Why doesnt MLM have any concern for supply and demand?

Question

Lets say for example a respectable MLM company sells juice made from a certain type of berry. And lets say 10,000 distributors can easily handle the demand for this tasty treat (that also cures cancer). Do they not see it as a problem if they sign up 20,000 or 30,000 people into this great opportunity?

Answer 1

All products and services have partial market penetration. For example, only so many people wish to use a discount broker, as evidenced by the very successful but only partial market penetration of Charles Schwab. Not everyone wishes to join a particular discount club, or buy gold, or drink filtered water, or wear a particular style of shoe, or use any product or service. No one in the real world of business would seriously consider the thin arguments of the MLMers when they flippantly mention the infinite market need for their product or services.

Thus, there is only a certain amount of product demand for any product. Once you have reached that demand, continually providing more and more sales people to oversell the market is ridiculous and sets up the salespeople for disappointment.

MLM is set up to continually add more and more salespeople forever with no concern for supply and demand. The numbers do not matter, 10,000, 20,000, eventually you will have too many reps selling product if you continue to grow.

Remember, part of the ridiculousness of MLM is that it is intended to grow exponentially, so if you have 20,000 reps, the idea is that all those reps should be recruiting, so eventually that 20,000 turns into 40,000 which turns into 80,000 etc.

It doesn't matter if the product DOES cure cancer because MLM is so flawed in that it is set up to continually add salespeople with no concern for how much product is in demand.

The only people who support MLM are deceptive people looking to make a quick buck off people, naive people who cannot comprehend simple flaws in the math, or emotional people who want to be rich so badly that they simply overlook that they are trying to run through a brick wall.

Answer 2

First of all, I market the juice you speak of and one thing I need to emphasize is that it does NOT cure cancer. I'm not sure where you got your facts from, but it definately isn't from the company.

I'm also convinced that you don't understand how sales work if you think MLM doesn't have a concern for supply and demand. Of course they do! That is why they have professionals ensuring that we never run out of this valuable berry. Not to worry, it's all being taken care of by those who know how to keep replenishing the berry.

As for signing 20 or 30,000 people, we've far exceeded that and it is nothing even close to a problem. The only problem we would have would be if people stopped using the berry. Which I assure you, they are not. The berry you speak of is the only food on earth that contains 4 natural polysaccharides, there is no other. Only the berries that contain these are used in the production of the juice, which is why each bottle contains a Spectral Signature.

I realize you have quite a resentment towards this method of marketing, but if you really studied it and did your homework before you make statements such as you have in the past, you will see that millions of people can't be wrong. We just choose to market in a different way than you choose to consume. It works for us, we don't just leave people swinging in the wind. Should they be serious marketers, they will move a great deal of product and earn an incredible income while doing that.


As a footnote: Jacques is so totally wrong with his statistics that it's almost laughable.

Our company is a Fortune 500 company as well, so I guess that means I know what I'm talking about too.
I don't know where he gets this idea that we suck the life out of people and that the top dog makes all the money and the newcomers are thrown under the bus. Not even remotely true.
I wonder what percentage Jacques made on his 47m in sales?? I wonder what the owner of the company made on that? I'll bet more than Jacques, which makes that a pyramid.

Marcello in his infinite wisdom (not) just elaborated on exactly what I said. He's just a little more long-winded than I am, but we said exactly the same thing.
Supply vs demand....I explained it.....duh marcello
Make sure you vote for yourself again.

Answer 3

Hi Tory,

I will give you a disclaimer first so that you can evaluate my answer without bias.

I HATE MLM's of ANY KIND because they are a disguised pyramid scheme. The people that start it make a TON and the rest make pennies.

The MLM does NOT care about your sales skill, dedication or any of the rest. They simply want to sign new people up and take advantage of their NETWORK and buy-in. It is simply a numbers game.

I have been in electronics distribution for over 30 years, been the TOP sales guy for Fortune 500 companies and think that I know what I am talking about.

I once was the top dog for a company that aloowed the sales people to "Break the bank" once (I did $47M one year). When you went over $2M in sales your territory was split and you had to train the new guy.

The justification was that one person was incapable of SUPPORTING more than $2M a year AND finding NEW business. As a sales guy it P#$$#d me OFF, but as a manager I can see the resoning behind their decision.

From a P/L standpoint does it make more sensse to process 20 $2M orders or 2M $2.00 orders? DUH!

THAT is why MLM's are the WORST! They suck the drive out of good people. Their MODEL is to get as MANY feet on the street as they can and SCREW loyality to the performers.

As a sales manager for several companies (Asian and Italian) I fought this over distribution thing until I was blue in the face and they just did not understand. It was a TOTAL mis-understanding of the US market and GREED with NO expense.

As a side comment, if this stuff cures cancer, why haven't they taken it to the FDA or IB sharks? It's just another line of BS to suck in more "salespeople".

Just think about your future and make the necessary decisions.

Good Luck,
Jacques

Answer 4

Only 1 in 10 people who sign up have the ability and actually want to do the hard work for the amount of time that it takes to succeed. Typically, people only work at it for about 2 weeks when it can take 6 months to make any money unless you've done it before. If you work smart and hard for a year, you can be making decent money. Out of 30,000 people you would expect to have maybe 1,000 people actually end up doing it and maybe 100 actually making a lot of money. In the end, it's up to the affiliate as to whether they succeed or not when an opportunity is offered.

Answer 5

MLM has a very high turnover rate. Most people who get into MLM will sell those whom they know and never do much beyond that. There is a constant need to recruit more distributors. I think the over recruitment situation you noted will correct itself by simple attrition.

Answer 6

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