasing a dream. I had to find the right opportunity or retire from my pursuit of a successful home based business. I finally had the right formula now I had to find the right opportunity and it wasn’t going to be easy and maybe this opportunity didn’t even exist. My search criteria eliminated any shinny new business, no distributor based business and the remuneration had to lean to the extraordinary. Remember, it’s do or die time, no halfway measures and no half hearted attempts, there was no room for ‘Ok, I guess I will give this one a try.’ This had to be the real deal.
To read more of my journey and the answer to whether network marketing really works, look for my next blog.
Or call me on 856-264-7802 and we can swap stories and I can tell you the bottom line on whether it will actually work and what you can do to be successful.
Es
Es Riggins
856-264-7802
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