Whats wrong with multi level marketing?
Multi level marketing has powerful incentives that turn out to be scams.
How is this? When you listen to a proponent you hear glowing pictures of wealth and success.
I knew a person who was an Emerald in the old Amway making $40,000.00 a year part time. Wow, what a wonderful hook, wouldn’t everyone want this too? But wait, here is the reality:
- He had to work more than 40 hrs a week while keeping his full time job to earn this amt. of money.
- He had large expenses to buy marketing material and venues.
- He spent many hours in seminars who’s purpose was to create hype to keep him working for them.
- He traveled every weekend costing a huge percentage of his earnings.
- A grocery store makes about 3-6% gross and after his costs he was making about .006% gross.
- His marriage ended in divorce.
- He suffered health issues, probably from the stress.
- Every penny he made profited his up line dollars. Thus making him a virtual slave.
These are the untold facts of multi level marketing, so next time someone presents the glory of their plan remember all they want is a slave.
I once ran a small multi level marketing plan for vacations. When I studied the spread sheet for the payouts and profits, I was shocked. It could not work if the payouts to the sales people was equal to the market place. The only way it would work is if the payout was less than a tenth of the market. For example say you sell cars and get a 10% commission. In order to pay all the up lines on a 6 tier multi level program the commission for the same car was closer to .001%. I tried over and over and it just was impossible. If I raised the payout even a few pennies it would not leave any money for a profit. The dynamics were that it was impossible to set it to make a reasonable profit. It only worked when it made exorbitant profits and enslaved its sales force.