Driking the MLM "koolaide"

by Josh Anderson 43 replies
For those of you who do not know what the reference to "drinking the koolaide" means it is a saying coined after the Jonestown Massacre where a paranoid delusional cult leader and his followers drank poison Koolaide in a mass suicide leaving over 900 dead including small children in the late 1970s.

I was on the set of a video shoot for a chiropractic pillow promotional production when two men that I will describe as "vultures" showed up and acted very strange and made some of the doctors and clients there for the shoot uncomfortable.

These "vultures" where there on the invitation of the Dr who owned the practice because he told them that they might be able to recruit some of the other doctors and client who would be there to join their berry juice network marketing business opportunity.

These guys were involved in a network marketing opportunity which marketed berry juice for $40 a bottle in bottles no lager than a normal wine bottle.

The users of this "high antioxident" juice tout its healing properties and are instructed to consume around a bottle of this $40 a bottle berry juice a week.

No inherant problem with that... if you like paying $40 a bottle for juice to get high antioxident intake which can also be obtained by consuming other lower cost more commonly available antioxident rich juices and even common concord grape juice...

However, these "vultures" hung out in the corner of our guest waiting area muttering amongst themselves about how they were going to take over various markets and perform MLM magic... for two hours!

And why did they hang out on our set for two hours when no one was interested in talking to them?

Because one of the actors had expressed interest and they wanted to give him a brochure.

So two people sat around for two hours to give a brochure to an actor with very little interest in their product or opportunity who after they left along with many of the other people in attendance commented no how uncomfortable these MLM recruiters made them feel and how much they reminded them of vultures waiting for a carcass to chew on.

The obsurde picture you get in your mind from this description is likely less obsurde then it was in person.

But even more absurde is the following quote taken from an investigative report on this highly successful berry juice MLM (network marketing) company:

"Meanwhile, most of the million-strong sales team is really just drinking the juice, according to MonaVie's 2007 income disclosure statement, a federally required printout of their distributor earnings. More than 90 percent were considered "wholesale customers," whose earnings are mostly discounts on sales to themselves. Fewer than 1 percent qualified for commissions and of those, only 10 percent made more than $100 a week. And the dropout rate, while not disclosed by MonaVie, is around 70 percent, according to a top recruiter."

Quote from - http://www.newsweek.com/id/150499?GT1=43002
This highly successful Network Marketing company has a sales force of 1 million network marketers.

Of that 1 million less than 1% have earned any commission at all. Of that less than 1% only 10% earned more than $100 per week!

So lets put that in perspective...

Of 1,000,000 (one million) distributors less than 1,000 (one thousand) earned more than $100 a week in 2007.

Yet the company has reported (unverifiable) lifetime sales of approximately 1 billion USD!

The sad part is that the entire MLM (network marketing) industry is not much different with most programs, opportunities etc producing a 99% failrure rate.

Not only that the MLM industry is rife with various scams and ponzi schemes such as the current fiasco you can read about in this Business week article: http://www.businessweek.com/print/te...086_509247.htm

You are far more likely to win at the casino than to make a profit in MLM. Casinos on average pay out 2-3% of every dollar they take in...

Of course that is not a testimonial for the gambling industry because if you play $100 in a casino the house odds are that you will leave with $2-3 in your pocket having lost 97-98%

You are much more likely to loose all money you invest in a MLM and never see any earnings... more than 99% likely.

Now compare that to starting a legitimate online or offline business and the chances of success are far more likely.
#main internet marketing discussion forum #driking #koolaide #mlm
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  • Profile picture of the author Melkor
    Amen. I was never more embarrased than when I discovered Dad had gotten involved with Herbalife...
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    • Originally Posted by Melkor View Post

      Amen. I was never more embarrased than when I discovered Dad had gotten involved with Herbalife...
      Oh, I did that, too. Was involved with that "Global Online Services" (or whatever) MLM branch of it. Lost thousands, and then didn't even get the $26 I earned. My "coach" kept it.

      In all honesty, the major reason I quit was because I just didn't have the heart to try to convince people in my economically depressed area to fork over that kind of money. They just don't HAVE it.

      Got quite a nasty-gram from my "coach" after I stopped working the program. Was called every name in the book, I think.
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  • Profile picture of the author Lance K
    If all customers are automatically set up as distributors, it may be that the majority never has any intention of making money. They just want to drink the koolaide. So it is possible that the data could be skewed.

    Don't get me wrong, I think MLMs are about as cool as a pooper in a punch bowl. But I'll still look at stats like that and try to understand why they may be so far off.
    Signature
    "You can have everything in life you want if you will just help enough other people get what they want."
    ~ Zig Ziglar
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    • Profile picture of the author Josh Anderson
      "If all customers are automatically set up as distributors, it may be that the majority never has any intention of making money. They just want to drink the koolaide. So it is possible that the data could be skewed."
      That is the problem with the MLM industry... they focus on selling the opportunity and false dreams rather than the product.

      It actually is illegal to force every consumer to become a distributor. They must retail the product.

      Also having heard the presentation this particular product is pitched in a strong way to be sold on a retail level.

      In the case of this product distributors must pay extra to become distributors so it is not very likely that 999,000 distributors who are making no money at all signed up just to drink the juice. Also note that to qualify to earn commissions as a distributor you must sell 8 bottles a month...

      So if a person were to sign up as a distributor for the sole purpose of purchasing off themeselves to earn commissions from sales to themselves (which is an idiotic idea that many in MLM industry fall for) they would have to consume 8 bottles of the stuff which retails at a suggested $40!

      People get sucked into the bizopp because of the dream of getting rich... not just because they think the juice is yummy... I tasted the stuff

      Under US law in order for an MLM opportunity to not be considered a ponzi scheme 70% of the revenues must come from retail sales.

      This is called the 70/30 rule.

      Most of the MLM companies in the health industry must at the very least put up the facade of being not just about the opportunity by encouraging their distibutors to retail the overpriced products and many will provide replcated storefront style websites for distibutors.

      However, they also artificially inflate product sales by requiring distributors to sign up for "auto ship" orders of product for their own consumption sometimes even attaching higher commission levels to the distributors forced auto ship requirements.

      At $30-$40 a bottle it is likely that order minimums and autoship requirements attribute for a large portion of the sales volume and many of the earnings of the various upline distibutors.

      This forced autoship could skew the earnings... in the favor of the company!

      Consumption of the product and earnings of the very few distributors who are earning anything are likely inflated by would be distributors who are forced to consume or order quanties of product beyond that which they would naturally consume had the autoship and minimum sales requirements not been in force in order to receive commissions.
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      • Profile picture of the author Don Schenk
        I knew there had to exist a certain amount of sales outside of the downline for an MLM to not be a Ponzi, but I didn't know the 70/30 rule. Thanks for that piece of info.

        Twenty-five years ago my wife and I became "soap" distibutors in an MLM because a couple of our friends had done so. We promptly managed to alienate all of our remaining friends by trying to recruit them. AAAahhhhrrrrggg.

        After a year or so we dropped out, and I think our friends have since forgiven us. We were such vultures.

        I may have told the story in another post about skiing at a Western ski resort about 12 years ago. It's a ski area where they have multi-million dollar homes along the ski runs.

        One of our friends signed up for an all day ski lesson, and there was a woman in her lesson group who was staying in one of the (then $5,000,000) homes.

        I met them at lunch time and learned about this lady's sister and brother-in-law who owned the $5 million house. It seems they also own one of the larger MLM companies. The skiing sister says her wealthy sibling and husband never get any time to enjoy the house...or much else. They are way too busy presenting pep rallies and MLM motivational bootcamps every weekend all over the country attempting to keep people motivated. It's a never ending battle.

        The spend their entire lives trying to keep people believing the MLM dream.

        Don
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    • Profile picture of the author YiKeS
      G`day,

      MLM = Many Lose Money

      that`s some powerful statistics Josh, the "vulture" analogy is spot-on and
      no matter what social networking site I`ve been on, seems it`s ALWAYS
      the MLM pushers that message you without asking to see if I`m
      "interested in my opportunity".





      An MLM program was what I did first online ... what a JOKE!!
      • I joined specifically because I could get a website (cookie cutter of course ... I knew no better then)
      • I made it potently clear that was how I had to market as I live in the middle of nowhere, am disabled so "door-knocking" etc was not what I wanted or could even do day after day at all
      • They promised to "teach me everything I needed"
      • Stupidly told them I was in debt and had to use my CC ... realize now the subtle questions they asked getting me to tell them exactly how much I could still use on the darn thing was so they knew how much more they could get out of me ... hindsight aye ...
      So what happened?
      • I got the website yeah ... even with two weeks under my belt I could tell the site needed changes made as I wasn`t getting traffic/signups/sales ... I bought the website ... 6 weeks later after getting the runaround I was told I was "renting it"! I was told "we don`t know how to make your website better ... OURS work fine! ... and No you can`t make any changes at all unless you WRITE ... not email .. write a real letter asking for permission to do so!! (Australia to head office in USA)
      • Then they said "Oh you`ll just have to go into your town and put up a stall and doorknock your neighbours and "suburbs" ... ummm ... there isn`t 10 000 people within a hundred Klms of me ... heck there isn`t 100 people within 10 mile of me ... lol... I`M DISABLED AND NOT ABLE TO WALK ABOUT ALL FRICKEN DAY! .... what happened to "work at home"!!???
      • Well they did teach me all I need to know to spot vultures like them I guess ... lol ... one thing my "mentor" "taught" me that stuck in my head though ...
      IF IT DOESN`T NEED TO BE SAID ... DON`T SAY IT!
      • Guess that`s why I was charged over $500 to join (buying a big pack etc) when I could`ve really joined for around $100
      • Guess that`s why my "mentor" made up my first order as I didn`t know what to get ... and got $500 worth of PROMO CRAP to give away for ***** sake ... MY PROFIT ... gone before I could even get the stuff!!
      • Guess that`s why they "conned" me to buy an even BIGGER pack so I "get a higher commission" ... (it "clicked" later on)
      So I have like $2500 worth of OUT OF DATE product sitting in my
      storeroom now ... well totally worthless now of course ... I joined
      to get out of debt and ended up thousands more IN debt ... vultures?


      YOU BET!!

      Christopher J.

      P.S. After I quit, friends I was trying to sell to told me the prices
      where simply to high ... lol ... now why is that? To keep those at
      the top of the PYRAMID in the big bucks! Even with a product,
      some things just should be darn well illegal aye.

      P.P.S. Due diligence isn`t possible when such a newbie ... I did
      research for a full week before joining ... after I quit I knew what
      to look for and boy did I find some horror stories then!

      **EDIT**
      P.P.P.S. I got in before my "coach/mentor" and abused heck out
      of her ... of course "We never gaurantee you`ll make anything blah
      blah blah!" ... ain`t finished with her, I have a looooong memory ... hehhe
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      • Sounds like the exact, same, program I was involved with. I could have written this post.

        Originally Posted by Christopher J. View Post

        G`day,

        MLM = Many Lose Money

        that`s some powerful statistics Josh, the "vulture" analogy is spot-on and
        no matter what social networking site I`ve been on, seems it`s ALWAYS
        the MLM pushers that message you without asking to see if I`m
        "interested in my opportunity".




        An MLM program was what I did first online ... what a JOKE!!
        • I joined specifically because I could get a website (cookie cutter of course ... I knew no better then)
        • I made it potently clear that was how I had to market as I live in the middle of nowhere, am disabled so "door-knocking" etc was not what I wanted or could even do day after day at all
        • They promised to "teach me everything I needed"
        • Stupidly told them I was in debt and had to use my CC ... realize now the subtle questions they asked getting me to tell them exactly how much I could still use on the darn thing was so they knew how much more they could get out of me ... hindsight aye ...
        So what happened?
        • I got the website yeah ... even with two weeks under my belt I could tell the site needed changes made as I wasn`t getting traffic/signups/sales ... I bought the website ... 6 weeks later after getting the runaround I was told I was "renting it"! I was told "we don`t know how to make your website better ... OURS work fine! ... and No you can`t make any changes at all unless you WRITE ... not email .. write a real letter asking for permission to do so!! (Australia to head office in USA)
        • Then they said "Oh you`ll just have to go into your town and put up a stall and doorknock your neighbours and "suburbs" ... ummm ... there isn`t 10 000 people within a hundred Klms of me ... heck there isn`t 100 people within 10 mile of me ... lol... I`M DISABLED AND NOT ABLE TO WALK ABOUT ALL FRICKEN DAY! .... what happened to "work at home"!!???
        • Well they did teach me all I need to know to spot vultures like them I guess ... lol ... one thing my "mentor" "taught" me that stuck in my head though ...
        IF IT DOESN`T NEED TO BE SAID ... DON`T SAY IT!
        • Guess that`s why I was charged over $500 to join (buying a big pack etc) when I could`ve really joined for around $100
        • Guess that`s why my "mentor" made up my first order as I didn`t know what to get ... and got $500 worth of PROMO CRAP to give away for ***** sake ... MY PROFIT ... gone before I could even get the stuff!!
        • Guess that`s why they "conned" me to buy an even BIGGER pack so I "get a higher commission" ... (it "clicked" later on)
        So I have like $2500 worth of OUT OF DATE product sitting in my
        storeroom now ... well totally worthless now of course ... I joined
        to get out of debt and ended up thousands more IN debt ... vultures?


        YOU BET!!

        Christopher J.

        P.S. After I quit, friends I was trying to sell to told me the prices
        where simply to high ... lol ... now why is that? To keep those at
        the top of the PYRAMID in the big bucks! Even with a product,
        some things just should be darn well illegal aye.

        P.P.S. Due diligence isn`t possible when such a newbie ... I did
        research for a full week before joining ... after I quit I knew what
        to look for and boy did I find some horror stories then!
        Signature
        -----------------------------------------


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        • Profile picture of the author YiKeS
          Originally Posted by Angela V. Edwards View Post

          Sounds like the exact, same, program I was involved with. I could have written this post.
          Well I didn`t wanna mention it was `erbalife ... oh I just did ...

          GUESS IT NEEDED TO BE SAID!

          Christopher J.
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        • Profile picture of the author trafficwave
          It is not my intention to defend network marketing or MLM here but I would like to clarify a few things from my own perspective:

          I believe the '99% failure rate' is a complete farce. I've never seen anyone actually produce verifiable stats for the business failure rate of any type of business; especially when the business involves network marketing.

          Here's a quote from smallbusiness411.org:

          ++++++

          "No doubt you’ve heard someone — even a highly educated someone, expound about the failure rates for small business. Some say that 90% of small businesses will fail in the first 5 years. Others use the 60% failure in the first three years.

          In fact, you can pretty much find any old numbers to support any dire predictions. But mostly it’s all wrong. It’s pretty much unreliable.

          [snip]

          Here’s the simple reason. It’s definitional. While there are studies all over the place about business failure, how business failure is defined varies from place to place, and often it includes businesses that have been sold (even for large profits), or closed due to death, or family issues, or a number of other reasons."

          Full article: http://smallbusiness411.org/wp/2008/...-urban-legend/

          +++++

          I think it's also important to clarify that "mlm" is not an industry. It's a distribution method.

          Telecom companies have used mlm as a distribution method.
          Nutritional companies have used mlm as a distribution method.
          Internet service providers have used mlm as a distribution method.
          Retailers of various shapes, sizes, and colors have used mlm as a distribution method.

          Some have met with better success than others. This is not because "mlm is bad". It's usually because (IMO) the owners have no real business sense make a series of bad managment and business decisions that lead to their demise.

          No doubt the world of network marketing is riddled with all sorts of nonsense. But it's certainly not alone in that distinction.

          The used car industry is riddled with crooks, scam artists, thieves, etc... yet we all continue to drive vehicles and most of us buy used cars. It's a multi-billion dollar industry.

          The mortgage industry is being smacked pretty hard right about now for a variety of reasons, not the least of which is the predatory lending practices. Yet people continue to buy homes.

          Bring up "Attorneys" at any dinner party and you'll be met with rolled eyes, a series of horror stories about those "blood sucking leeches", a run of lawyer jokes, etc... But the first time someone threatens to sue you, your first call will probably be to an attorney.

          So is it "mlm" that is bad? Or are there simply some companies and or mlm distributors that cause problems for everyone else involved?

          My opinion is the latter. There are simply some bad apples in the bunch and they cause trouble for everyone involved.

          Unfortunately, the bad apples are the ones that get most of the press and it is easy to come to the conclusion that all companies that use the mlm distribution method are suspect.

          I've had some bad experiences with some fairly unscrupulous types myself. But I also know many credible professionals with high levels of integrity that do quite well in businesses that use the mlm distribution model.
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          TrafficWave.net Email Marketing AutoResponders
          Email Marketing Blog

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          • Profile picture of the author Josh Anderson
            "I believe the '99% failure rate' is a complete farce. I've never seen anyone actually produce verifiable stats for the business failure rate of any type of business; especially when the business involves network marketing."
            The 99% failure rate statistic I pointed out in the original quote was from the company's own 2007 financial report reported to the federal government.

            In fact if you do the math the 2007 report revealed a 99.9% failure rate if you consider that of the 1% of 1,000,000 distributors who earned commissions in 2007 only 10% of them earned more than $100 a week.

            Let me state that again...

            That is a statistically proven 99.9% failure of distributors to earn significant commissions from a 1 million person sales force.

            Not exactly the kind of statistics you would wip out on stage at a Koolaid drinking rally.

            "Join this money making opportunity where only 1 in 1000 make more than $100 a week."

            Not very appealing when you have the facts... but when is the last time you saw an MLM company pitching their opportunity with success statistics from their own financial reports?

            It's an industry built on self deception and selling dreams that in this case are never realized by more than 99% of those who are involved.
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            • Profile picture of the author Jelasco
              Josh, the report you quoted said 1% earned commissions. That does not mean a 99% failure rate!

              Failure requires trying first, and you said many of the people were involved just to use the product. I'm sure some of them did not try to sell the product, therefore cannot be considered failures.

              I'm a customer of another MLM company because I actually use the product. I have not tried to sell it- does that make me a failure? You said yourself they need a certain % of people to be retail customers, yet you seem to consider those customers to be failures.

              I wonder what % of people with Clickbank accounts have not made a sale. Are they all failures?
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              • Profile picture of the author Josh Anderson
                Josh, the report you quoted said 1% earned commissions. That does not mean a 99% failure rate!
                99% of registered distributors in said company failed to earn any commissions in 2007.

                Additionally 90% of the 1% who did earn commissions failed to earn more than $100 a week.

                Said company who sells business opportunities and pipe dreams and holds rallys with thousands in attendance fails to inform their distributors that at a rally with 4000 in attendance only 1 in 4 could have possibly earned more than $100 a week in 2007 (that is only if all of their 1000 out of 1,000,000 commission earning distributors were in attendance) and that only 1 in 1000 distributors earned even $1 in commissions in 2007.

                In said company 99% of people failed to earn any commissions in 2007.

                Failure to earn commission rate among distributors for said company in 2007 = 99%

                "and you said many of the people were involved just to use the product"
                No, we are talking about people who paid extra to become distributors of the product... people who paid to become part of the business opportunity.

                Koolaid anyone?
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                • Profile picture of the author Jelasco
                  Josh, you are still assuming all those people tried to sell the product. Do you really believe that?
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                  • Profile picture of the author Josh Anderson
                    "Josh, you are still assuming all those people tried to sell the product. Do you really believe that?"
                    The last two posts you made were about assumptions and statements that I neither formulated nor made rather they were your interpretation of my statements. You may want to read a little more carefully to see exactly what I stated was about the company and the failure of a majority of its registered sales force of distributors to qualify to earn commissions.

                    In fact in order to even qualify to earn commissions according to the article one must sell at least 8 bottles of berry juice (retail) a month.

                    I believe that those people signed up as distributors because they were sold on a dream... whether they tried or not is irrelevant. At the time they were sold the distributorship they paid extra to become a sales agent for the company.

                    The question I would like to put forward is that if anyone actually had the financial report set before them and saw that 99.9% of 1 million distributors failed to earn significant income in 2007 would they buy into that business opportunity?
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                    • Profile picture of the author PowerOfOne
                      Not trying to start an 'Im right your wrong' drama
                      here but my perspective is that this thread shows some
                      very clear ignorance to one of the largest segments of the
                      entire home based business industry.

                      Here's my input on it... I do both.

                      I run a multi 6 figure annual info product business and climbing.

                      and a multi 6 figure annual network marketing business and climbing.

                      And hands down i have 10x more fun doing network marketing
                      then sitting behind my computer all day, all by myself,
                      writing web copy, crafting ads, creating products, writing
                      articles, and all this other stuff.

                      That's IM.

                      When i do network marketing I basically just build relationships
                      with people, put them in front of information, and network
                      with the highest caliber people in the world.

                      Low and behold...something emerges that is 100 million x
                      times more residual then internet marketing INCLUDING
                      continuity programs, and in my perspective far more
                      enjoyable to build.

                      I wouldn't be stupid enough to say its for everyone or fits
                      everyone's personality...

                      but I also wouldn't be stupid enough to make fun of business
                      models that have created more millionaires from thin air
                      then almost any business model I've ever heard of, and for
                      more people, especially when half of my points were biased
                      judgmental opinions rather then any substantial facts.

                      The whole, 'not everyone succeeds' line is seriously so ridiculous
                      its not even funny. What's the IM success rate again?

                      And frankly, to put all the value of network marketing
                      into the end all of someones paycheck shows even more the
                      ignorance some have of the industry.

                      I would suggest to entertain the fact that lots of people get
                      lots of value from actual BEING around very positive people,
                      going to conventions, listening to seminars, trainings,
                      conference calls, getting their beliefs and dreams re awakened,
                      etc.

                      I know more people who are very happy simply to be part of
                      a real COMMUNITY, and see more community in the network
                      marketing industry then i do in just about ANY segment of
                      general society.

                      I could go on and on about the positives of this industry, the massive
                      value so many people get out of it, and how many people in my
                      own DOWNLINE are full time, free, living their life, with actual
                      RESIDUAL income regardless of whether they send emails,
                      make products, or do anything else Im'ers have to do all day...

                      But i wont. Its no point. Because usually threads that start
                      like this serve one point and its to perpetuate belief structures
                      and making the person who started them feel 'right' about
                      what they believe...

                      rather then anyone actually challenging their beliefs, possibly
                      admitting they really don't know everything about the world,
                      and letting people be happy and go on their merry way.

                      I suggest this... lets UNITE the world. UNITE the freedom industry,
                      UNITE what it means to work from home and be an entrepreneur
                      instead of feel the need to make on model right and another wrong.

                      Otherwise you're substituting one koolaid with another.

                      If you want to bash me, go ahead.

                      But while browsing through this forum looking for some
                      specific information and coming across this... it just seemed
                      like someone needed to say something.

                      Remember 'we really don't need to act like we know everything
                      when its quite obvious we're all humans here' Lets just suck it
                      up and admit to our egos that most of the times our believes
                      are NOT right and only act as someway for us to build an identity,
                      a 'person' who we can feel right about.

                      Ok, im outa here!

                      Jonathan
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                      • Profile picture of the author Ricky Parker
                        We all know an opinion is like a.... And we all got um!

                        If MLM is your thing. SWEET.

                        If not. SWEET too.
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                      • Profile picture of the author Josh Anderson
                        Hey Jonathan,

                        I appreciate the time you took to post from your perspective... and though I never generated six figure income from any one MLM I did earn thouands a month and recruit and train thousands in several MLM companies. I also developed several prospecting tools and automated training platforms for MLM which is what led me into multimedia technology development which originally my primary purpose for developing was to leverage multimedia technology for online lead generation and recruitment training.

                        What made me leave MLM to focus 100% on product and service development was that even though I focused on the retail side of the businesses and training people to become retailers... there was far too much focus in Network Marketing on selling the dream and far to little needed support and training for retailing the product by company leaders and my own upline.

                        The essential problem is that if distributors are constantly told to sell the dream and never trained to sell the product you have a bunch of people spending every day trying to sell a dream which must be sustained by sales of a product or service which they never try to market.

                        In other words if you have a company that sells juice with a sales force of 1 million distributors a majority of whom have never sold a bottle of juice nor been trained to do so but instead have been fed a dream and taught to regurgitate the dream hoping to sign more distributors etc. what are you left with?

                        So my question to you and anyone else on the subject again is this:

                        "The question I would like to put forward is that if anyone actually had the financial report set before them and saw that 99.9% of 1 million distributors failed to earn significant income in 2007 would they buy into that business opportunity?"
                        And lets take it a bit further...

                        Would you not only join that business opportunity but could you invite others to become distributors given those statistics posted by the company in their own financial report?
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                        • Profile picture of the author Lance K
                          Interesting commentary, Josh. Thanks for clearing up my confusion about customers vs. distributors.
                          Signature
                          "You can have everything in life you want if you will just help enough other people get what they want."
                          ~ Zig Ziglar
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                          • Profile picture of the author ankur sharma
                            mlm sucks as simple as that .
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                            • Profile picture of the author deepestblue
                              I too am very skeptical of anything MLM, but it's good to remember this: When Donald Trump was being interviewed by David Letterman a couple years ago, Letterman asked him what he would do if he lost it all tomorrow. He said "I'd become a network marketer." The audience hissed at him. Trump's reply? "And that's why I'm sitting up here, and you're all sitting out there."
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                              • Profile picture of the author trafficwave
                                Originally Posted by deepestblue View Post

                                I too am very skeptical of anything MLM, but it's good to remember this: When Donald Trump was being interviewed by David Letterman a couple years ago, Letterman asked him what he would do if he lost it all tomorrow. He said "I'd become a network marketer." The audience hissed at him. Trump's reply? "And that's why I'm sitting up here, and you're all sitting out there."
                                Comments like this are part of the problem. Do you actually have any evidence of Donald Trump ever saying this or anything remotely like it?

                                You should ask whoever told you this nonsense to either verify it or stop saying it. I would encourage you to do the same. This sort of stuff just causes problems and hurts the credibility of the entire network marketing arena.

                                There are plenty of celebrities and moguls that actually DO endorse network marketing as a method of revenue generation, including Robert Kiyosaki and T Harv Ecker.
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                              • Profile picture of the author Lance K
                                Originally Posted by deepestblue View Post

                                When Donald Trump was being interviewed by David Letterman a couple years ago, Letterman asked him what he would do if he lost it all tomorrow. He said "I'd become a network marketer." The audience hissed at him. Trump's reply? "And that's why I'm sitting up here, and you're all sitting out there."
                                Even if Donald Trump did say that, the reason he's sitting "up here" and the audience is sitting "out there" is NOT because of their view of MLM.


                                Success is more dependent on your
                                vehicle (mindset & work ethic, etc.) than the road you drive it on (IM, MLM, Sales, Brick & Mortar business, etc.)
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                                "You can have everything in life you want if you will just help enough other people get what they want."
                                ~ Zig Ziglar
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                                • Profile picture of the author ibringjoy
                                  I'm glad some people posted in this thread to show both sides of the story. The reason I didn't post after I saw the first few was because I didn't want to turn the thread into some kind of argument. I figured if they wanted to rant about mlm, let'em. I would just stay out of it. But now that the thread is showing varying opinions without arguing, I'll jump in, too.

                                  Anyway, my opinion is that it is just another business model. Some people will be successful with it, and others won't. Just like any other business model.

                                  You may be surprised at all the well-known IM Gurus who are also raking in 6 figure residual incomes from mlm. These people are not the ones who run around pitching their mlm to everyone and their mother, alienating their friends and family. These people use their IM skills to build huge organizations from targeted prospects on the Internet. They certainly do not fit the stereotypical picture of the crazed mlm vultures. They do not spend their time at rallys, conference calls, conventions, etc. They use the very same skills we are learning here to build their mlm businesses.

                                  With reference to the "failure rate" being 99%:

                                  A lot of people DO get in just to use the product, and they DO become distributors also. The reason they become distributors is because they get a discount on the product. It's like belonging to a wholesale club. If you are a distributor, you get 25% to 50% off the cost of the product. Now if you are joining just to buy the product, wouldn't you rather buy it for half-price?

                                  Yet, all these customers are included in the failure rate statistics. Most customers would take the option to buy at wholesale, rather than retail, to save money in the long run. So, yes, most of the customers are distributors. This doesn't mean that the only people who will buy the product are the distributors. It just means that a LOT of the people getting in have no intentions of ever selling the product.

                                  So, not everyone in mlm is part of a "cult", or drinking the mlm Koolaid. That's just a stereotype as invalid as any other stereotype. Some people are like that. Others are not.

                                  Kathryn
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                              • Profile picture of the author Melkor
                                Originally Posted by deepestblue View Post

                                I too am very skeptical of anything MLM, but it's good to remember this: When Donald Trump was being interviewed by David Letterman a couple years ago, Letterman asked him what he would do if he lost it all tomorrow. He said "I'd become a network marketer." The audience hissed at him. Trump's reply? "And that's why I'm sitting up here, and you're all sitting out there."
                                Letterman? Not Oprah, Leno, or Carson then?

                                It pays to google a bit before you make claims about what someone as famous as Trump did or didn't say.

                                Merchants of deception. Read it.

                                If MLM was focused on product retail with the bizopp as a backend for the savvy marketer, it would be a good idea - but in practice it never is.

                                When it comes to MLM, y'all had better listen to J.F Straw's take on what's wrong with MLM today.
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                                • Profile picture of the author Bruce NewMedia
                                  "Merchants of Deception" is an awesome ebook ,as was just mentioned. Really shows the lengths to which many Big Dog MLM guys will go to to to keep the truth from getting out.
                                  The author of that book had a lot of courage to publish and expose what goes on.
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                                • Profile picture of the author Barry Plaskow
                                  Warriors!

                                  we need to provide the alternative. 99% of network marketers fail because they have no idea about real marketing.

                                  The truth is, if they would know, they would probably drop out of Mlm immediately and become internet marketers.

                                  It suits the companies to keep their "business owners" dumb.

                                  Barry
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                                  • Profile picture of the author jasonl70
                                    When I was in the USAF, I was stationed in England from 93-97. While I was there, Amway had started to make a presence in my neck of the woods. They were telling the locals that Amway was responsible for something like 80% of all Ford auto sales in the US!!! I guess those who WANT to believe such nonsense, will...
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                                    • Profile picture of the author Josh Anderson
                                      When it comes to MLM, y'all had better listen to J.F Straw's take on what's wrong with MLM today.
                                      Great read. From his article:

                                      You Can Get Rich In Multi-Level Marketing! If you have no qualms about taking people's money under false pretenses ... can stomach telling people that they will make outrageous amounts of money (knowing full well they won't) ... without working ... by getting other people to do the work for them - or - "We do the work for you!" ... without selling anything ... just by "recruiting" others ... all you have to do is develop your own personal customer base of Multi-Level Marketers ... like the heavy-hitter have.
                                      I hope Jim registers here at the new forum if he has not done so already.

                                      That is a man with great experience and wisdom and it is always a pleasure to learn from him on a variety of marketing subjects.

                                      Here is another great read on Multi Level Marketing from Gary Halbert -

                                      http://www.thegaryhalbertletter.com/..._marketing.htm



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                                      • Profile picture of the author JohnMcCabe
                                        Originally Posted by Josh Anderson View Post

                                        Great read. From his article:

                                        I hope Jim registers here at the new forum if he has not done so already.

                                        That is a man with great experience and wisdom and it is always a pleasure to learn from him on a variety of marketing subjects.

                                        Here is another great read on Multi Level Marketing from Gary Halbert -

                                        The Gary Halbert Letter



                                        .
                                        Too bad Mr. Halbert could never stop candy coating things and tell us what he really thought...

                                        I spent several years marketing several mlm opportunities. The problems were

                                        a) the companies kept folding on me, whether due to too-fast growth or a midnight visit from the IRS, and

                                        b) I tried to build organizations of product sellers, most of whom had no idea of how to sell air in outer space.

                                        I agree with Jonathan's points about the culture and rekindling dreams. I met some really cool people during my time in that world. But at some point, all the feel-good airy-fairy stuff has to take second place to running a business or else the whole thing is just a hobby.

                                        Pick the right opportunity and mentors, and you can get a first class education in how to sell and how to run a business. Ask Robert Kiyosaki, or read his book on the subject (The Business School for People Who Like Helping People).

                                        Pick the wrong ones, and you end up with the vultures Josh started this thread talking about, and a season ticket to the No Friends League.
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                                        • Profile picture of the author Josh Anderson
                                          "Kool-Aid is forever getting a bad rap. Flavor Aid is what was served at Jonestown. And I think that stuff would kill even if it weren't laced with cyanide.

                                          Give Kool-Aid Man a break, huh?"
                                          Yet "Don't drink the Kool-Aid" is the phrase that has stuck for decades and was originally coined in reference to the Jonestown massacre.

                                          Bad rap or not...

                                          Now the phrase "bad rap" has certainly given all rap a bad name as well
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                        • Profile picture of the author trafficwave
                          Originally Posted by Josh Anderson View Post

                          The essential problem is that if distributors are constantly told to sell the dream and never trained to sell the product you have a bunch of people spending every day trying to sell a dream which must be sustained by sales of a product or service which they never try to market.
                          I think that's a very valid point. A friend of mine refers to that as "selling air" and while there are people that can do it, it's a poor model for long-term success, IMO.

                          From my perspective, by showing people the true benefit of the product or service, you can gain long-term success.

                          There are a number of products my wife and I purchase from companies that use network marketing as a distribution method. I won't name them but we purchase from them based on the value we feel we get from using the products, themselves.

                          Over the course of using the products, we have referred other customers and as a result, we get a check from time to time.

                          With one of them, I don't have any referrals, at all. I just genuinely enjoy the product and we order it each month.

                          With another, we enjoy the products and because we've referred a few customers, we get a commission check each month. It basically pays for a nice dinner here and there.

                          As far as stats, figures, etc... there are several different ways to figure and display that information. Just look at Enron!

                          There is no shortage of companies and distributors we can point to as bad examples.

                          My point, I suppose, is that I don't believe that all companies that use network marketing as their distribution method should be painted with the same brush.
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                        • Profile picture of the author PowerOfOne
                          Rock out loud Josh.

                          completely see where you're coming from my friend.

                          And truthfully, it's a combination of things that makes
                          the mlm industry work so well.

                          It's the fact that it does allow so many people to really
                          start dreaming again. It allows them to re awaken their
                          dreams, and personally, I love that.

                          I love the fact that people start believing in their dreams again,
                          and regardless if its the specific opportunity that causes them
                          to realize their dreams...I've still seen lives change just
                          because of being in the culture.

                          And also, developing a love for the product you are bringing
                          to market is huge too. And I've seen people fall in love with
                          products and really get passionate about them.

                          In my current company, they really lead with this mission
                          statement of changing the wellness paradigm of the world.

                          So it gets a lot of people actually plugged into a higher purpose,
                          plugged into wanting to do good for people's lives, really
                          believing in the product they are bringing to market, as well
                          as re awakening their dreams. So...there's some real
                          positives you can derive from the culture and I experience
                          these alot.

                          And on top of it...it's a little bit easy for the average person
                          to wrap their head around then being an IM entrepreneur.

                          More people see themselves being successful in network marketing
                          then learning the ins and outs of IM.

                          So...it's just a huge market of people to tap into.

                          I love it. But of course, i totally respect and appreciate whatever
                          other peoples loves are too! And at the end of the day... IM and
                          mlm are just two different tools that have gotten a lot of people
                          to where they wanted to be.

                          ANd also two different tools a lot of people have tried that didn't
                          necessarily work for them for lots of different reasons.

                          I love em both incredibly! And feel grateful to be part of this
                          industry no matter what way I look at it.

                          Your new video software looks pretty cool man, I'll be picking
                          a copy of that up too, yet still haven't implemented the last
                          one I bought yet.

                          Keep rocking my friend,
                          Jonathan
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                          • Profile picture of the author Mo Goulet
                            I do not know if I should release this information but anyway as a former MLM owner I can give you some straight facts....

                            Back in 1998 I started the first cigarette mlm in the world and ran it until 2005 from several Native American Reservations.

                            I decided to do it simply because I knew MLM was a viable way to network a product.

                            I was not trying to get people to buy something new. I was offering them something they were already using. Offering it to them for less than what they were paying for it already and giving them an chance to make a little money by helping other save on their smokes.

                            The bottom line is ...That was a unique opportunity compared to most of the mlm's in existance today.

                            Today you are asked to buy something you do not use. You pay more than you would if you bought it locally at a dept store and you ultimately feel guilty trying to get others to do the same thing.

                            Don't you guys remember how Allen started out when we were making money selling the secret site...

                            I was registered for years here under a different name...

                            Network marketing only works where there is real value and not just a way to make money....

                            I do not judge a program by it's method of distribution but by it's true value to the end user. Would I buy the product if there was no opportunity attached to it..?
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                      • Profile picture of the author DavidCutter
                        I couldn't agree more with Jonathan's post.

                        Are there bad apples in nework marketing - of course. Are there bad apples in "internet marketing" - of course. In affiliate marketing - yep.

                        What about the incestial (?) cycle of internet marketers selling recycled dreams to other internet marketers who in turn sell dreams to internet marketers, and on and on and on?

                        Or ebooks about how to make a fortune writing ebooks, by writing how-to's?

                        So many of the "distributors" who don't earn money are just customers who want wholesale prices. I'm not disagreeing that a vast majority never make any money, but if they did an actual survey of the entire active distributor base of people who were actively working to build their business (meaning at LEAST 5-10 hrs/week) I doubt the numbers would be anywhere near as high as the cliche 95%-99%.

                        Why? Because only 1 in 10 (rough guess) is really trying to do anything anyways.

                        I'll leave it at that, because Josh obviously has issues with the network marketing business model and that's okay...we can agree to disagree. But remember, nework marketing is JUST a means of moving products from the company to the customer, it is not in and of itself a bad or negative thing. It's just a channel of distribution - by itself it is neither good nor bad.
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                        • Profile picture of the author OnlineMasterMind
                          I agree that MLM is a far inferior business than IM, especially on paper.

                          In fact, I wouldn't even call MLM a true business.

                          You're Self-Employed and you are NOT in complete control (as we recently saw with ASD)

                          Moreover, in MLM when your marketing succeeds your reward is WORK.

                          And often, that work results in ZERO COMPENSATION work.

                          In IM, when your marketing succeeds you get PAID....automatically.

                          I've been involved in MLM and pretty much figured this out the hard way even though it's strikingly obvious looking back in retrospect.

                          At the same time I think Jonathan makes some great points that really can't be disputed...

                          A lot of us miss the point... many people are searching for something beyond money.

                          And you really can't put a price tag on relationships.

                          I know Jonathan and he is a freakin marketing mastermind who I've personally I've learned a ton from.

                          Also, there are a lot of things in IM that are very common sense to us but are simply to overwhelming for the average person with no I.M experience.

                          MLM or top tier direct sales is much easier to understand and can be a great way for someone to get started in the world of free enterprise and at the very least, get some great sales experience, which could prove very valuable...

                          But at the end of the day, the pinnacle isn't being a distributor, it's being a business OWNER.

                          That's why the smart entrepreneurs (Buffet, Trump) don't participate in MLM companies, they OWN them. And smart internet marketers like Jonathan and Mike Dillard don't simply build a downlines they build information product businesses around them.

                          Sure, you can make a lot of money by simply building a big downline but in the end that simply equates to being a mobile CEO (like a high paid lawyer or doctor) and for some, that may even be a dream come true.

                          Although it definitely wouldn't be for me....
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                          • Profile picture of the author jasonl70
                            LOL!! not the juice guys!!!

                            My brother and I stumbled across these folks last year at a hotel we were at.. what a hoot! $40 bottles of juice!!! Guys trying to pick up girls, bragging about their "berry business" :p

                            Sorry - nobody is signing on as distributors just to get a discount on $40 juice bottles, just like nobody signed on to ASD for the wonderful advertising They're signing up to make money - and will ignore any logic to the contrary..
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                          • Profile picture of the author Josh Anderson
                            "I'll leave it at that, because Josh obviously has issues with the network marketing business model and that's okay...we can agree to disagree. But remember, nework marketing is JUST a means of moving products from the company to the customer, it is not in and of itself a bad or negative thing. It's just a channel of distribution - by itself it is neither good nor bad."
                            Actually we do not disagree...

                            I do not have issues with Network Marketing as a sales and marketing method.

                            The essential problem is that if distributors are constantly told to sell the dream and never trained to sell the product you have a bunch of people spending every day trying to sell a dream which must be sustained by sales of a product or service which they never try to market.
                            And since everyone seems to be missing the question that I posted I will restate it again:

                            Quote:
                            "The question I would like to put forward is that if anyone actually had the financial report set before them and saw that 99.9% of 1 million distributors failed to earn significant income in 2007 would they buy into that business opportunity?"
                            And lets take it a bit further...

                            Would you not only join that business opportunity but could you invite others to become distributors given those statistics posted by the company in their own financial report?
                            Just because there are a small hand full of distributors making money (in this case 1,000 out of 1,000,000 are earning more than $100 a week) does not validate the business or its markeing practices.

                            Additionally the statement about "you'd be surprised" referring to the number of successful IM guru types making 6 figures in MLM does not validate the practice in the industry in selling dreams rather than product.

                            I am not surprised because I was a network marketing insider in the IM market... that is how I got introduced to IM. I was involved in several lauches of network marketing companies to the IM market years ago and both marketed product and recruited thousands of distributors.

                            What made me get out of recruitment of distributors was the 100% focus of company leaders in just about every network marketing company I got involved with on the recruitment of distributors and the almost non existent training and focus on the marketing of product.

                            So why is that a problem?

                            Because its illegal.

                            I still belong to a couple network marketing companies today... but only because I use and retail their products.

                            So for those of you who think this is some guy who does not "get" network marekting.

                            We'll I get it. But the marjority of people involved in MLM do not get it. That is the problem.

                            They do not understand how a sustainable business is built. Very few in mlm do.

                            Most treat it like a lottery because that is what they have been told... that all they need to do is sponsor some super recruiter and they will be set for life without ever having to market any product themselves.

                            That's the lie of network marketing.

                            That is the fales dream constantly sold.

                            If everyone just sponsors distributors and no one focuses on selling product...

                            Then you have to use artificial force consumption called "auto ship" which fills the cupboards and basements of distributors with unused product... more than they can or care to consume.

                            All because they think that sometime in the future they are going to sponsor the world greatest recruiter and win the MLM lottery.

                            If MLM focused on retail with recruiting distributors as a benefit then they would not have the constant controversy and there would not be the constant scrutiny of the federal government.

                            But it is network marketing's close relationship to the ponzi or pyramid scheme that causes companies to focus on the lottery aspect too much.

                            This is why there is tight government oversight and financial reporting requirements.

                            This is also why companies that focus most of their training on recruitment of distributors and selling the business opportunity and not retailing the product tie forced consumption and autoship to commision levels.

                            They have to artificially inflate their retail sales numbers in this way so that they can try and appear that they are following the 70/30 rule... yet most companies are not.

                            The more you know about network marketing, the laws governing it, and the operations of many of the companies who use it as a marketing method the more clear the problems and lies of MLM companies show themselves.

                            So again I ask:

                            "The question I would like to put forward is that if anyone actually had the financial report set before them and saw that 99.9% of 1 million distributors failed to earn significant income in 2007 would they buy into that business opportunity?"

                            And lets take it a bit further...

                            Would you not only join that business opportunity but could you invite others to become distributors given those statistics posted by the company in their own financial report?
                            The story is the same throught the network marketing world.

                            Very few companies focus on the retailing of the product... most are put together by network marketing vetrans who have the compensation plan and bizopp worked out first and then just look for the product that they can snap into it...

                            A sure sign of a koolaide drinker is someone who is involved in network marketing who talks about how much others have made and how much you can make but has not made a significant income themselves.

                            Contact them just one year later and and ask them how much money they are making in the network marketing company they pitched you on back in the day and I guarantee you that the vast majority will be making little to nothing.
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                          • Profile picture of the author trafficwave
                            Originally Posted by OnlineMasterMind View Post

                            I agree that MLM is a far inferior business than IM, especially on paper.

                            In fact, I wouldn't even call MLM a true business.

                            You're Self-Employed and you are NOT in complete control (as we recently saw with ASD)
                            MLM is not a business. On this we can agree.

                            "ASD" and "MLM" should not be used in the same sentence unless that sentence is to clarify the difference between scams like ASD that use "MLM" terminology but are not actually related to legitimate MLM in any way, shape, or form.

                            There is just as much misinformation on both sides of this argument.

                            Kinda funny in some ways ... yet still so very sad.

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                            • Profile picture of the author SarahMcHarry
                              I still don't think that anyone here has addressed the problem of MLM versus the hucksters in the IM field.

                              How many WSO offers do we see advertised here that promise untold riches for doing zilch? How many of the ebooks here teach newbies how to teach newbies how to make a fortune in IM?

                              How many lies are told by how many 'gurus' to keep the dream alive? We've all fallen for this in some way or another and I don't think we can be too sniffy about MLM.

                              I've designed websites/blogs for people who are doing very well in network marketing. I don't know how they do it but they genuinely seem to have cracked the code and made the MLM business work.

                              I certainly wouldn't want to cast the first stone at the MLM industry...

                              Sarah
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  • Profile picture of the author vinnylingo
    Kool-Aid - Wikipedia, the free encyclopedia

    Kool-Aid is forever getting a bad rap. Flavor Aid is what was served at Jonestown. And I think that stuff would kill even if it weren't laced with cyanide.

    Give Kool-Aid Man a break, huh?

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