Wednesday, September 06, 2006

WARNING: Anecdote Ahead

I haven't been visiting Quackwatch as often, lately, but I bumped into this over there. It's a letter from some people who joined a Multi-Level Marketing scam, and broke out of the cycle: They realized that the large number of failures couldn't be due to lack of drive, like MLM promoters are fond of saying, so they did the math, among other things.

Excerpt:

Searching for the Cause

The many American books written on the subject of MLM all indicate that the biggest problem in MLM is the constant attrition of people. It appears that many people who join a MLM organisation stop after a short while. We wondered what the cause of that might be. We could not accept that the thousands of Nikken Distributors who ceased their activities during the past eight years in Britain and the other European Countries were all lacking in talent.

On the face of it the sale of generally good quality products and the building up of a marketing organisation does not appear to be too difficult. Everyone with a bit of common sense, enthusiasm and perseverance must be able to do this. Why is it then that so few Distributors are able to create a reasonable income?

All MLM authors are unanimous in their opinion that if a Distributor is not successful that this is purely due to a lack of vision and perseverance. We doubted this viewpoint and we made a completely different assumption. We assumed that the lack of success was not because of the people, but because of the marketing system. If that assumption was correct, what was then the precise reason why people failed? We started to look at Nikken’s marketing methods very critically. After a while certain matters became clear to us.

We arrived at the following conclusions:

  1. Nikken does not concern itself with sales but is predominantly interested in the recruitment of people
  2. The customers are primarily the Distributors themselves
  3. The Nikken products are not officially approved and also expensive. This combination means that the products are very difficult so sell to ordinary consumers.

5 comments:

Hoopy Frood said...

More Anecdotes?

I remember the first time I saw Nikken products. I walked in my house after school one day to find a Nikken salesman giveing a demo to my parents.

All too enthusiastically they asked me to help in a demonstration. They had me stand on the floor and curl a barbell. Easy enough. They then asked me to stand on some magnetic shoe inserts that were sitting on the floor and repeat the curl. I did. When it was done my dad emphatically stated "That second time was much easier for you!"

I protested saying it was the same weight and what I was standing on made no difference in the curling effort. Predictably they argued with me saying that I had an easier time curling when I stood on the inserts.

Needless to say, my first exposure to Nikken demonstrated that it was a sham...

ted said...

Had a similar experience with Amway once, many years ago and came to pretty much the same conclusions.

Especially point 2; "Be your own best customer" is pounded into you, along with the need for a healthy belief in greed and Jeebus. Amazing stuff really...

Blingjamin said...

I love #3...

I too had 3 hours of my life stolen from me with Amway. I really didn't know what Amway was, but I heard my folks talking about it and laughing every time it was mentioned.

I was 19 or so, and a slick business man asked me if I liked the internet (remember this is 1996 or so)...I said sure. He asked me if I wanted to learn how to make money on it. Why not? That sounded cool.

I won't bore you with the whole story, but in short, he bought me a coke at JBs told me how rich I could become and then disclosed it was Amway he was selling. I told him NO, and he insisted that I listen to some tapes...(this is the best part).
We walk out to his car (He is in full 3 piece suit), his car is a 197x station wagon that is beat up and rusty, he opened the back to get the tapes and I was able to see all of his posessions.
It appeared that he was living in his car! HAHAAA...

Ken said...

There are some good successful programs. Like one of the Top 5 Network Marketing Companies.

Ken

Bronze Dog said...

Don't know about the above link. Anyone who clicks through should take anything they say with a grain of salt.

The big thing about MLM/pyramid scams is that they focus entirely on recruitment. I think an MLM could work if it limits the number of levels, but I doubt it'd be as efficient as more traditional business models.