Anyone else have a combined Self Reliance/Finances lesson?


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12 hours ago, Mores said:

I'd wonder if the most successful MLMs have a mechanism for either firing people in the chain, or of limiting their dividends within the chain.

 

1 hour ago, Mores said:

In a regular sales force, one gets promoted by selling really well.  Then you teach others to sell really well.  In an MLM, what is it that you're selling that gets you promoted?  More product sales will NEVER get you promoted.  You might make more money, but never a promotion.  You get promoted by selling the system, i.e. recruiting.

If the entire motivation is to recruit people rather than sell products, there is a severe weakness in that business model.

These doesn't make sense.   An MLM business is drastically different from a regular sales force because you don't get paid a salary plus commission.  You get paid commission period.  You don't need to fire slow performing marketers on your downline because you don't need to - firing them and having them make 0 sales gives you the same results - 0 commissions.  But you can train slow performers and try to correct the issue.  Now, you might think - but they might be giving the business a bad name.  It's MLM.  Each marketer is an independent consultant.  No different than a franchise in this sense where the terrible service in your neighborhood McDonald's doesn't affect the other McDonald's franchises.

Promotions is meaningless in MLM.  You want to get promoted in a regular sales business because promotion is how you increase your salary.  In MLM, you increase your salary by making more sales or increasing your residual commissions.  Now, if you want to get residual money in addition to sales, then you find good marketers who can sell the product for you.  The more good marketers you can train to make good sales numbers, the more residuals you make.  Just putting any Joe-and-Sue in your team doesn't help you (this is another major cause of failure with the MLM recruiting process).  You need to learn how to spot innate talent for marketing and learn to train down-lines - not just onboarding but also ongoing training.  Basically, your job shifts from just selling product, to training marketers to sell product.

"The entire motivation is to recruit people rather than sell products" is not a severe weakness.  In a regular sales company, not every person in that company does the selling of the product.  A lot of the company manages the people selling the product.  In an MLM, you can recruit people to sell the product for you, so your focus shifts from just directly selling the product to also hiring and managing sales people - this doesn't change the fact that even when your sole focus is recruitment, you are still recruiting people to SELL products because recruiting people who can't sell products doesn't make you any money.

Edited by anatess2
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Guest MormonGator
19 hours ago, estradling75 said:

Very very true...  But if I had to have a flaw... "Too trusting"  is better then a lot of other options.

Perhaps, but in business one of the main attributes you need is a healthy does of skepticism. If you want to be trusting and sweet, you are free to do so, but not with my money. 

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12 minutes ago, MormonGator said:

Perhaps, but in business one of the main attributes you need is a healthy does of skepticism. If you want to be trusting and sweet, you are free to do so, but not with my money. 

And if you are giving me your money that would be a bigger flaw then "To trusting"  :D

Whereas if it is my money and I lose it because I am "To trusting." then it becomes an expensive education.

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Guest Mores
1 hour ago, Fether said:

Yes I know. As I said above, I don’t believe (and never have) they are MLM scams.

My purpose for the question was not out of misunderstanding, it was more to gage how everyone else sees them and to question whether the fact that most of these sales companies with MLMesk structures reside in Utah/Idaho is effecting the statistic that says Utah s fall for this stuff all the time.

To answer that... sort of question...???  I'll say that my concerns around MLMs is that they center on the recruiting than the moving of actual products.  And insomuch as some can make a living off of selling the products, they can be that successful.  But most don't.  And the emphasis is not on the product, but the structure.

The affinity fraud is mainly about the encouragement of people into the structure rather than the selling of products.  And if it is about selling the product, I just don't buy from door-to-door salesmen.  Only on some projects about home improvement will I invite someone into my home to sell me anything.  Everything else can be done in someone else's place of business or over electronics (phone/internet).

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Guest Mores
38 minutes ago, anatess2 said:

These doesn't make sense. 

Yes it does.

38 minutes ago, anatess2 said:

You don't need to fire slow performing marketers on your downline because you don't need to - firing them and having them make 0 sales gives you the same results - 0 commissions.

Wrong.  Say the owner of the company is at level 0.  The newest recruit is at level 10.  You're at level 5.

When anyone sells stuff at level 10, everyone above gets money regardless of whether they even lifted a finger or were even aware of the business even existing.  So, level 4 gets less money because you (at level 5) exist.  And you do nothing to help the business move forward.  That is why there is a weakness.  All of the middle line can be super lazy and still suck up profits from the company with no chance of losing the job.

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36 minutes ago, Mores said:

Wrong.  Say the owner of the company is at level 0.  The newest recruit is at level 10.  You're at level 5.

When anyone sells stuff at level 10, everyone above gets money regardless of whether they even lifted a finger or were even aware of the business even existing.  So, level 4 gets less money because you (at level 5) exist.  And you do nothing to help the business move forward.  That is why there is a weakness.  All of the middle line can be super lazy and still suck up profits from the company with no chance of losing the job.

You don't really understand how this works.

You only get residuals from SALES of your downline - which you are responsible for training/keeping healthy.  Level 5 is Level 4's downline - that means, it is the responsibility of Level 4 to train Level 5 to be a better manager of downlines.  But, regardless of whether Level 5 through 9 lift a finger or not, it does not hurt Level 4 as long as Level 10 continues to do a good sales job.  Level 5 already did his job of building Level 6, which is why he earns his residuals of sales.  Level 6 already did his job of building Level 7... etc.  In any case, Level 5 will be earning low-to-no residuals if he is not doing anything to make more sales or recruit more Level 6's or keeping his downlines healthy and selling product.

Now, if Level 10 of that particular downline is struggling due to no support from her uplines, then it is the job of the responsible high-level to go through her Levels and strengthen them up.  The higher up the Levels you go, the bigger your responsibility - it comes with the bigger money.  If that downline is not salvageable and there's no sales coming out of Level 10 or anywhere on that line, that's fine.  Level 4 can always recruit another Level 5 and build another downline.

By the way, it is rare (if not nonexistent) to get commissions from 10 levels deep.  The normal is 4 levels - you get residual from earnings of up to 4 Levels of your downline.  So most MLM managers consider that line dead if the 4th Level Down is not earning residuals or sales and training the 4th Level down is not helping.  Also, most MLM companies will allow a good "Level 10" to go directly under "Level 4" if his upline proves to be sucky.

 

Edited by anatess2
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1 hour ago, anatess2 said:

even when your sole focus is recruitment, you are still recruiting people to SELL products because recruiting people who can't sell products doesn't make you any money.

Sure, but one critique I've seen is convincing people to stockpile. One doesn't care if their recruits sell, just that they order.

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9 minutes ago, Backroads said:

Sure, but one critique I've seen is convincing people to stockpile. One doesn't care if their recruits sell, just that they order.

Then you're not recruiting.  You're selling product.

The upline I had for Arbonne is actually doing this as their "strategy".  In Arbonne, you get residuals from your downline if your downline sells at least $100.  So, what they did is - instead of recruiting sellers, they simply found people who would buy the vitamins which would cost $100 a month.  Once you're a seller, you can buy the same vitamins for 40% discount (the idea is you buy the product for $60, then you sell it for $100 making a $40 profit) and it still counts as the $100 sales (selling to yourself).  So, I would get these monthly reminders from my upline to remember to purchase my vitamins.  I actually didn't buy the Vitamins, I bought the cleansers, so I would just stagger my purchases so I end up spending $60 per month which my residuals from my downline ended up paying for.

Edited by anatess2
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6 minutes ago, anatess2 said:

Then you're not recruiting.  You're selling product.

But isn't the point to have someone down the line eventually selling to those outside the company? If recruiting is the ideal, who actually sells the product?

Edited by Backroads
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9 minutes ago, Backroads said:

But isn't the point to have someone down the line eventually selling to those outside the company? If recruiting is the ideal, who actually sells the product?

Everyone should be selling the product.  The point is not recruiting to recruit.  The point is recruiting to sell product.  Whether you sell the product to people within your downline or selling the product to people outside of the company, it's the same.

That's the problem with a lot of MLMs.  Even as they are legit MLMs (have good product to sell), they don't sell the product, they sell the levels and make you think that buying more of the product you can't sell is building your business - this is an indicator that that particular marketer is bad and you shouldn't join it.  If you really believe in the marketability of the product, then find another marketer of that product that actually knows what he's doing.

Edited by anatess2
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