Monday, August 24, 2009

Proof That 99% Lose Money in MLMs ??

From reading a recent article on a negative site that proves that 99% lose money in an MLM is because
"Robert FitzPatrick of Pyramid Scheme Alert has conducted extensive research on multi-level marketing companies (MLMs)." Okay, that is the proof, just believe it. ??? I don't see one individual's an opinion proof. (not to me anyway)

I will never deny that people will lose money involved with an MLM, especially one that is not product based. I can only speak for my MK unit and the ones that I associated with, but our units sell alot of product to real clients. So dispel Myth #1 (that no one sells to real clients) but.... I have a different point I have often pondered. Not perhaps with all mlm's but with Mary Kay.

I know of several woman that join Mary Kay not to "make" money but to save money by getting their products for themselves and family members at wholesale. Well, not making money, many of these woman are saving money by purchasing their products at wholesale. If they wanted the products, they would have a choice, they could pay a consultant retail or they could join and become a personal use consultant and save money by buying their products at wholesale instead of paying retail. If a P/L statement was done on these individuals, perhaps it would show a small loss or perhaps it would be a break even situation. I feel this is probably a significant number of consultants (probably in many mlm's - if a person would like the product but would care not to pay retail). So, how does this play into the 99% loose money? Did it ever enter into the equation? I doubt it. It would certainly produce a differnt not so negative result. People that join to save (not necesarrily to earn) are not failures in my opinion. They are getting out of the Company what they want. I would consider that a win/win situation. (also if a consultant came in, was not doing well, opted to use her 90% buyback and was able to recoup her money, that should not be included in the 99% loss figure either).

Yes, there will always be people at the top that make large $$'s, isn't that the way it is with any Company? MLM or not? The President and CFOis going to make big $$ but I am sure the janitor and cook is going to be paid far less. Everyone in business is not going to be making a ton of money, let's face it, because if it was that easy, everyone would be a Donald Trump, right? There will always be people in this world that will take advantage of others to get ahead. That is why, it is up to individuals to educate ourselves on what we are getting ourselves into. Mama always said, "if it sounds too good to be true, it probably is". Please all readers, before you jump into anything read, research, don't look at one website, one piece of literature, or talk to one person, and then make your decision. And remember because you read it once somewhere on the web, well, it doesn't make it true.

So be it MLM, or any other company please do your research before you jump in, no matter who tells you, it is great!

I sat thru a Small Business Development Planning Seminar (offered free by our State) because mr.mk4me is considering dabbling in something. Just this free first session was over 3 hours long. It was informative. But I assure you, they made no promises about making money in your first year or two in business. It is a building process. They emphasized that one would need to have working capitable to cover expenses, (to spell it out -they said borrow enough to cover all expenses and payroll for several months for lean times) etc... or if the income didn't come in as you would expect. Without going over the entire course, I wanted to share on item, I thought was just great. It pertained to goals.... (Yes, they were talking about goals and the necesity of having them) - The Statement was to make S.M.A.R.T. goals...(short & Long term)

Broken down this stands for:

S specific
M measurable
A attainable
R realistic
T Timely

It was also (not) surprising at how many small businesses fail within the first few years of business, many with big losses, and no they did not include mlm's in this workshop. So plain and simply any small business is a risk, it can bring forth posetive benefits or it can be destructive but educating ones' self on how to run it properly is going to help one be more profitable which is the name of the game!

So, in closing, I would love to suggest that anyone planning on starting any type of business, look into your State/University system to see what free informations is available. It was very informative and they really want you to understand what it takes to make it. They don't candy coat it and they provide alot of assistance, alot of it n/c. Heck even if you are already in a business, it may be very valuable to sit thru it. I enjoyed it and I was even able to answer several questions when they asked the audience for their input and the room was quite.

So if you are planning on doing MK, plan on not being one of the 99% that loose money by doing things smart! OK??


  1. oh, the venture capital thing? Mr. Gothboy is having some thoughts in that direction as well. There's an association of retired business executives or something that will give advice for free and I am trying to get him to go to them. I'm like...this is going to be much more complicated than you think! Learn everything before starting, and think hard! You may have a good idea but until you have a solid and proven method of implementation, you still got jack sh*t.

    EVERYONE do your homework before going into business!

  2. I hava a whole handout they passed out, when I find a few minutes I will photocopy it and send it to you if you wish!


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