When Does the Profit End

by 7 comments
Logic would suggest that multi level schemes have a natural limit-because you will reach a point of market saturation, and for each level down you are, your profit potential would be lower. How severe is the drop off per level, and how often do these schemes reach the limit?
#internet marketing #end #profit
  • Profile picture of the author trafficwave
    Actually, "logic" would dictate that the idea of saturation is a complete myth.

    For any sort of actual saturation to take place, we would need to stop making humans. The population on our planet is growing. In just plain old fashioned marketing speak, new customers are being born every minute.

    Now, if we somehow stop making more humans, we would eventually run out of people to sell to. And that means virtually every business on the planet (with some notable exceptions) would be faced with the saturation myth becoming a possibility, regardless of whether or not they used network marketing as their distribution model.

    EVERY business has a "natural limit" due to a number of factors including market timing, market penetration, available market share, capitalization, competition, barriers to entry, etc... (just to name a few).

    Put someone on the first level of any legitimate company using the network marketing distribution model and if they sell, they will make money. If they don't sell, they won't make a dime.

    Put someone 30 levels down in any legitimate company using the network marketing distribution model and if they sell, they will make money. If they don't sell, they won't make a dime.

    As for how often any company reaches the limit... I don't know of any company in any industry with any distribution model that has actually reached the limit.

    Most companies are absolutely thrilled if they are able to reach a 10% market penetration. But even that depends on the total market size and a number of other factors.
    • Profile picture of the author Tirmizi
      depends on the market , what sort of mlm progarm are you in, if its backed by a strong product then you could be in for a ride but if is the other way around then it could run out really quick
  • Profile picture of the author giveusallfreedom
    I've never really heard of a MLM reaching the limit. Amway/Quixtar has been around forever and there are still people making money with it as far as I know. Like Brian said there are constantly new people arriving. The closest I've ever heard to an MLM reach a limit is the limit of people that will believe in a scam or the a corrupt company hits an income limit and ends up hitting the Feds radar. But for legitimate companies that isn't an issue.
  • Profile picture of the author Scott Ames
    They never do. The model is never perfectly filled out. Amway Global has been going since what? 1958 or so with no signs of stopping. Here's what happens:

    People join, do a little , then quit
    People die, new people are born grow up and discover Amway (whatever program)
    There is constant turnover.

    The myth is that all the downline will recruit 3 or 2 or whatever number, in reality it just doesn't work that way.

    One could apply the same reasoning to IM products. You would think that by now, it would be reaching a point where everyone has all the information they need. That might be true if there were a static number of people interested in IM. The millions born every year are just entering the funnel and the millions that die are moving out the other end. It just keeps on going. The circle of life....

Next Topics on Trending Feed

  • 1 {{ upvoteCount | shortNum }} 5

    So I am fairly new to CPA marketing and have developed my first campaign, I get a $1 for every lead and current campaign converting at about 11%. Using Bing ads I am paying around .05c per click and target close to 3000 words. Because I am bidding so low for keywords I only get about 20 clicks per, but I am try to make up with volume and research new low cost keywords. Traffic is driven direct to a landing page and then to the offer. At first I was capturing emails and then directed to the offer but found conversions even lower, also for this campaign I have no real interest is staying in contact with the people who sign up to the offer.

  • 1 {{ upvoteCount | shortNum }} 5

    I'm really good at turning over content quick; what slows me down is research and also bidding on projects. I've read that Textbroker is far superior to iWriter in terms of number of jobs and approval rate (apparently the later is marketed to content buyers in a way that creates really high expectations and high rejection rates as a result). Is there any true competitor to Textbroker in terms of job volume? I've heard Constant Content is also good, a bit less on the volume but much higher paying.