From: bglazier@buffalo.asd.sgi.com (Bill Glazier)
Newsgroups: alt.business.multi-level
Subject: Re: Nuskin
Date: 2 Oct 92 18:00:29 GMT
Organization: Silicon Graphics, Inc.

In article <1ah48cINNgf3@agate.berkeley.edu>, abulloch@garnet.berkeley.edu (Anthony Bulloch) writes:
|> Bill -
|> 
|> I don't think any of the more experienced of us here is going to disagree
|> with you that many of the more vulnerable (emotionally as well as economically)
|> are often drawn to MLMs, and that they are often misled, by being invited
|> to fantasise that their own success is just a stone's throw away. And there
|> are many others that are not so vulnerable, but end up deluding themselves:
|> they are always _about_ to go out and start working their row, but never
|> quite do so.  And both types often join one MLM after another, searching
|> for the perfect opportunity that will generate wealth like the golden
|> goose. I know quite a few individuals who fall into these categories.
|> 
|> Yes, there are lots of companies ready to exploit these vulnerabilities
|> and make money out of fantasy and fad; there are quite a lot of company
|> founders (and most people in the business know who the worst offenders
|> are) who start a new concern with lots of rah, rah, rah, sign up a few
|> 'big hitters' to get things well established, and then pull up their
|> tents after a few years, when several million have been turned over into
|> their own pockets, ready to move on to the next pitch. These are the
|> guys that need to be identified clearly for what they are, and avoided
|> if they are just sharp operators, and run out of town if they are anything
|> worse. The trouble is, of course, that most of those attracted into MLMs
|> either don't know that there are lots of these companies and types out there,
|> or, if they do, don't necessarily know how to spot them. 

Anthony, I could not have said it any better than you just did.  

I was introduced
|> to the field of MLM by Kent Ponder, who runs a whole business whose
|> purpose is to analyse and assess MLM (and other) 'opportunities'. He
|> is renowned for calling a spade a spade (and a crook a crook), explicitly,
|> clearly and in print, and anyone who wants to know what's going on in
|> the field, whether to select a company to work with or just to keep up,
|> should consider subscribing to his monthly newsletter ('Netword Hotline') -
|> $10 per month, but well worth it if you are serious.

I am very glad to know that a consumer watchdog such as this exists.

|> 
|> But that said, there's another side to all this.  Gary asked What's wrong
|> with having some aspirations ('dreams', if you like). For most of us a
|> good MLM offers a unique possibility: the chance to go into business
|> for yourself, with tried and tested products and with the support of a
|> big, and hopefully experienced organisation, with *no start-up capital*,
|> and with really minimal initial outlay. (Most MLMs have a sign-up fee of
|> $25-$40, and you can get going seriously with purchase of only $100-200
|> in sales aids, and you can start with less than, or none of, that, even,
|> if you have to.) There's just no other area of business that offers such
|> possibilities: to be able to get started for about what it costs if you
|> take your family out for an afternoon or evening at the ball-game!  So
|> you do have to bear this in mind when assessing the field: because it
|> costs so little to try out working with an MLM, there are going to be
|> plenty of people who will try it and then decide that it's not for them.
|> They try it and drop out not because they were misled, but because
|> it was easy to do so. [The drop-out rate is not 90%, though; it's
|> around 60%, which is the same as the drop-out rate for insurance
|> agents and realtors.]

I agree entirely that in theory this is an economically very attractive
alternative for many people.  See my comments below. 


> I'll offer you proof. Give me your
|> address and I'll send you an audio tape of the senior heart surgeon at one
|> of Detroit's major hospitals describing why he regards the IDN vitamin/mineral
|> supplements as "the finest selection of nutritional products you are
|> ever going to see", and describing what he calls "the overwhelming
|> science" that has gone into them. And I'll provide you with other
|> striking testimonials along the same lines. I'll also send you a video
|> tape of the founder/owner of Espial in his shirt-sleeves conducting a
|> private business session with a group of Espial distributors - not a
|> promotional tape, but an informal record of what LeRoy Cox says in
|> private session about his company and its products and his rationale
|> for the business.
|> 
|> Anthony Bulloch
|> 
|> PS At the end of one of your posts you add students to your list of
|> people to be looked down on (along with people from Utah and other assorted
|> fools): I realise you were trying to rile me by casting a few ritual insults,
|> but this is rather tedious as well as childishly obnoxious, and it makes
|> it seem that you're not interested in conducting a mature discussion.

I should publicly apologize to you.  My comments contained a certain amount
of sarcasm and insult.  The posts could easily be seen as biased and perhaps
a touch slanted - you and others rightfully accuse me of selectively using
certain facts to support my case. You and I both, I believe, understand
and agree there exists the potential for substantial abuse in MLM.  I personally
have seen it happen to friends and relatives.  You and I both want it stopped.
Though this hasn't been mentioned by either of us, you and I would both agree
there needs to be tougher regulations and controls to monitor the potential
for abuse.

I thought it best to fight fire with fire.  Abusive MLM's selectively use the
facts to woo new prospects.  I did the same to condemn them.  Unfair, but to
some effective.  I would vastly prefer to use concrete data to prove my case.
As I mentioned early on, I am no professional MLM-baiter.  I don't have the time
to search for hard data, though I am sure it exists somewhere.  

There clearly exists the potential for an MLM like structure to grow, prosper,
and offer economic and personal rewards for individuals such as yourself.  But
very few people really understand all the work that is required.  Even for those who do, many owner/managers create organizational structures that substantially
bias the rewards.  It seems like what *could* be a very good thing turns sour
*most* of the time.  

The arguments most MLM'ers use in defense of their industry, as I know you
observe, lack much thoughtful logic.  I see the same justifications over
and over again.  There exist very good justifications.  It's just that those 
justifications won't inspire many people to join their company - at least not as
many as do presently. 

In response to your earlier offer of product literature and an update on
NuSkin and Espial, I'd be glad to take you up on the offer to learn more.
Just out of personal curiousity.  But I would take serious issue that the claims
of 1 heart specialist/surgeon (or even 10 for that matter) 'proves' its value.
I have seen many very prestigious (and in some cases well paid) individuals 
promoting products, who later regretted any affiliation with the company.
If I saw an article published in the New England Journal of Medicine analyzing
the health effects of the specific product being sold, and I heard the
words 'revolutionize the health of millions of Americans' - I would concur
entirely.  

One point I would like to make which I haven't clearly expressed in earlier posts.  I find it unusual that very few  MLM based
products ever find there way eventually into retail stores.  If these products
are in fact so revolutionary and so superior to anything on the market, why aren't major drug store chains/major food store chains/major discount warehouses
beating down the inventor/owners doors to sell the product?  The potential
market through these larger, lower cost, and more sophistiicated channels should
be incredible, if the product is in fact as revolutionary as stated.  If the
goal of the company was to maximize sales,  wouldn't it be logical to sign up
the distribution channels most well suited to large scale distribution?  Perhaps
another way to say the same thing is to ask  "if personal sales is so effective why haven't the vast majority of American industry stopped selling through its
traditional channels and instead hired large numbers of individual people to 
sell direct?".  It seems the real value added therefore is not the product as
much as it is the motivational training and the financial rewards of this particular kind of organization.  Again, I acknowledge personal selling can
be effectivce in particular situations, but I just find it strange that so few
ever emerge and go beyond that single method of distribution.

So, where are we?  I've had some fun, authoring a series of posts some might
consider 'yellow journalism'.  On the other hand, I am sure some agree wholeheartedly with what I said - and liked the way I said it.

My opinions haven't changed about MLM.  I respect the well considered opinions of those, such as yourself, who defend the potential for good in the MLM industry.  It is not intellectually inconsistent to agree that there is the
potential for good, but that the outcome is bad most of the time. Maybe that
isn't much different than real estate or insurance.  I'm not sure.  But
both real estate agents and insurance reps are much more heavily regulated
by the government than the MLM industry.  

Thanks for your thoughtful post.  I enjoyed it.