Author Topic: Why is Network Marketing so bad?  (Read 23842 times)

ASquared

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Why is Network Marketing so bad?
« on: December 25, 2014, 11:23:31 PM »
I have noticed there is a definite negative opinion on this board for network marketing/MLM/direct sales - whatever you want to call it. I am NOT referring to any type of pyramid scheme, but rather a reputable company that sells actual products.  Donald Trump and Robert Kiyosaki have been noted to say that they believe strongly in this as a way to financial independence, and have also suggested as a way to want to be retirees to close the gap with income/spending.

Again - I am NOT referring to any type of "screwing people over" situation, crazy $5k vacuum sales etc.

Interested in your feedback and opinions. I can definitely see this as a way for side income during working years and potential some passive income after FIRE. 
« Last Edit: January 13, 2019, 04:22:40 PM by ZsMom »

MikeBear

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Re: Why is Network Marketing so bad?
« Reply #1 on: December 25, 2014, 11:49:06 PM »
Oh, boy, they found a sucker, didn't they?


Name me ONE Network Marketing system in the last 40 years that doesn't involve screwing over at least ONE of your (now former) friends.

Anybody that's successful at any business that even comes close to any scheme such as this, would be successful as a salesman for ANYTHING legit, which many of these are NOT.

My suggestion is that IF it in any way involves recruiting people, stay away from it. If it involves parties and the like where you simply sell something, it might be fine, and could work out ok for you.
« Last Edit: December 25, 2014, 11:52:02 PM by MikeBear »

vern

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Re: Why is Network Marketing so bad?
« Reply #2 on: December 25, 2014, 11:56:37 PM »
Always be closing.

ASquared

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Re: Why is Network Marketing so bad?
« Reply #3 on: December 26, 2014, 12:02:39 AM »
Always be closing.

Sorry - you mean the companies close?

vern

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Re: Why is Network Marketing so bad?
« Reply #4 on: December 26, 2014, 12:09:56 AM »
No, it was a marketing joke.  Sorry for the confusion!





iamlindoro

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Re: Why is Network Marketing so bad?
« Reply #5 on: December 26, 2014, 12:23:05 AM »
I'll attempt to give a serious response, though I know these companies pour millions upon millions of dollars into coming up with flashy but ultimately empty counterarguments to some of what I will say.

First off, let me say that I consider neither Donald Trump nor Robert Kiyosaki to be particularly praiseworthy businesspeople.  Both are savvy in their way but both are plagued with controversy and trade more on their name than on any special business acumen.  These are not people you should aspire to emulate, unless the sole goal is to make fistfuls of money.  They both have a history of ethical breaches, shady dealings, and failing spectacularly.  Both trade on former success and I will bet a shiny nickel that the article you linked, clearly from a MLM publication, was generated after both were cut a nice fat check for the use of their names.

Secondly, the problem I have with most of the modern forms of these companies is that they rely on people to mine their relations and close friends and capitalize on personal relationships to pressure friends into sales and, even worse, into becoming salespeople themselves.  Most sell products of questionable value.  You have either:

* Trinkets (jewelry, clothing, etc.) of low quality and high price.
* "Medicalish" products which operate in a gray area where their claims are limited enough that they can claim "FDA approval" or "CE Mark" because they carefully avoid concrete promises and rely on subjective evaluation of results (The classic "frowny/bad lighting" before pic and the "smiling/makeup/well lit" after pic). I used to work in the medical device field and FDA/CE approval essentially come down to "do what you promise you do" and "don't hurt anyone."  These products use language designed to provoke an emotional response, often in those with image issues, without specifically promising to address their problem in any concrete way.
* Products which are available through the mass market, but either marked up, repackaged, or subcontracted to reduce costs and increase profits (communications services, etc) at the expense of the customer.

If you know the signs to look for in these businesses, it's easy to spot the way they skate the line between legitimate and snake oil.  If these products were of high quality, were a real value, and were genuinely something people needed, they would not require people to pressure their friends into purchases, "hosting parties," etc.
« Last Edit: December 26, 2014, 12:27:57 AM by iamlindoro »

iamlindoro

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Re: Why is Network Marketing so bad?
« Reply #6 on: December 26, 2014, 12:31:03 AM »
Just to add to my earlier point re: Trump and Kiyosaki:

http://en.wikipedia.org/wiki/Robert_Kiyosaki#Controversy

(The age-old "come to my free seminar" where they spend the entire time telling you to "pay $500 for my three day seminar" which of course consists only of "you really need to pay $45,000 for my complete seminar")

And

http://en.wikipedia.org/wiki/Donald_Trump#Other_controversies

(Trump also does the "seminar" scam and is basically a huge fraudster in many, many ways).

These are bad people.  Do not emulate them.

ASquared

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Re: Why is Network Marketing so bad?
« Reply #7 on: December 26, 2014, 12:36:17 AM »
Thanks for the reply.

We are on a good financial path. No debt besides mortgage, and while I would always love to save more and decrease expenses more, we have been able to max out a 401k, Roth x2, ESA and contribute to a 529 and throw some extra in a Betterment account. I'm happy with this. A few months ago I started doing the business end of a product we use and love. No "recruitment requirements", no high pressure anything, etc. It's a casual, fun thing. And it's been giving us $500-1000/mo with little effort.

I guess my question is - from a financial perspective why such a negative rap?  Seems like a decent way to save/invest more or for already FIRE individuals to have a little side income.  I would never want anyone to purchase something to "benefit me" and tell people this all the time. Actually have very few family members that are using this, mostly friends and friends of friends, work acquaintances.  The feedback on the product is amazing - I have zero concerns of anyone being a "former friend" as mentioned (though good consideration in general for this type of thing).   
« Last Edit: January 13, 2019, 04:23:21 PM by ZsMom »

iamlindoro

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Re: Why is Network Marketing so bad?
« Reply #8 on: December 26, 2014, 12:43:43 AM »
I guess my question is - from a financial perspective why such a negative rap?

Because some things, like integrity, are not worth any amount of money.

Some people might tell you that if you see value in the product, that that's great and that you should use it.  I am not among them.  As I said above, if these products were legitimate, then they would sell themselves and not require "independent consultants" to huck them.  These products (It seems you're probably talking about a beauty or "medicalish" product) fall into one of two categories-- snake oil that relies on the placebo effect, or widely available commonly used items repackaged with flashy marketing (such as Proactiv, which contains the same exact ingredients as any acne medication found at CVS).

I think that MLM gets a bad rap in our community because there is an undercurrent of social justice here too.  I think that fundamentally, most of us think that selling a wildly overpriced or ineffective product is not worth the tradeoff in self respect.  I can tell that this is something I might have a hard time convincing you of if you already strongly believe in the product.  If you want to share the product, I suspect we could do a pretty thorough dissection of what makes it shady.

Just curious, if you weren't suggesting that Trump and Kisosaki's opinions on the topic were of value, then why mention them at all in the original post?  Why is it relevant that they approve of schemes like this if we agree that they are shady and unethical businesspeople?  If anything, shouldn't their endorsement of MLM, in light of their shady (and criminal) business practices, be a strong argument against MLM?
« Last Edit: December 26, 2014, 12:47:23 AM by iamlindoro »

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Re: Why is Network Marketing so bad?
« Reply #9 on: December 26, 2014, 01:14:02 AM »
Here is my personal way of evaluating MLM, and I have yet to find one that passes this test. Look at the product objectively and see if the product is really necessary and if you can really make money by just selling the product? If  you can't make money by just selling the product than it means you have to convince more people to sign up. This makes the product secondary, as all the emphasis is put on signing up other people and no one is actually selling the product they are just paying money to be able to sign other people up. Of course some product is sold because the people are required to buy the product when the sign up to sell it but in reality they are just buying the opportunity to sign more people up and don't really need the product.

Buying an unnecessary product at inflated price just so you can encourage others to do the same thing is just about as Anti-Mustachian as you can get.

Most MLM'ers have gone through several different programs/products and are always trying to find the one that will make them hit it big. This just goes to show that it isn't really the product that matters but the dream that they can make it rich by just signing up 10 people who sign up 10 people who sign up 10 people.

Overseas Stache

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Re: Why is Network Marketing so bad?
« Reply #10 on: December 26, 2014, 02:08:18 AM »
I guess my question is - from a financial perspective why such a negative rap?

.  If you want to share the product, I suspect we could do a pretty thorough dissection of what makes it shady.


Her product is "Young Living Essential Oil"

MikeBear

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Re: Why is Network Marketing so bad?
« Reply #11 on: December 26, 2014, 02:53:29 AM »
I guess my question is - from a financial perspective why such a negative rap?

.  If you want to share the product, I suspect we could do a pretty thorough dissection of what makes it shady.


Her product is "Young Living Essential Oil"

If that's true, then: http://www.fda.gov/ICECI/EnforcementActions/WarningLetters/2014/ucm416023.htm

Overseas Stache

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Re: Why is Network Marketing so bad?
« Reply #12 on: December 26, 2014, 04:24:59 AM »
I guess my question is - from a financial perspective why such a negative rap?

.  If you want to share the product, I suspect we could do a pretty thorough dissection of what makes it shady.


Her product is "Young Living Essential Oil"

If that's true, then: http://www.fda.gov/ICECI/EnforcementActions/WarningLetters/2014/ucm416023.htm

To be fair, just because a couple of people (not the manufacture) claim  the stuff can do things it obviously can't do (Cure Ebola), it doesn't mean the product is bad. That being said I don't think I would buy a bottle of 250 drops for $40 for some "Thieves oil".

MikeBear

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Re: Why is Network Marketing so bad?
« Reply #13 on: December 26, 2014, 02:14:03 PM »
I guess my question is - from a financial perspective why such a negative rap?

.  If you want to share the product, I suspect we could do a pretty thorough dissection of what makes it shady.


Her product is "Young Living Essential Oil"

If that's true, then: http://www.fda.gov/ICECI/EnforcementActions/WarningLetters/2014/ucm416023.htm

To be fair, just because a couple of people (not the manufacture) claim  the stuff can do things it obviously can't do (Cure Ebola), it doesn't mean the product is bad. That being said I don't think I would buy a bottle of 250 drops for $40 for some "Thieves oil".

At least they gave it an appropriate name! Somebody must have a sense of humor, or is that irony? lol.

herbgeek

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Re: Why is Network Marketing so bad?
« Reply #14 on: December 26, 2014, 03:34:07 PM »
"Thieves oil" is available from other reputable companies (like Frontier) for about 25% of the mentioned cost.   This particular direct marketing scheme also advocates unsafe practices like internal consumption and undiluted skin applications.

clarkfan1979

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Re: Why is Network Marketing so bad?
« Reply #15 on: December 26, 2014, 06:31:25 PM »
I made some money selling Excel long distance phone minutes in 1998 at the age of 19. The plan was .08 or .10 cents a minute and the current market was higher .15 cents? It was an easy sell. I signed up 30 people and a few businesses and got a check for $1500 or maybe $2000, I can't remember. I don't remember screwing anyone. 

iamlindoro

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Re: Why is Network Marketing so bad?
« Reply #16 on: December 26, 2014, 06:59:44 PM »
I made some money selling Excel long distance phone minutes in 1998 at the age of 19. The plan was .08 or .10 cents a minute and the current market was higher .15 cents? It was an easy sell. I signed up 30 people and a few businesses and got a check for $1500 or maybe $2000, I can't remember. I don't remember screwing anyone.

Know that I am not accusing you personally of anything- I think most people involved at the lowest levels in these schemes don't mean anyone any harm.  It's the companies/business models I have a problem with.  They are built on a premise that sounds plausible but is meant to take advantage of their "consultants" just as much as their customers (who are generally in whole or in part the same people).

http://excel-telecommunications.pissedconsumer.com/
http://www.fundinguniverse.com/company-histories/excel-communications-inc-history/
http://www.mombu.com/culture/puerto-rico/t-the-excel-vartec-long-distance-mlm-pyramid-scam-3784111.html
« Last Edit: December 26, 2014, 07:01:54 PM by iamlindoro »

iamlindoro

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Re: Why is Network Marketing so bad?
« Reply #17 on: December 26, 2014, 07:11:26 PM »
Yes Young Living oils. Our family uses and loves. Yes totally - they are expensive. But they work better than anything else - trust me I tried repeatedly with every store brand out there, Mountain Rose Herbs, Frontier, Aura Cacia etc. I really wanted to find something less expensive to use.  I got hooked because they really help my daughter sleep better and night and for naps as needed (use in a diffuser, nothing internal). Then we started making products at home and replacing many of our personal care, beauty, cleaning products. I am not the slightest bit concerned about the cost, because the cost of all the things we don't buy now is huge. Allergy meds. Variety of skin care products. To be honest, we haven't used an OTC or prescription product for >1 year, for myself, my husband and our toddler. So fine - expensive, many people think they're no different, whatever. It's working for us and I'm happy with it.

We can indeed disagree respectfully, so I'll offer a respectful counterpoint here.  These are, to me, the most dangerous sorts of MLM products available, because of exactly this kind of belief.  The health of our loved ones invokes some very strong emotions and instincts in people.  Who wouldn't want their family to be happy and healthy, and to see their ailments cured and hardships eased?  How does one tell a desperate mother or father that the treatment they want so desperately to see work is a scam?  The trouble is that these things are marketed informally as a replacement for medicine when they are not medicine.

I don't say that lightly.  I believe that there are many scientific discoveries still to be discovered, and allow for the possibility that some MLM product somewhere might be able to make good on its claims.  However, the difference between science and pseudoscience-- and medicine and snake oil-- is that actual pharmaceutical's efficacy is *objectively* provable in a clinical environment.  That is, the treatment can be administered, and the effect recorded, using quantifiable means.  Oils, potions, and juices all occupy the space where the efficacy is measured entirely by *subjective* means.  The person experiencing or hoping for the effect is the one measuring the efficacy.  This is a dangerous and unreliable measure.

These companies exist because there is a narrow loophole in our laws that allows them to make no claims, or nonspecific claims, and avoid having to prove efficacy.  By remaining elusive in making claims, they avoid entering an approval process wherein they will be forced to *objectively* prove the effectiveness of their product by a yardstick that they themselves did not invent.  Ask yourself this-- if these companies truly believe in their products, what do they have to fear in seeking objective verification of claims relating to specific ailments, and specific effects?  These companies often generate pseudo-clinical sounding "studies" that are meant to answer this kind of question-- but in every case they are sponsorships, non peer reviewed, and otherwise subjective (or worse, fabricated) in every way.

Dangerous stuff.
« Last Edit: December 26, 2014, 07:16:55 PM by iamlindoro »

hodedofome

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Why is Network Marketing so bad?
« Reply #18 on: December 26, 2014, 08:08:36 PM »
My wife got into Jamberry last year and made almost $70k her first year. Truly incredible. She knows a few girls that are making $50-$100k a month. She works her tail off however, it has not been easy.

I was ok with her signing up because it's only $100, so there's not a huge up front cost. You can make part time income by selling the product yourself through Facebook parties or house parties/events/word of mouth, or you can build a team and make full time income. She and her friends are having a lot of fun with it because the products are girlie and they are learning to run a legitimate business.

As far as Jamberry goes, it's not a health product and it falls into more of discretionary spending. Although it is more expensive than what you find in stores, it's cheaper than getting your nails done and they are higher quality than the stuff in Walmart. Sure it can be sold directly (and it is), but you really need to know the tricks to get the nail wraps to stay on for a while. This is where a local/personal consultant has real value. It's not difficult but you really do see better results when you have an experienced girl show someone the proper application.

I sold Advocare in college and realized I suck at sales and MLM just didn't fit my personality. I might have made $20.

Essential Oils...my wife and her friends just got into that. I think it's ridiculous but some women swear by them. They are completely convinced it works. I think it's mostly placebo effect along with individualized real results. Meaning it may actually work for someone because of their biological makeup but it won't necessarily work for everyone. That's just my opinion. I won't allow my wife to spend anything but her fun money on it however.

Norwex or however you call it doesn't seem to be so bad, they are cleaning pads that don't require any chemicals. I don't know if there are cheaper alternatives however.

There's some real snake oil out there in MLM for sure.

As far as MLM in general, I don't see it as evil. There are real benefits in structuring a company this way. You save on marketing because you don't have to hire a huge sales force. You have thousands of evangelists out there selling your product. You have to charge more for the product as the consultant needs to get their cut, but you don't have a large up front cost of getting your product into thousands of stores.

In a way it's not much different than my business. We are a reseller of accounting software. There's no way the software manufacturer could spend the money to build up a direct sales force as well as implementation teams all over the country. So they pay us a decent margin to sell and implement and support their product. Much less up front costs for them. And you would never be able to get the productivity that we provide from a regular employee. Only a real entrepreneur would work as hard as we do. We are playing a big part in getting small to medium sized businesses into an ERP system that they could never figure out on their own, nor could they spare the expense for having their in own in house team to do it. They've outgrown quickbooks but can't afford SAP, so the mid market is dependent on middle guys like us. We provide real value to the general economy by making businesses more efficient. I don't see the MLM structure as much different, and not all the companies are snake oil.
« Last Edit: December 26, 2014, 08:19:44 PM by hodedofome »

franklin w. dixon

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Re: Why is Network Marketing so bad?
« Reply #19 on: December 26, 2014, 08:42:54 PM »
Thanks for the replies. I was prepared to take a beating here haha:)

Yes Young Living oils. Our family uses and loves. Yes totally - they are expensive. But they work better than anything else - trust me I tried repeatedly with every store brand out there, Mountain Rose Herbs, Frontier, Aura Cacia etc. I really wanted to find something less expensive to use.  I got hooked because they really help my daughter sleep better and night and for naps as needed (use in a diffuser, nothing internal). Then we started making products at home and replacing many of our personal care, beauty, cleaning products. I am not the slightest bit concerned about the cost, because the cost of all the things we don't buy now is huge. Allergy meds. Variety of skin care products. To be honest, we haven't used an OTC or prescription product for >1 year, for myself, my husband and our toddler. So fine - expensive, many people think they're no different, whatever. It's working for us and I'm happy with it.

I "fell into" the business end of it when several friends wanted to start using the same things we have, with ZERO prompting etc from me.  I was really really reluctant to do so, mostly because of the negative connotation with network marketing companies. But then I hear the other side - that every product has some sort of compensation chain, that companies can do direct sales rather than advertising, etc and wonder if it's really all "awful" like people make it out to be. And again, definite negative opinion on this forum, which I am well aware - and this is why I asked the question.

No hate, disrespect etc necessary. We can all peacefully disagree here!
I fed my babey Official Franklin Doubleyou Dixon Brand(tm) (patent pending) tap water and now she's gigantic! Please send me nine hundred dollars and I will tell you the secret! I'm a legitimate business!! My huge beautiful baby is all the proof I or you require!

franklin w. dixon

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Re: Why is Network Marketing so bad?
« Reply #20 on: December 26, 2014, 08:46:01 PM »
Didn't believe me? Here's a picture of my huge beautiful baby aside a quisling tiny baby fed regular water or worse! That itty bitty weakling baby will probably die or become a loose woman! DO NOT RISK YOUR BABY ANY LONGER. Buy Franklin Doubleyou Dixon Brand (tm) (patent pending) tap water today, to prove that you love your baby and are a good parent! I'm judging you right now!!


franklin w. dixon

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Re: Why is Network Marketing so bad?
« Reply #21 on: December 26, 2014, 08:49:44 PM »
Is there any limit to how huge and beautiful your baby can become with Franklin Doubleyou Dixon Brand (tm) (patent pending) tap water? Once skeptics claimed no human could live at the height of the Eiffel Tower but today men dance on the surface of the sun! If you have faith and know the power of love then NOTHING is impossible! How HUGE and BEAUTIFUL will YOUR baby be??

swiper

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Re: Why is Network Marketing so bad?
« Reply #22 on: December 26, 2014, 09:43:05 PM »
Shut up and take my money!

ASquared

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Re: Why is Network Marketing so bad?
« Reply #23 on: December 26, 2014, 10:21:55 PM »
My wife got into Jamberry last year and made almost $70k her first year. Truly incredible. She knows a few girls that are making $50-$100k a month. She works her tail off however, it has not been easy.

I was ok with her signing up because it's only $100, so there's not a huge up front cost. You can make part time income by selling the product yourself through Facebook parties or house parties/events/word of mouth, or you can build a team and make full time income. She and her friends are having a lot of fun with it because the products are girlie and they are learning to run a legitimate business.

As far as Jamberry goes, it's not a health product and it falls into more of discretionary spending. Although it is more expensive than what you find in stores, it's cheaper than getting your nails done and they are higher quality than the stuff in Walmart. Sure it can be sold directly (and it is), but you really need to know the tricks to get the nail wraps to stay on for a while. This is where a local/personal consultant has real value. It's not difficult but you really do see better results when you have an experienced girl show someone the proper application.

I sold Advocare in college and realized I suck at sales and MLM just didn't fit my personality. I might have made $20.

Essential Oils...my wife and her friends just got into that. I think it's ridiculous but some women swear by them. They are completely convinced it works. I think it's mostly placebo effect along with individualized real results. Meaning it may actually work for someone because of their biological makeup but it won't necessarily work for everyone. That's just my opinion. I won't allow my wife to spend anything but her fun money on it however.

Norwex or however you call it doesn't seem to be so bad, they are cleaning pads that don't require any chemicals. I don't know if there are cheaper alternatives however.

There's some real snake oil out there in MLM for sure.

As far as MLM in general, I don't see it as evil. There are real benefits in structuring a company this way. You save on marketing because you don't have to hire a huge sales force. You have thousands of evangelists out there selling your product. You have to charge more for the product as the consultant needs to get their cut, but you don't have a large up front cost of getting your product into thousands of stores.

In a way it's not much different than my business. We are a reseller of accounting software. There's no way the software manufacturer could spend the money to build up a direct sales force as well as implementation teams all over the country. So they pay us a decent margin to sell and implement and support their product. Much less up front costs for them. And you would never be able to get the productivity that we provide from a regular employee. Only a real entrepreneur would work as hard as we do. We are playing a big part in getting small to medium sized businesses into an ERP system that they could never figure out on their own, nor could they spare the expense for having their in own in house team to do it. They've outgrown quickbooks but can't afford SAP, so the mid market is dependent on middle guys like us. We provide real value to the general economy by making businesses more efficient. I don't see the MLM structure as much different, and not all the companies are snake oil.

Thanks for the reply. Yes familiar with Jamberry and know some people into this. Personally it's something I would never use so don't see the value - but it is my understanding that it's a reputable "company". I think it's great your wife is doing so well - obviously helps with your financial goals and sounds like it is fun for her. I have some friends that sell Young Living that are making insane amounts of money as well. It is crazy, and I don't expect to ever do that. Interesting for sure. Younique (makeup) is another company with a similar story, a friend of mine is doing >1 million per year (income to her).

ichangedmyname

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Re: Why is Network Marketing so bad?
« Reply #24 on: December 27, 2014, 12:48:37 AM »
When the pitch is about how much money you can earn by "building your network" instead of how good a product is, I become wary.

hodedofome

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Re: Why is Network Marketing so bad?
« Reply #25 on: December 27, 2014, 01:44:05 AM »

When the pitch is about how much money you can earn by "building your network" instead of how good a product is, I become wary.

That could be said by any business people get into, not just MLM. Most people start a business to make money, not because they love the product so much they just feel the need to make it or sell it. Obviously, if the product isn't very good, we would hope the business wouldn't do well, but that's not always the case.

maricela

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Re: Why is Network Marketing so bad?
« Reply #26 on: December 27, 2014, 12:09:14 PM »
The biggest problem I see is the starting audience is always your friends and it's annoying and high pressure. Then there is the quack product issue.

Shade00

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Re: Why is Network Marketing so bad?
« Reply #27 on: December 27, 2014, 12:56:45 PM »
Aside from the fact that you will likely kill relationships with MLM sales, or I guess they are tactically calling it "network marketing" now, many of these schemes call for significant upfront investments in the form of very expensive startup kits. It is designed to get the easy money in the door and up the chain early, so the low hanging fruit are left chasing friends to recoup their own startup costs. These schemes, including Mary Kay and other well-known brands, are almost never profitable for the people at the bottom.

Indexer

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Re: Why is Network Marketing so bad?
« Reply #28 on: December 27, 2014, 01:24:00 PM »
If the product is so good why don't they just hire people to sell it?  You know, experienced trained sales people?  At best they just don't want to give their sales people benefits.  At worst they couldn't make money only selling the product. 

Why hasn't Walmart come in and made an offer to buy a few million units.... thus putting all the freelancer sales people out of business.

These companies aren't selling a product to consumers.  They are selling a dream to dreamers.  Sure some people who buy the dream are equally good at reselling it and make a ton.  Most aren't so good at that.

Jags4186

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Re: Why is Network Marketing so bad?
« Reply #29 on: December 27, 2014, 01:45:18 PM »
My wife got into Jamberry last year and made almost $70k her first year. Truly incredible. She knows a few girls that are making $50-$100k a month. She works her tail off however, it has not been easy.

I was ok with her signing up because it's only $100, so there's not a huge up front cost. You can make part time income by selling the product yourself through Facebook parties or house parties/events/word of mouth, or you can build a team and make full time income. She and her friends are having a lot of fun with it because the products are girlie and they are learning to run a legitimate business.

As far as Jamberry goes, it's not a health product and it falls into more of discretionary spending. Although it is more expensive than what you find in stores, it's cheaper than getting your nails done and they are higher quality than the stuff in Walmart. Sure it can be sold directly (and it is), but you really need to know the tricks to get the nail wraps to stay on for a while. This is where a local/personal consultant has real value. It's not difficult but you really do see better results when you have an experienced girl show someone the proper application.

I sold Advocare in college and realized I suck at sales and MLM just didn't fit my personality. I might have made $20.

Essential Oils...my wife and her friends just got into that. I think it's ridiculous but some women swear by them. They are completely convinced it works. I think it's mostly placebo effect along with individualized real results. Meaning it may actually work for someone because of their biological makeup but it won't necessarily work for everyone. That's just my opinion. I won't allow my wife to spend anything but her fun money on it however.

Norwex or however you call it doesn't seem to be so bad, they are cleaning pads that don't require any chemicals. I don't know if there are cheaper alternatives however.

There's some real snake oil out there in MLM for sure.

As far as MLM in general, I don't see it as evil. There are real benefits in structuring a company this way. You save on marketing because you don't have to hire a huge sales force. You have thousands of evangelists out there selling your product. You have to charge more for the product as the consultant needs to get their cut, but you don't have a large up front cost of getting your product into thousands of stores.

In a way it's not much different than my business. We are a reseller of accounting software. There's no way the software manufacturer could spend the money to build up a direct sales force as well as implementation teams all over the country. So they pay us a decent margin to sell and implement and support their product. Much less up front costs for them. And you would never be able to get the productivity that we provide from a regular employee. Only a real entrepreneur would work as hard as we do. We are playing a big part in getting small to medium sized businesses into an ERP system that they could never figure out on their own, nor could they spare the expense for having their in own in house team to do it. They've outgrown quickbooks but can't afford SAP, so the mid market is dependent on middle guys like us. We provide real value to the general economy by making businesses more efficient. I don't see the MLM structure as much different, and not all the companies are snake oil.

Thanks for the reply. Yes familiar with Jamberry and know some people into this. Personally it's something I would never use so don't see the value - but it is my understanding that it's a reputable "company". I think it's great your wife is doing so well - obviously helps with your financial goals and sounds like it is fun for her. I have some friends that sell Young Living that are making insane amounts of money as well. It is crazy, and I don't expect to ever do that. Interesting for sure. Younique (makeup) is another company with a similar story, a friend of mine is doing >1 million per year (income to her).

I am incredibly dubious of anyone who claims to make or claims to know someone that makes $100k+ a month selling this garbage.  ZsMom you sound like you are about to drop your referral sign up link anytime soon.

I went to one MLM "introduction" meeting as a favor to a not so bright, but nice, coworker who was doing ACN and needed to bring people to the meetings.  It's painfully obvious that there are only 2 types of people who partake in these types of things.  Shysters and unintelligent/gullible people.  The shysters are always standing up in front of the room in cheap suits touting great success stories and the dopes are always the ones in the seats saying "amen".  No thank you.

hodedofome

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Re: Why is Network Marketing so bad?
« Reply #30 on: December 27, 2014, 01:54:18 PM »
My wife got into Jamberry last year and made almost $70k her first year. Truly incredible. She knows a few girls that are making $50-$100k a month. She works her tail off however, it has not been easy.

I was ok with her signing up because it's only $100, so there's not a huge up front cost. You can make part time income by selling the product yourself through Facebook parties or house parties/events/word of mouth, or you can build a team and make full time income. She and her friends are having a lot of fun with it because the products are girlie and they are learning to run a legitimate business.

As far as Jamberry goes, it's not a health product and it falls into more of discretionary spending. Although it is more expensive than what you find in stores, it's cheaper than getting your nails done and they are higher quality than the stuff in Walmart. Sure it can be sold directly (and it is), but you really need to know the tricks to get the nail wraps to stay on for a while. This is where a local/personal consultant has real value. It's not difficult but you really do see better results when you have an experienced girl show someone the proper application.

I sold Advocare in college and realized I suck at sales and MLM just didn't fit my personality. I might have made $20.

Essential Oils...my wife and her friends just got into that. I think it's ridiculous but some women swear by them. They are completely convinced it works. I think it's mostly placebo effect along with individualized real results. Meaning it may actually work for someone because of their biological makeup but it won't necessarily work for everyone. That's just my opinion. I won't allow my wife to spend anything but her fun money on it however.

Norwex or however you call it doesn't seem to be so bad, they are cleaning pads that don't require any chemicals. I don't know if there are cheaper alternatives however.

There's some real snake oil out there in MLM for sure.

As far as MLM in general, I don't see it as evil. There are real benefits in structuring a company this way. You save on marketing because you don't have to hire a huge sales force. You have thousands of evangelists out there selling your product. You have to charge more for the product as the consultant needs to get their cut, but you don't have a large up front cost of getting your product into thousands of stores.

In a way it's not much different than my business. We are a reseller of accounting software. There's no way the software manufacturer could spend the money to build up a direct sales force as well as implementation teams all over the country. So they pay us a decent margin to sell and implement and support their product. Much less up front costs for them. And you would never be able to get the productivity that we provide from a regular employee. Only a real entrepreneur would work as hard as we do. We are playing a big part in getting small to medium sized businesses into an ERP system that they could never figure out on their own, nor could they spare the expense for having their in own in house team to do it. They've outgrown quickbooks but can't afford SAP, so the mid market is dependent on middle guys like us. We provide real value to the general economy by making businesses more efficient. I don't see the MLM structure as much different, and not all the companies are snake oil.

Thanks for the reply. Yes familiar with Jamberry and know some people into this. Personally it's something I would never use so don't see the value - but it is my understanding that it's a reputable "company". I think it's great your wife is doing so well - obviously helps with your financial goals and sounds like it is fun for her. I have some friends that sell Young Living that are making insane amounts of money as well. It is crazy, and I don't expect to ever do that. Interesting for sure. Younique (makeup) is another company with a similar story, a friend of mine is doing >1 million per year (income to her).

I am incredibly dubious of anyone who claims to make or claims to know someone that makes $100k+ a month selling this garbage.  ZsMom you sound like you are about to drop your referral sign up link anytime soon.

I went to one MLM "introduction" meeting as a favor to a not so bright, but nice, coworker who was doing ACN and needed to bring people to the meetings.  It's painfully obvious that there are only 2 types of people who partake in these types of things.  Shysters and unintelligent/gullible people.  The shysters are always standing up in front of the room in cheap suits touting great success stories and the dopes are always the ones in the seats saying "amen".  No thank you.
I'm certainly not trying to change anyone's mind here. If you believe that there's nothing I'm gonna do to change that. But I've seen what my wife does, her best friend who is her 'sponser' did $23k last month, and a few girls they know really well in the business have been doing $50-$100k a month. I'm not lying to you but you can choose to believe whatever you want.

arebelspy

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Re: Why is Network Marketing so bad?
« Reply #31 on: December 27, 2014, 03:16:42 PM »
I guess my question is - from a financial perspective why such a negative rap?

Because some things, like integrity, are not worth any amount of money.

I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

10dollarsatatime

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Re: Why is Network Marketing so bad?
« Reply #32 on: December 27, 2014, 06:45:46 PM »
I've participated in a couple of MLMs...  I sold Modbe and Avon.  Pretty much for the discount.  It's the same reason I worked at BigLots for two months.  I never made much money, but I'm not a salesperson, and beyond letting people know I was doing it, never tried to sell to my friends/family.  I did sell to random strangers who saw my business cards and my craigslist ads, and some that my family sent to me.  I don't consider myself gullible or a shyster.  I honestly liked the products.  The people I sold to liked the products.  And I liked the extra couple of hundred dollars a month for not very much work.

My mom has sold both 'Close to my Heart' and 'Stampin' Up'.  Mostly for the discount.  And she was already hosting paid 'card parties' and figured it wouldn't hurt to have a couple of catalogs around.  She did pretty good, but quit because she loved the product enough that she was spending as much, if not more, than she was making.  She still does card parties, though.

So... I think you need to add to your list... *Gullible *shyster *actually likes the products and would like a discount and if anyone is interested in buying from me, that's great.

On the other hand, I live and work in the MLM capital of the US.  I turn down at least one invite to an MLM party every week.  I have been a technician for more MLM conventions than I want to admit.  The Nuskin Headquarters are just down the street from my Arts Center.  I've been asked, while working a breakout session at a convention, why I wasn't selling the product.  I've shaken hands with a lot of greasy salesperson higher ups who are there for the money.

I'm also acquainted with a very sweet lady who started selling MaryKay about 10 years ago who drives that coveted ugly pink Cadillac that they give their top performers.  I've been to one of her makeover parties.  She isn't pushy.  Beyond mentioning that reps get a 50% discount and anyone who is interested can come chat with her, she doesn't push the selling bit.  She's just good at what she does.  And she's selling a product that already has a pretty loyal following.

What I'm saying is... those pushy, money-grubbing, greasy higher ups are the reason the MLMs have a bad rep.  That, and some MLMs are really just selling snake oil.  If you can sell a good product without becoming a parasite, more power to you.

(Also... I've met the owners of Young Living.  A sweeter old couple you will never meet.  They believe in their product.  They work alongside their employees.  And they're generous with their employees.  Not that an essential oils company will ever have need of a lighting designer/full time event production specialist, but if they did, I wouldn't mind working for those people.)

Cpa Cat

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Re: Why is Network Marketing so bad?
« Reply #33 on: December 27, 2014, 08:20:32 PM »
I don't think they're all bad... but some of them are and some people are.

I've known more than a few women who did one of these Network Marketing products simply because they liked the product. Most were able to basically cover their own expense and maybe make a tiny bit of money without any high-pressure tactics or friend alienation - just by using local advertising, "trade" fairs, word of mouth, etc. I have attended a couple of parties and enjoyed some of the products that I've bought. I bought a couple of purses from one (Bag Daddy) that I liked and were of suitable quality for the price and I like a product that I bought as a result of a Pure Romance party so much that I still regularly buy it, years later.

The Pure Romance lady said that she quit her day job because of the demand for her parties - and I believe it - the party was successful and fun, and certainly there appears to be individual repeat business. She never harassed me, spammed me, upsold me, asked me to host a party - nothing.

On the other hand, I've known some that were alienating. The Cutco knives have to be some of the worst - they lure people in with a "job posting" and have you come in for an interview - then they make you buy knives and encourage you to sell to your friends/family with high-pressure sales tactics. They also ask you to provide a list of names of potential knife sellers. I had a family member get involved in this and agreed to let him "practice his sales pitch" (a tactic the Cutco people teach the salesperson) and found the whole thing to be a  betrayal of trust.

Amway is predatory - my personal favorite is where a pastor at a friend's church got involved with Amway and recruited his entire congregation to be part of his down line. Totally manipulative. Only one person made money in that church. 

And on the "Why don't you people go away" end of things - I had to block a friend on Facebook due to the spammy and ridiculous Jamberry nails sales efforts. And I find it incredibly distasteful that I'm constantly being invited to jewelry parties at work because one of our office managers sells some manner of tacky MLM jewelry.

The problem is that people are far more likely to have a negative experience with MLM than a positive one. The positive sellers are pretty quiet about it and the negative ones are very loud. You know the saying "one bad apple spoils the bunch" - in the case of MLM, it's a bucket full of bad apples and somewhere in there is one good one.

shuffler

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Re: Why is Network Marketing so bad?
« Reply #34 on: December 28, 2014, 12:06:26 AM »
I have no experience with Young Living (neither the company nor their products), but I can google ...

These companies are required to publish stats about their distributors compensation, which is publicly available.
Here's Young Living's income disclosure:
  http://youngliving.cdn.cymbeo.com/f/69rwmp3g/503c69wh74kg/YL_incomedisclosure_0414_v2_mh_FINAL.pdf

The break-down table they give only represents the top 8% of their earners.  92% of their members are "Distributor" ranked, and they earn $1/mo on average.

The next rank is "Star", and it's the first rank included in the table.  When the table says that "Star" ranked members comprise 62.2% of the table, it's really 0.622 * 0.08 = ~5% of the overall population of members.  Note that the Star-ranked members are making significantly less than minimum wage.  The work an average of 5 hrs/wk, and receive an average of $876 in yearly compensation.  So $876 / (5 hr/wk * 52 wks/yr) = $3.37/hr.

The next rank is "Senior Star", who make $8.60/hr, and who comprise 0.208 * 0.08 = 1.7% of the overall population of members.

So the vast majority of their members make basically zero income.
And 98.7% of their members (92% Distributors, 5% Stars, 1.7% Senior-Stars) make at most a minimum-wage-level income.

There are definitely people making 100K/mo, at Young Living, Younique, and Jamberry, I'm sure there are others.
Yes.  There is a row for $100k/mo income.  It represents less than 8% * 0.1% = 0.08% of their active member population.
That's less than one-in-1,250 members.  It's probably worse than that since the "less than 0.1%" that they report isn't very precise.

I think the conclusion that can be drawn that this is not a good money-making venture.
I agree with their disclosure when it says:
   ... some wish to discover a sense of purpose and independence, while still others simply want to enjoy
wholesale access to superior products.

There may be a multitude of personal reasons to join, but the likelihood of a decent income doesn't seem to be one of them.

Indexer

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Re: Why is Network Marketing so bad?
« Reply #35 on: December 28, 2014, 09:32:57 AM »
Thank you Shuffler!

That is an amazing breakdown.  I wish everyone who ever thought about doing one of these things was required to read your post first!

BlueHouse

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Re: Why is Network Marketing so bad?
« Reply #36 on: December 28, 2014, 06:45:55 PM »
I'm certainly not trying to change anyone's mind here. If you believe that there's nothing I'm gonna do to change that. But I've seen what my wife does, her best friend who is her 'sponser' did $23k last month, and a few girls they know really well in the business have been doing $50-$100k a month. I'm not lying to you but you can choose to believe whatever you want.

Would you mind elaborating on the "doing" 50K-100K a month?  Is that total sales revenue?  Is this income after expenses?  I assume they also have to pay for the cost of goods sold?  Are the salespeople considered self-employed and are they paying self-employment taxes on that or is this net income? 
Thanks for the info.

hodedofome

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Re: Why is Network Marketing so bad?
« Reply #37 on: December 28, 2014, 07:01:33 PM »
I'm certainly not trying to change anyone's mind here. If you believe that there's nothing I'm gonna do to change that. But I've seen what my wife does, her best friend who is her 'sponser' did $23k last month, and a few girls they know really well in the business have been doing $50-$100k a month. I'm not lying to you but you can choose to believe whatever you want.

Would you mind elaborating on the "doing" 50K-100K a month?  Is that total sales revenue?  Is this income after expenses?  I assume they also have to pay for the cost of goods sold?  Are the salespeople considered self-employed and are they paying self-employment taxes on that or is this net income? 
Thanks for the info.
This is the commission check from your down line sales. The girls making $100k a month probably have down line total sales of well over $1 million a month. My wife has about 1k girls under her now and her down line sales are almost $200k a month.

As far as expenses, for my wife they are minimal. She buys some supplies for a party or mails some thank you notes. She hands out samples and business cards everywhere she goes. She buys inventive gifts for the girls under her. She bought a laptop and printer this yea and a home phone. Honestly she hardly makes any $$$ from parties and events, most of it is done online through Facebook which is free. Total expenses for her this year were probably $10k and there is self employment tax to prepare for, although there are ways to minimize that.

The girls making hundreds of thousands of dollars are gonna have a substantial tax bill, but that's true for anyone making that kind of money.

hodedofome

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Re: Why is Network Marketing so bad?
« Reply #38 on: December 28, 2014, 07:05:27 PM »



Yes.  There is a row for $100k/mo income.  It represents less than 8% * 0.1% = 0.08% of their active member population.
That's less than one-in-1,250 members.  It's probably worse than that since the "less than 0.1%" that they report isn't very precise.

I think the conclusion that can be drawn that this is not a good money-making venture.
I agree with their disclosure when it says:
   ... some wish to discover a sense of purpose and independence, while still others simply want to enjoy
wholesale access to superior products.

There may be a multitude of personal reasons to join, but the likelihood of a decent income doesn't seem to be one of them.

This is true for any business. Most businesses fail.

Jags4186

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Why is Network Marketing so bad?
« Reply #39 on: December 28, 2014, 09:10:20 PM »
I have no experience with Young Living (neither the company nor their products), but I can google ...

These companies are required to publish stats about their distributors compensation, which is publicly available.
Here's Young Living's income disclosure:
  http://youngliving.cdn.cymbeo.com/f/69rwmp3g/503c69wh74kg/YL_incomedisclosure_0414_v2_mh_FINAL.pdf

The break-down table they give only represents the top 8% of their earners.  92% of their members are "Distributor" ranked, and they earn $1/mo on average.

The next rank is "Star", and it's the first rank included in the table.  When the table says that "Star" ranked members comprise 62.2% of the table, it's really 0.622 * 0.08 = ~5% of the overall population of members.  Note that the Star-ranked members are making significantly less than minimum wage.  The work an average of 5 hrs/wk, and receive an average of $876 in yearly compensation.  So $876 / (5 hr/wk * 52 wks/yr) = $3.37/hr.

The next rank is "Senior Star", who make $8.60/hr, and who comprise 0.208 * 0.08 = 1.7% of the overall population of members.

So the vast majority of their members make basically zero income.
And 98.7% of their members (92% Distributors, 5% Stars, 1.7% Senior-Stars) make at most a minimum-wage-level income.

There are definitely people making 100K/mo, at Young Living, Younique, and Jamberry, I'm sure there are others.
Yes.  There is a row for $100k/mo income.  It represents less than 8% * 0.1% = 0.08% of their active member population.
That's less than one-in-1,250 members.  It's probably worse than that since the "less than 0.1%" that they report isn't very precise.

I think the conclusion that can be drawn that this is not a good money-making venture.
I agree with their disclosure when it says:
   ... some wish to discover a sense of purpose and independence, while still others simply want to enjoy
wholesale access to superior products.

There may be a multitude of personal reasons to join, but the likelihood of a decent income doesn't seem to be one of them.

Here is the breakdown:

As of January 2011, there were a total of 161,500 Distributors and 28,000 Customers in Young Living.
Of active Young Living 161,500 Distributors there were:
3,744 Executives (2.3%),
672 Silvers (0.4%),
155 Golds (0.1%),
31 Platinums (0.02%),
15 Diamonds (0.01%), and
7 Crown Diamonds (0.004%).

http://www.raindroptraining.com/messenger/v9n2.html

Only about 900 (edit to reflect silvers making more than minimum wage) out of 161,500 people make over minimum wage working at Young Living. This is why MLM is looked down upon.

ZsMom, I suspect you sell many of the 28,000 customers (yes, 6 sellers for each buyer) if you make as much as you say!  Well done if that's the case.
« Last Edit: December 28, 2014, 09:13:50 PM by Jags4186 »

hodedofome

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Re: Why is Network Marketing so bad?
« Reply #40 on: December 28, 2014, 09:50:16 PM »
Most people under my wife just don't work very hard. They sign up thinking it'll be easy money and don't realize how hard my wife has worked to get where she is. My wife has a sense of urgency if she doesn't have any parties lined up. She will work the phone and Facebook nonstop until she gets at least 2 or 3 parties booked per month. A lot of girls under her seem to be waiting for something to happen. They haven't even gone through the free online Jamberry 'university' yet complain that they aren't successful enough.

My wife was a teacher with literally 0 business and sales experience before starting Jamberry last November. She worked day and night around our kids naps and bedtime to teach herself the skills she needed to be successful. She watched no tv, didn't give herself any entertainment at all for months. She'd be on facebook working online parties before I'd go to work, during kids naps and all during the evenings and weekends. When I saw it taking off I began doing most of the housework and taking the kids on the evenings and weekends so she could work. I'm prepared to quit my job and stay home with the boys if she makes enough and the time demands are enough.

Of course, she also started at a great time as well. It was right as Jamberry was taking off as a company and enough people had heard about it to have some reputation, but not many were selling it yet. That part is pure luck, there's no way she could have predicted that. But there are other girls who started at the same time and have not seen the same success. That's because they aren't willing to work as hard. They think just because a few of their friends are making a lot of money that its somehow easy. Its just like any other business. If you work really hard you'll have a chance of being successful. If you don't, then don't ever expect anything to come of it.

annegables

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Re: Why is Network Marketing so bad?
« Reply #41 on: December 28, 2014, 10:13:26 PM »
I can hardly believe that this is the post that got me to delurk! 

Please, please, please, go to the website pinktruth to read about MLMs.  It was originally started as an expose site on just Mary Kay, but it has info about a lot of other MLMs as well.  I am a military spouse, and good grief do I see a bunch of military wives in mlms.  Most are lucky if they never make money, because many are in the red after it is all said and done.

If you are going to do a "network marketing" company, I beg of you, dont pawn off the products on your friends and family as gifts.  I received Mary Kay crap for every birthday and Christmas for almost 10 years before my family member realized that I dont wear makeup and dont do scented stuff.  But she had the discount and needed to meet a monthly ordering quota, so family got gifted all the stuff she had to order just to stay a consultant.  I dont care what the company is, most people I know do not want to be gifted this stuff. 

Also, in regards to jamberry (a really popular company with milspouses), because it is more recent, I have heard of more success stories of people who got in on the ground floor as consultants so now they have a downline.  Another company I keep hearing about in regards to this is Beachbody and their shakeology products.  Please, almost no one is interested in always hearing about one's "great products" or "great opportunities".  If I really wanted whatever you are selling, I would just buy it on Amazon.

And good Lord, do people not know that you can buy essential oils online without going through a consultant???  Why would I buy stuff specifically through a middleman who is increasing my cost because of all of the upline getting a cut of the profits???

annegables

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Re: Why is Network Marketing so bad?
« Reply #42 on: December 28, 2014, 10:17:44 PM »

kendallf

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Re: Why is Network Marketing so bad?
« Reply #43 on: December 28, 2014, 10:27:14 PM »
I have a problem with these companies and the financial stats quoted here underline it perfectly.  Making money at these companies requires hard work (and mining your social contacts, which I find repellent).  More importantly, it requires luck in getting started at the beginning of the growth curve.

These products, most of negligible value, reach a saturation point in market share.  If you're lucky, you pick a company early in the growth cycle and make money during the expansion.  Join a year later and work hard, and you'll still make peanuts.

The harm is in the dream sold the thousands of late-joining suckers who buy products they often can't afford and shouldn't be purchasing, in the vain hope that they too will see the chain below them expand, when the saturation point has already been reached.

Some *relatives; edited to keep this vague* made money in a MLM for a couple of years, nearly 30 years ago.  Then the pyramid crumbled in a management dispute.  They hadn't paid their quarterly tax bill; they were counting on the next quarter to be so much bigger, you know?

They lost their house, their car, the IRS chased them for the tax bill for at least 15 years.  The whole time, they kept looking for the next MLM business success and buying these shit products.  They're in their early 60s now and don't have two dimes to rub together.  They're working stopgap jobs and renting a too-big house.  I hope their health holds out.. maybe the essential oils will help with that.  Or not.

shuffler

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Re: Why is Network Marketing so bad?
« Reply #44 on: December 28, 2014, 11:43:46 PM »
Those are 2011 numbers ...
The data I posted is from 2013.  It's from their own site, and appears to be their latest disclosure.

Also, the "distributors" are usually just people that use the product for personal use only.
Even if you exclude the 'distributors', 83% of the active-and-selling members (Stars and Senior Stars) still make a minimum-wage-level income at most.  Most make significantly under that.

I wish the disclosures gave some indication of the 'depth' of the people at each rank (or earning each level of income), as well as how long the people had been with the company.  It would be interesting to see if the pyramid is rigid (as I think many of us suspect that it is), and what the fate of the average newcomer tends to be.

Goldielocks

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Re: Why is Network Marketing so bad?
« Reply #45 on: December 29, 2014, 12:27:07 AM »
Didn't believe me? Here's a picture of my huge beautiful baby aside a quisling tiny baby fed regular water or worse! That itty bitty weakling baby will probably die or become a loose woman! DO NOT RISK YOUR BABY ANY LONGER. Buy Franklin Doubleyou Dixon Brand (tm) (patent pending) tap water today, to prove that you love your baby and are a good parent! I'm judging you right now!!


OK, now THAT was funny!

What do you sell me if I am tired of the huge, energetic baby and would like the quiet calm one that lets me sleep.

Dicey

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Re: Why is Network Marketing so bad?
« Reply #46 on: December 29, 2014, 12:32:33 AM »
I dont know if I am allowed to post links, but here goes:

http://www.pinktruth.com/mary-kay-facts/myth-of-mlm-income-opportunity-99-lose-money-in-mlm/
Oh, I loved this! Bookmarked for future reference any time anyone even hints of MLM opportunities. Thanks!

annegables

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Re: Why is Network Marketing so bad?
« Reply #47 on: December 29, 2014, 03:22:45 PM »
You're welcome!  Mary Kay really did a number on my relative's marriage and finances.  I spent 2 years lurking (I love lurking) on Pinktruth as I got my brain around the fact that my relative's experience is the norm and not the exception with MLMs. Also, as a military spouse and having lived in Utah (very high rate of MLM consultants) I need to be well informed on the new games in town and how to say no to invitations to parties and "opportunities". 

swick

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Re: Why is Network Marketing so bad?
« Reply #48 on: December 29, 2014, 06:37:19 PM »
ZsMom,

There is an interesting thread on eo's here: http://forum.mrmoneymustache.com/ask-a-mustachian/essential-oils/

Here is a re-post of my response:
Quote
I have some pretty strong thoughts on the issues. I'm going to cut and paste a facebook convo I had with a lady who just started getting into Young Living as a rep, instead of repeating it all:

"I saw your Young Living ad and I wanted to comment, but thought I should just message you instead. I have some pretty strong opinions about ALL the MLM essential oil companies. Not that their products are bad (although really expensive) some of the suggestions for use they promote are flat out dangerous. I figured I'd share what I know and you can do with it what you will.

What you mentioned about the expiry dates is YL propaganda. All essential oils, regardless of source, will degrade over time. They are affected by light, heat, air exposure. The chemical structures do break down leading them to be less effective. It is about 6 months for cold pressed (citrus) oils and can be years for others, some like sandalwood and frankincense and patchouli get better with age. They don't go rancid or expire - unless they are already mixed with a carrier oil.

the problem with Young Living specifically is the info they put out to their sellers is the problem - and most people who sell oils don't have the chemical background or time to look into it themselves. They advocate the use of Essential oils internally, which is actually against the law and should never be done unless it is administered by a naturalpath, herbalist or doctor who is allowed to dispense medicines.

Essential oils don't need to be ingested to work and used in that high of doses Some can lead to both liver and kidney toxicity - (but it makes you go through them faster and therefore buy more)

Also they advocate a therapy called "Rain drop therapy" which is dropping undiluted essential oils on the skin - on the back and along the spine. There are only a few oils you should ever use undiluted - you have to worry about sensitization and skin reactions some can be sever.

The terminology they use such as "Therapeutic Grade" doesn't actually mean anything.

In all the aromatherapist organizations, you have to sign saying you will never advocate the raindrop technique or suggest oral use of essential oils unless you have a medical liscense to dispense medicine. Suggesting internal use will void any insurance coverage as well.

Recently the essential oil MLM's have been targeted by the FDA for making false medical claims - while I think the FDA is essentially evil, the claims that YL distributors are making are in some cases very dangerous.

What you have to remember about everything that enters your body is broken down to a chemical level - essential oils are very, very concentrated and very powerful medicine. They can do a lot of good but can also hurt you - you really have to be aware on the contraindications for each oil as they all effect the system differently. They are absorbed by the skin and the olfactory system and the molecules are small enough to pass the blood brain barrier as well as the placenta. Also most essential oils are VERY toxic for cats (their livers can not process them AT ALL) and some are very toxic to dogs. You should know what you are using around your house - especially in areas animals may lick or be breathing in.

It is a neat field of study and using essential oils has changed my life and made my whole family healthier - all I would ask is that you look beyond the Young Living supplied information and do your own research there is a lot to learn!

One I would suggest is always have a bottle of Lavender on hand for the kitchen - it is an analgesic, antiseptic and anti-inflammatory. It is WONDERFUL for burns takes the pain away almost instantly and heals up great. I'm a clutz so I use it all the time.

Also, Helicrysum although super expensive is worth it's weight in gold. I have it in my first aid kit. it is a Cicatrisant, which makes your wounds and cuts heal quickly and scar marks disappear fast. It is also an antiseptic and can help staunch blood flow because it encourage platlet formation. when I chopped the tip off my finger it was the only thing that helped me stop the bleeding.

Personally, I use Vitex as a hormone regulator and help ease the symptoms of the severe PMS I get.

Probably the easiest thing to do would be to find a chart of the contra indications and all the most common oils and have it to refer to. There are oils that Pregnant women should avoid, those people with high or low blood pressure, or if they are on medications - especially wolfarin. Essential oils should not be used around cats at all, their livers cant process them and it can kill them. Peppermint can cause homeopathic remedies not to work...there is a lot to keep track of for sure!"

So, OP, that is my take on it, I do not have all the answers but I am almost finished up the case studies and research paper required for me to finish off my Registered Aromatherapist designation.  Happy to try and help if you have any specific questions.

As far as suppliers - New Directions is a great company - but they have everything so you have to be careful you aren't buying fragrance oils and things like that. Also Mountain Rose herbs has super high quality oils that I have used in my practice. The thing is to really figure out WHAT you want to solve/do with the oils FIRST and then look for the oils suggested. It is really easy to buy a whole bunch of oils and go overboard because they are all so intriguing :)

But I have saved hundred (probably thousands) of dollars in medical issues and being able to make my own gifts for people. It is a lot of fun!

Perhaps YL isn't structured as a "money losing scam" but there are some major ethical problems with their recommendations and the education they give their reps. I hope you will do your own research.


iwasjustwondering

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Re: Why is Network Marketing so bad?
« Reply #49 on: December 30, 2014, 06:12:04 AM »

I am not the slightest bit concerned about the cost, because the cost of all the things we don't buy now is huge. Allergy meds. Variety of skin care products. To be honest, we haven't used an OTC or prescription product for >1 year, for myself, my husband and our toddler.

This is a false medical claim.  You are engaging in an unethical and possibly illegal marketing practice.