Friday, June 4, 2010

REAL TALK ~ What are the numbers.......Market Saturation???

Andrew D Hayes, Basic Author

   In my last entry, I touched upon the inherent issues that come along with many MLM companies. I'd like to dig a bit deeper. These inbuilt issues when understood, can provide you a bit more intel when you are pursuing a career in MLM as a business.

   Again, I like to add that I am in no way attempting to denounce nor promote MLM. Merely providing facts I can confidently write upon. With a number of years actively participating in this industry under my belt one thing is for sure, I can say its night & someone will see it as day.

   How you intake the info can surely be up for debate, but please feel free to reply, comment and discuss any topics.

   Realize now , that alot of our societies infrastructure incorporates some form a pyramid structure. Lets see.....the military, Army, Air Force, (generals, majors, sgt, etc.,) our government and as I pointed out in my last entry most traditional business models this pyramid structure.

- A typical corporation will have a CEO or President at the top, then their directors, the directors have their managers, and the managers their supervisors, and the supervisors, foremans have workers who do the work!

In an traditional supply chain structure it operates like this:
- Manufacturer
- Distributor
- Wholesaler
- Retailer
- Customers
   Each step adds expense to the final destination........the           consumer!

In Network (Internet) Marketing (MLM) the structure operates like this........
- Manufacturer (supplier)
- Distributors (you)
- Customers (the end user)

These customers, represent a targeted market that you the distributor have to penetrate

   Running your online business so that it becomes profits, is where some MLM companies structure make it nearly impossible to achieve. Why......?
Well, you've heard that famous quote....."It's a numbers game"!
You best believe that. It's the numbers needed to stay ahead, that does... become an issue.
The compensation vs. the consumer vs. the distributors

Simply by the numbers alone:
   Let say your business needs to employ/recruit 5 people now that 5 needs to employ 5....and so on and so on! Here what it would look like.................

LEVEL       New Members needed
1       ~ ~     5
2      ~ ~      25
3     ~ ~      125
4     ~ ~      625
5      ~ ~     3125
6     ~ ~      15,625
7     ~ ~      78,125
8     ~ ~      390.625
9     ~ ~      1,953,125
10   ~ ~      9,765,625
11    ~ ~     48,828.125
12    ~ ~     244,140,625
13     ~ ~    1,220,703,125

   This is just you - what about the other 10,000+ people that are also looking to market that same business!

In this manner, MLM can differ financially from normal business practices.

Market saturation - Point at which a market is no longer generating new demand for its products or services. A result of competition, decreased need. Simply not enough targeted consumer, an end user!

Copyright © 2010 Andrew Hayes All Rights Reserved