Questions About MLM/Networking

**jhnkvn** · July 15th, 2014 02:53 AM

Okay, my stance on this issue is neutral.

To start, I'm not into networking or multi-level marketing although I found myself dragged on a lot of their conferences. From Royale (which Top Gear Philippines FB page viewers absolutely "love"), Fern-C, Front Row, UNO, VMobile, etc. the list continues on and on with the last being Nu Skin Philippines.

For a point, I'm not being dragged unwillingly. I mainly attend to speak to whoever's speaking. I value my connections and I'm not biased whether you came from X MLM company or Y prestigious company. Skills are skills and the top networking peeps are extremely good in their salesmanship to get them where they are.

I just don't find myself joining is because:

(1) I don't need the money. This draws most people - pictures of cheques in Facebook, etc. Everytime a person wants to state that he earned X amount last year or this year incessantly, I simply smile but internally it makes me want to slap him around with my private banking statement.

(2) Time is precious. Instead of using it on salesmanship - which I utterly suck at since I'm quite frank personally.. I instead focus it on other stuff - like starting a new entrepreneurial venture.

Over time, ganito lang yan. If you believe the product and you recruit the people to use the product, I'd say it passes my metric. For example, I don't condone Avon's direct-selling method. Fern-C has enough brand-power that you equate it immediately with Vitamin C and people actually pony up extra for branding (think: Viagra) and V-Mobile's loading schemes seems quite sustainable given that they act much like middle-men for telecos.

However, if you're recruiting people for the sake of recruitment. That's easily pyramiding na. As a man, I don't believe how glutathione can be sustainable. But seeing how successful Placenta is (who's beside our Quezon City office), I'm guessing a LOT of our typical Filipinos gets suck up into this whitening business so that's a gray area for me. For others it might be a sustainable business but in my eyes it isn't. Nu Skin's marketing premise is also based on its "age-defying" products - they essentially market "life" so that's also a gray area for me.

The industry is simply summed up in one phrase naman: you're in the business of selling. Wala naman talaga instant-yaman nor do early uplines have an immense edge over the starting newbie. As with every business, hard work will propel your success.

A very good case on MLM's compensation structure is seen in NuSkin's Annual Report - Compensation Summary which I was crunching its 2012 version way back while the speakers were speaking. The statistics aren't encouraging it all (https://www.nuskin.com/content/dam/g...stearnings.pdf)

For example, there's only a total of 14.5% "active" distributors. In other words, 85.5% of people simply bought the product (either for use or was lured in by the promise of earning $$ but simply left it) and didn't bother redistributing. The pay structure is exponential with huge jumps in annualized salaries amongst divisions. While the non-executive distributor with comprises 5% of distributors getting a paltry $360/Php16,000~ annually. It begins getting worthwhile if you're at the Ruby Executive level with compensation of Php1.5m annually.. but at a 0.36% statistic chance? I'd rather risk making a new venture and managing it. But it's good to be at the top as with all companies. In this case, NuSkin gives out roughly Php26 million per annum to its top earners. That's pretty much a Ferrari 458 Spyder in Philippine peso terms.

Before I end this discussion, the sad thing I just want to point out is that most top earners' material stuff aren't really fully-cash paid. In fact, a lot of them use credit for the purchase. Not that I want to criticize given our favorable credit rates but it's quite sad that being fancy is actually a implied requirement once you're on top.

P.S. Technically, Zalora Philippines' Brand Ambassador Program IS a MLM network (http://www.zalora.com.ph/brand-ambassador-program)

Disclaimer:
I am a former shareholder of Avon
I also did in-depth research on whether to back Ackerman's short position in Herbalife (which I eventually did not)
I'm also acquaintances with a lot of the "top" in MLM companies

**jut703** · July 15th, 2014 02:54 AM

Wala naman MLM na priority yung product development eh. Which is why I really think the product is just an overpriced front.

I have a friend though, joined Usana last year. Seems to be doing well, better than his day job as a Samsung MT. But then again, they all pretend to be doing well. And usually, if ever they do well, it's only on one aspect - finances. I feel that he's missing out on corporate experience that he could use to build his career or business. Though he can argue that networking is also important for business.

But then again there's still the materialistic culture of MLMs that I totally hate. And of course the trickery.

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**jhnkvn** · July 15th, 2014 03:13 AM

Actually, walang MLM ang priority ang product development is because.. why bother? It's not their specialty. The specialty is in selling... selling.. and more selling. For example, Nu Skin is arguing their age-products are researched and all.. but that's BS. They're not an R&D company.. that's like Estee Lauder claiming that they developed X product. Not really.. most of these are simply license here and there.

**uls** · July 15th, 2014 11:24 AM

Originally Posted by jhnkvn

Over time, ganito lang yan. If you believe the product and you recruit the people to use the product, I'd say it passes my metric. For example, I don't condone Avon's direct-selling method. Fern-C has enough brand-power that you equate it immediately with Vitamin C and people actually pony up extra for branding (think: Viagra) and V-Mobile's loading schemes seems quite sustainable given that they act much like middle-men for telecos.

yes if i like a product being sold thru MLM i'll join just to get the member discount. and i would recommend it to other people

Avon is more product oriented than other MLMs. Avon people aren't like uno or frontrow people

However, if you're recruiting people for the sake of recruitment. That's easily pyramiding na. As a man, I don't believe how glutathione can be sustainable. But seeing how successful Placenta is (who's beside our Quezon City office), I'm guessing a LOT of our typical Filipinos gets suck up into this whitening business so that's a gray area for me. For others it might be a sustainable business but in my eyes it isn't.

they just need a product to make the pyramid scheme look legit

it can be glutathione or vitamin c pills or some 3-in-1 powder drink

you can even use bottled water to legitimize a pyramid scheme

The industry is simply summed up in one phrase naman: you're in the business of selling. Wala naman talaga instant-yaman nor do early uplines have an immense edge over the starting newbie. As with every business, hard work will propel your success.

and that's their answer to people who don't make it in MLM. kung di ka kumikita sa MLM it simply means you're not working hard enough. hindi scam yan sabi nila

I also did in-depth research on whether to back Ackerman's short position in Herbalife (which I eventually did not)

you mean Bill Ackman who wants the US govt to investigate Herbalife for being a pyramid scam

**uls** · July 15th, 2014 11:35 AM

actually Avon is so product oriented you wouldnt think it's an MLM company

**CLAVEL3699** · July 15th, 2014 12:03 PM

Marami akong kilala na nasa MLM before na nasira ang pamilya at nagkautang utang.

Galing ako sa W. Brown before noong may direct selling pa sila.

**uls** · July 15th, 2014 01:26 PM

bottom line is you join an MLM coz you like their products

kung hiyang ka sa USANA vitamins or Herbalife shake then sumali ka para sa discount

pero kung sumali ka sa MLM dahil umasa ka na makakabili ng Ferrari you're going to be disappointed

**jut703** · July 15th, 2014 01:39 PM

Too bad 99% join for the Ferrari.

Ano ba earning structure ng usual MLM? Nacurious lang ako kasi yung isang friend ko may hashtag #6digits eh. Wala pa siyang 1 year sa sinalihan niyang MLM.

May napuntahan ako dati, fuel additive chuchu MLM. Discussion was 5% about the product (with ludicrous claims) and 95% about success stories. No discussion about how you'll get to the top. Masarap yung pagkain though.

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**uls** · July 15th, 2014 01:56 PM

basically the higher up you are in the pyramid the bigger your earnings

the money comes from everyone underneath you (your downlines) -- you get a cut from every product your downlines buy. even those above you get a cut (kaya mahal ang MLM products kasi ang dami nakikinabang)

so it's not impossible for a successful MLM to have a number of millionaires in the network

**miLes** · July 15th, 2014 03:32 PM

Originally Posted by jut703

Too bad 99% join for the Ferrari.

Ano ba earning structure ng usual MLM? Nacurious lang ako kasi yung isang friend ko may hashtag #6digits eh. Wala pa siyang 1 year sa sinalihan niyang MLM.

May napuntahan ako dati, fuel additive chuchu MLM. Discussion was 5% about the product (with ludicrous claims) and 95% about success stories. No discussion about how you'll get to the top. Masarap yung pagkain though.

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its all about front/masquerade, who can you recruit if you dont show 'results'? alot of people are blinded by money, fast money, MLM takes advantage of that.