Question

Topic: Strategy

Advantages Of Mlm To Bring Product To Market

Posted by Anonymous on 11/20/2004 at 8:08 PM ET 250 Points
The August 8th issue of Fortune magazine made a compelling arguement for using network marketing / MLM / Interpersonal Marketing for bringing products to market for minimal cost and maximum effeciveness. How can I go wrong by paying people only for production? I thought the most effective advertising method - word of mouth.

What are the advantages of using network marketing for a world -wide rollout of a technology product or almost any product that can be sold via word of mouth.

Why are old school marketers so against this marketing startegy. Other comapanies both franchise et al have a high failure rate and high initial cost.

Are you familiar with the position of Dr. Charles King of the Harvard University and the University of Illinois (Chicago) teachings on MLM?

If I can market my product for 1/3rd the cost using MLM why are so many traditional marketers against this business model. My understanding is that Fortune 1000 companies are now joing with network marketing companies to get their products to marke because it does not require the overhead of traditional storefront marketing

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  • Posted by Inbox_Interactive on 11/21/2004 at 12:49 AM Accepted
    * No points sought *

    You've got what you came here for--the truth! Dole out the points to those who've already answered.

    When people hear "MLM" their guard instantly goes up, and rightly so. If your business is recruiting people to recruit people who recruit people, you don't have a business. You want your people focused on your product, not in adding another layer to the pyramid.

    I remember once I read an annual report for a popular vitamin company that was heavy into MLM. They boasted XX,000 distributors. When I ran the math, I realized that each "distributor" was generating about $100 in sales for the company per year. What's the point of all that paperwork and liability for a lousy $100 in sales? Not to mention, entrusting your brand and company images to XX,000 cowboys all running their own show?

    I declined to buy the stock, and yes, it's tanked since.

    My $0.02. YMMV.
  • Posted by Inbox_Interactive on 11/21/2004 at 7:01 PM Accepted
    I'm really not sure why you've wasted your time here. You came to this forum with an opinion that just wasn't going to be changed. That's your right. March on.

    But then when you learned that this place wasn't The Mutual Admiration Society, where every idea is greeted with "Atta-boy!" and "Huzzah to the shopkeeper!" you took it down a level and started questioning the intelligence of the people who took time out of their day to give you personal, thoughtful opinions.

    Shame on you.

    Although my bar brawlin' side wants to write a 3,000-word reply to put you in your place, I'm going to simply wish you well and move on to greener, more hospitable pastures.

  • Posted by telemoxie on 11/25/2004 at 11:02 AM Member
    I have a question about paragraph 12 of your 11/21/2004 2:14 PM (EST) post, in which you write:

    The tax write-offs that the IRS allows a MLM distributor should be incentive enough to make it stupid for any taxpayer that does not own a store-front business to at least start a home based business with a product they enjoy and would recommend to others even if they were not compensated.

    My question is: are you calling us stupid?
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