A Big Secret: How to Make Big $$$ with Multi-Level Marketing!

Posted by Greg L on February 26, 2010 · 2 Comments 

 

This post was prompted by someone approaching me with a multi-level marketing situation.  This generally happens to me every few months  Most people try to get in with accountants, physicians and attorneys as they figure you’ll be able to access your client base to quickly build their organization.  Typically, I’m approached with something very nebulous where they won’t come out and tell you what it is, but just simply say it’s an opportunity where you can sell a product and make money.  The situation I was just approached with wasn’t  even that subtle,  but was a flat out illegal pyramid scheme where you put in money.  This person really just believed that he was in “business”  and was offering me an “opportunity”.

It’s been my experience that when someone makes a blatant appeal to a base emotion like greed rather than one’s logic,  nine times out of ten the so called “opportunity” is a scam.  If you can’t explain to me in 5-10 minutes what the opportunity is, but insist on me tying up my time to attend a “meeting” to “learn more” , I quickly conclude that your opportunity is about nothing but some snake oil.  I know how real business works.

Over the years I’ve been preparing tax returns, I’ve not encountered one instance  where anyone made any significant money with any multi-level marketing company.  I’m not suggesting that there aren’t people who do, but I am suggesting the vast majority do not.  The main emphasis of most multi-level marketing situations is recruitment of people to your organization along with the requirement that you and your recruits buy your monthly minimum allotment of product.  This scenario implies to me that what’s really being created is a distribution network to sell product sans the investment in physical locations, transportation and etc.  The people who believe they are in business building organizations are in fact mere cogs in the wheel of a distribution network that benefits the manufacturer of the goods.  The more I think about it, these people are actually consumers fooled into believing that they’re distributors.

A very popular multi-level opportunity revolves around a girdle known as Body Magic.  Using this an example, let’s talk briefly about how to make money using MLM.  Suppose you had the bright idea that you wanted to make money selling this product by manufacturing it and distributing it.  You’d probably outsource the manufacturing to some place like China where the people work for next to nothing hence making your cost of product next to nil.  You realize that these sorts of products may have a short life cycle, so you really don’t want to invest heavily in a distribution network, so if you can convince some people that they will make money with a MLM set up, you effectively get your product also distributed for a cost of next to nothing.  Since each of the folks in the MLM scheme have to buy their monthly allotment, they are the ones who you’re really distributing the product to and since that’s the case who cares if they don’t build an organization?  You’ve got your sales locked in and if someone does in fact build an organization, you’re even better off.  You can’t lose with MLM if you’ve got product to distribute as it’s  almost a foolproof way to sell product without the cost of rent and employees.

In about a year or two once the excitement dies down and the product life cycle ends, you’ll come up with something else, outsource the manufacturing, set up another MLM scheme and do it all over again. A few successive iterations of that is certain to leave you flush with some ducats.  It’s almost like a pyramid scheme, except it’s legal.

Guess what the secret is?  The guy manufacturing the product is the one in business and making money.  That’s how you make big money with MLM and that’s the only way I’d get involved with MLM.

 

Filed under Business · Tagged with Multilevel Marketing