Monday, June 21, 2010

REAL TALK ~ What is really happening in MLM

Not admitting that I am older, lol......

   But, back when direct-selling, meant person-to-person/door-to-door contact, sending post cards or flyer to a mailing list. which was equivalent to your e-mail list today. It meant newspaper ads, radio spots and business cards to generate leads. Understand that even major league (name brand companies) participated in direct sells marketing (The Sears, JC Penny's catalogs) Many of these strategies have had to adapted to the new age of technology based marketing. The problem is that these tactic are being exploited and abused over the internet.

   Advertising has always been about hype, attraction - promoting a product, service or event to a targeted audience. Internet marketing is purely advertising in the 21st century. What MLM/Network marketing has done, is employ under-skilled marketers/advertiser to promote their many products and/or services. Because of internet technology, many in the network marketing industry simply over-hype these companies they market for because of inexperience. Oh yes, I hear it now, but I have a mentor or the training teaches me this and that. Training is good but experience is a completely different ball game.

MLM and networking strive on this very notion.

   Each year, neither desperation, the economy or just fresh NEW prospects are enticed to jump on board and venture into this world of making a living online. All the experience marketer have to do is cater (invent) new ways to advertise a product or service.

   I have seen over the years, such advertising & marketing tactics that surely could be persecuted under the "Truth in advertisement act" in this country. Take a look at the language written under the Federal Trade Commission (FTC)

Examples (pulled off any result search of MLM. work at home, Network marketing opportunity)

  • Anyone who signs up after you in this, will automatically be placed below you in your own Cash Generating ...... 
  • Earn a substantial income in this $100 Billion worldwide Market ..... 
  • Financial Rewards Without Making A Single Sale....... 
  • Start Making $12500 Or More Monthly By Simply..... 
  • $300 per day computer work...  
  • Secret Formula For Making Money Online.... 
  • Beginners making $10,000 within their first month

Oh yeah, the list goes on & on.... makes you go, hmmm........?

   Of course, at the end of the pitch, in very fine print is the disclaimer. Which most people tend to ignore.

   Yep, over the years, I have seen a lot of different strategies used, from beginner to these home based internet gurus??? There are a lot of bad habits exhibited when it comes to online marketing. Habits that I like to believe are just innocent attempts to pull in more leads. just plain inexperience in marketing. Sometimes its out of desperation, others, just a deliberate attempt to recruit people into their program or business.

   Now, I have come along way in my approach to marketing online. But, one thing I never attempted to do was hype these companies, products or service unless i was actually doing it myself. (Why), after all the work it takes to get (build) your list, why have those people leave you because they no longer trust the things you offer.

   Trust me, I have dropped or will not do business with many of these marketer ( the ones that are still hanging around) I keep a few on my email list so I can watch what they are promoting or doing. And over the years its just funny to watch them jump from one program to another. I imagine that they are making some kind of money because they are still around. Rest assure that they are feeding off those new crop (newbies). Try getting a response to an e-mail after you sign-up with them. Usually not a problem in the start. But, when you do not get the results that seem to be promised at the start on that venture. All of sudden, it taken weeks to reply if at all.

   See, auto-responder can't reply to tech or personal issue. So these big time marketer are to busy promoting other programs and business, that its nearly impossible to reply to thousand of inquiries.

   You always hear that there is this or that secret. This or that system that will propel you into this wonderful world of making money online. Well, I'm here to clear some things up. Not to piss on anyone parade, but the truth in becoming successful in your online business is..... TRUST.

   Trust will bring you targeted leads that should allow you to build relationships. Whereby, allowing you to pass off vivid information on products, services or events to a targeted audience. These being potential clients, consumer!

   Throughout the years I have connected with many of these so called leader. And many, I am sorry, to have giving my trust to. Because they represented themselves in a manner that should have benefit all parties. But, truth is, it only benefits them and those on top!

Heres some misunderstood facts you should live by......

FACT ~ Most MLM/network marketing companies will ONLY provide hefty profits to those on top. ( Why else would they construct such complicated pay-out plans)

You sell a product or service you get paid for that sell! It straight forward business = simple financial model of Cost of Goods + Overheads + Margin/Mark-up = Sales Price. You sell to cover your expenses then you keep the profits

FACT ~ The top 1% makes all the money in MLM structure 2% generate moderate income and the rest will lose. Again, there is a reason why many online business construct these matrix.

FACT ~ No-one is just going to come off the street (sort to speak) and I will stress this, NO-ONE, is going to decide one day to join a online business and make a full-time income in a matter of months. If you are brand new to marketing online, forget it. You will be lucky to break even after a year! This is just fact.

You simply can not possible tap into the kinds of numbers needed to sustain a wealth building strategy that MOST MLM companies claim. Many, many people are not looking to buy anything related to MLM, point blank. Also, when you look at the amount of MLM/networking marketing related opportunities across the web. Seriously, how many people do you think are on this planet.

   If you have 100 people - 80% are working regular 9 to 5 job. Of the remaining 20%, a percentage run their own business, a percentage simply don't have the income it take to start a business. a percentage are in countries you simply can't tap into.

FACT ~ The only people that realize the promised income are those that get in on the ground floor. Those that are privy to much "behind the scenes" info.

   Ok, so you have this huge list of business associates right. A very interesting business opportunity has opened up. You first, let your top producing contact in on this insight. They in turn let their top producing contacts in on this. By the time, the average Joe/Josette is "privy" to this opportunity, you have market saturation.!

   The only way that a regular Joe or Josette can achieve that kind of success in as lttle amount of time is simply because they have a huge social networking relationship established. Still that will only be accomplished by spending time building that network first.

  With many of us being bombarded with ads & invites each day, this too, is becoming a bumpy road. This is why we see so many lead generation programs/business popping up.

FACT ~ You will need thousands of people under you on a continous basis to fulfill even a part-time income (after expenses R.O.I.).

   Best to understand that there isn't enough people in this known universe for everyone to make money at a level 5 matrix let alone at every level 10 or more. Again unless you are on top!

FACT ~ Having no ability to run a business or no sales, network marketing experience or little computer skills, the learning curve will be overwhelming.

Which is why so many spend money on these all in one lead generation business.

FACT ~ their primary source of income is from individuals who sign up and purchase the basic supplies and training materials.

FACT ~ Traditional business models succeed by the numbers of repeat customers they keep.

   So when someone doesn't make the kind of income, in the amount of time they were attract to, do you think they will buy anything from you again.

FACT ~ Not that there isn't any decent MLM type business but most MLMs rarely sell anything of value, mostly just selling the opportunity to sell.

   This is just REAL TALK - when you are armed with the honest truth, you can make an informed decision on matter concerning a home based business. Again, people can earn a living working from home. As long as they understand what the elements are.

Copyright © 2010 Andrew Hayes All Rights Reserved

Sunday, June 13, 2010

Do people really fail at MLM or is it something else........?

    OK, I'm back with some more REAL TALK about MLM, Network marketing as a Home based business. In the last entry, I try to focus a little on why most people will fail in MLM from a stand point of sheer numbers. When I speak about, failing, I'm speaking about how they were not able to obtain a profit or why they were unable to become wealthy in their business. We will look at what is consider a failure. Along with some issues surrounding the tactics, and some personal insights.

   It may seem that I am not a fan of MLM. Well, I can't say that I completely dislike all MLM, just not popular with most of the tactics or those that promote MLM in a fashion that leads their people to an inevitable doom. I will discuss these on several fronts!

But first, do yourself this task, 

   Do a google search (or whatever search engine platform you favor). Try to find some real information/data on the number of participants in MLM. Try to find some solid numbers on subjects like.......failure rates, turnover(dropout rates) How many new MLM companies are there? Which ones are you likely to succeed in? You will find very little, I assure you on this. Is this on purpose? Is there a reason why? Especially, when there are so many MLM opportunities out there.

   Over the last 3-5 years, there are upwards of 10s of thousands even millions worldwide, who became victims of their failed MLM business and just as many who switched programs (business). Another things about MLM, is people don't (fail) quit, they just stop recuiting others into their business.

Visit here for re-enforcement ideas >>> Internet marketing & E-commerce

   So, combine this with the lack of business experience, no true understanding of their compensation plans and the perception of  "little work builds hugh profit." It is no wonder we don't hear about these short comings. Would you go online an explained that the true reason you failed was because it was your own fault? Of course not. Hence, the only complains one finds, are how the company misled them. Or simply how all MLM/Network marketing are just ponzi or pyramid scheme.

Ideas & insights here ~ Home based business

   These are the same ones whos only real purpose was to get a quick buck with as little effort as possible.They were focus on the hype, they saw only that beautiful, perfectly made sandwich on menu. Without fully understanding what it took to get it that way! It took work, effort & time! Sometimes several do-overs to get it the way they wanted it!

   Now, I have talked a bit about the lack of effort as a contributing factor to why people give up in my last entry. When looking at your business as a business, did you figure out exactly how many people you will needed to create financial security within that companies. Every MLM distributor will in some form go through a rough time obtaining a profit from these MLM. I bet most, didn't get pass the basic look of their compensation plan let alone understand it.
(In some cases, they are presented/designed in just that manner) be a bit confusing.

  There are:
  • Bonuses
  • Overrides,
  • Left & right leg,
  • Spillovers,
  • Unilevels,
  • Stairsteps/breakaways

DO you REALLY understand these plans?  HOW YOU MAKE YOUR MONEY!

 "This is where YOU get paid for YOUR effort in YOUR business"

Can you explain them to others so they know exactly what it will take to profit.

   These company pays you a commission on your sales but also on the sales of all the people you've brought into the network, either directly or indirectly. This is the bread & butter of your business, When this is not understood completely, Your income is not undersood.

Now, I found a very interesting video clip that I believe will help get your mind focus on an alternative view. In terms of this word "Failure" as it pertains to this industy.

   Network marketers who are serious about building a business should be reading and learning about business fundamentals, the latest sales and marketing techniques, strategies for internet marketing, networking and business development, etc.

   It doesn't matter what you think you know, just like technology. Marketing (online) is ever changing. There are ways that work one day or in some situation. While in others, simply,  ineffective.!

   Ever watch a movie once, believing you saw everything, then you watch it again, only to discover scenes you missed, parts or acts you understand more clearly. This is your business, something that you want to be able to live off of, survive off of. Yet, many, many people skim over some of the most important aspect of running a business. "That it's a business" then wonder why it doesn't work! ????

Really think about whats being said in the video clip!

Copyright © 2010 Andrew Hayes All Rights Reserved

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

Tuesday, June 1, 2010

Some REAL TALK (facts) about MLM...... Why its tough to really make good money!

Ask yourself this question (particularly if you have been working with MLM)......

  • What is the average time your clients STAY with your business?
  • Are you constantly, replacing clients that dropped out with NEW ones?

   I know there are die-hard MLM fans out there but, really, there is a disturbing truth behind this question! And many folks involved in this industry.....know the truth!

Andrew D Hayes, Basic Author

   In my last entry, I talked about the worth of working from home as an Internet marketer. One word that should stand out is "EFFORT". There are many reason why people fail in this industry.....lack of effort is only one of them.

   Why, because most are "recruited" under the pretense that it only require a few hours of work. After a few attempts with little response they are ready to throw in the towel. But MLM type companies have many other issues as well.

   Before I begin this article, I want to be perfectly clear, This is not an attempt to undermine or put down MLM as a home based business opportunity. I have (in the past) marketed some MLM companies and would most likely (under the right conditions) market some in the future.

*These participation usually pertain to products or services that will benefit your online business!*

Keywords being an actual product and/or service (to an end user)!

TIP: See what a few marketer in this industry do not understand is that many of the techniques.products & services use to promote MLM type businesses can be use to build other types of legitimate online business.

   However, there are some real facts based on a number of years that I have spent....dealing with, participating in & research of MLM companies over those years.

Once again, this is not an blog that is meant to degrade MLM, but as an aid to those who maybe looking into, wondering why they are not succeeding in their MLM business..

   First, over the years, they're  people who have made plenty of money in MLM companies. Truth is the basis of MLM structure is that of traditional business model. A typical corporation will have a CEO or President at the top, then their directors, the directors have their managers, and the managers have their supervisors, and the supervisors have their foreman's who have workers that do the work!

   The structure of MLM is at it's basic.... build upon this platform. A crude platform but today, I'm not here to discuss in-depth MLM structure. Whether the inherent facts that are embedded in every MLM!

Some real talk when it comes to marketing MLM companies.

In my first months of market online as a real business, meaning that, even though I had done some direct marketing in the early 90's. I was still wet behind the ears when I became interested in internet marketing.  (After some research), I understood that money could be make with hard work & effort. See there were certain aspect of direct marketing that taught me much about MLM type business at that point!

TIP>>> Truely, one really simple fact.......You will have a much higher success rate (% wise) when you have an actually product or service to sale to an end user.....a customer!

Even with that wisdom in mind I began using the trainings, paying for online/offline advertising, buying leads trying to convince prospects to join or stay in  my businesses. The income from commissions was still less than my R.O.I. (Return On Investment). I was truthful in my presentations, careful not to hype products or services excessively ( I'm turned off by this types of tactics of advertising myself), willing to build relationships etc., yet I kept losing my clients. The harder I seemed to work didn't seem to stop my rollercoaster ride in building my MLM business.

There is a reason for this.

Now this was a few years ago. I've seeked, explored & have learned so much more!

Nowadays, there are 2-3 times more of these MLM type businesses and more every month.

Seriously,  financially, the odds for an individual to achieve financial success is against them straight out the gate.

For one, MLM are not defined nor regulated like say, franchises are. MLMs can be established without federal or state approval. There are no federal law specifically against MLM with many of them in fact being nothing more than an pyramid schemes in disguise. Not all but many are floating around out there!

MLM, just like pyramid schemes, generate income from those continuous influx of new distributors at the bottom that goes straigh to the top and that profits those in top level positions & their sponsoring corporations.

Fact ~ one the largest MLM, Amway, of all distributors they only produce 1/2 of 1% of basic "direct" distributor level, with an average income from those Amway distributors being about $40 a month. Where do you think ALL of that revenue from the other 99 1/2% went too???

And think about this ( if you do any amount of research or even just looking for a business) You are likely to find these businesses, at one point will claim that there are X amount of people enrolled in their business. Usually some number of thousands of  other distributors who are trying to make money just like you.

 Which brings upon another fact......

Market saturation! The simple fact is that even the most successful products will have only partial market penetration.

Huh???  LOOK....not everyone will buy, say, a PS3(Playstation3), some will buy the Xbox! Not everyone will buy a GMC cars some will buy Toyota.

Yet, these MLM companies have 10s of thousands of distributors. Is there a cut-off when enough sales people are hired? In a traditional business, there is someone that says, "We have enough, let's stop hiring people at this point." But in most MLM, there is no way to do this. An MLM continues to saturate the market. Out of control by design, this will eat up the lower level distributors money, time, credibility, and entrepreneurial energy of well-meaningful people who joined merely to supplement their income.

Some of these businesses are primarily in the business to continuously enroll distributors with little focus on products or services retailed towards consumers (an end user). Unless, of course, it benefit their company (and/or other business venture). Things like leads generation programs, auto responders, splashpages etc., ( Which again does what.......benefit top level participants).

   BIGGEST mis-conception about MLM is it can be done  in your spare time. As a business, it offers the greatest flexibility and personal freedom of time. A few hours a week can earn a significant supplemental income and may grow to a very large income making other work unnecessary.

Come on, now really.......I understand this business of advertising.

Example: You go to one of these fast food joints, We look at the menu, and boy those pictures makes you want to eat the menu. When ever, has your burger, sandwich ever come to you looking like it does on the menu? So yes, there is always a bit of hype (exaggeration) in advertising, commercials. This is or has been reasonably except-able. MLM companies or their distributors on the other hand, sometime really do over do it. Many times bordering false advertising. Which is almost always cover by the fine printdisclaimers!

   Decades of experience involving millions of people have proven that successful entrepreneurs who make even a reasonable amount of return on their investment ~ requires extraordinary time, commitment as well as hard work, effort & persistence.

Which is WHY people drop out of they're respective business.

   It’s sad that 90-95% of all home businesses (mlm and network marketing) fail to produce a substantial income (if any income at all). And this is well documented. The remaining 5% are considered to be the home business or internet “guru’s” who make ALL THE MONEY! 

Top level participants

   Most people begin and end their MLM career only talking to a few family members and friends. That is the extent of their lead generation, their marketing campaign. Their effort to run a business. Clearly, any serious network marketer or business owner cannot build a sustainable income like this.

   Truth is these guru's can claim they built their massive organization nearly over night, however, it took them years of building teams through affiliations with numerous other MLM companies. After years of building relationships with hundreds or thousands of distributors, these top producer can switch companies, contact their down-line (list). . . have what seems like an overnight success.

   Choosing the wrong product, a weak compensation plan, the wrong team or the wrong lead generation system are other reasons you will fail in this MLM and network marketing arena.

   Strategic planning, organizing and goal setting are all a major parts of running a successful business, whether at home or in a traditional business.

The exact nature of your internet marketing activity will depend on the following things:

   - What do you want to achieve?

   - How you are going to achieve it?
   - How much you are willing to invest?
   - Are you willing to dig in and work hard towards your goal/dream?

TIP>>> Understand that most home business entrepreneur and network marketers are ALREADY in business for themselves. They already have a business opportunity, or affiliate program, and don’t want to hear about yours. So don't spend alot of time or effort in that direction!

(Don't believe or understand this statement.....take a look at your inbox of your email, social networking etc.,)

How many opportunities do you pass up?

   Ok, the question at the beginning of this entry "What is the average time your clients STAY with your business?"

   After an intense research...... There seems to be no actual hard data, giving the nature of many MLM business over the last decade. With no real state or federal regulations in place and many company's being fly-by-night operations. True data can only be calculated through numbers provided to the IRA by up-front companies who reps are required to provide their social security number for tax purposes.

 * Roughly 70-75% of new start-up MLM companies fold after the first year
    * Nearly  60% of sign-ups to an online business cancel after the 1st month
                 * Nearly 80-85% after the 3rd month                                                        
   Again, many many MLM. network marketer understand that there is a very high turn-over ratio in this industry. Granted that you have been networking for a little bit, it is easy to see.
I know I  do.

Visit these sites for some interesting topics on MLM

   Hope that you find this piece of value to your online endeavors. Also remember to really focus on the basic of marketing online. When you take care and have a solid foundation of the essential working of marketing online. Many of the pitfalls can be avoided.

   Find your own groove or niche, that is how a true entrepreneurs succeeds. Think outside the box. If you need and want to work successfully from home/online you've got to be willing to adjust, work hard and stay informed.



Copyright © 2010 Andrew Hayes All Rights Reserved