MLMs often teach their participants to recruit their best customers. And there are almost always plenty of competitive alternatives to every consumer product. However, as a business model i.
However, there are some major downsides here: The structure more or less [ edit ] See the main article on this topic: There isn't an endless supply of people willing to serve as self-appointed salespeople in any market, anywhere - some of us have better things to do than sell overpriced supplements to our friends on Facebook.
Far from being the behavior of "just a few bad apples," as the MLM industry would have you believe, this practice is encouraged and rewarded by a system that prioritizes raw recruitment numbers above all else. In a normal business, the purpose of commissions is to encourage sales; in an MLM, the purpose of sales is to encourage commissions. It creates its own competition[ edit ] MLMs blur the line between 'contractor' and 'customer.
It creates its own competition[ edit ] MLMs blur the line between 'contractor' and 'customer. The result is higher prices, frequent unexplained delays, and products that are constantly "on back-order. The problem is that as the market saturates at an exponential rate, the pool of potential new recruits rapidly dries up, and new distributors must sink lower and lower and engage in steadily shadier and more desperate practices to build their downline. Everyone wants to be at the top earning commissions , and nobody wants to be on the bottom selling.
It's a bold accusation, one not to be trotted out lightly, but there's simply no other way to describe the techniques MLMs use to attract and retain recruits. MLMs often teach their participants to recruit their best customers. Let's say I decide to start an MLM business and I recruit another distributor, who takes over all my leads.
You should devote your entrepreneurial efforts to basically anything else. To succeed in an MLM, you must essentially con your downline into buying tickets for a plane that has already taken off. That's because unlike normal retail business, where the supply chain is direct and logical from manufacturer, to wholesaler, to retailer, to customer , in MLMs the supply chain follows the customer's upline, accumulating markups and compounding inefficiencies at each level of the pyramid.
Posted by: Gardale | on October 2, 2012
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