Saturday, February 10, 2018

Follow-Up To My MLM Re-Print: Market Saturation.....The Truth Is In The Numbers



Andrew D Hayes, EzineArticles.com 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 home 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. Yet, in MLM , it's ALL about the numbers & the numbers don't lie.

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 How you intake this information can surely be up for debate, but please feel free to reply, comment and discuss said topics.





Realize, that a lot of our societies infrastructure incorporates some form of pyramid like 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 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 is the numbers needed to stay ahead (profit) that does.......become the 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      ~ ~     3,125
  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.
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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 or end user!

Knowledge:
This is why the importance of a solid product and/or service oriented company will be your true money maker in your online endeavors. 




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