Why MLM is the future of business
I wanted to share an article I happened upon by a very successful Network Marketer, Randy Gage. I do not take credit for anything below and it is quoted from his site. Please visit his site for more information.
Wow, what a firestorm created from the comment from anonymous in yesterday’s post. If you haven’t read all the replies, I suggest you do so. Powerful opinions on both sides. And some good marketing insights.
Rather than responding to so many individual comments, I thought it better to share my thoughts on the issues here. So here goes:
Many years ago I received a challenge to appear on a nationally syndicated radio show debating Network Marketing. The host was up front and told me that he felt MLM was a scam and wanted someone to debate him live on the air. Naturally I jumped at the chance.
A lot of what was said there is completely relevant to the discussion we’ve had on the blog over the last few days…
The host pounced right away with the argument, “Randy, isn’t it true that only five percent of the people get rich in network marketing?” I responded that this was very likely. And also challenged him to name other businesses that had a higher percentage of people that became wealthy. I reminded him that most businesses would have a smaller percentage. Things like real estate, which certainly had created many millionaires, probably had a rate less than one percent. The host was forced to concede this.
Then to explore it deeper, I raised the following scenario: Let’s suppose someone joins Herbalife, Shaklee, USANA, or some other nutritional company and doesn’t get rich. But they do use the products every month, and become regular nutrition disciples. They lose some weight, lower their blood pressure or cholesterol, or prevent diabetes. They have more energy, can play with their kids, and maybe they live five or even 10 years longer. Suppose they never earn more than $100 a month in their business, but they get those health benefits. Isn’t this a good thing? A very good thing? (Of course we can make the same argument today with Mona Vie, Vemma, Xango, Agel, and a host of other companies.)
He acknowledged that, and then suggested that the profession was corrupt, because new people were being front loaded to buy $50,000 worth of products when they began. I thanked him for raising the issue and admitted that this had been a problem in the past. Then I went on to tell him about the Direct Selling Association (DSA) and their code of ethics. I explained that any reputable company would be a member of the DSA, and to do so required a one-year probation period, and their compensation plan would have to abide by the DSA code. And the code required that no one be allowed to purchase more products or services then they could reasonably re-sell with 30-60 days, and that they must offer an inventory buy back policy. Of course he was unaware of all this, was glad to hear about the DSA, and agreed that this would prevent the front loading.
It went on like this, issue for issue. Finally by the end of the program he actually came around and agreed that legitimate network marketing – not illegal pyramids and chain letters – was a good viable option for people looking for a better life. And I believe that is truer today than it has ever been.
And by the way, if anyone is worried about being victimized by a Ponzi scheme, they should be much more worried about their banker, Wall Street broker or their government than a network marketing company!
Regarding some of the other issues raised on the blog…
Personally I don’t find MLM products over priced as a rule. There are skin care lines that are vastly superior to the gooky junk being sold in department stores at a fraction of the price. Companies like Shaklee, Amway, and Melaleuca pioneered good value, concentrated cleaners with green packaging many years before it became fashionable.
Other products are certainly not the cheapest, but offer quality and value not available elsewhere. I’ve been buying Oxyfresh mouthwash and toothpaste (at $9 a tube for years) as a retail customer, because they have a scientifically proven process to prevent halitosis that no store brand can compete with. As I mentioned in the MLM Manifesto, our profession has brought many helpful products to market that need to be conversationally marketed, and never would have made it in a traditional retail environment.
It is true that some companies in our business have products priced higher than equivalent ones. But those products eventually die. The free enterprise system self cleanses anything like that.
As far as the cost of entry, that dog don’t hunt with me. I have failed in numerous traditional businesses, including two restaurants, a hairstyling salon, and a retail store, because I didn’t have the tens of thousands of dollars necessary to start them up successfully.
My friend has three Burger Kings and he has millions invested, personal guarantees for hundreds of thousands of dollars more. He has hundreds of employees to worry about who will call in sick, quit without notice, and steal from him. He’s the guy the police call at 4 am when the alarm goes off.
I have a business I started for about $1,500, I earn $1.5 million a year, and have no employees and can run it from a laptop under a palm tree anywhere. And I don’t have to wear a paper hat. Tell me who has a better business!
Especially in difficult economic times like these, the opportunity we have is meaningful to many people. And becoming helpful to many more by the day. Let’s not get jaded with all the big numbers. The truth is, even bonus checks of $400 or $600 a month would help millions of people right now. And the checks of $1,000 and $3,000 a month are transforming lives. They pay for better schooling, medical care, car payments, mortgages, charitable donations and much, much more.
The best thing you can do for poor people is not be one of them! So I’ll go back to what I said in the original post. Go out and get the money thing out of the way. And I don’t know a better opportunity for most people than network marketing.
Now if you still think network marketing isn’t for real, feel free to look for something else and we wish you the best of luck. And if you agree that what we do is important, get out there and spread the word. Talk to five people about your business today.
Hope you guys in Canada and the US have a safe and fun holiday weekend and celebrate your independence.
-RG