MLM Analyst

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.

What are the origins of the list and what relationships caused you to initially focus so heavily on 1 or 2 companies in particular? Specifically, is there a business relationship? Are you, or have you been a distributor for one of the 2? Honestly, the way this list was launched makes it looks suspect.

I’ve contacted my sources at some major MLM companies and they claim they were never approached with the opportunity to contribute or respond to the list before (or even after) it was published. That seems to intentionally create an uneven playing field which, again, raises some questions about the list’s purpose and objectivity.

An Alternate Approach

I wonder how the list would look if some additional research had been done before it was published. I’m guessing that a number of MLM companies would have been reluctant to reveal their earnings numbers at all and others would have been tempted to disclose artificial numbers, either to build up their perceived success or to reduce the poaching of their top distributors.

Couldn’t the first concern (privacy) be countered by allowing a company to disclose top earners’ payouts without actually naming the distributor, thus protecting their privacy? Couldn’t the second concern (accuracy) be handled by requiring proof of payments that would be averaged over time.

If that’s not possible, how about providing a confidence indicator for each line? A more useful list might show which entries were based on 1) verified company records (including records over time), 2) unverified company reports (no records to back up the claims), 3) distributor self-reports, or 4) hearsay/rumors.

A Completely Different Approach

While looking at an accurate static list of earners might be interesting, indicators of growth might be more important to distributors wanting to compare which MLM companies offer them the greatest potential future. A lot of companies say things like, “pre-launch” or “ground floor” or “look how much we currently make/pay.”

But that doesn’t mean they are growing, let alone going viral. What if they are actually shrinking? I have some interesting ideas for estimating growth trends of network marketing companies that I’ll be fleshing out in future posts. Stay tuned…

This post explores the motivations of MLM companies that publish their distributor earnings numbers.