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, if you were to buy an apartment building and investigate whether it was a good financial opportunity, this would consist 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, you would have the building properly inspected and assessed by a professional, etc. All that information would be used in your financial assessment of the deal and to help you to 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?
So an MLM member's research was merely looking at a COMPENSATION PLAN put out by the MLM itself?? Hmmmmm.
What exactly did they verify and how? That the plan would pay a particular compensation percentage? So, do they believe that their upline number’s, someone who is supposedly making money running this MLM business, was of no interest to them and they just take their "word" with no actual hard proof?
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.