MLM spokesmen have argued that the expected saturation and resultant market collapse has not occurred because some MLMs are still operating after decades of recruitment –and the market is nowhere near saturated, with less than 1% of total domestic sales accounted for by MLMs. But the issue is not whether or not total saturation has occurred – which would be absurd. Why would a town of 100,000 people need 100,000 distributors? Perhaps ten or twenty would be all the town could support, with new distributors finding it harder and harder to recruit or sell to persons who had not already been contacted.
It is market saturation that is relevant, not total saturation. Some have been contacted multiple times and will never buy.
Market saturation is high in the US, and this is not just for individual MLMs, but for the aggregate collection of hundreds of extant MLMs operating. We know from worldwide feedback that MLM recruitment is both predatory and extremely viral, quickly spreading to other states and countries as saturation makes recruiting difficult in market after market.
As far as
market collapse is concerned, this is replaced by
continuous collapse in MLM. New recruits are continually replacing dropouts – in revolving door fashion. And as I suggested, eventually MLMs must recruit in other countries, or the MLM may start new product divisions and start the chain of recruitment all over again – a process I call re-pyramiding. This is combined with deceptive recruitment to keep the endless chain of recruitment going. Nu Skin, for example, has done this in numerous countries and with several new product divisions, including Interior Design Nutritionals, Big Planet, Pharmanex, PhotoMax, and others suspiciously appearing on the scene with inordinate frequency.
I
hired some students to do a random survey of residents in Utah County, which has the highest concentration of MLMs in the U.S. headquartered there. We found four MLM distributors for every one customer who is not a part of the network of distributors.
4. Attrition is high among MLM firms. Contrary to the representations of MLM promoters, MLM participation does not lead to permanent, passive, residual, annuity-like income, except for a few at the top or who got in at the beginning of the chain of recruitment. Attrition rates for participants in MLM companies are extremely high.
Replacement of dropouts is accomplished by continual recruitment of a revolving door of new recruits, which is one reason “TOPPs” (top-of-the-pyramid promoters), or “kingpins,” garner a disproportionate share of the revenues. TOPPs are the driving force of MLMs.
MLM companies are careful to keep information on attrition rates hidden. However, a Google search for “MLM” – associated with the words “turnover” or “retention” or “attrition” – reveals a great concern about the number of participants that drop out each year. And some of the most damaging evidence of high attrition rates has come from court cases in which MLM officials have been forced to reveal data they have attempted to keep from participants, the media, and from law enforcement.
For example, according to Eric Scheibeler, author of the book Merchants of Deception, from a 2005 Quixtar (Amway) internal management report,
out of 10,000 participating IBOs, only 414 remained in the business after the 5th renewal. That’s a 95.9% dropout rate in only five years for the largest of all MLMs – truly a smoking gun!
Melaleuca at one time claimed to have the highest retention rate in the MLM industry – 94.5%. But in a Texas court case, it was revealed that instead of an average attrition rate of 5.5%
per year, it was 5.5%
per month, for an annual dropout rate of approximately
66%! That’s a huge difference. Prepaid Legal also revealed on its annual report that half of its customers and distributors quit each year. Nu Skin and Excel Telecommunications also reported such high dropout rates. (Robert Fitzpatrick, 10 Big Lies of Multi-level Marketing).
In sharp contrast, one nationwide survey of small businesses showed that over the lifetime of a business, 39% are profitable, 30% break even, and 30% lose money. Cumulatively, 64.2% of businesses failed in a 10-year period. (William Dennis, Nat’l Federation of Independent Businesses, reported by Karen E. Klein in Business Week, September 30, 1999).
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I had to get away from that... I turned out to be the only good son in the family. Cult members are not humble and likely don't follow the scriptures in the bible. They also don't give money to people either ... I was in my crusader armor walking around town giving people money it was an awesome feeling my good man. I recorded it
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Originally Posted by Soapboxmom
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