Multi-Level Marketing
Sunday, November 07, 2010
Harry Potter and the Order of the Phoenix is good. Looking forward to the Half-Blood Prince, and the Deathly Hallows, which will be out real soon.
Ok, i'm playing my playlist on my ipod for the umpteen time after i ORD-ed. Time to update my ipod...
Anyways, that isn't the main point of this post. Today's post will be on Multi-Level Marketing, better known as MLM.
Yesterday one of my friends brought me to one of the better-known MLM companies in Singapore. I haven been poached by another MLM company before, and trust me, that one sucks to the core. Still, I decided to go in with an open-mind, and listened to the speaker with as much attention as I could give.
I was, as a matter of fact, biased against MLM companies. There are friends around me who claimed to be scammed, and the Sunshire Empire saga didn't help things either. So what prompted me to relook MLM is this - the friend is someone i do trust, and that we should look at things with an open mind.
So, this particular company has a good business model. it basically did everything it could in terms of marketing, sales and advertising. And its products certainly do have a demand. So the only question i have is, why then do they need MLM to boost their sales? I will address this question later.
Back to MLM. When I got home, I decided to read more about MLM. and so I learnt that MLM only becomes illegal and a scam when it's sole focus is on recruitment and not sales. Which essentially was the case of Sunshine Empire. However, there is a very fine difference between a legal MLM company, and one that is a scam. And it all has to do with the pay structure.
MLM companies pay you according how high-ranking you are in their hierarchy, and how high-ranking you are depends on how many 'subordinates', or members as they like to put it, you have under your charge. So those people who earn a 5 figure sum has alot of people under them. they possibly do not have to fight for sales; they just have to recruit more members, who will then do the sales for whoever brought them in. but of course it depends on the individual. is the sole focus recruitment, or working together as a team to fight for greater sales? that would determine whether or not this business model becomes a scam.
i am trying to hold a neutral stance towards MLM (and of course hope that I am successful). What i finally concluded is this: that MLM is just one of the many marketing methods available. and like technology, the method is always neutral. what makes it harmful, or in this case illegal, is the user. we shouldn't just claim that it is a scam given the bad examples in the past, and should examine and evaluate it carefully before we actually give it such a bad name. To address my question earlier, MLM is an effective, and sometimes only method for certain industries, such as insurance, to be sustainable. and that's why it's legal, even in Singapore, to practise MLM.
eventually, i didn't join. firstly because i don't have the start up capital, secondly because my idea of doing business isn't what MLM offers. My idea of business is basically setting up a shop and selling goods, preferably hand-made or hand-picked from it. I like doing it on my own. More of direct retail. But that's for another post.
That night, i reminded my friend of the pitfalls of MLM, and told him not to lose himself along the way. Money can blind. I hope he got my message...And this means that an opportunity to work together, is lost.
There will be plently of opportunities in the future. But for now, I wish him all the best. =)
Ok, i'm playing my playlist on my ipod for the umpteen time after i ORD-ed. Time to update my ipod...
Anyways, that isn't the main point of this post. Today's post will be on Multi-Level Marketing, better known as MLM.
Yesterday one of my friends brought me to one of the better-known MLM companies in Singapore. I haven been poached by another MLM company before, and trust me, that one sucks to the core. Still, I decided to go in with an open-mind, and listened to the speaker with as much attention as I could give.
I was, as a matter of fact, biased against MLM companies. There are friends around me who claimed to be scammed, and the Sunshire Empire saga didn't help things either. So what prompted me to relook MLM is this - the friend is someone i do trust, and that we should look at things with an open mind.
So, this particular company has a good business model. it basically did everything it could in terms of marketing, sales and advertising. And its products certainly do have a demand. So the only question i have is, why then do they need MLM to boost their sales? I will address this question later.
Back to MLM. When I got home, I decided to read more about MLM. and so I learnt that MLM only becomes illegal and a scam when it's sole focus is on recruitment and not sales. Which essentially was the case of Sunshine Empire. However, there is a very fine difference between a legal MLM company, and one that is a scam. And it all has to do with the pay structure.
MLM companies pay you according how high-ranking you are in their hierarchy, and how high-ranking you are depends on how many 'subordinates', or members as they like to put it, you have under your charge. So those people who earn a 5 figure sum has alot of people under them. they possibly do not have to fight for sales; they just have to recruit more members, who will then do the sales for whoever brought them in. but of course it depends on the individual. is the sole focus recruitment, or working together as a team to fight for greater sales? that would determine whether or not this business model becomes a scam.
i am trying to hold a neutral stance towards MLM (and of course hope that I am successful). What i finally concluded is this: that MLM is just one of the many marketing methods available. and like technology, the method is always neutral. what makes it harmful, or in this case illegal, is the user. we shouldn't just claim that it is a scam given the bad examples in the past, and should examine and evaluate it carefully before we actually give it such a bad name. To address my question earlier, MLM is an effective, and sometimes only method for certain industries, such as insurance, to be sustainable. and that's why it's legal, even in Singapore, to practise MLM.
eventually, i didn't join. firstly because i don't have the start up capital, secondly because my idea of doing business isn't what MLM offers. My idea of business is basically setting up a shop and selling goods, preferably hand-made or hand-picked from it. I like doing it on my own. More of direct retail. But that's for another post.
That night, i reminded my friend of the pitfalls of MLM, and told him not to lose himself along the way. Money can blind. I hope he got my message...And this means that an opportunity to work together, is lost.
There will be plently of opportunities in the future. But for now, I wish him all the best. =)