Saturday, January 4, 2014

MLM Absurdities: MLMers Encouraging College Kids to Drop Out and Do MLM Full-time... Crazy.

One of the most dangerous absurdities is the notion that MLM offers an even playing field, therefore you need NO education to succeed in MLM, and thus, college is not necessary and a complete waste of money (thus you should drop out). Plenty of people dropped out of college and went on to successful ventures.

This is often used by MLMs that concentrate on younger people, such as Vemma, with their Verve energy drink line, signing college kids and even some high school kids as their affiliates (formerly "brand partners").

We have to look at this myth in separate pieces.

  • Does network marketing really offer a level playing field? 
  • Can *any one* succeed in network marketing? Or is talent / education required?  
  • Is College a waste of money? 
  • Are the the successful college dropouts actually relevant to the premise? 

Does Network Marketing Really Offer a Level Playing Field for All? 

One of the often repeated myths is that NM is a level playing field, in that anybody can succeed. 

Frankly, that is absurd. The idea that you have an upline and s/he benefits from YOUR work should tell you this is NOT level at all. He got there first. 

Furthermore, there are a LOT of circumstantial evidence that the industry is plagued by insider advantage and cronyism... just like the "regular corporate America". 

Did you know that a mother-daughter team in Vemma, both "Ambassadors" (making 15000 a month in commissions) actually is related to the head motivational speaker for Vemma, and the speaker is a close friend of head of Vemma BK Boreyko and his parents? 

Network Marketing is not as level as they want you to think. 

Can any one succeed in network marketing?

I've had network marketing enthusiasts claim that the top income careers all require heavy education or extreme amount of physical talent, like doctors, engineers, sports stars, and so on... Except network marketing.  The claim is anybody can succeed in network marketing, and the playing field is even. 

At first glance, this sounds reasonable, as the top twenty income careers based on US Bureau of Labor Statistics are mostly medical and engineering careers. However, is it true that any one can succeed in network marketing? 

US Bureau of Labor Statistics 2010 "20 highest paying occupations, by median annual pay, 2010 census data"
The top entries are doctors, surgeons, engineers, lawyers, and very senior managers
The idea that you need no education to succeed in network marketing is actually quite ludicrous. At the minimum, you need to learn how to market. It is network MARKETING, after all. While some people have a talent for it, all people need some tests to assess their skills and add some remedial lessons for the areas they are lacking. In a Harvard Business Review blog entry, the author estimated that 70% of top salespeople have innate talent or natural instincts that give them an edge ins ales, while 30% had to learn to sell, having no such talent.   

It's safe to say that if you had not specialized in sales career before, you probably don't have much sales talent or instinct. Thus, let's assume that you have no such talent or instinct. What are your chances of 'success'?

According to the same author, given 100 people with no talent, 40% will fail, 40% will do average, and 20% will do above average, in a sales career.

Keep in mind that in network marketing, in almost every major MLM, "average" means making a lot less than 2000. This is the figure directly from Direct Selling Association (DSA). As of 2012...  15.9 million people sold 31.63 billion worth of stuff in the US.

Now if you do the math... 31630/15.9 = 1989.31 dollars... that's average RETAIL sold per person.

That's not profit. That's just retail sold. Profit would be less than half of that, perhaps a LOT LESS. That's less than $1000 PER YEAR PER PERSON.

Extrapolating from that 40/40/20... That means 40% of you will earn practically nothing. 40% of you will earn just a little (less than $90 a month), and maybe 20% of you will actually earn enough to call it a part-time job. And a tiny percentage of that 20% will really really earn a car or whatever.

Saying that you *can* succeed in network marketing without an education is like saying anyone born in the US of A can be president. While factually true, it is of no practical use. It's like saying any valid lottery ticket has a chance of winning. Duh!

The reality is you will have to spend time and money and effort to become a good salesperson... assuming you have the right personality traits to be one. And you will keep paying for seminars, meetings, training calls, workshops, and so on and so forth, just like any other education.

Also keep in mind that there are TWO colleges in the US that offers courses in network marketing.

Is College a Waste of Money? 

By now you should have realized that college is only a waste of money... If you go there to waste it on non-educational stuff... such as plotting to make money with your non-existent skills (or party, or hook-up, or whatever).

But wait, you said, what about Kiyosaki? Doesn't he advocate no college? Why yes! In 1993 (years before before Rich Dad Poor Dad), he wrote a book that nobody seem to have heard of, called If you want to be rich and happy, don't go to school! Which is rehashed into, you guessed it, Rich Dad Poor Dad. Remember the scene where he described that other people came at the Rich Dad's beck and call? That's in that "If" book... page 64.  The description on Amazon says it all:
If you're like most of us, your years in school did little to prepare you for the challenges of the real world. They are more likely to have planted seeds of financial and emotional failure in your life. These seeds sprout later, sabotaging our most sincere attempts to get ahead and create happy, prosperous lives for ourselves and our families. 
Remember Kiyosaki said his real dad, i.e. "Poor Dad", was superintendent of education in Hawaii? Sounds like he's having some daddy issues, with that sort of attitude toward education.

What'll you earn with or without college? US Bureau of Labor Statistics says:

If you have no college, as of 2012, your weekly income is 735.

If you finished college, as of 2012, your weekly income is 1371, almost DOUBLE.

Obviously, this is average of all US wage and salary earners, all fields, blah blah blah. Go read it yourself. (PDF link)

Anything that has potential of double your income for the rest of your life cannot be a waste of money. Right?

So WTF was Kiyosaki talking about? Remember, he finished his equivalent of college... Merchant Marine Academy.

Hmmm... Maybe that's why he hated formal education so much. Maybe he hated academy life. Maybe he was hazed. That, plus his daddy issues.

Do College Dropouts Really Succeed? 

The answer is no, as the chart above from BLS had already shown. College dropouts earn a bit more than high school graduates, but a LOT less than college graduates.

The problem is the "poster childs" of MLM, the idols that did drop out of college, are all exceptions, not rules.

Steve Jobs -- audited some classes at Reed College, but never graduated, went on to work for Atari, then met Steve Wozniak, who's the real technical guru. THEN they founded Apple Computers.

Michael Dell -- quit college when his PC building business (out of his dorm, then his garage) took off

Bill Gates -- graduated from Lakeside School high school, the most expensive academy in the state (cost more than some colleges) and they had access to timeshare computers before colleges got them. Bill Gates learned how to program BEFORE he got to Harvard, so Harvard actually don't have much to teach him.

Mark Zuckerberg -- dropped out of Harvard to create Facebook.

Notice any commonalities? They were all in TECH, and they know they're good in something which is why they dropped out of college to do it full-time.


You don't know if you're good in marketing or not. You may or may not have those talent / instinct that make you a good salesperson, despite sales pitches to you that "any one can succeed, it just takes hard work".

You thought you have an equal chance of success, a level playing field, in network marketing, but there are data that suggests insiders, esp. those who got there ahead of you, are more likely to make money than you in network marketing than you are, no matter how hard you work.

You thought that college education is worthless, but statistics shows that college education virtually doubles income for the rest of your life. And the few success stories of college dropouts are exceptions, not rules.

You'd be crazy to quit college, halve your potential income, to go after something that you don't even know you're good in... just because someone told you some half-truths. 

But it's up to you.

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  1. Skipping college to start an MLM business would be as absurd as skipping college and using my tuition money to buy lottery tickets. MLM advocates will cry that MLM is not a game of chance. but that's exactly my point. A game of chance has about the same likelihood of success as an MLM business.

  2. You should make an article about the colleges that do teach MLM, and the reasons why they do ;)

    1. There's only two colleges that I know that teaches MLM. I know one of them *may* (allegations only) have a professor whose wife's in MLM.

    2. If you can do a research about that and make an article, that would be great.

      MLM'ers seriously need to STFU, and you seem like you know your stuff.

      Please do! ;D