Question by Marcello: What do people in MLM use to assess the business opportunity financially?
Being that all MLMers tell you its a business, I am wondering what business principals are used to assess the opportunity from a financial point of view.
For instance, last year I bought an apartment building and my investigation of whether it was a good financial opportunity consisted of looking at the gross and net incomes for the prior 3 years (verifying income and expenses) , looking at the market rents and occupancy rates, and calculating the average sales prices (on a per unit base) over the past 6-12 months within a 1 mile radius. All that information was used in my financial assessment of the deal and to help me decide whether it was worthwhile.
Looking at financial statements is key in buying any business, but I have never heard of this in MLM. Other than statements made at a meeting or from their sponsor, what financial criteria is being used to decide whether the MLM “business opportunity” makes sense financially and is it ever verified?
Mexico4me, so your research was merely looking at a COMPENSATION PLAN! Oh my, how sad.
What exactly did you verify? That the plan would pay a particular compensation percentage? So, you are telling me your upline number’s, someone who is supposedly making money running this MLM business, was of no interest to you?
Yes, you are delusional. Thanks for proving my point!
Best answer:
Answer by fukinluckyfuker
MLM’s make 90% of their money through turn-over. Constantly repeating a cycle of recruiting, training, selling and quitting.
Most people will join, sell what they can to friends and family, then quit.
It’s only an opportunity for those willing to recruit and train. Problem is, once you realize you are selling overpriced crap to your friends and family, most people won’t be able to recruit anyone if they don’t believe in the product they are selling.
Bottom line, MLM’s are tough for most people to make any real money at, unless you stick through it long enough to recruit lots of people below you, where you make money on their sales.
And of course no one wants to show you their books or really look at hard figures, because it’s all pie in the sky.
What do you think? Answer below!
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