I Have An Opportunity For You, or Not!

“In these tough economic times, don’t you want to do things differently this year? I have joined forces with a bunch of like-minded people. We have a meeting planned this week, can I reserve a seat for you?”

This is the hook that your family member, colleague or acquaintance might use to get you to listen to their groundbreaking business opportunity. In fact, it will turn out to be in fact a multi-level marketing, network marketing or, god forbid, a pyramid scheme based business.

This type of business originated in America in the 1950’s. The longest standing of them is Amway, meaning the American Way. They will claim that this longevity is proof of their legitimacy. History will, however, show that they exert tremendous political power to influence regulation. The most recent example is the appointment of Betsy De Vos, daughter in law to Amway’s founder, as the American Secretary of Education under Donald Trump.

But, I am starting to sound like a conspiracy theorist, let me get back on track!

There is still hope when governments step in to protect the people. In 2016 Herbalife, American based was investigated and fined. In South Africa, the reserve bank is currently investigating the activities of companies such as MMM [1][2].

While their share of the world economy is a mere 0.2%, it represents close to $180 billion dollars. This still entitles them with some bragging rights.

Let’s take a closer look at the opportunity.

They start by giving you the opportunity to buy a “starter pack“ from them, giving you the right to sell their products. When you sell the products to your friends, you get paid a commission on the sales. As soon as you refer another friend to buy a starter pack, you get more commission on their sales as well. And guess what, if they refer another friend you get even more commission. You are not limited to the amount to “levels” you can build, so infinite income is up for brags!

I agree that on paper this is exceptional.

The company is first shielded from being branded with the P-label because they offer “real“ products to their clients. Commissions are also not earned on the sign-up fee.

You need to, however, look closer to determine if staying in Network Marketing business is worth your time and effort.

Half of the people do not stick around for longer than a year, and after 5 years it falls to 1 in 10 people [3].

If you were able to create a perfect referral structure you will have the entire population of the earth under you in less than 13 levels.

Understandably most people do not know how to do marketing and work with people. In the case of Amway, a company such as Network 21 will step in to guide you. The person that refers you will however not declare that they earn a commission on these learning products. By hiding this at the start, changes the opportunity [4].

Similar to franchise opportunities you will always be limited by the type of products to sell and the market which you can enter.

I will not end this article before giving some alternative to how you can do things “differently this year”.

Invest in a skill that will make you world class and increase your income potential.

If you’re a master of your craft, you can develop a product or service that nobody uses already, but desperately need.

And lastly, if you invest in something, considering the risk, you must be willing to let go of that money if it fails.