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Doc Bunkum
03-13-2011, 08:09 AM
So I come across this blog Why I Hate MLM...MLM Exposed... (http://www.whyihatemlm.com/MLM-myths.html) and the guy makes some good points about why he hates MLM. One in particular is the line of working 2-4 years and building up a walk-away income that MLM feed prospects.

Does this really happen?

No it doesn't, according to people that have been in the industry and who are either being totally honest or their conscience has finally caught up with them. As the guy above puts it...


Your Upline will tell you in your MLM that you can earn passive income. This is not really true. Having a bunch of people paying a monthly fee or being on autoship is NOT passive income. This is not like the passive income that comes from owning rental properties, receiving distributions or dividends from a company, or royalties from a book. I am not giving a technical definition, but MLM is like a sales job with some residual income. But keep in mind that 30% of your people will quit quickly, and very few will stay for longer than 1-3 years. So, you keep having to getting new people. There are few if any people that literally stop “working” their business, and there income does not go down. I had the problem of people cancelling. I tried to relax on passive income, and it caught up to me quick, and my income went down. Its not like having an office property in an area where it will always be full and you’ll make money off of rent.

Interesting.

I went looking to see what do others have to say about residual income.


Residual Income or "Walk Away Income" are terms used by many people promoting Network Marketing opportunities. These terms mean that you can build up a group of people that you will get paid on whether you work or not, like royalty income from books or cd sales. Well, the truth is, it doesn't happen like that at all... and here is why.

This is a touchy subject amongst some people, but I want to share my opinion regarding it. I have been working full time in the home business industry for 10+ years. A period of the time was spent in multi-level marketing companies where the idea of working 2-4 years and building up a walk-away income is marketed to prospects. I have been blessed to have tremendous success in network marketing over the years, 7 years were spent in that type of marketing or pay plan.

During that time period I've had enough time to see trends and see that this concept of walk away income doesn't exist. I've met many top earners who you would think had achieved the mythical walk away income, but guess what...? They are still working today, some in their 2nd or 3rd company since I've known them!

I ask, where is the residual or walk-away income here? I say it doesn't exist. I have known reps who have had 100's of thousands of distributors on their teams at one time and now they are rebuilding and doing it all over again still promoting walk away income. It makes me want to scream! They can't see that 99.9% of the people can't do what they do and they can't even achieve the mythical income.

The Myth Of Walk Away MLM Income - Marshall Gilliam (http://www.articlesnatch.com/Article/Mlm---The-Myth-Of-Walk-Away-Income/595144)


Something I've always suspected. Heck, why can't an industry leader like Clements retire if residual income existed? How many companies does he claim to have been the #1 producer in? Is he still receiving residuals? If not, how come?

Anyways, Gilliam, having played the MLM game for a long time, gives some reasons why residual income is a myth:


There are many reasons why I feel this way and all are based on real life examples. One is companies change. I don't think companies like paying a million dollars a year to a someone sitting on a beach somewhere not doing anything to grow the company, so they change the compensation plan to include requirements to make these people "work", hence no "walk away". The company may go out of business or get sold, the product may have issues with a regulatory agency and people get scared and your team vanishes. One of your top leaders gets a signing bonus to move over to a new company and takes most of your team with them, then what? No walk away income and you are starting over.



Makes perfect sense to me!

So why even bother getting started in some jackass MLM venture in the first place?

Get a real job or start your own small business. We all have specialized talents and knowledge that other people will pay for if you just use your head and think a bit about how to market them.

A Life Aloft
03-13-2011, 05:48 PM
Ah.....the tried and false lure of passive income and lifetime residual income and ever elusive pot of gold at the end of the rainbow. Lenny, as you have mentioned is the perfect example of how these claims are truly a bag of lies. People think they can purchase hope. Sad but true.

In all MLMs, the success of the few (the leaders/directors/owners/founders) comes at the expense of all the other people, the little people who waste their time and money pursuing a goal they can never reach. And that’s my problem with 99% of all multilevel companies. You are encouraged to make money on your ability to use other people. Selling is an honorable profession. If you can sell, you can provide a valuable service or product to your customers, taking advantage of no one in the process. This in no way describes what MLMs do and how they behave. Have you been interviewed as a reasonable candidate for what is required, or have you just been recruited as one more number in someone else’s “downline?” Do you have to pay someone in order to work for them? That is the difference.

When Robert Fitzpatrick wrote the following, he was telling the truth and exposing the lies of all MLMs:

"MLM's economic scorecard is characterized by massive failure rates and financial losses for millions of consumers. Its structure in which positions on an endless sales chain are purchased by selling or buying goods is mathematically unsustainable and its system of allowing unlimited numbers of distributors in any market area is inherently unstable.

MLM's espoused core business - personal retailing - is contrary to trends in communication technology, cost-effective distribution, and consumer buying preferences. The retailing activity is, in reality, only a pretext for the actual core business - enrolling investors in pyramid organizations that promise exponential income growth.

As in all pyramid schemes, the incomes of those distributors at the top and the profits to the sponsoring corporations come from a continuous influx of new investors at the bottom. Viewed superficially in terms of company profits and the wealth of an elite group at the pinnacle of the MLM industry, the model can appear viable to the uninformed, just as all pyramid schemes do before they collapse or are exposed by authorities.

Deceptive marketing that ably plays upon treasured cultural beliefs, social and personal needs, and some economic trends account for MLM's growth, rather than its ability to meet any consumer needs. The deceptive marketing is nurtured by a general lack of professional evaluation or investigation by reputable business media. Consequently, a popular delusion is supported that MLM is a viable business investment or career choice for nearly everyone and the odds of financial success in the venture are comparable or better than other trades, professions, employment or business ventures.

MLM's true constituency is not the consuming public but rather hopeful investors. The market for these investors grows significantly in times of economic transition, globalization and employee displacement. Promises of quick and easy financial deliverance and the beguiling association of wealth with ultimate happiness also play well in this market setting. The marketing thrust of MLM is accordingly directed to prospective distributors, rather than product promotions to purchasers. Its true products are not vitamin pills, health potions or skin lotions, but rather the investment propositions for distributorships, which are deceptively portrayed with images of high income, minimal time requirements, small capital investments and early success.

The word, lie, is provoking and it is used here for provocative purposes. At some level, everyone who participates in MLM in which little retailing is occurring is unconsciously lying to himself or herself. Many at the top of these organizations are consciously lying to everyone else. Deception is inherent in this type of MLM scheme and is pervasive in its marketing."

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What he states, is correct. MLMs will never ever provide you with a passive anything, let alone an income. Merely recruiting new members will not be enough to establish a source of passive income. New members will have to be guided, mentored and monitored by you, as they most often will not know how to proceed in getting new members themselves. Thus you are bound to either work and educate your recruits or constantly recruit new and never ending new members. The attrition rate will be horrendous. It goes without saying that this will result in massive workload for you and very little income, current or passive.

No residual income affiliate program is not able to generate new wealth. Wealth is generated by the conversion of an initial investment into some form of profit. As MLMs do not, provide a true product or a service that is a real of benefit to the consumer, the whole scheme boils down to the transfer of wealth and not wealth generation. In other words residual income affiliate programs will always fail, because they are unsuccessful in generating wealth due to a lack of a quality product or service that can grow in the long run. This, in effect, results in the tedious and complicated on going recruitment process.

Whip
03-13-2011, 06:15 PM
I fail to see the myth.....you can actually make an income as soon as you walk away from mlm....:RpS_laugh: