Ahh, I may have taken some time off – 2 1/2 years of time. If you were enjoying my analysis, I apologize for leaving. If you hated it, I apologize for coming back.
It’s not that I didn’t thoroughly enjoy the hobby of analyzing various aspects of network marketing and sharing that with my readers. It’s just that my day job became more of a day and night job. Considering my commitments to a balanced life, something had to give and so this little hobby “gave.”
However, these days I find myself with some extra time and continued interest as a network marketing outsider so I’ve got some ideas I’ll be sharing with you shortly. Stay tuned…
Lately I’ve been looking at how MLM companies balance three critical types of costs:
- Distributor commissions
- Product & development costs
- Company operations & profit
Here’s basically how these three types of costs interact.
If an MLM company is generous with its distributor/sales commissions (paying, let’s say 40-45% of its total gross revenue) that leaves less money for paying for a quality product (along with investing in new product development) or maintaining the company’s overall viability.
Look, I was hoping I could generally avoid singling out individual companies when doing my analysis. But lately I’ve received so many confused comments & emails from apparent MonaVie distributors regarding the Inc. 500 list that I’ve got to clear up some things for them. I’ll try not to be unkind…
Within this site’s comments you’ll find the following,
Do you also think the INC magazine top 500 companies (in the September issue) list is also bologna because MonaVie is the only mlm that made the list. Should we also be calling that publication a bogus, bias, poorly researched and invalid lie?
And you’ll also find this gem,
I’ve really enjoyed some recent comments posted on the site. Some of my favorites are those riddled with stories of how the author knows a guy who knows a guy who makes a billion dollars a month, etc. etc. They are usually provided as evidence that one network marketing company or another outperforms all the rest. Take this one for example,
“…i have a personal friend named [deleted] who makes 13k a week and i know this because i saw it and his dad is a black diamond that makes 1.5million a year and i also saw that so i know its not fake…”
Many of you know that if you’ve exposed yourself to enough companies & products, you hear the same basic stories from them all – people were healed, the most unlikely people became crazy rich, and so on. I suppose the storytellers can’t be faulted. If you want someone to take action, you typically want to appeal to their emotions. Emotions motivate. And stories touch our emotions.
I’ve recently suggested there might be better ways of measuring the appeal of a network marketing company & their opportunity. Most new network marketing members I know make the decision to join a particular company based on emotion, typically fueled by questionable information. But when a distributor is looking for a new opportunity, shouldn’t they be most interested in a company’s momentum – their recent and ongoing growth?
Why Growth & Momentum?
If a distributor joins with a company whose market share is shrinking, they’ll find it increasingly difficult to win team members, make sales and otherwise succeed.
So, I decided to look at growth & momentum. Since no network marketing companies regularly publish audited revenue numbers, we can’t use those. Plus, revenue lags momentum in this industry so it would be a late indicator. Read more…
Categories: Momentum and Growth, Predicting MLM Growth Agel, Amway, Forever Living, Herbalife, Life Plus, Mannatech, Max Intl., Melaleuca, MonaVie, Pharmanex, Tahitian Noni, Usana, Vemma, Waiora, Xango, Zrii
I recently had an interesting exchange with a man named Mike within a post on the MLM.com forums. I thought it was entertaining enough that I would share parts of it with all of you.
It started with a re-post of an article/sentiment that has been circulated in many other places about the promise of direct selling vs. typical employment. It extolled the virtues of working hard in direct sales in the short-term so that you can achieve long-term dreams.
In general I agreed, but made an argument for balance. I wrote, Read more…
I recently finished a post on why you should be nervous about MLM companies that release distributor earnings. I finished that post suggesting that if your MLM company shows some distributors with massive monthly income numbers, there’s a great chance that its compensation program is unfairly top-heavy.
Fair vs. Unfair MLM Compensation Models
What makes a top-heavy MLM comp plan imbalanced & unfair? If you aren’t one of a few dozen of those top earners you may never see a decent income no matter how hard you work at it. Wouldn’t you rather be part of an organization that gives a fair chance for everyone to prosper? Read more…
I was looking at the (very warped) “before” and (still warped) “after” tables in my recent post about the changing MLM 500 Earners List wondering how well one could trust the self-reported income figures of most top distributors – especially those posted on a publicly open site like the MLM earners list. At first glance you might think there is a lot of benefit to be gained from reporting the highest possible numbers, regardless of their validity.
If I was a distributor anxiously recruiting people into my downline I might state the largest imagined number as frequently as possible. If there was some public list where I was able to submit whatever average monthly income number I felt like…well, you get the point.
What if you were part of some top earner’s downline? Would you be tempted to submit to some free-for-all public list the highest rumored number you’ve heard to help support your claims that you belong to the best organization in the best company? After doing so would you blog and comment all over the web to promote your organization? Haven’t we all read dozens of such posts and comments? Can you trust them? Read more…
At the bottom of this post you’ll find the top 20 earners list as it looked in mid-May and how it looked a few days ago. As most people following the list know, the initial version was very heavily weighed toward MonaVie and Amway.
Since it was so obviously inaccurate and weighted, it led me to wonder how legitimate it was and whether there were any ulterior motives in releasing it. If you’ve read my latest post you’ll remember that I suggested a more effective way at analyzing the value of any particular MLM opportunity from the view of a potential distributor. I think I’ve nailed down a pretty insightful methodology measuring momentum, which you’ll see in my next post. Read more…
You may have noticed a response to my previous post from Ted Nuyten, author of the MLM Top 500Earners List. I appreciated his comments and thought they were insightful.
This was the bulk of his response:
“The MLM 500 rankings is a list which has approx. 30% of all Top Earners listed. So if you miss people that is the only reason. It’s a lot of work, but our list grows every day. We are independent of which direct selling companies may exist. Some companies and distributors however are more willing to share their top earnings income then others.”
Some Lingering Questions
Those are fair disclaimers, but they leave me with some additional questions. I’ve invited Mr. Nuyten to to comment again on the following questions. Read more…