MLM Analyst

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.

For now, check out the before and after view of the top 20 earners. Notice that whereas MonaVie and Amway used to fill 15 of the top 20 spots, they now occupy “only” 10 of the top 20. If the list was more accurate I wonder if those 2 companies combined would have more like 4-5 of the top 20. My insiders tell me that the list publishers still haven’t actively reached out to request information from some of the biggest MLM companies, especially those based outside of the U.S.

The obvious inaccuracies haven’t stopped distributors and even some companies (ok, 1 in particular) from referencing the list as evidence of their opportunity’s superiority.

Oh well. Coming from more traditional businesses, perhaps I expect too much. But then again if the industry wants to be taken seriously shouldn’t everybody in network marketing, companies & distributors alike, expect more?

How the Top 500 MLM Earners table looked in May 2009

How the Top 500 MLM Earners table looked in September 2009

I wonder if the rounding to the nearest $50,000 that occurs with #s 11-20 means that those are imaginary numbers or otherwise guesses.

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

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.

In my last post, Why I’m Blogging About Network Marketing, I mentioned hearing about the MLM 500 Top Earners list from a soccer teammate. He was excited because it seemed to be evidence that the MLM company he’s associated with was one that produced an inordinate number of top earners. It made me suspicious. So I decided to look into it.

Here’s some of what I’ve found so far. The people producing the list are certainly not doing so for altruistic reasons. You can see from their site that accessing it now requires a subscription. That’s fine. Capitalism is a good thing. But did they purposely disseminate inaccurate information in order to create an uproar and then profit from it? Don’t know. More on that later.

I found the list posted elsewhere. Right at first glance you can see some issues. Of the top 20, 9 are from MonaVie and 6 are from Amway.Those 2 companies have produced 15 of the top 20 earners? Really? Want to guess how many of the top 65 are from MonaVie? Why, 46 of course.

Is it at all disconcerting that from number 29 through 65, every earner is from MonaVie? Umm, yes. Consider the block of Amway distributors that monopolize all but 3 of the 60 positions from #77 to #137. Statistically speaking, how does that happen?

Is there any possible way that this data could be legit? I’m pretty sure there’s not – partly because while I was viewing the list my college statistics professor came back from the grave and began screaming at me to close my web browser before he died a second death.

Even without a ghostly visit, or a college degree, or a 7th grade math class for that matter, any rational person would toss the list out as meaningless.

Still, I couldn’t help but notice a few more oddities:

• Usana shows up only 4 times in the top 150?
• There’s only 1 Herbalife distributor in the top 100?
• There are only 2 Xango distributors in the top 100?
• Nu Skin only shows up 6 times out of 500 and not until #158.
• There is only 1 Melaleuca distributor in the entire top 500?

Ok. So the list is clearly bogus. The people putting it together either didn’t even try or perhaps had ulterior motives. I think that deserves some analysis.

Uh oh, I think I just felt my ethics professor roll over in his grave. Gotta run. I’ll be back with more later.

My analysis of the top MLM earners list continues in this post about motivations behind such a list.

If you wonder, like I do, why an MLM company would publish their top earners’ numbers, and why a typical distributor would publicize that, you might find this article interesting: Which MLM Comp Plans Screw the Typical Distributor?.

Why am I blogging about network marketing? Well, an interesting thing happened to me the other night – for about the hundredth time, actually.

After playing a soccer game I was sitting on the sidelines with my similarly out-of-shape, middle-aged teammates when one asked me what I did for a living. I described my company and services and he began bending the discussion toward network marketing. I didn’t really mind. I’m used to it.

I explained that I was pretty satisfied professionally and pretty familiar with most MLM products & companies. I didn’t shut him down. I love having these discussions. So I asked which one he was part of and he mentioned one of the larger ones.

No problem there. I know people that like their product and system. But he peaked my interest when he mentioned a sort of Inc 500 list for MLM downlines. And, of course, his company dominates the list – ergo, their business must be an astonishingly better opportunity than all others. It sounded a bit too convenient to me.

I’m familiar with how Inc Magazine builds their list. It requires very detailed & documented disclosure by it’s applicant companies. So I wondered how anyone could possibly create such a list based on the poorly-documented, highly-guarded, and overly-hyped numbers of big MLM distributors.

I guess I wondered enough that I’ve decided to dig into it a bit. So I finally launched the blog I’ve always wanted to write and here we are.

Stay tuned…