Saturday, February 10, 2007

Biggest flaw with MLM

In my opinion, biggest flaw with MLM is constant need to grow. I do free lance software development and server maintenance. I'll be happy if I keep on getting what I've been getting in past few months. But if MLM is not growing, it means majority is not even profitable.

Lets say there is an MLM Quixtar. Lets say they make around a Billion every year for past four years. Good for Quixtar, but does that means it is good for IBOs?

There could be two scenarios.

- Pretty much every IBO is where he was. 100 PV is @ 100 PV, 1000 PV is @ 1000 PV. Platinum is platinum. It should be good if they are profitable at those levels.

  • # of new 100 PV = # of 100 PV who are 100 PV no more.
  • # of new 1000 PV = # of 1000 PV who are 1000 PV no more.
  • # of new Platinums = # of Platinums no more.
2nd scenario is more likely. What does that mean? Lot more work to build a team given the attrition rate? Sponsor 100 and 99 quit? It is like trying to fill a glass with pores in the bottom.

So...If you are in MLM,
  • Are you profitable at your current level?
  • Does your profit justifies the time and effort you put it?
  • At what level it justifies?
  • Are you at that level?
  • How many people can be at that level at a given time?
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