Many MLMs no longer send the products to the distributors and have them resell them. Paying someone 10% for finding customers is MLM, and the more layers there are makes the products more expensive and more difficult to sell to pure customers.
It's emphasized in Amway that the money that would be spent on marketing goes into the bonuses, this is partially true and a big chunk goes to corporate profit as well.
Buying from an MLM is generally much more expensive compared to other product sources as it is a captured market and the carrot is future wealth. That's a huge carrot.
Regarding tracking profits and losses, most people joining an MLM have no business background and the upline takes advantage of that and doesn't mention, even discourages, tracking profitability.
Amway's retail sales rule is a minimum of 50 PV (about $170 in today's PV/BV ratio, the dollar amount increases over time to account for inflation) or 10 different customers on a monthly basis, in order to receive the downline volume bonus. The inventory loading rule is the 70% rule. This means a maximum of 30% can be placed into inventory, and the remainder must be consumed by the IBO or sold to customers or upline/downline. Neither rule is enforced, which means that in practical terms, the rules do not exist.
@WatchBeforeYouJoin-n1j A point was made that a razor company went public and the quality suffered. While that may be true, it doesn't automatically mean every private company has superior products compared to public companies. For MLMs, retail sales are needed regardless of whether the company is private or publicly held. Most customers don't care whether a company is public or privately held. They want a good product at a good price.
@WatchBeforeYouJoin-n1j A customer is not the same thing as a distributor. As the BurnLounge judge stated, a distributor has a conjoined opportunity or incentive to buy an overpriced MLM product. Namely, future wealth.
Many MLMs no longer send the products to the distributors and have them resell them. Paying someone 10% for finding customers is MLM, and the more layers there are makes the products more expensive and more difficult to sell to pure customers.
It's emphasized in Amway that the money that would be spent on marketing goes into the bonuses, this is partially true and a big chunk goes to corporate profit as well.
Buying from an MLM is generally much more expensive compared to other product sources as it is a captured market and the carrot is future wealth. That's a huge carrot.
Regarding tracking profits and losses, most people joining an MLM have no business background and the upline takes advantage of that and doesn't mention, even discourages, tracking profitability.
Amway's retail sales rule is a minimum of 50 PV (about $170 in today's PV/BV ratio, the dollar amount increases over time to account for inflation) or 10 different customers on a monthly basis, in order to receive the downline volume bonus. The inventory loading rule is the 70% rule. This means a maximum of 30% can be placed into inventory, and the remainder must be consumed by the IBO or sold to customers or upline/downline. Neither rule is enforced, which means that in practical terms, the rules do not exist.
Correct
81% of what, the number of customers or the amount of product purchased? It matters and needs to be the latter to not be an illegal pyramid.
There are privately and publicly held MLMs. There's no difference in the need to have retail sales to customers.
@@ScottTexJohnson I don’t understand
@WatchBeforeYouJoin-n1j A point was made that a razor company went public and the quality suffered. While that may be true, it doesn't automatically mean every private company has superior products compared to public companies. For MLMs, retail sales are needed regardless of whether the company is private or publicly held. Most customers don't care whether a company is public or privately held. They want a good product at a good price.
@WatchBeforeYouJoin-n1j A customer is not the same thing as a distributor. As the BurnLounge judge stated, a distributor has a conjoined opportunity or incentive to buy an overpriced MLM product. Namely, future wealth.