The Fugi Files I - The Big Myth

To me, the most interesting part of the “Big Myth” of Network Marketing is that the critics are as in the dark about the reality of MLM as those involved. Keep that in mind as we look at the “Big Myth”.

What is the “Big Myth” of Network Marketing?

According to Fugi Saito - (see bio), “The belief that MLM is about making money” is the "Big Myth" of Network Marketing.

Mr. Saito continues:

“Network Marketing is about marketing, about getting products and services to the end user (customer). The fact that some people do make money is a natural consequence of engaging in the activity of getting products and services to the customer. They can do it themselves (customer growth by addition) or they can get others to help (customer growth by multiplication).

So, if you join a Network Marketing Company, and do not do the work needed to get products and services into the hands of the end users, you will not make any money.

Just to make sure you understand this:

IF YOU DO NOT DO THE WORK NEEDED TO GET PRODUCTS AND SERVICES INTO THE HANDS OF THE END USERS OR CUSTOMERS YOU WILL NOT MAKE ANY MONEY.

Sure, you can join a company, or buy from a distributor of that company, and you should still get value for the dollar you spent, but simply joining a Network Marketing company does not guarantee you a lifetime income.

No magic, no bells and whistles, no hoopla -- the more product or services that you and your organization get into the hands of customers, the more money that will be paid.

So forget all the cheque waving, capped tooth smiles, the big cars and the houses. Forget all those overnight "rags to riches" stories and the tried and true "humble beginnings" dialog.

Network Marketing is about creating a large organization of loyal customers who find the product or service of value and they will buy and continue to buy because of the value of the product or service.”

Remove the hype and scams from MLM and you find a very fair and simple business. One that offers the average person the opportunity to launch their own company for a fraction of the costs typically associated with a start up. But it is not a ticket to riches. Move a lot of products to end users and you will likely make a lot of money in Network Marketing. Don't and you won't.

Comments

[Paul]

AMEN!

[Ty]

Funny, I don't see anything about spending $200-300 a month on CD's and meetings...

[Shannon]

Well said. If it wasn't true, most people you meet would certainly be a member of some mlm company and filthy rich. Many people would be spinning many circles in my face and telling me how rich I could be. " Start your business, buy products from your own business, show others how to do it and retire next year!!" Right.

[QBlog]

What's the difference between network marketing and multilevel marketing?

[Ty]

"What's the difference between network marketing and multilevel marketing?"

Nothing. The terms are interchangable.

[QBlog]

Ok, then I would add that Network Marketing is two things:

1. Getting products to people
2. The Network (or Multi-Levels)

I'm interested to see what else you post but right now you've described Wal-Mart. What makes the MLM or NM different is that Network of levels.

[Shannon]

Wal mart lacks the ability to multiply customer growth except by word of mouth. They can't pay me for telling others how great they are or how inexpensive their products are. Walmart offers great value but no bonus checks to customers.

[Shannon]

I failed to mention Walmart multiplies customer growth with mass media advertising. In contrast, an mlm company multiplies customer growth with a network of people using word of mouth, internet,etc. The mlm company pays bonus money that would otherwise be spent on mass media advertising.

Walmart does have a network of levels. Store managers make the most money, followed my asst. mgrs., followed by dept. heads, followed by stockers, checkers and janitors, respectively.
No one in mlm is reqired to build a network of levels. On a smaller scale, they can sell products like Wal mart sells products, and still make profits. Ideally, a distibutor would have a large number of customers on autoship every month much like cable companies or cell phone companies have millions of subscribers to their services every month.
If a distributor finds a customer willing to become part of the distributor network, the distibutor has even more profit potential because customer growth can multiply by adding a new distributor. Free enterprise in its purest form.
Because of network marketing or mlm, people are not depending on corporate networks of levels as their sole source of income. Free enterprise in its purest form.

[QBlog]

I disagree but let's see how this Fugi thing shapes up.

By the way, every MLM in existence has Managers, dept. heads, stockers, checkers, janitors, etc. I think that was one of Fugi's points, that moving products is moving products. Where does that shampoo you love come from? A factory, run by a manager, who manages stockers and checkers and is sure the floors are swept by the janitor. Products is products is products.

[Shannon]

You're referring to the mlm corporation. I'm referring to the mlm distributor force, the people out in the field
hawking their wares and recruiting distributors. Without distributors succeeding in the field, the shampoo I love can't me made in a factory that gets shut down if no products are sold. No revenues, no mlm company.
Walmart would have the same problem without customers.
Walmarts and mlm companies are primarily customer driven. That's where the similarities end.

[Ty]

Whether you are marketing to end users via direct sales or marketing to end users through a network of people on levels, you are still only paid for one thing....moving products from the warehouse into the hands of the end users (customer).

If you look deeper into the world of MLM, you will find that many people that signed up for the business side are actually just customers. They enjoy the products and have no intentions on ever building a network of people. A lot of companies are starting people off as "members", they get many of the benefits of being associates with the company, but do not participate in MLM bonus pools until they sponsor a certain number of people.

The Quixtar business and it's systems of influence (and companies that follow their lead) really cloud the world of MLM. Most people have a mental picture of MLM and it often includes some type of scam. I believe that if you peel all of the scam away, you have a simple business that doesn't cost much to operate.

[Marc]

I agree Ty, according to the DSA...

http://www.dsa.org/selling/opportunity.htm

Yes, it's a simple business, but not easy.

At least not what the hypsters say.

Marc

[Brian]

I think one of the biggest issues with mlm's is that they make it sound like its so easy to do when it really isnt. But I guess they wouldnt get anybody to join up if they told you the truth up front.

[Imran Aziz]

Here are few flaws IMO with MLM

1 - Any one can do it.
No, not any one can do it. Ppl with enough sales and ppl skill can move the product from warehouse to end user. Make 1000 websites, but you gotta do selling and any once can't and won't do it. And no, it's not easy. It's just like any other business.

2 - Ppl not adding value may get $$$. E.g. I got signed up under X. X may not be working / helping me but may still got paid because of me, or X sponsor. At work, every body add value else got fired. At business, I go to best value supplier and go for 'big' clients.

3 - Stuck 'under' the same dude - Y can't I change my LOS? Why? Free Enterprise in it's purest form? I can change my job. ppl had changed their jobs when they had problems with their employer. I can change my supplier, teacher or whatever. Why am I stuck under same dude I signed up for good? Why can't I say, "Ok that group is moving faster, I should jump on that group" why not?