Wednesday, November 4, 2015

MLM Basics: Is there such thing as "good MLM"?

The MLM Skeptic has been asked repeatedly, "is _____ a good MLM?"

The short answer is: I don't know.

The longer answer is: I don't know. I can't do your due diligence for you, as I am not you.

But perhaps here's a more philosophical question... Is there such as thing as a "good MLM"?

Almost every MLM claimed they are good, and some may go as far as point out a few "bad apples" that had been stopped by government action, but they won't name a running company, unless the company's so egregious nobody is surprised they got shut down, such as Monavie head outright stated that Zeek Rewards is a ponzi scheme.

But first, we have to answer the question...

"What is a 'good mlm'?"

Good for the participant, good for the society, or good for the owner(s)?

I am going to assume that by asking this question, the asker is looking for the right company to participate in, and therefore, 'good mlm' means a company that justly compensates the participant for the effort put in. The other two factors (good for owner, good for society) are not really relevant for the participant, but they'd be nice to have.

But what exactly means "justly compensates participant for the effort put in?" While it may be "obvious" to everyone that one wants to be paid the maximum amount for doing minimal work, the real world is exactly the opposite... companies want you to do the maximum work for the minimum pay. The actual amount of work and pay is somewhere in between... at least, that's what's supposed to happen in a real job. Nobody want to be paid peanuts for hard labor, and no company will pay 1M a year for doing something that can be done in a few minutes with minimum skills.

The next question we have to answer: in MLM, are you rewarded for your own efforts?

But you're only PARTIALLY rewarded for your own efforts. Depending on how many levels of downlines you've developed (and how well they sell), you may make practically nothing based on your own efforts (your PV, personal volume is bare minimum), and you live mostly on the commission based on your group volume (GV) generated by your downlines.

In other words, the longer you spend in the business, the more you're rewarded for OTHER PEOPLE'S EFFORTS, as you build up your team. In fact, many MLM participants only knows how to recruit downlines. They can't sell the products they are supposed to be selling, and just buy the products themselves for self-consumption just enough to qualify for commission based on group volume.

And that's assuming you are in a real MLM selling real products

Keep in mind those "real product" MLMs can be illegal too. Just look at FHTM and Vemma.