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  1. #1
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    MLM is a human "churning machine" with no "off button"

    http://www.consumerfraudreporting.or...saturation.php

    Market saturation can be defined as the point at which all people who want the product at the desired selling price, will purchase. No products and services will achieve 100% market penetration; since not everyone will want the product, nor be able to afford it. The fact that a multi-level marketing scheme that is based upon an ever-expanding network of distributors, each of whom may pay fees, buy products and/or recruit more "distributors" can not work for all, or even most participants can be proven mathematically and shown.
    How is the market saturation point determined?

    Now, while everyone could use a new product or service, not everyone will. Some will be afraid of anything new. Some will be loyal to existing brands. Some will want to buy an inferior product for less money. Some will want a more expensive product for prestige, regardless of quality. The reasons go on and on, and the fact is that only "X" Widgets will sell at the set price.
    The question for would-be marketers is... what is "X," and how can it be predicted to maximize profits? The fact that "X" is hard to pin down does not mean that it does not exist, and every Widget built beyond "X" will end up producing a problem for the organization. The market only wants "X" Widgets at $100. What are you going to do with your extra inventory of Widgets beyond "X" that no one wants, and the sales people you hired to sell them?
    No one can perfectly predict "X," and the situation is not nearly as simple as considered here, but the objective for marketers is to forecast "X" as closely as possible in order to provide lasting value to all parties involved: to avoid missed opportunities as well as waste, loss, or failure.
    Let's look at an example:

    The population of the United States is about 300,000,000, and, let's say you want to sell a new type of bra; obviously only the women (and a few cross-dressers) will want to buy one. That means, out of 300 million people, there are about 110 million who are adult women. If you sell the bra at $45 each, you can eliminate most woman who are in the lower income groups; so now you are down to 50 million potential customers. Then there is the style. Even with a wildly popular style it still won't appeal to everyone, so of the remaining 50 million potential customer, probably only half will want it enough to buy one. Therefore, we can reasonably say that the potential maximum size of our market for designer Britney Spears bras, will be no more than 25 million woman, out of a total population of 300 million people in the United States. That's about 1/10 of the population, even for something as basic and necessary as a bra.
    Similarly, not everyone wishes to join a particular discount club, buy gold, use high-end cosmetics, drink filtered water, wear a particular style of shoe, or use any product or service. No one in the real world of business would seriously consider the thin arguments of the MLMers when they flippantly mention the infinite market need for their product or services.
    Why is market saturation important?

    Any business must carefully consider supply and demand. For example, if the Newco Corporation thinks, based on past year's experience, that they will sell 10 million pairs of their new designer Britney Spears orthopedic underwear next year; they will plan to build and distribute accordingly. This involves gearing up factories, setting up distribution and dealer networks, advertising and marketing campaigns, and carefully managing the inventories at each level so that Newco will still have credibility with their distributors, retail outlets, and the public the following year, by having enough to meet demand without a glut of excess.
    If it turns out that there is a "run" on Newco products, and they sell out in mid-year, then they have miscalculated demand and will miss out on profits they could have made. The more serious problem, however, is overestimating the saturation point for the product. If they make 10 million pairs, and sell only 2 million, this may be the end of Newco as a company, as the excess will sit on selves and sell for a fraction of the original price.
    The all-too-obvious point here is that management of supply and demand, and keen insight into realistic market penetration and saturation are crucial to any business, for any product or service. Execution upon this plan and these calculations, including careful management of all aspects of manufacturing, distribution, and advertising and marketing is critical to success. Simply stated, a failure to "hit the target" of supply and demand can ruin a company if the market is oversaturated.
    What is the problem with MLM's and Market Saturation?

    Matching the manufactured supply to the market demand is key to a company's suvccess. Interestingly, the issue of supply and demand is what brought the USSR to its knees. By design, the Soviet government tried to macro-manage supply, where bureaucrats would decide how many potatoes were needed, how much toilet paper, etc. Assuming these bureaucrats did the best they could, unfortunately their efforts to deliberately manipulate the control "knob" of supply and demand was not good enough. Notwithstanding their good intentions, they were usually wrong, which created huge shortages and surpluses, and led to a massive economic collapse, as resources went into producing products that weren't needed, while other products were in limited supply.
    With MLMs, the situation is much worse. Nobody is home. Even the Soviets had SOMEONE thinking about how much was enough! If the bureaucrat in Soviet Russia was having a hard time trying to play Adam Smith's "invisible hand" in setting the supply level in the Soviet Union, then an MLM "executive" is in a truly unfortunate position. Not only is there no one assigned to make the decision of how much is enough, the MLM is set up by design to blindly go past the saturation point and keep on going. It will grow till it collapses under its own weight, without even a bureaucrat noticing.
    MLM is like a train with no brakes and no engineer headed full-throttle towards a terminal.
    "Everyone Will Want to Buy This Product!"

    Who has an eye on "X," the point of market saturation at a given price, in an MLM? Well, the funny thing, or perhaps the tragic thing, is that "X" will be reached and exceeded without anyone noticing or caring.
    Let's just suppose that "X" has been reached today in a particular MLM; the number of possible units sold at this price has just been exceeded, and you happen to be a starry-eyed prospect sitting in an MLM meeting listening to the pitch. Now consider: Does anyone in this company know about "X"? Does anyone care? Is the issue being suppressed on purpose for some other motive? Since we are supposing that the market saturation number "X" has been reached, everyone joining the MLM from now on is buying into a false hope. But that is not what the speaker will be saying. He will be telling you, "Now is the time to join. Get in on the 'ground floor'." But it is all a lie, even though the speaker may not know it. The total available market "X" has been reached and nobody noticed. All the distributors will lose from here on out. Could this be you? How could you possibly know at what point you will become the liar in an MLM
    Example

    Imagine that McDonald's became suddenly convinced that "since everyone needs to eat," we'll open four McDonald's franchises on each of the four corners of an intersection in your neighborhood. In a matter of months, the four outlets would die a slow death. The franchisees would think twice about doing business in such a manner again. This is why real-world distributorships and franchises are contractually protected by defined territory and/or market; they don't allow too many distributors in a given area.
    Again, the simple fact is that even the most successful products will have partial market penetration. The same is true for services. Demand and "market share" are finite, and to overestimate either is catastrophic.
    So why are MLM promoters obscuring this? Who is in control of the supply "knob," carefully and skillfully managing the size of the distribution channels, number of salespeople, inventory, etc., to insure the success of all involved in the business? The truth is chilling: nobody.
    Imagine trying to write a computer model of how MLMs work, and you will see this point most vividly. An MLM could never work, even in theory. Think about it.
    Where is the "switch" that can be flipped in an MLM when enough sales people are hired? In a normal company a manager says, "We have enough, let's stop hiring people at this point." But in an MLM, there is no way to do this. There are never enough or too many "distributors" or sales people. An MLM is a human "churning" machine with no "off button." Out of control by design, its gears will grind up the money, time, credibility, and entrepreneurial energy of well-meaning people who joined merely to supplement their income.
    There is simply no way to avoid the built-in failure mechanism of MLMs. If a company chooses to market this way, it will eventually "hire" (with no base pay and charging to join) far too many people, who can not successfully compete and sell.
    Thus, the only "control system" will be the inevitable losses and subsequent bad image the MLM company will gain after it does what it was designed to do: fail. And sooner or later we have got to stop blaming this particular MLM company or that, and admit that the MLM technique itself is fundamentally flawed.


    http://themlmfile.com/whatsnew.htm


    The MLM Recruiting Machine

    I see many websites dedicated to both promoting MLM and trying to denigrate anti-MLM sites. The people behind these efforts choose to ignore basic common sense, insisting instead on concentrating on delivering a barrage of mostly irrelevant illogic to overcome some of the lesser cogent arguments of some anti-MLMers. So be it. Let the pro-MLMers answer this:


    I live on a remote island with a single town of 100,000 people, as yet untouched by MLM.

    I decide to make MLM my life's work. I have 100,000 people as my marketplace.

    I have ten retail customers. I find my first successful distributor convert. My new downline member invests, I earn money. Provided only that I have recruited a person of equal capability to myself (am I not looking for the best downline possible?), I have just cut my marketplace down to less than 50,000 people, as my downline member must be treated equitably. Right? After all, I've just sold him or her some product and the opportunity to make money.

    The very next person sold into my downline, by me or by my initial recruit, causes my market to become just some 33,000 people. One more and it becomes 25,000 people.
    With just three recruits in my downline I have dropped my market share by 75%, from 100,000 people to just 25,000 people. With four recruits, 20,000. With 5, just under 17,000. My common sense tells me that this number would adequately service the island with the type of products offered.

    To complicate matters, I’ve just realised that I was only one of ten people who were originally recruited by the same off-shore recruiter... and all of them are doing exactly as I am doing! What’s worse is that my local paper is now filled with other off-shore recruiters trying to find recruits for their own downlines. The competition is hotting up.

    The question, of course, is, "If they haven’t already realised the situation, do I tell all this to my recruits?"

    You see, I get a cut from everything sold by my downline, but each of my downline members would then NOT have this same opportunity. They would get their own retail sales profit, but would find it harder and harder to find more recruits. With the market becoming progressively smaller with every new recruit in every downline, it suddenly becomes obvious that the opportunity is NOT equal for all, doesn't it?

    So, my upline will say I shouldn't tell my downline about this. In fact, I should do everything in my power to prevent this knowledge getting out. Besides, they will continue in justification, it's more a case in the first instance of recruiting that 2 people have 99,998 people to work between them, NOT 50,000 each (and so on). Simply put, may the best man win. This is capitalism at its very best, they say.

    At all costs, I should not explain to a new recruit that I have just recruited my own competition. And that that is what they will be doing in turn if I ignore my common sense. Instead, I should explain that help will be forthcoming, that every resource within my power will be made available to them so that they might succeed in recruiting. And that they should do the same with their recruits.

    The problem is, how do I reconcile the fact of diminishing market share with each new recruit in every downline against my promise to them that I will help them succeed within a "burgeoning" marketplace? The two are diametrically opposed. The market is a fixed, finite number, (no matter how large that number may be), and I have no control over what is happening at all.

    Ah! say the pundits, but everyone has the whole world in which to operate their business! So don't worry about it! Recruit overseas!

    The whole world is available, that’s true, but it makes no difference to the end result locally or elsewhere. The larger the numbers involved, the larger the problem for the more recent recruits. The business will grow for the company until the number of recruits/distributors servicing a given area reaches saturation, at which point people are forced to simply give up. This is called "distributor failure" by the company. After a time, the area will change demographically and voila! the company is back in business recruiting more people.

    It all just means the company may make a lot of money over time. The people who are good at recruiting may also make great income. It will all be paid for by the recruiting machine system churning through recruits who pay their money up front and who must eventually fail as the company grows its influence.

    Sad but true.
    MLM's Mission Statement:

    "The primary product is opportunity. The strongest, most powerful motivational force today is false hope."

    "Almost everyone is not going to learn the skills and use them consistently over time, you would be better off joining Costco" -Dank111

  2. #2
    Join Date
    Jul 2008
    Posts
    21,904

    Re: MLM is a human "churning machine" with no "off button"

    Quote Originally Posted by BoxAlarm126 View Post
    http://www.consumerfraudreporting.or...saturation.php

    Market saturation can be defined as the point at which all people who want the product at the desired selling price, will purchase. No products and services will achieve 100% market penetration; since not everyone will want the product, nor be able to afford it. The fact that a multi-level marketing scheme that is based upon an ever-expanding network of distributors, each of whom may pay fees, buy products and/or recruit more "distributors" can not work for all, or even most participants can be proven mathematically and shown.
    How is the market saturation point determined?

    Now, while everyone could use a new product or service, not everyone will. Some will be afraid of anything new. Some will be loyal to existing brands. Some will want to buy an inferior product for less money. Some will want a more expensive product for prestige, regardless of quality. The reasons go on and on, and the fact is that only "X" Widgets will sell at the set price.
    The question for would-be marketers is... what is "X," and how can it be predicted to maximize profits? The fact that "X" is hard to pin down does not mean that it does not exist, and every Widget built beyond "X" will end up producing a problem for the organization. The market only wants "X" Widgets at $100. What are you going to do with your extra inventory of Widgets beyond "X" that no one wants, and the sales people you hired to sell them?
    No one can perfectly predict "X," and the situation is not nearly as simple as considered here, but the objective for marketers is to forecast "X" as closely as possible in order to provide lasting value to all parties involved: to avoid missed opportunities as well as waste, loss, or failure.
    Let's look at an example:

    The population of the United States is about 300,000,000, and, let's say you want to sell a new type of bra; obviously only the women (and a few cross-dressers) will want to buy one. That means, out of 300 million people, there are about 110 million who are adult women. If you sell the bra at $45 each, you can eliminate most woman who are in the lower income groups; so now you are down to 50 million potential customers. Then there is the style. Even with a wildly popular style it still won't appeal to everyone, so of the remaining 50 million potential customer, probably only half will want it enough to buy one. Therefore, we can reasonably say that the potential maximum size of our market for designer Britney Spears bras, will be no more than 25 million woman, out of a total population of 300 million people in the United States. That's about 1/10 of the population, even for something as basic and necessary as a bra.
    Similarly, not everyone wishes to join a particular discount club, buy gold, use high-end cosmetics, drink filtered water, wear a particular style of shoe, or use any product or service. No one in the real world of business would seriously consider the thin arguments of the MLMers when they flippantly mention the infinite market need for their product or services.
    Why is market saturation important?

    Any business must carefully consider supply and demand. For example, if the Newco Corporation thinks, based on past year's experience, that they will sell 10 million pairs of their new designer Britney Spears orthopedic underwear next year; they will plan to build and distribute accordingly. This involves gearing up factories, setting up distribution and dealer networks, advertising and marketing campaigns, and carefully managing the inventories at each level so that Newco will still have credibility with their distributors, retail outlets, and the public the following year, by having enough to meet demand without a glut of excess.
    If it turns out that there is a "run" on Newco products, and they sell out in mid-year, then they have miscalculated demand and will miss out on profits they could have made. The more serious problem, however, is overestimating the saturation point for the product. If they make 10 million pairs, and sell only 2 million, this may be the end of Newco as a company, as the excess will sit on selves and sell for a fraction of the original price.
    The all-too-obvious point here is that management of supply and demand, and keen insight into realistic market penetration and saturation are crucial to any business, for any product or service. Execution upon this plan and these calculations, including careful management of all aspects of manufacturing, distribution, and advertising and marketing is critical to success. Simply stated, a failure to "hit the target" of supply and demand can ruin a company if the market is oversaturated.
    What is the problem with MLM's and Market Saturation?

    Matching the manufactured supply to the market demand is key to a company's suvccess. Interestingly, the issue of supply and demand is what brought the USSR to its knees. By design, the Soviet government tried to macro-manage supply, where bureaucrats would decide how many potatoes were needed, how much toilet paper, etc. Assuming these bureaucrats did the best they could, unfortunately their efforts to deliberately manipulate the control "knob" of supply and demand was not good enough. Notwithstanding their good intentions, they were usually wrong, which created huge shortages and surpluses, and led to a massive economic collapse, as resources went into producing products that weren't needed, while other products were in limited supply.
    With MLMs, the situation is much worse. Nobody is home. Even the Soviets had SOMEONE thinking about how much was enough! If the bureaucrat in Soviet Russia was having a hard time trying to play Adam Smith's "invisible hand" in setting the supply level in the Soviet Union, then an MLM "executive" is in a truly unfortunate position. Not only is there no one assigned to make the decision of how much is enough, the MLM is set up by design to blindly go past the saturation point and keep on going. It will grow till it collapses under its own weight, without even a bureaucrat noticing.
    MLM is like a train with no brakes and no engineer headed full-throttle towards a terminal.
    "Everyone Will Want to Buy This Product!"

    Who has an eye on "X," the point of market saturation at a given price, in an MLM? Well, the funny thing, or perhaps the tragic thing, is that "X" will be reached and exceeded without anyone noticing or caring.
    Let's just suppose that "X" has been reached today in a particular MLM; the number of possible units sold at this price has just been exceeded, and you happen to be a starry-eyed prospect sitting in an MLM meeting listening to the pitch. Now consider: Does anyone in this company know about "X"? Does anyone care? Is the issue being suppressed on purpose for some other motive? Since we are supposing that the market saturation number "X" has been reached, everyone joining the MLM from now on is buying into a false hope. But that is not what the speaker will be saying. He will be telling you, "Now is the time to join. Get in on the 'ground floor'." But it is all a lie, even though the speaker may not know it. The total available market "X" has been reached and nobody noticed. All the distributors will lose from here on out. Could this be you? How could you possibly know at what point you will become the liar in an MLM
    Example

    Imagine that McDonald's became suddenly convinced that "since everyone needs to eat," we'll open four McDonald's franchises on each of the four corners of an intersection in your neighborhood. In a matter of months, the four outlets would die a slow death. The franchisees would think twice about doing business in such a manner again. This is why real-world distributorships and franchises are contractually protected by defined territory and/or market; they don't allow too many distributors in a given area.
    Again, the simple fact is that even the most successful products will have partial market penetration. The same is true for services. Demand and "market share" are finite, and to overestimate either is catastrophic.
    So why are MLM promoters obscuring this? Who is in control of the supply "knob," carefully and skillfully managing the size of the distribution channels, number of salespeople, inventory, etc., to insure the success of all involved in the business? The truth is chilling: nobody.
    Imagine trying to write a computer model of how MLMs work, and you will see this point most vividly. An MLM could never work, even in theory. Think about it.
    Where is the "switch" that can be flipped in an MLM when enough sales people are hired? In a normal company a manager says, "We have enough, let's stop hiring people at this point." But in an MLM, there is no way to do this. There are never enough or too many "distributors" or sales people. An MLM is a human "churning" machine with no "off button." Out of control by design, its gears will grind up the money, time, credibility, and entrepreneurial energy of well-meaning people who joined merely to supplement their income.
    There is simply no way to avoid the built-in failure mechanism of MLMs. If a company chooses to market this way, it will eventually "hire" (with no base pay and charging to join) far too many people, who can not successfully compete and sell.
    Thus, the only "control system" will be the inevitable losses and subsequent bad image the MLM company will gain after it does what it was designed to do: fail. And sooner or later we have got to stop blaming this particular MLM company or that, and admit that the MLM technique itself is fundamentally flawed.


    http://themlmfile.com/whatsnew.htm


    The MLM Recruiting Machine

    I see many websites dedicated to both promoting MLM and trying to denigrate anti-MLM sites. The people behind these efforts choose to ignore basic common sense, insisting instead on concentrating on delivering a barrage of mostly irrelevant illogic to overcome some of the lesser cogent arguments of some anti-MLMers. So be it. Let the pro-MLMers answer this:


    I live on a remote island with a single town of 100,000 people, as yet untouched by MLM.

    I decide to make MLM my life's work. I have 100,000 people as my marketplace.

    I have ten retail customers. I find my first successful distributor convert. My new downline member invests, I earn money. Provided only that I have recruited a person of equal capability to myself (am I not looking for the best downline possible?), I have just cut my marketplace down to less than 50,000 people, as my downline member must be treated equitably. Right? After all, I've just sold him or her some product and the opportunity to make money.

    The very next person sold into my downline, by me or by my initial recruit, causes my market to become just some 33,000 people. One more and it becomes 25,000 people.
    With just three recruits in my downline I have dropped my market share by 75%, from 100,000 people to just 25,000 people. With four recruits, 20,000. With 5, just under 17,000. My common sense tells me that this number would adequately service the island with the type of products offered.

    To complicate matters, I’ve just realised that I was only one of ten people who were originally recruited by the same off-shore recruiter... and all of them are doing exactly as I am doing! What’s worse is that my local paper is now filled with other off-shore recruiters trying to find recruits for their own downlines. The competition is hotting up.

    The question, of course, is, "If they haven’t already realised the situation, do I tell all this to my recruits?"

    You see, I get a cut from everything sold by my downline, but each of my downline members would then NOT have this same opportunity. They would get their own retail sales profit, but would find it harder and harder to find more recruits. With the market becoming progressively smaller with every new recruit in every downline, it suddenly becomes obvious that the opportunity is NOT equal for all, doesn't it?

    So, my upline will say I shouldn't tell my downline about this. In fact, I should do everything in my power to prevent this knowledge getting out. Besides, they will continue in justification, it's more a case in the first instance of recruiting that 2 people have 99,998 people to work between them, NOT 50,000 each (and so on). Simply put, may the best man win. This is capitalism at its very best, they say.

    At all costs, I should not explain to a new recruit that I have just recruited my own competition. And that that is what they will be doing in turn if I ignore my common sense. Instead, I should explain that help will be forthcoming, that every resource within my power will be made available to them so that they might succeed in recruiting. And that they should do the same with their recruits.

    The problem is, how do I reconcile the fact of diminishing market share with each new recruit in every downline against my promise to them that I will help them succeed within a "burgeoning" marketplace? The two are diametrically opposed. The market is a fixed, finite number, (no matter how large that number may be), and I have no control over what is happening at all.

    Ah! say the pundits, but everyone has the whole world in which to operate their business! So don't worry about it! Recruit overseas!

    The whole world is available, that’s true, but it makes no difference to the end result locally or elsewhere. The larger the numbers involved, the larger the problem for the more recent recruits. The business will grow for the company until the number of recruits/distributors servicing a given area reaches saturation, at which point people are forced to simply give up. This is called "distributor failure" by the company. After a time, the area will change demographically and voila! the company is back in business recruiting more people.

    It all just means the company may make a lot of money over time. The people who are good at recruiting may also make great income. It will all be paid for by the recruiting machine system churning through recruits who pay their money up front and who must eventually fail as the company grows its influence.

    Sad but true.

    Your ''source'' is a known anti-MLM site. Move along...nothing to see here.
    "People are not interested in your product or your business; they are interested in solving their own problems." -- James Dillehay, Entrepreneur and Author

  3. #3
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    Jul 2011
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    Re: MLM is a human "churning machine" with no "off button"

    Quote Originally Posted by ChrisDoyle View Post
    Your ''source'' is a known anti-MLM site. Move along...nothing to see here.
    Your response is an obvious ad-hominem. You've submitted links from sites that favor MLM in the past. Are we supposed to casually dismiss material from pro-MLM sites without debating the material?

    From my last post, what can you prove to be inaccurate?
    MLM's Mission Statement:

    "The primary product is opportunity. The strongest, most powerful motivational force today is false hope."

    "Almost everyone is not going to learn the skills and use them consistently over time, you would be better off joining Costco" -Dank111

  4. #4
    Join Date
    Jul 2005
    Location
    Northern, California
    Posts
    16,985

    Re: MLM is a human "churning machine" with no "off button"

    Quote Originally Posted by ChrisDoyle View Post
    Your ''source'' is a known anti-MLM site. Move along...nothing to see here.
    More fun with numbers in Boxy's head...exciting...!!

    Too bad he knows practically NOTHING about Direct Sales!

    Boxy, your confirmation bias is showing, clearly.
    As long as it is acceptable for a person to beLIEve that he knows how god wants everyone on Earth to live, we will continue to murder one another on account of our myths. ~ Sam Harris, 'The End Of Faith'
    ~~~~~
    Christianity demands the crucifixion of the intellect.
    ~ Susan Kierkegaard

  5. #5
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    Jul 2011
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    Re: MLM is a human "churning machine" with no "off button"

    Quote Originally Posted by ohein56 View Post
    More fun with numbers in Boxy's head...exciting...!!

    Too bad he knows practically NOTHING about Direct Sales!

    Boxy, your confirmation bias is showing, clearly.
    Numbers are the Achilles' heel of MLM, it's Kryptonite, if you will.

    What is inaccurate about the above examples?
    MLM's Mission Statement:

    "The primary product is opportunity. The strongest, most powerful motivational force today is false hope."

    "Almost everyone is not going to learn the skills and use them consistently over time, you would be better off joining Costco" -Dank111

  6. #6
    Join Date
    Jul 2008
    Posts
    21,904

    Re: MLM is a human "churning machine" with no "off button"

    Quote Originally Posted by BoxAlarm126 View Post
    Your response is an obvious ad-hominem. You've submitted links from sites that favor MLM in the past. Are we supposed to casually dismiss material from pro-MLM sites without debating the material?

    From my last post, what can you prove to be inaccurate?
    Your game is the same...... post some long blurb from an anti MLM site, a few of us show you its a crock of shite then you disappear for a few months then come back with the same posts.....gets boring after a while.
    "People are not interested in your product or your business; they are interested in solving their own problems." -- James Dillehay, Entrepreneur and Author

  7. #7
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    Jul 2005
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    Northern, California
    Posts
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    Re: MLM is a human "churning machine" with no "off button"

    Quote Originally Posted by BoxAlarm126 View Post
    Numbers are the Achilles' heel of MLM, it's Kryptonite, if you will.

    What is inaccurate about the above examples?
    Let's see here, Amway's been around how long now?? (since 1959!)? ...any idea when it's going to 'saturate', boxy?

    Click Here!

    Hey Boxy, do you know anyone that doesn't have a refrigerator or a car??? No!! Why isn't the market 'saturated' then??!! How in the world does GE and Ford stay in business with such a 'saturated' marketplace then!!...OMG!!

    Boxy, the sky is NOT falling.:crazy1:
    As long as it is acceptable for a person to beLIEve that he knows how god wants everyone on Earth to live, we will continue to murder one another on account of our myths. ~ Sam Harris, 'The End Of Faith'
    ~~~~~
    Christianity demands the crucifixion of the intellect.
    ~ Susan Kierkegaard

  8. #8
    Join Date
    Jul 2005
    Location
    Northern, California
    Posts
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    Re: MLM is a human "churning machine" with no "off button"

    Quote Originally Posted by BoxAlarm126 View Post
    Numbers are the Achilles' heel of MLM, it's Kryptonite, if you will.

    What is inaccurate about the above examples?
    Well, let's see...if...5 get 5 who get 5 on & on, the entire world is 'in' & the world is 'saturated' in a matter of moments....on PAPER!!!!

    Isn't playing with numbers in your head, FUN!!??

    It's odd how those stats play out in the real world though, huh?!

    I suggest you start a survey, ask 1000 random people if they've heard of Amway & or MLM....

    Get back to us with your results, please. I'm sure it'll help you come to terms with what 'saturation' means here in the real world.

    Can't wait...:rryumy:
    As long as it is acceptable for a person to beLIEve that he knows how god wants everyone on Earth to live, we will continue to murder one another on account of our myths. ~ Sam Harris, 'The End Of Faith'
    ~~~~~
    Christianity demands the crucifixion of the intellect.
    ~ Susan Kierkegaard

  9. #9
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    Re: MLM is a human "churning machine" with no "off button"

    Quote Originally Posted by ohein56 View Post
    Let's see here, Amway's been around how long now?? (since 1959!)? ...any idea when it's going to 'saturate', boxy?
    Why is China the biggest or one of the biggest markets for Amway?
    Originally Posted by nomaxim
    Sorry there ''ohein56', but it appears that 'Joecool44' does not have the position that you envision on this topic.

    'Joecool44' has, as a matter of routine, refuted most of your accusations
    Quote Originally Posted by Jax74 View Post
    Some people have the ability to think critically, some do not. ohein obviously doesn't.

  10. #10

    Re: MLM is a human "churning machine" with no "off button"

    Quote Originally Posted by BoxAlarm126 View Post
    Numbers are the Achilles' heel of MLM, it's Kryptonite, if you will.

    What is inaccurate about the above examples?
    IBOs are in fact the majority of an MLM's customer/consumer base. They are also the distribution method for a company to sell and move their product. The demand is a mixture of both product and biz op. The number of IBOs willing to be in the market place does in fact set the demand curve criteria. In other words the IBO themselves set the demand for the product. There is no "saturation". A change in the number of IBOs is the adjustment to demand.

  11. #11
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    Re: MLM is a human "churning machine" with no "off button"

    Quote Originally Posted by noagenda View Post
    IBOs are in fact the majority of an MLM's customer/consumer base.
    That can be considered a red flag for a product based scheme, depending on some other factors of course.

    Quote Originally Posted by noagenda View Post
    In other words the IBO themselves set the demand for the product. There is no "saturation". A change in the number of IBOs is the adjustment to demand.
    I think older markets do get saturated. Not to the point where "everyone" is involved, but I believe companies with the capital will begin to expand to other markets when their flagship market begins to see slowed growth (i.e. McDonalds, Amway, etc)
    Originally Posted by nomaxim
    Sorry there ''ohein56', but it appears that 'Joecool44' does not have the position that you envision on this topic.

    'Joecool44' has, as a matter of routine, refuted most of your accusations
    Quote Originally Posted by Jax74 View Post
    Some people have the ability to think critically, some do not. ohein obviously doesn't.

  12. #12

    Re: MLM is a human "churning machine" with no "off button"

    Quote Originally Posted by Joecool44 View Post
    That can be considered a red flag for a product based scheme, depending on some other factors of course.
    IBOs are their uplines customers. Just the nature of it. In order to take advantage of discount pricing and other incentives, being an IBO would seem the most logical way to acquire product whether you are actively building a business or not.



    Quote Originally Posted by Joecool44 View Post
    I think older markets do get saturated. Not to the point where "everyone" is involved, but I believe companies with the capital will begin to expand to other markets when their flagship market begins to see slowed growth (i.e. McDonalds, Amway, etc)
    I agree and the market adjusts accordingly. In mature markets IBO participation is reduced in response to reduced demand.

  13. #13
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    Re: MLM is a human "churning machine" with no "off button"

    Quote Originally Posted by noagenda View Post
    IBOs are in fact the majority of an MLM's customer/consumer base. They are also the distribution method for a company to sell and move their product. The demand is a mixture of both product and biz op. The number of IBOs willing to be in the market place does in fact set the demand curve criteria. In other words the IBO themselves set the demand for the product. There is no "saturation". A change in the number of IBOs is the adjustment to demand.
    The fact that the MLM's main customer is the IBO is, in fact, MLM's main flaw. Lack of retail results in a lack of sustainability of the distributor business opportunity. One McDonalds on a city block will do well, due to a large customer base. four or eight McDonalds on a city block, not so much, because they have to compete with each other. One McDonalds restaurant per customer would be outright absurd, but that's how you're describing MLM - a virtual 1:1 salesperson to consumer ratio.

    It's clear that when you have a ratio of nearly 1:1 of salespeople (excuse me, "IBO's) to customers (excuse me, "IBO's), it will always and forever be impossible for the vast majority to make money at any given moment. The only real profit to be had is by funnelling the profit from those sales far up the chain. This is a big part of the reason why 97%, 99%, or whatever number north of 90% you choose, are not making money in MLM. Since it's unreasonable to expect even 10% of the front line to duplicate the results of the top 1%, and then 10% of those to do the same, most people find it impossible to earn much in MLM. It's not that most distributors don't do "what's necessary," apply the skills or whatever, it's that most distributors can't do "what's necessary" and successfully apply the skills, because the system is working against them the entire time!

    As discussed within the links I've provided, by design, by MLM's very nature, each new distributor is at a disadvantage when compared to their uplines due to a reduced market share, from their uplines, their downlines, and their crosslines. When a market has been thoroughly worked over, the business looks to open new markets to regain momentum, such as entering new countries. Amway in the U.S. is a perfect example - Amway is not a household name due to a reputation for inexpensive or quality products - it is known mostly as a way to lose money at best, and as a pyramid scheme at the worst. If you poll ten people in the street, I'm sure that most of them will offer that opinion of Amway. For those that may still be susceptible to joining Amway (they may have been living in a rural area, and just turned 18, perhaps, statistics show that they are 99% likely to fail in the business, and then will have the same opinion of Amway, and tell their friends and family to stay far away, if they haven't already alienated their warm market.

    The reason why Amway continues to grow is because they entered new countries. It's only a matter of time before the business ends up the same as it has in the U.S. We're already seeing this start to happen in India, for example.
    MLM's Mission Statement:

    "The primary product is opportunity. The strongest, most powerful motivational force today is false hope."

    "Almost everyone is not going to learn the skills and use them consistently over time, you would be better off joining Costco" -Dank111

  14. #14
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    Re: MLM is a human "churning machine" with no "off button"

    Quote Originally Posted by noagenda View Post
    IBOs are their uplines customers. Just the nature of it. In order to take advantage of discount pricing and other incentives, being an IBO would seem the most logical way to acquire product whether you are actively building a business or not.
    If IBO's were joining simply for product discounts, they would still stay as customers after quitting as IBO's. This does not happen, obviously, because there is rampant turnover (which proves lack of product loyalty), but still a 1:1 IBO - customer ratio, give or take.
    MLM's Mission Statement:

    "The primary product is opportunity. The strongest, most powerful motivational force today is false hope."

    "Almost everyone is not going to learn the skills and use them consistently over time, you would be better off joining Costco" -Dank111

  15. #15
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    Jul 2008
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    21,904

    Re: MLM is a human "churning machine" with no "off button"

    Quote Originally Posted by BoxAlarm126 View Post
    If IBO's were joining simply for product discounts, they would still stay as customers after quitting as IBO's. This does not happen, obviously, because there is rampant turnover (which proves lack of product loyalty), but still a 1:1 IBO - customer ratio, give or take.
    It depends on the product. In my company which has a range of nutritional products that people use for life we have very long term customers some who've been customers for decades. In a company like Herbalife whet the main product is weight loss there is a bigger turnover as people lose weight and stop taking the products, often coming back to lose weight again. Nothing wrong with this, the same thing happens with products like Slim fast and all the club's like weight watchers.
    "People are not interested in your product or your business; they are interested in solving their own problems." -- James Dillehay, Entrepreneur and Author

  16. #16

    Re: MLM is a human "churning machine" with no "off button"

    Quote Originally Posted by BoxAlarm126 View Post
    The reason why Amway continues to grow is because they entered new countries. It's only a matter of time before the business ends up the same as it has in the U.S. We're already seeing this start to happen in India, for example.
    Until 2013 Amway was growing significantly in the U.S for many consecutive years. It would be best to look at year over year figures. As far as India is concerned I would say what has been slowing it down is legal uncertainty not maturation.

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