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Friends and MLM recruitment. HELP!

Biscuit

Philosopher
Biscuit
Joined
Aug 16, 2007
Messages
6,929
I got recruited for an MLM yesterday and wanted to talk about it without it blowing back on the friends that are trying to recruit me. Hoping some of you might have some advice.

Lets call my friends Jesus and Marco.

I know, respect, and would love to be in business with Marco. He is about 15 years older than me and rather successful. I have worked for him in the past and will again in the future. Respectable, honest, and reliable would be the words that come to mind when I think of Marco.

Jesus is another story. While I don't outright distrust him its a keep your enemies closer kind of deal. I tried to buy his failing business once, years ago, and he used my offer to lever new investors. I may have done the same thing if I were in his shoes at the time and it turned out to be a blessing that I didn't buy it. I would do business with him but I wouldn't let him date my sister.

So here it goes. Jesus called me about an opportunity that He and Marco were starting. I agreed to meet him because Marco was involved. He is a good sales man but I know the tricks and tactics so I let him practice his pitch. Filled with personal reflection, related to me, played to my ego.... it was a good pitch. Its a Multilevel Marketing company that is in the "travel club" business called worldventures.

While I am familiar with the MLM concept and am skeptical I never looked into it much. Marco being involved leant the idea some credibility. Their unique approach would be to use contacts at the local colleges to market to students. I immediately decided that (if I joined) I would not market to any of my friends or family until I saw a profit but might be willing to try it out on the extensive student population.

I did some research last night and today and I have to say I am almost 100% not going to join and I really don't want Marco to burn his contacts and his reputation being involved in this. Jesus is the one that recruited him and seems fully "brain washed" after attending, at his expense, some seminars in Vegas and Colorado.

What is the best way to advise Marco to get out? I do not want to damage our relationship. Should I just say "thanks but no thanks" to them both and walk away?

In my research I could not find a really solid and up to date website that talks about the MLM model and the pitfalls and problems. What is the best source of information on MLM companies and the business model?

Thanks for any tips or advice.
 
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Biscuit said:
I got recruited for an MLM yesterday and wanted to talk about it without it blowing back on the friends that are trying to recruit me. Hoping some of you might have some advice.

Lets call my friends Jesus and Marco.

I know, respect, and would love to be in business with Marco. He is about 15 years older than me and rather successful. I have worked for him in the past and will again in the future. Respectable, honest, and reliable would be the words that come to mind when I think of Marco.

Jesus is another story. While I don't outright distrust him its a keep your enemies closer kind of deal. I tried to buy his failing business once, years ago, and he used my offer to lever new investors. I may have done the same thing if I were in his shoes at the time and it turned out to be a blessing that I didn't buy it. I would do business with him but I wouldn't let him date my sister.

So here it goes. Jesus called me about an opportunity that He and Marco were starting. I agreed to meet him because Marco was involved. He is a good sales man but I know the tricks and tactics so I let him practice his pitch. Filled with personal reflection, related to me, played to my ego.... it was a good pitch. Its a Multilevel Marketing company that is in the "travel club" business called worldventures.

While I am familiar with the MLM concept and am skeptical I never looked into it much. Marco being involved leant the idea some credibility. Their unique approach would be to use contacts at the local colleges to market to students. I immediately decided that (if I joined) I would not market to any of my friends or family until I saw a profit but might be willing to try it out on the extensive student population.

I did some research last night and today and I have to say I am almost 100% not going to join and I really don't want Marco to burn his contacts and his reputation being involved in this. Jesus is the one that recruited him and seems fully "brain washed" after attending, at his expense, some seminars in Vegas and Colorado.

What is the best way to advise Marco to get out? I do not want to damage our relationship. Should I just say "thanks but no thanks" to them both and walk away?

In my research I could not find a really solid and up to date website that talks about the MLM model and the pitfalls and problems. What is the best source of information on MLM companies and the business model?

Thanks for any tips or advice.
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Tell him to mark your words that within six months he'll consistently be shelling out more money than he's bringing in, while the company will consistently be doing the opposite.
 
wow, what's with all the MLM posts today?

You'll undoubtedly get some people posting a bunch of links to well known anti-mlm critics that can give you a list of reasons to avoid it, some valid, many not.

World Ventures has been around quite a while. A friend tried to get me involved a couple of years ago. Biggest issue I have with them is that I simply didn't find the product personally appealing or of good value, which means I wouldn't be willing to market it to others either. The fact there is a required monthly purchase (RBS) is also a red flag for me, particularly when it's not an otherwise usable or sellable product.
 
I meant this for the Community forum. Not social issues. I will try and find a mod! I found this review,

One thing a lot of companies don’t provide the general public with is an income disclosure. Cutting through hype and marketing spiel, an income disclosure provides a quick snapshot of how a particular business is faring or has fared over a period of time.
World Ventures thankfully do provide an income disclosure spanning the fiscal years 2006 to 2009.
So how did they fare?
The single most important fact to take away from World Ventures’ income disclosure is the fact that 73.7% of World Ventures’ Representatives did not earn a commission during their time in the business.
Out of the 26.3% of representatives that did earn a commission, 26.28% failed to progress past the rank of ‘Qualified Representative’ and took home an average annual commission of just $193 and $684 (Active and Qualified Representatives respectively).
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link
 
It just occurred to me that while Jesus said that he picked me because of my sales and business skills that they are going to pitch this to all of our mutual friends. My stomach is turning.
 
Polaris said:
Tell him to mark your words that within six months he'll consistently be shelling out more money than he's bringing in, while the company will consistently be doing the opposite.
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I would prefer a less aggressive approach.
 
Biscuit said:
I meant this for the Community forum. Not social issues. I will try and find a mod! I found this review
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Income disclosures have their uses but percentages at particular levels aren't very informative as they don't disclose anything about how long the person has been a rep or how hard they worked.

MLMs have low costs of entry, which means many people join up to give it a go, decide it's not for them and do nothing more with it. So that "single most important fact" isn't actually all that important. We don't know if they made no commissions because they worked hard and failed, or didn't work at all. In MLM it's quite common for people to join simply to get distributor pricing, but a quick look at the compensation plan indicates that's likely not a motive in WV.

Back to your original post though, the simplest way to reject something like this (assuming it's the truth!) is to simply say it's not a product that interests you and you wouldn't want to promote something you wouldn't use to other people.
 
Marcus is a grown man and can make his own mistakes I think its best if I just back away. It can't blow back on me and who knows maybe he will make millions and I will be the fool. I thanked him for the opportunity but said I would not be comfortable marketing this to my friends and family. I told Jesus the MLM model was not for me but thanks anyway.

I would appreciate a good, current, website about MLM if anyone knows one.
 
icerat said:
Income disclosures have their uses but percentages at particular levels aren't very informative as they don't disclose anything about how long the person has been a rep or how hard they worked.

MLMs have low costs of entry, which means many people join up to give it a go, decide it's not for them and do nothing more with it. So that "single most important fact" isn't actually all that important. We don't know if they made no commissions because they worked hard and failed, or didn't work at all. In MLM it's quite common for people to join simply to get distributor pricing, but a quick look at the compensation plan indicates that's likely not a motive in WV.

Back to your original post though, the simplest way to reject something like this (assuming it's the truth!) is to simply say it's not a product that interests you and you wouldn't want to promote something you wouldn't use to other people.
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As a salesman I look at it this way. In traditional sales your training is provided and your "upstream" takes a smaller percent of your commission than you do. In MLM you pay for your training and they take more of your commission than you do. Seems rather bogus to me unless you are the top of the pyramid.

World ventures sells nothing themselves except a membership that is incentivized to sell more memberships with the lions share staying at the top. Given they can change the compensation, the structure, or even fire you and keep your team whenever they want I see no upside and their own numbers bear this out.

The other thing those numbers don't reveal is how much was lost by everyone in the 74%. I am not going to be a statistic.
 
Biscuit said:
I would appreciate a good, current, website about MLM if anyone knows one.
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Here's a few -

Direct Selling Association

Inside Network Marketing

Thompson Burton Attorneys (the current lead post is an April 1st one btw)


Biscuit said:
As a salesman I look at it this way. In traditional sales your training is provided and your "upstream" takes a smaller percent of your commission than you do. In MLM you pay for your training and they take more of your commission than you do. Seems rather bogus to me unless you are the top of the pyramid.
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I'll check the WV compensation plan now, but the upline taking more of the commission than you do is certainly not normal for legitimate multi-level marketing companies.

ETA: An extremely complicated compensation plan, but it appears you are correct, at least regard WV. The retail profit margins for World Ventures are 10% and 15%, yet a total of 65% is paid out in bonuses, the majority of which is not available to the person actually making the sale. Contrast this to Amway, where retail margins are up to 35%, volume bonuses (available to the original salesperson) can boost that as high as 64%, and only 5% of sales volume is dedicated to "upline".
 
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icerat said:
ETA: An extremely complicated compensation plan, but it appears you are correct, at least regard WV. The retail profit margins for World Ventures are 10% and 15%, yet a total of 65% is paid out in bonuses, the majority of which is not available to the person actually making the sale. Contrast this to Amway, where retail margins are up to 35%, volume bonuses (available to the original salesperson) can boost that as high as 64%, and only 5% of sales volume is dedicated to "upline".
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Total misrepresentation. You use Amway as an example. Amway's products are not competitive (in general) so just selling a single item could prove to be challenging. Secondly, unless you are at a fairly high level, your upline will take the lions share of the bonus you generate.

If you are a newbie, you will likely get 3% commission while uplines will enjoy the rest of the 30% (approximately) commission you were responsible for generating. In other words, your 100 points will get you a bonus of about $10 and uplines will share the rest of the $90 to $100 bonus you worked for.
 
Run! You can thank me later. Friends don't "recruit" friends into MLMs. MLM's are cash vacuums, and like an acid, will corrode any and all personal integrity it comes in contact with. 99% are thinly disguised ponzi schemes at best and blatant criminal empires at worst, with no redeeming qualities mixed in whatsoever.
Here's a good link...
http://pyramidschemealert.org/
 
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Biscuit said:
I know, respect, and would love to be in business with Marco.

<snip>

What is the best way to advise Marco to get out? I do not want to damage our relationship. Should I just say "thanks but no thanks" to them both and walk away?
Click to expand...

Biscuit said:
Marcus is a grown man and can make his own mistakes I think its best if I just back away.
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If all of this is true, that you value your relationship with Marco and want to advise him to get out, and you view him as a grown man capable of making (and presumably dealing with) his own mistakes, why not just talk to the guy and be honest? I'm not seeing where the downside is in a polite, frank discussion with your friend.

If he is so offended by a reasonable, factual conversation from a concerned friend that it damages your relationship, then he's not much of a grownup or much of a friend.
 
Show Marco the financial information you found, and tell him you're not willing to invest in such a poor business proposition. If he's as smart as you say, he'll arrive at the same conclusion.
 
Good advice in this thread. I remember my own brief foray with MLMs - Vector Marketing. Almost got suckered into it, too. Got this letter inviting me for an interview, so I show up with my resume and portfolio, then find out that it's direct marketing. I stick around, listen to the scheme. The product wasn't too bad, but urgh. What's worse, the rep berated me for not knowing enough people to try and sell to! After that, she kept trying to badger me into getting my parents to pay for the $130(or so) starter kit, since I couldn't afford it as I was barely out of high school and just affording my bills. Thank god I only had to pay $2.00 for a slice of cold pizza. Lesson learned, and cheaply.
 
Mike! said:
Run! You can thank me later. Friends don't "recruit" friends into MLMs. MLM's are cash vacuums, and like an acid, will corrode any and all personal integrity it comes in contact with. 99% are thinly disguised ponzi schemes at best and blatant criminal empires at worst, with no redeeming qualities mixed in whatsoever.
Here's a good link...
http://pyramidschemealert.org/
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Sorry, but Rule 1 of evaluating a post on MLM: if they reference Jon Taylor or Robert FitzPatrick then they don't know what they're talking about.
 
I agree with the 'stay away' views. In the 1970s I was looking for something as a hobby but already knew about the MLM techniques, so listened to various sales pitches with the clear idea that the chances of my joining them were just about nil! However, I did become a Tupperware demonstrator. I saw an ad in the local paper and knew the product was a reliable one, although having been abroad, I hadn't got any myself. I decided I was prepared to sell the stuff on several conditions: (a) I would do so in my own time and would not on any account try to achieve targets, (b) that I would not try to recruit people unless they asked me; (c) that I would do it as a hobby, not with the intention of making money; and (d) on condition that no-one tried to push me into anything! Well, she, and her next-level manager quickly realised that I meant what I said!

I knew the product was more expensive than the stuff available in the shops, but also that it would really last and that the guarantee was good. I remained as a demonstrator for about 20 years, on and off, and thoroughly enjoyed doing the presentations, clearing my costs and meeting many people who became friends. I also had it earmarked for a retirement activity, but that idea ended when I had to give up driving.

I still have in daily use, a dozen or more containers for cereal etc. I looked them up on the internet recently, and after they closed down a few years ago, I see that it is still available, in places.
 
SusanB-M1 said:
I agree with the 'stay away' views. In the 1970s I was looking for something as a hobby but already knew about the MLM techniques, so listened to various sales pitches with the clear idea that the chances of my joining them were just about nil! However, I did become a Tupperware demonstrator. I saw an ad in the local paper and knew the product was a reliable one, although having been abroad, I hadn't got any myself. I decided I was prepared to sell the stuff on several conditions: (a) I would do so in my own time and would not on any account try to achieve targets, (b) that I would not try to recruit people unless they asked me; (c) that I would do it as a hobby, not with the intention of making money; and (d) on condition that no-one tried to push me into anything! Well, she, and her next-level manager quickly realised that I meant what I said!

I knew the product was more expensive than the stuff available in the shops, but also that it would really last and that the guarantee was good. I remained as a demonstrator for about 20 years, on and off, and thoroughly enjoyed doing the presentations, clearing my costs and meeting many people who became friends. I also had it earmarked for a retirement activity, but that idea ended when I had to give up driving.

I still have in daily use, a dozen or more containers for cereal etc. I looked them up on the internet recently, and after they closed down a few years ago, I see that it is still available, in places.
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I think we've still got some Tupperware, as it is pretty durable, but you've been able to buy multiple containers for buttons in any poundshop for ages, so I imagine the bottom fell out of that market years ago.
 
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