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MLMer’s Survival Guide.

Devoted to people who are at the bottom of MLM net and seek ways to move up.

The information below may help you to move up in the MLM world without using of deception. But it does help you only if you are a smart and hard working person.

The way is to follow the next five steps:

Step1. Understand the MLM problems.

Step2. Select the right solution.

Step3. Design your own AP.

Step4. Compete with top levels participants.

Step5. Extend your network.

Step1. Understand the MLM problems.

The basic problems of a legitimate MLM are:

1. MLM companies get lion's share of income not from consumer market (customers) but from their own distributors. So the business life of MLM companies depends on their ability to grow and preserve the net of distributors.
2. High cost of entry to MLM programs for a participant/distributor. Participants should buy “seminars”, “products” and the like to participate in the MLM program. But in this case they are exposed to the risk of loosing this money (cost of entry). In fact majority of participants at the bottom of the net/pyramid do loose their money.
3. Finite market size. Even children know that any market is finite (at least for the reason that number of people on the Earth is finite), but many MLMers ignore this fact. When this limit is reached the MLM Net formation is stopped and many participants (sometimes more than 90%) became losers.

 The key to the success is to solve some of these problems. At least the first two problems can be solved. Any method or program could not solve the third problem (but it is do possible to increase the market’s limit on a finite number).

Step2. Select the right solution,

Usually MLMers do not solve the mentioned problems. They are trying to extend the market going to Cyberspace, but on this way they usually create additional problem-generate SPAM.

To find the way to the solution let us consider the following analogy (see Table1).

Table1. Analogy between MLM network and Social hierarchy in era of feudalism.

As we know from history, feudalism was replaced by more progressive system –capitalism.

In capitalism there is no a fixed hierarchy as in feudalism, but there is a competition among many hierarchies.

So the key idea is- to repeat the way that evolution (or GOD) chooses.

If you will do this (recreate competition) then the winners will be smart and hard working persons, not the first comers (as in MLM).

Step3. Design your own AP.

Truth to say, there is no need to invent something that can compete with MLM, it does exist and prosper. This is Affiliate Marketing (or more modern version- Affiliate Network Marketing). In many ways it analogous to MLM, but it has not the first two problems that MLM has. An Affiliate is not a distributor. She/he does not buy/sell products. An Affiliate only refers customers to a seller (for example, to you). There is zero cost of entry in an Affiliate Program, therefore there is no risk for an Affiliate. The commissions are paid according to a scheme similar to MLM. You should decide how many levels your scheme has, how mach you pay on each level, and type of payment (fixed or %).

Let us consider this step on the example. Assume that you buy a product at $90 price, sell it at $100 price. In addition a company pays to you commissions according to the scheme:

From your 1st level distributors –4%

From your 2nd level distributors –3%

From your 3rd level distributors –1%

From your 4th level distributors –1%

From your 5th level distributors –1%.

If a distributor at the bottom, her/his income is only 10% from a sale (there is no distributors "under" you). You can propose to her/him up to 19%(1% you should reserve for yourself). Suppose you choose the following scheme:

14%- from own sales (This mean that affiliate which refers a customer to you receive 14% from the sale)

5%-from 1^st level  affiliates,

1%- from 2^nd level affiliates.

Now compare two propositions

Step4. Compete with top levels participants.

Look at the table above and give an answer on the question: “Which proposition is more attractive to the people on the last levels of the company network?”

Now let us estimate how many such persons in the network.

Suppose the net was grown with factor 10. This mean that on the 1-st level there are 10 high ranked distributors (winners), on the second level 100 distributors (each recruited10 new), on the third –1000 recruiters,… and on the 6^th level - 1 million distributors (losers).

In this network more than 90% distributors may find your proposition more attractive than the initial proposition of the company, so you can recruit these persons as your affiliates.

Step5. Extend your network.

Now you have something that has a value and can compete with the initial “product”, so you can extend your network in any direction.

Let us mention some of them.

1. Risk averse people (as shows research they are majority). These people do not want to risk their capital, so they never join a MLM network, but these people do can refer a lot of customers.

2. Distributors from other MLM companies.

3. Web site owners.

4. E-mail list owners.

5. Many Internet users seeking opportunities to earn some income without risks.

And the last -be open minded. Any person can do the same as you do, so be prepared to compete with others. 

Copyright © 2001 Apfa Group
Last modified: March 09, 2001