Thursday, November 03, 2005

On MLM/Network Marketing

Found this excellent treatment of the subject at

"...many MLM recruits are deceived by the "possibility" (which is real) and don't consider the "probability" (which is pathetically small, and seldom documented) of the MLM recruit's personal success. In a recent study I have the drop out rate is 74% for MLM, and slightly higher for Mortgage brokers, and slightly higher than that for Insurance sales.

"My conclusion is that MLM actively seeks the small percentage of very greedy people in society, who will do well in such a program. There is no efficient way to find these star performers and so a system of numbers (big recruiting effort - small success rate) has developed.

"Many of the failed people (those of us that don't have the greed gene) have cried foul and labeled MLM as fraud.

"...the greed gene is very uncommon, and all the sales rah-rah and training sessions in the world will not convert the average person to be an MLM champion.

"...if MLM was that easy for the average person, there would be no differentiation and the MLM industry would collapse to the level of a grocery store or gas station business model and have very many people earning very little margin.

"The great majority of us are quite content to take low risk - modest reward careers, and work them strategically to earn a comfortable living year in and year out.

"What is amazing is that people on the "normal career" path, happy or not, get the call to join MLM and become intoxicated with the idea that they will become fabulously rich in no time at all, if they sign up for the program. This is not logical, but clearly an exploitable character flaw in humans."

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