Rod Cook

•Tom "Big Al" Schreiter •Ken Seto •Rod Cook - Contributing Editors

MLM IS A GOOD BUSINESS MODEL

Reality Adjustments For MLM Critics

By Rod Cook B.s., M.H.A., M.B.A.
"The MLM Watch Dog"

I have been with the MLM Industry almost 40 years. For the life of me I can't understand MLM critics prevaricating to make MLM – Network Marketing look bad! What is worse yet is most critics have never "worked" a true MLM – Network Marketing company but some how have become "experts." I did a recent "Google" of "MLM." I wasn't pleased! The first 20 pages had negative MLM critics. The majority of These critics had no experience with an MLM company. They criticize MLM based on zero or faulty research!

The First Big Lie -- Nobody (but a few "big" hitters) in MLM – Network Marketing makes any money! What a lie! In a good company the people that stick around, train and work make money. Big gobs of money? No not all! Extra part time income for a house payment, a car payment or putting the kids through college is "blessed" money! Some even consider making enough money to get products or services for free good enough! A trip to an MLM – Network Marketing national convention can be the vacation of a decade! Pure free enterprise -- there are not any restraints on what people earn! Will some people make big money (6-7 digit incomes)! Yes! The same 2-3% that do in any industry.

Dealing With The MLM Critic Fabrications -- Our biggest MLM - Network Marketing problem is the drop out rate of new distributors. I did a 6 month comparative study of occupations in marketing segments that were similar to MLM – Network Marketing. The same amount of time to learn, the same individual characteristics required to succeed, and last but not least and investment of time and money (MLM is usually less money) that within same framework. Surprise! The whole direct marketing industry makes MLM look pretty good!

HERE IS A COMPARISON OF DROP OUT RATES

A picture is worth a 1000 words! MLM Marketing looks good!

MLM Has A Lower Dropout In Comparison (of studied independent contractors) MLM - Network Marketing on the left runs a 70-72% average drop out of new distributors annually (varies by company). Why? Very easy entry! Most good companies charge little or a reasonable amount to join (less than $500). Just sign a Web form. No hassles, quick and easy! If there is something to be considered " bad " it's MLM is too easy to start and quit. Because it's too easy MLM isn't taken seriously! If there is an error in these numbers it is because many MLM distributors don't drop out, they just don't do anything (different measurements - different companies).

Mortgage Loan Officers (often independent contractor salespersons) Three mortgage brokers that employ mortgage loan officers told me that after months of study, on the job training and then taking the required tests that the majority 75 – 80% dropout. The amount of bodies that we could count among 2 out of the 3 brokerages showed 75% drop out. The third brokerage was higher but not included because of statistical anomalies in independent contractor record keeping.

Real Estate Agents (independent contractor salespersons) They spend about $1000 to go to school. They study and spend $250-500 to get their license in most states. After this 75-85% percent drop out without ever selling a house! This research came from one of the best sources! A Real Estate broker that owned a real estate school!

Direct Sales Agents (independent contractor salespersons): A friend of mine ran a Kirby vacuum "sales crew." The drop out rate was 95% in the first two weeks after a week of training. New car salespersons at your local distributorship are gone in 2 weekends! No obscure research here, 90% or more of new salespersons here drop out in measurements of days! Call your local car dealer!

We Could Go On and On!: My, my, my -- in just about any direct marketing field for the transfer of goods or services 60% or more drop out. Non MLM? Just about the same number of people drop out of College their freshman year (after spending $8-10K of Mom and Dad's money)! When I came back from Viet Nam I tried selling Life Insurance - true story! Five of us started, 3 months later we had all quit and made zero dollars. Oh – yes, we sold 5 life insurance policies. We had to buy a Prudential life insurance policy on ourselves to qualify to sell a policy and get commissions.

Pyramid Schemes Yes, there are a lot of them out there. They are not MLM OR Network Marketing. A Pyramid Scheme is a criminal activity. Good MLM distributors hate them and fight them! Why? Because they steal good prospects from good MLM companies! Critics Distort Truth! It is easy to see MLM critics don't have experience AND don't do research to know the difference! In "yellow dog" journalism these are called high profile unproven claims by unproven people.

Rod Cook a retired Army Officer, is one of the major researchers in the Direct Marketing arena. He has almost 40 years of experience in Network Marketing (MLM). He and his staff of reporters at the MLM WatchDog review and analyze almost 1000 companies a year. He has done this for 10 years of publishing and is one of the most knowledgeable persons in the world on the subject of MLM Companies, their sales psychology and pay plans. He consults with many companies and top MLM Distributors. Good MLM link! The MLM WatchDog News, Stopping Pyramid Schemes and Scams is http://www.MLMwatchdog.com/index.html This page sponsored by http://www.MLMconsultant.com/index.htm