dear africa – Network Marketing, Multi Level Marketing

I have abandoned writing my regular rumblings for a while now, and a few of my loyal followers started complaining. So I’m back, by popular demand. Without making up a list of excuses about why I don’t write often as I used to, honestly, the truth is that it is hard to keep up to a frequent schedule without starting to bore people and sounding monotonous. It is damn hard to come up with fresh original content all the time, especially to address the same issue, ie, personal finances.

In the past 6 months, a couple of friends have tried to recruit me to their respective MLM business, but I had to turn them down gently, or not so gently if they persisted. This morning, a friend send me this inbox below:

“Dear Paul
What is your opinion on Network Marketing Businesses.”

Now, as you read my reply to ***Thabo, keep the question in mind, with emphasis on the word “opinion”

Hi ***Tbos

I’m not a big fan for of Network Marketing / Multi Level Marketing. I have been exposed to them since 2006 or there about, I even worked at Clientele for few years, running statements for their IFA program. I know a few people who were making a decent living. “Few” is the operative word here, and don’t get me wrong, few is relative to the size of the Network Marketing size itself. So for old and successful ones like Forever, the “few” can run into thousands, while millions in the network are just scraping by, and actually funding their upstream leads.

That’s where my main issue lies. MLM It is not for everyone, and it is designed that way. Let’s paint a hypothetical scenario. Say there was 1 MLM company in the whole world, and all of us joined, all 7 billion of us. By design, in most MLM companies, to be fair this is the case in all companies anyway, the structure is not flat. The early adopters as well as hard workers who are very good in influence and manage to convince as many people as they can to join will benefit significantly. This is a wild unscientific guess, but I don’t think more than 10% of the pool in a typical MLM structure can make a decent living on their earnings. The other 90% funds the 10%. You can challenge my guesstimate. But even at 50/50 split, the logic is still the same, the 1 half funds the other half.

In a large MLM company, like the one in our hypothetical example, that 10% can easily be 1 billion people making a decent living, but the other 6 billion people will be struggling, the 7000 000 000’th person will be getting zero for referral income, because there’s no one else left to recruit. And referral income is the lifeblood of the all MLM businesses, the underlying product comes a distant second in terms of earnings. Even if the Product does sell, what if all the 7 billion people have already bought that product? What now, who do we sell to? My example is probably stupid or narrow-minded or both, but it can be scaled down, what if you have sold to all your family and friends all all your social media links?

Now, let talk about the “few”, the 10% who makes it to the top ladder. To be part of the the “few” that make it in MLM business, you have to be an early adopter, and hope that the actual business will be sustainable for a long time. And you have to work damn hard selling the business and getting new leads all the time to increase your downstream. Eventually, you will get to a point where you don’t have to even do anything anymore, when you have big enough pool in your downstream, that works equally as hard as you did, to also increase their own fortunes. If you’re not an early adopter, you can still achieve some decent success, if you work hard enough, in converting new people to join.

I personally don’t have a single bone in me to either do the hard work, or selling, same reason I’ll just suck if i was a politician. And unfortunately, I cannot join any MLM knowing very well that I just don’t have the personality to do well in MLM business.

I know a “few” people who seem to be doing well with their respective MLM businesses, they’ve quit their professional careers to focus on it, and have been doing so for few years. So it does work, for some. Not everybody, actually most of them will collapse in 1 day if we were all to join and expect the same returns.

I hope I didn’t discourage, and I hope it works out for you, just keep on knocking on as many doors as you can, and don’t dwell too much of the ones who shut down the door in your face (like me 🙂 ) Just focus on the ones you win. You will lose some relationships along the way (but this depends entirely on how you sell, and how those relationships responds to it). Just be prepared for it.

All the best.

Ps: ***Thabo/Tbos is not his/her real name 🙂

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