To MLM or not to MLM
admin February 5th, 2008
Yesterday, one of my friends asked about MLM (Multi-level Marketing). Since I’ve written such a long article for him, I’d better share it with all of you =)
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I have some experience in MLM and I have also taken several business courses.
Firstly, the only way you can make money in MLM seriously is through recruiting members. Not selling. If you just sell, you might make about RM200 - RM300 per month (assuming that you can sell 1 product a day with price around RM50). It would be okay if you just want to make this figure.
But if you think you want to earn more than RM1,000 per month - you can either do MLM full time (which is very not worth it, you better off go work somewhere full time and get RM3000) or you can recruit members and let them work for you.
But how? Will every single member be active at all? Or do they just pay registration fee and then gone? Aha.. I have read some statistics somewhere.. but i don’t remember where, the average number of people being active, is 1 out of 30. Probably worse. What does this mean? Every 30 people that you persuade to be your downline, only 1 person will be active. However, mos5 probably he’s only an active seller. Only probably 1 in 50 will become an active recruiter.
So, to build your downline so that you can make some decent money, you need to have about 10 downlines.. 5 of them as active seller, 5 of them as an active recruiter. But, you have to recruit about 150 + 250 = 400 people in order to get 10 active downlines.
So, basically, only the people at the first level can become very rich. All those people who show off their Mercedes car or whatever they’ve own from MLM, are those people at the first or second level when MLM was first published. The people below them, most of them are lying if they tell you they’re making more than RM5000 per month. How do I know this? One of my friends who’s active in MLM said that the huge money and cars are the usual tactic that is used by MLM to recruit people to become their downline. They insist that they want to buy you coffee, but then, they will start their long lying speech about how you can make thousands and thousands per month..
So in the end, you are making the MLM company even richer. What about you?
If you really want to do business, I suggest that you sell something unique - or something that almost everyone wants. Try hunting for the cheapest price you can get, probably factory prices - and markup the price 100% (as long as it is about market price or a little lower from market price). One of my friends love to do this. He sold mp3 players, iPhone, headphones, bracelets, etc (ikut trend..ramai nak barang apa time tu) and all of the products have at least 100% markup. He usually make about RM3000 profit per month part time.
I can also give you an advice from my knowledge from the business courses I’ve taken. Let’s say higher level MLM people have recruiter most of the people in the country. Why should anyone buy from you (except your family and friend) if they or their family members who have become a member that MLM? It’s same as selling bananas. Why would they buy bananas from you if their family also sell bananas. The bananas are of the same brand and also the same price. What makes you special than their family members?
And then, you can take real case to compare. Let’s just say Nintendo Wii. If Nintendo just “duplicate” PS3, will it be able to sell 9 million units? (PS3 only sold about 3 million). Why Nintendo Wii can sell a lot more? Because they are unique. They don’t just duplicate anything with huge success and hope that they can get that success too.
Haha.. this makes me remember that the MLM people like to use the phrase “that person has gotten over $100,000. If you duplicate what she made, you will also get $100,000″. Very convincing eh? But go read some business books - this concept is so wrong.
Okay.. that’s my words on MLM… That’s what I can offer you. If you still want to join MLM, that is up to you. ^_^
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Salam and hopefully this article might help some of you a bit! =)
- Money
- Comments(12)
to me, selling membership and false hope is immoral and selfish.
i don’t know where i got this figure but only 5% of top positions will get the profit(or a lot of profit).
it’s not about how to get profit by doing mlm, but what happen to the lower 95% downline who struggle even to breakeven. they lost their money to upline who really good in convincing people.
entering mlm is like lose-lose situation. if you are the top upliner, you eat money that come from suffering of your downliners. even if you think the money is halal, you still make people lose their money that should be used to feed their children.
p/s:sorry, i really get pretty emotional when talking about mlm.
ahaha… it’s okay. thanks irwan for your view on MLM. Yea, I’m kinda anti-MLM too. =) I wish everyone could see the truth about MLM.
bagi syia kan.. konsep MLM tu tak salah cume sebab cara biz tu dijalankan macam ‘makan’ duit orang yang baru join.
konsep recruiting tu cam ok sebabnye kalau pikir dr sudut jimat kos tapi confirm promote barang.. recruiting is one of the best way
selling banana tu analogy dlm carl pavarini bg….kan dah kantoi. haha
Hehehheheheheh… dah tu je yg ade dalam otak..nak wat camne. haha =P anyway, actually i think earning percentage of what referrals earned is okay BUT like irwan said, it’s the selling of false hope which is so bad..
i cant do mlm, bad at selling and convincing ppl to join under me haha!
don’t do MLM.. go do something else. Hehe =)
Carl Pavarani saje buat2 xnampak nisa.. ish.. tsk tsk
sapekah carl itu? x penah dgr.. google2 pun xde
nisa angkat aa tangan tggi2 sikit, baru die nampak. carl tu cikgu technogenesis daa. ade aaa nama die kat google
Thanks for the article, One of my friend is been bugging me to join some MLM company in his downline, I am gonna send this article to him, Thanks again
glad that i managed to help you! ^_^