From: djk@saki.NoSubdomain.NoDomain (Douglas Knights)
Subject: Re: MLM Fairness Disclosure (was Nuskin)
Organization: Bellcore, Livingston, NJ
Date: Wed, 30 Sep 92 13:21:05 GMT

In article <1992Sep29.210832.4289@odin.corp.sgi.com>, bglazier@buffalo.asd.sgi.com (Bill Glazier) writes:
|> 
|> |> And, on a slightly different tack -- what's WRONG with dreaming, Bill?
|> |> Dreams are what help people rise above the muck of their everyday existence.
|> |> SOME people work with those dreams and make them reality.  Some don't.
|> 
|> Nothing is wrong with dreaming.  You and I both have our own dreams.  But, most
|> MLM owners/managers target the most economically vulnerable segment of society,
|> and in their marketing pitch casually drop how many gazillionaires MLM (or
|> their company in particular) have created.  The clear objective is to get
|> the potential enrollee to think he is just a few quick, easy steps away from
|> being independently wealthy.  I would like the MLM industry to impose
|> upon itself a simple fairness diclosure rule.  Every presentation to prospective
|> new members should include the following:
|> 
|> 	- the % of people still in the program 1 year after joining
|> 	- the average income of the average participant
|> 	- the salary of the 10 most senior members of the company, including
|> 	  benefits and stock rights
|> 	- the distribution of total sales commissions among the total
|> 	  organizational hierarchy for the past 12 months
|> 

Yes, you are right, and all these figures are readily available and we make
it know to new prospects.  We are not looking to drag anyone into this
business, merely show them an option.  Some people, like yourself, are
happy working for someone else (that is until the layoffs start).  And for    
your information, the drop out rate is not 90+% in Nu SKin.  I don't have
exact figures, but I think is is around 30-50% for the industry.  And
yes, we also disclose the average earnings for distributors at various
levels as well  (based on 1991 averages)

|> If this were done, the 'dream' as sold by most MLM owners/managers would be
|> much more sobering, the real prospect of the likelihood of success would
|> be clear, and an honest and fair choice could be made.  Instead of hard data, 
|> what new prospects get is the psychobabble, a few selected incidents where
|> someone made a lot of $$, and a hard sell.  

No hard sell here.  If a person is interested great...if not that is fine
too!

|> 
|> 
|> |> 
|> |> Let's take an example that's a little closer to home.  What would Bill Gates
|> |> do if you called Microsoft a "ripoff/scam...etc"?  But would you deny
|> |> he got richer, quicker, than ANY MLM founder in history?  Would you deny
|> |> that lots of people joined his company with dreams of growing with and
|> |> growing rich with the company, but couldn't cut the mustard?  Would you
|> |> deny that lots of them "dropped out" because of this?
|> 
|> Microsoft delivered a series of quality products that have
|> received tremendous acceptance in the industry.  They have been recognized
|> as outstanding by nearly every consumer journal in the PC business.  (BTW, I've
|> yet to see an MLM product receive a consumer award of any national
|> signifigance).  Lots of personal testimonials, but never a Consumer

Well for you information, the "shampoo" that you talked about in an earlier
post, called Nutriol, did receive national recognition in Europe back in
1982 (somewhere close...I would have to look it up), and in France in 
over-the-counter sales, only aspirin and Tylenol outsold it.  Is that
recognition enough?

|> Reports award.  Seems world class products aren't that important to these
|> kinds of companies.   
|> 
|> While I am sure some people left Microsoft, as it is somewhat of a high pressure
|> place (and some can't stand the rain), it was nowhere near 90+%.  If it

Well, MLM is the same.  Some "can't stand the rain" as you so eloquently put
it.

|> were, I guarantee you Bill Gates wouldn't even have a company today.  
|> 
|> Microsoft and its employees deliver value to customers.  They don't
|> need to hard sell their salespeople to get them to join.    
|> 
|>  
|> |> Somebody drawing a weekly salary for "showing up" at work is hardly comparable
|> |> to someone trying to build an organization in MLM.  The people going into it
|> |> know damn well they don't have a guaranteed paycheck, unless they EARN it.
|> |> And some decide it's not for them.  I see no sin in that.
|> 
|> It's simple.  When you consider the reward for 'showing up' at work - the 
|> salary - and the likelihood of success - keeping your job - and compare it

And the possibility of keeping your job these days is good?  Have you heard
what the CEOs of companies like AT&T, IBM, Xerox, GM, Bellcore, and others
are saying?  Read my lips, "there is no job security anymore".  This is
coming from them, not me....I am just repeating what I have heard them say.

And what company in coporate America would let you continue to have a job
if you "just showed up?"  I doubt not one.  Unless you produce, you are
unemployed.  With MLM, if you don't produce, you are not thrown out.  So what
has more security?

|> against the admitted infinitesimal chance of success in MLM, the logical
|> solution is clear.  If you start your own business, you begin with
|> 100% of the equity.  In MLM, you begin on Day 1 with a whole upline of
|> people who have a legal claim to a large chunk of your business value, even
|> if they do NOTHING other than sign you up.  
|> 
|> |> 
|> |> Compare MLM "entrepreneurs" (and please let's not get into a semantic battle
|> |> over that) to someone starting his own "traditional" business, and you'll
|> |> find the dropout rate is pretty comparable.  Both have to build their income
|> |> from scratch.  The biggest difference is, the people who start traditional 
|> |> businesses tend to lose a HELL of a lot more money when they "drop out".
|> 
|> You can call MLM'ers anything you want.  Like I said, I'm not criticizing
|> those that try.  I'm after those that mislead....

Yes I agree that misrepresentation does occur, but the organizations that I
have been dealing with have not been doing so...so by your same logic I
can say that everyone in Nu Skin is honest and does not hype this business. 8-)

			Doug
Newsgroups: alt.business.multi-level