Tuesday, January 10, 2017

MLM Veteran on answering MLM income question: Be evasive

Recently Ray Higdon, a self-professed high flyer in MLM and inspiration coach, posted on his blog "How to Answer 'How much Money Have you Made in Network Marketing". His answer is evasive and shocking, as it basically sidestepped the answer.

Here is a screenshot of Ray Higdon's blog, and copy of his text:

How To Answer “How Much Have You Made In Network Marketing?” 
This is a question that you most likely get when people feel like you’re maybe not as postured as you could be. Right? That maybe you’re not as confident as you could be, and people like to ding you with this question. “Well how much money have you made in network marketing?” 
Obviously, those of you who haven’t made any money in network marketing, you’re, “What do I say?” Right? My suggestion for this circumstance would be you can rely on your upline. You can rely on even trainers. You can use a little bit of my story, if you’d like. 
But my suggestion on answering that is to say: 
“Hey, you know what? I’m just getting started, but the people that I’m working with and getting trained by have made millions of dollars in network marketing. They’re showing me exactly what to do, so I’m fired up about it. I’m just getting started, but I’m excited that I’m learning from people who’ve proven it over the last X number of years. They’re helping me follow the exact footprints, exact steps that they took to make money, so I’m fired up about it.” 
That’s how I would answer it. By painting where you’re going. It’s very powerful.

Yep, you read it right: self-professed MLM coach telling everybody to NOT ANSWER THE QUESTION. Be evasive, blah blah about "getting training" instead.

Right, and my teacher was "Rich Dad", Bill Gates, and Buckminster Fuller.  Or I can rattle all the rich and famous people I'd like to emulate.

What a bunch of crock.

Sunday, January 1, 2017

One unexpected victim of Ponzi schemes: College Sports

Did you ever consider where are the ponzi scheme victims?  I mean, you usually think that the ponzi scheme victims are rich folks like Madoff victims, right?

You'd be very wrong.

ZeekRewards had an estimated 2.2 million victims all over the world.

TelexFree had almost TWO MILLION victims in US and Brazil

But here's a victim you'd never expect... College football.

You're probably exclaiming, "WTF? What does Ponzi scheme have anything to do with college football?"

Wednesday, December 14, 2016

MLM Basics: Why is MLM so... addicting?

Many people who are NOT in MLM wonder WHY MLM seems to be so addicting to its participants, and even as members lose money month after month. After all, an "entrepreneur" is supposed to be making money, right?

MLMSkeptic has studied the issues, and it is clear that the participants are not merely valuing the economic benefits from MLM (for there is minimal evidence of such enrichment except for a few near the top), but actually SOCIAL and MENTAL benefits that came with the MLM participation. It is the social and mental benefits, not the financial, that keeps the members in despite their minimal economic gains.

Those social and mental benefits can be divided roughly into three types:
  • Sense of belonging (family and group dynamic)
  • Sense of being something greater than oneself
  • Sense of accomplishment  (recognition)
Let's discuss each one.

Sense of belonging (family and group dynamic)

Many of the articles that tout the benefits of MLM emphasize the camaraderie of the group and team. There are even articles that tout "come for the opportunity; stay for the relationship".

One such leader asked the question:
Have Your “Why” Established. This is very important. This is your major driving force, your reason WHY you decided to make a move and become a network marketer. It could be family, financial freedom or even time freedom.  
It's not an accident that the author talk about family being a driving force, but have you ever wondered which family did he mean?

He probably doesn't mean YOUR family. Not your wife/husband/partner, not your father/mother, not your children.

He probably means your SALES/NETWORK family: your upline, your downlines, your lateral marketing folks.

But doublespeak is a standard tactic in unethical network marketing.

So how do you know if your specific network marketing is ethical or not? You don't.

There were plenty of examples where families have been torn apart because half of the partnership saw and recognized the hidden dangers, but the other half was already in too deep to see the forest for the trees. It will take a huge jolt for someone to recognize the threat to one's family from cultish-MLMs and some just sank deeper and deeper.

One example was when a wife, who's in MLM was talking with her MLM female friends, and the topic drifted to the husband, who was not in MLM.  One of the so-called female friends suddenly suggested that the husband is such a loser for not joining the MLM and the wife should leave that loser of a husband. Clearly, the husband is what's holding the wife back from true success. Wife was shocked into silence. WHICH does she value more... her family (husband and children)... or her personal success for a few dollars? And what sort of people are around her that would suggest NOT placing her family first?

Friday, November 11, 2016

MLM Basics: Numbers Needed To Profit

One of the hardest things to analyze in a MLM is "How Much Money Will I Make".

The stupid ones recite the slogan: "As much as you want!"

The weasel ones add a disclaimer, "As much as you want (don't blame us if you fail)"

The realistic ones don't feed you BS, "Your success is dependent on your ability to sell, your ability to form a sales team, your effort and willingness to dedicate yourself and a whole lot of luck."

But none of them will be able to quote you a number, except what *they* have personally earned, or what someone in their team earned. And that doesn't say whether they do this every pay period, or where did this money come from: "personal volume" (retail sales by oneself), or commission from "group volume" (i.e. team total sales volume)

Amway is one of the few companies that even calculates what average member earn via retail.

The average monthly Gross Income for "active" IBOs was USD $183 (in the US) / CAD $206 (in Canada) in 2014. 
53% of IBOs in the US (and 49% of IBOs in Canada) were considered "active" (in 2014)
source: Achieve Magazine, published by Amway, August 2014 issue, from AchieveMagazine website
Amway calculate "gross income" from retail sales, minus the cost of the goods sold, which basically means they ASSUMED that product purchased by the IBO (independent business owner, i.e. participant) will be sold at MSRP and thus profit can be calculated. While they did not include any commissions (most MLMs report ONLY commissions), it also (and quite understandably) did not attempt to estimate business expenses, such as time and effort to attend meetings, demonstrations, seminars and events, and so on.

Apology for lack of updates

Apology to followers of this blog. I went off to do some other things but rest assured, this blog is NOT being abandoned.

I am working on a couple posts right now, I should have something with in 24 hours, and you should look forward to at least weekly updates from here on.

Monday, October 10, 2016

Bad Argument: Flip the Burden of Proof

One of the most often tactics used by bad arguers is refuse to prove anything, even when you prompt them "where's the proof?"  Instead, they claim it is YOUR responsibility to give THEM proof that they're right.

Hilarious, right? Yet that's exactly what happened here.

K.S. : So provide evidence to prove him (Dave Ramsey) wrong. Where is it?

C.M. : Thousands of millionaires

K.S. : Citing please, or is that you just spitballing?

C.M. : Use Google, it's easy. do not be lazy.

K.S. : Sorry, telling people to "Google It" is not a valid answer to "citings please". You claimed it, so it is your job to provide evidence to support what YOU wrote. So it is YOU being lazy. Try again.

Friday, September 30, 2016

Bad Argument: Citing Celebrity Endorsement as Evidence despite Celebrities said Some of the Craziest Things

It is a fact that celebrities have said some of the kookiest stuff in public including
There are even dedicated lists of celebrities idiotic comments. Yet celebrity endorsement remains one of the top forms of advertising. Indeed, MLM has repeatedly used celebrity endorsements. Back when Vemma was a thing, Vemma followers have repeated cited association with Dr. Oz, mainly because B K Boreyko, Vemma's founder, had once said it is Dr. Oz's "favorite fatigue fighter." The real truth is Dr. Oz never endorsed Vemma... The linkback is a courtesy because Boreyko is on the board of one of Dr. Oz's charities.  In other MLMs, Both Donald Trump and Ben Carson (candidates for 2016 Presidential Campaign) have had dealings with MLM (ACN and Mannatech respectively).

SIDENOTE: Trump was quoted by Wall Street Journal, "I (Trump) know nothing about the company (ACN) other than the people who run the company, I’m not familiar with what they (ACN) do or how they go about doing it, and I make that clear in my speeches." A ringing endorsement indeed, despite Trump pocketing millions in speaking fees from ACN events. 

MLM itself often tout their "sales leaders" as minor celebrities, complete with big pageantry of award ceremonies and such.  As an example, Mary Kay is well known for its huge spectacles which are deceptively called "seminars" where new sales rep who reach some minimum goal are showered with praise from the crowd. It is very intoxicating and "inspiring".

Mary Kay convention, all the "ruby" folks getting recognized (date unknown)
But what makes celebrities seem to goof up more often? This can't really be merely explained by the spotlight effect, i.e. anything celebrity said is repeated ad infinitum, while a regular person's kook can often be overlooked. It is a factor, but it can't be all that there is.

Other factors at work includes:
  • Luck blindness / Survivorship Bias
  • Dunning-Kruger effect
  • Self-Centered bias
  • Positive reinforcement / confirmation bias / Echo chamber effect