Recession and What MLMs Really Sell

[wserra]

I have seen a curious thought recently, supposedly backed by even more curious reasoning. MLM "gurus" such as this one are writing that their "industry" is at least recession-resistant, if not recession-proof. That's pretty strange when you think about it. Product after product - go to virtually any thread on this forum for examples - ridiculously overpriced at the least, and frequently of dubious benefit as well. Money is tight, and they think people are more likely to blow hard-earned money on overpriced nostrums? It doesn't seem to make sense.

It makes perfect sense when you remember that the idea isn't to sell the product, but rather the pyramid. As the above guy put it, "Whatever Network Marketing company you point to, there is money to be made in recruiting new people into the business". And the more desperate people are, the more likely they are to bite at the promises of riches these guys put out.

This is why the FTC's long-delayed proposed bizopp rules are so important. People need to be told that 95% of them will never make a dime.

[TheBest]

It makes perfect sense when you remember that the idea isn't to sell the product, but rather the pyramid. As the above guy put it, "Whatever Network Marketing company you point to, there is money to be made in recruiting new people into the business". And the more desperate people are, the more likely they are to bite at the promises of riches these guys put out.

Well, wserra, wrong again.

In fact, there ara some MLM companys out there where you don´t get a cent for the recruiting part. You only get paid when you sell products.

/TheBest

[buck09]

It makes perfect sense when you remember that the idea isn't to sell the product, but rather the pyramid. As the above guy put it, "Whatever Network Marketing company you point to, there is money to be made in recruiting new people into the business". And the more desperate people are, the more likely they are to bite at the promises of riches these guys put out.

Well, wserra, wrong again.

In fact, there ara some MLM companys out there where you don´t get a cent for the recruiting part. You only get paid when you sell products.

/TheBest

I assume then the motivation would be to get a cut of sales on your downline, so your motivation to grow the pyramid as large as possible still exists. There's no motivation not to. Except that it's even harder to make money, since the MLM takes 100% of the new sign-up profit.

[wserra]

Well, wserra, wrong again.

Oh, I don't think so.

In fact, there ara some MLM companys out there where you don´t get a cent for the recruiting part. You only get paid when you sell products.

Well, if it's a straight commission sales arrangement (like, for example, overstock.com), no problem. That's been around forever. It's also not what people call an "MLM", because there's no incentive to recruit your own competition. And yes, I agree, there are MLMs with no signup bonus for the distributor who adds to his downline. As buck09 writes, in those the signup fee (what sane person would ever pay someone else for the privilege of selling his products?) goes right to the MLM.

For example, consider the MLM that has a $60 minimum fee to sign up, going to the company. The distributor is "promised" the following gobbledegook:

Generate at least 100 points in Personal Volume (“PSV”). You can personally generate PSV in several ways: (a) purchase X Company products or services for your own personal use or for resale to your customers, (b) personally sponsor “No Inventory Retail Customers”** to enroll in x Company's’s Autoship Program, or to enroll as FoneFreedom customers; or (c) introduce No Inventory Retail Customers to your X Company website where they purchase any of X Company’s products and/or the FoneFreedom service, All products and services have a Commission Volume (CV) associated with them. The CV associated with your purchases and sales of these products is accumulated to comprise your PSV. Understand that it is not necessary for a Distributor to personally purchase products from X Company to qualify for commissions. You can meet your qualification criteria strictly through NIRC sales if you wish. In fact, NIRC sales are particularly helpful since once you reach your PSV qualification quota, all excess sales to your personal No Inventory Retail Customers count towards your GSV.
** A “No Inventory Retail Customer” (“NIRC”) is: (a) a Preferred Customer; (b) a Non-Distributor who purchases X Company products or services via X Company’s autoship program; or (c) a Non-Distributor who purchases X Company products or services from a Distributor’s replicated X Company website.

Sponsor one person on your right side who personally generates at least 100 PSV, and one person on your left side who personally generates 100 PSV, and you are qualified to earn commissions. This can be done at any time.
To maintain qualification, personally generate 50 PV of FFi products or services every month. If you don’t maintain 50 PSV per month, you will not be eligible for commissions that month and your accumulated GSV will flush (reset to zero in both legs).
How Your Business Centers Provide Income to You

As you sponsor Distributors, you place them in open positions in your downline, remembering to first place one on your left side and one on your right side. (Figure 2). After placing one on each side, you may sponsor Distributors on either side of your downline. You and everyone in your upline are able to help build your organization because new Distributors are always added downline. This structure fosters a team effort with everyone working together to add new Distributors. Everyone in your group benefits each time sales are generated in your organization . The team will work together to reap faster growth and faster rewards for everyone in the downline organization (figure 3). As you introduce the products and services to more people, you will want to add more people and more Group Sales Volume to your organization. You can place new Distributors in any open spot under the person on your left side or the person on your right side, helping whichever person you wish. You will be helping to build your other Distributors’ downlines as well as helping yourself. Your success is built on product sales, which are achieved by sponsoring people in your organization, sharing the products with your customers, and teaching the Distributors in your downline to do the same thing.

Commissions earned vary by the efforts and skill of each individual distributor. They are paid based on accrued Group Sales Volume. The Group Sales Volume (GSV) is the accumulation of the Commission Value (CV) on all products and services purchased and sold in your downline group that fall within a 1/3 weak-side, 2/3 strong –side ratio once at least 300 GSV is accrued on the weak side and 600 GSV is on the strong-side. (Figure 4). All unused volume after the commissions are calculated carries forward to the next pay period as long as the monthly qualifier has been met (Figure 5).

Each time 300 in GSV is accumulated in the weaker leg and 600 GSV is accumulated in the stronger leg, a cycle is completed and a $50 commission is paid to you. Maximum allowable cycles is 500 per week,(although the compensation plan is programmed to permit up to 500 cycles per week, it is not realistic to expect to cycle this many times).

The remaining volume after the commissions have been processed is carried forward to the next week. Commissions are calculated weekly and paid one week in arrears. The end of the commission period is Sunday at 11:59 PM.
*Note: The maximum payout under the compensation plan is capped at 60% of total company-wide CV for the week. If in any week the total payout for all bonuses exceeds 60% of total company-wide CV, the actual payout will be limited to 60% of total company-wide CV for the week and all Distributors’ commissions will be reduced on a pro-rata basis.

3. Leadership Matching Bonuses
Level 1 -- As you continue to grow your business, you will want to tell more and more people about the incredible opportunity X Company provides. When you have personally enrolled 6 Distributors who have each generated at least 200 PSV in one month,with at least 2 Distributors on the left side and at least 2 Distributors on the right side, you will be promoted to the rank of Silver Distributor, and you will begin earning an additional 20% on all binary cycles of all qualified people you personally sponsor.
Level 2 -- When you have personally enrolled 12 Distributors who have each generated at least 200 PSV in one month, with at least 3 Distributors on the left side, and at least 3 Distributors on the right side, you will be promoted to the rank of Gold Distributor, and you will earn an additional 20% matching bonus on all qualified Distributors your personally sponsored Distributors enroll.
Level 3 -- A third level match is awarded when you have personally enrolled 12 Distributors who have each generated at least 200 PSV during one month with at least 4 Distributors on the left side, and at least 4 Distributors on the right side. Earning your third level of matching bonuses awards you the rank of Platinum Distributor. You will earn a 10% bonus on all of your third level qualified Distributor’s binary cycles.
Matching bonuses are only paid on binary cycle commissions. No match is paid on downline matching bonuses.

4. QUARTERLY LEADERSHIP BONUS POOLS
Five percent of the total PSV derived from X Company’s Innovative Fuel Technologies (“IFT”) program will be divided among three leadership bonus pools. These pools are based on calendar quarter sales and are potentially the most lucrative component to the X Company compensation plan for those who display the leadership qualities to drive their businesses forward.
Diamond Bonus Pool
One-third of the total Leadership Pool funds will be allocated to the Diamond Bonus Pool and will be divided among all Diamond Distributors. The Pool will be allocated among all Diamonds on a pro-rata basis based on the number of Platinum Distributors that the Diamond has personally sponsored.

I mean, what incredible gibberish. It can't be something simple, like you get a commission of 10 percent on your sales, right? People might do the math too easily on that one, and realize that they're not likely to become millionaires anytime soon. Can't have that. What a ripoff, right?

Well, since this is FFI's "Compensation Plan", maybe you won't agree.

BTW, how's ol' Jerry Lang doing? Why can't he be bothered to talk to Tony? Are you going to post those Millbrook results you've been lying about?