Let me say a few things with some rationale here.
MLM is a FORM of DIRECT MARKETING, a form of distribution of
PRODUCTS used for many years. The form of MLM comes in the last 3
decades or so. MLM is NOT a new idea and not an innovation that
comes out recently.
Thus, like any form of distribution of products, be it franchising,
MLM or by agency, it is perfectly ok if the company thinks that
that is the best way to distribute its products and to maximise its
potential. Thus I would have nothing against DW or NUSKIN or AMWAY
or whoever if they decide that MLM is the way to go. MLM is neither
superior nor inferior, it is just a matter of suitability.
However, let me point out a few things and let you all ponder over
it.
1) In MLM, its very common to hear that "anyone can be your
customer" sort of statements. This means that all 4 million people
in Singapore could and would buy your product if only you know how
to do it. Unfortunately, such IDEAL situations just do not exist in
the REAL BUSINESS WORLD. There is NEVER a single market where
everyone is a potential customer. A company who targets everyone as
a customer is doom to fail because you cant be all things to all
men. Even WALMART believes that it cant possibly make everyone in
USA buy from WALMART just because it is big and found almost
everywhere in USA. Different people has different needs.
Thus for people in MLM, consider this, if saying that there are 'X'
number of people in Singapore who might be interested to buy your,
say, MAGNETIC MATRESSES, at $1000 per piece for the benefits it
claimed to give. Then we must accept that there are definitely 'Y'
number of people who will not simply pay $1000 for this product or
who feels they have no need for such product or have found a
substitute for this product. So no matter what 'X' is, if you are
in MLM, you have to make a smart estimate how many customers 'X'
represents. 'X' cannot simply means EVERYONE.
2) Once you know what 'X' is, you have a rough guide of your market
size. Now this is the crux. You see, you can have 50% of the market
share but that does not mean 50% of the population, thus 50% of
market share could mean just 100, 000, could be more, could be
less. Let us just take that in a 4 million population, 5% of
Singaporeans are willing to pay $1000 for a MAGNETIC MATRESS.
Now, consider this, do MLMs limit the number of distributors it can
have? NO. So imagine, if I just recruit 5, then the 5 recuits 5
each who in turn recruits 5 each, I would have 755 people as my
downline!!! This is certainly not a far fetched number because this
is exactly what the MULTI LEVEL MARKETING structure is about. THEN,
imagine, there is just 5 people like me: meaning there will be a
total of 3775 distributors in SINGAPORE.
This is what we call in business, OVER SUPPLY, meaning that the
market is only so big but yet there are so many supplies, some
suppliers are bound to die. Thus by having so many distributors,
who do you think benefit most? Its not the majority, its the
company itself; the people who own the brand and also the higher
uplines. THis means ultimately, most people in MLM is doomed to
fail all because of the structure alone.
EVEN a mega brand like UNILEVER has only 7 sales executives going
around Singapore to serve their even bigger base of customers (cos
I am one of them). So how many of the people in MLM will succeed?
Some will but not most.
**** I still have many points to write but I am tired.....this is
not to burst your bubble. MLM is a perfectly legal structure.
HOwever, the serious flaw in it is that the more levels you have,
the more distributors you have in a market, the more failures you
will have in this business. MLM is a sales job, just like many
other jobs. In a sales job, we should aim to give customers an
EXPERIENCE which they enjoy with our service, honesty and efforts
to solve their problems. Having nicely printed brochures and
catalogs about your factories in some obscure places do not do
that. I was and I still in a way still am in a sales related job.
MLM can bring success just like any other sales job. But if you
think that MLM is the next KILLER APPS, then I would love to burst
your bubble and tell you
"just try your best with all honesty, ethics and effort but do not
be too muddle headed and foolish and not know when to stop trying
and focus on other things instead."
Cheers.
