I recently read a story that included an FTC report stating that 99% of MLM recruits end up losing money. If this report is factual, it certainly represents a real recruiting problem for the MLM industry. The following contains a paragraph that is a quote from that report.
“Inside the multibillion-dollar MLM industry - where commissions are filtered through a pyramid-like structure of independent, non-salaried sales force distributors who pay to play- at least 99% of recruits end up losing money, according to a report published by the Federal Trade Commission.”
This story is obviously an attempt by the author to discourage people from participating in an MLM financial opportunity. The FTC report reminds me of another multibillion-dollar pay to play industry, the State sponsored lottery games where 99% of the players end up losing their money.
The gambling industry’s answer to this negative number is: if you cannot risk losing your money, do not play the game! They justify the business practice by paying a percentage of the profits to education and point to the good they are doing. It is a personal choice to play. The gambling business is an example of a high-risk business concept that promotes a simple transfer of wealth, from the many to the few.
However, in the MLM business model concept things are completely different. There are products to purchase and/or services to perform that have sufficient perceived value to cause people to exchange their money for the items the company sells. People are therefore purchasing items that they perceive to have an equal or greater value to them than the money exchanged. Let us not forget the reason most people go into business is to earn money. So yes, there is the financial gain part of the business that drives people to participate.
Let us look at this perceived loss of money problem in a different light. It is true that when a person spends money, they technically lose it, it is gone! The money has left their possession, and they no longer have the use of it. A person that spends money to buy food is losing their money even though they may want the food they purchased. If an accountant were to track these events the person would lose money when purchasing the food. The FTC could claim that 99% of the people have lost their money by their actions of participating in the grocery store business. However, their desire to exchange their money for food proves the items purchased have at least an equal or greater value to them than the money spent.
NOTE: When a person enters a grocery store and exchanges their money for food, the money is at risk of being lost.The person has lost nothing during the exchange of money for food, if they feel they received an equitable value during the exchange. They may have wanted to spend it on something else but then it comes down to the individual’s choice of where to spend the money. Losing money in an MLM business is at best a misnomer. A better statement in the report may have been the person may not have earned a profit but did receive something of perceived value during the exchange.
The reason most people go into business is to earn money. Most people will earn more money owning a business rather than working for someone with a similar business. This is the reason people are willing to take the financial risk and fund the cost of starting a business. So, what is the solution for a person that is willing to take the risk of entering a MLM financial opportunity? The solution may be discovered by understanding the Multi-Generation-Marketing business concepts and the methods utilized for the distributor’s compensation.
CONCEPTS
ValQuest Ads Inc. is a person-to-person MGM structured advertising company. ValQuest Ads provides advertising campaigns to a variety of businesses utilizing our Zero-Cost Advertising Program. The cost related to a business advertising campaign is paid for by our distributors being issued Value Certificates for their personal use and their customers’ use.
The Distributor incentive for the advertising campaign’s payment method is the guarantee that the Distributor will be able to redeem a portion, or a percentage of the bill, with the issued Value Certificates. The distributor may then receive a commission for each Value Certificate issued and redeemed. A distributor’s customer may also receive a payment for each Value Certificate purchased and redeemed. The Value Certificates are available from ValQuest Ads and are named the ValQuest Value Certificates.
ValQuest Ads agenda is to stretch the value of the dollar and thereby help its Distributorship overcome the harmful effects of inflation. Our distributors loan their dollars and are issued Value Certificates so they can participate in an advertising campaign. The Value Certificates are used to identify a person to a participating merchant’s business and to verify that the person is entitled to a discount on the merchant’s products and/or services. The action of and by the distributor ensures that no money is lost by purchasing name brand products that are normally purchased anyway. The process of exchanging the Value Certificates for the merchant’s products and/or services produces a net increase in value for the distributors.
The Self-Liquidating Loans are instantly converted into Advertising Units to track the effectiveness of an advertising campaign. An Advertising Unit is the smallest unit of measurement utilized to determine the size and scope of an advertising campaign. The Advertising Units are converted into a number that represents the Redemption Value. Distributors will personally earn an Alpha Personal Commission percentage from each Value Certificate issued and redeemed for the merchant’s products.
As a distributor purchases and redeems $400.00 of Value Certificates, that distributor would receive the name brand products they purchased and would also receive a $100.00 Alpha Personal Commission for their participation in the advertising campaign’s activity. As you can see, a distributor is not losing money, and in fact is earning an income! They have the products they normally purchase and $100.00 Alpha Personal Commission compensation for the act of going shopping. A Distributor may enroll other like-minded individuals and may also receive commissions from their activity. The Alpha Personal Commission is the result of the distributor’s participation in the Advertising Campaign. The Alpha Personal Commission represents the amount of value a person receives by shopping and redeeming the Value Certificates at the merchant’s business.
A distributor may increase their Redemption Volume footprint by adding customers. As a distributor and their customers go shopping and redeem the Value Certificates the shopping activity will increase the distributor’s Redemption Volume and therefore the potential income.
The distributor may also earn a three-generation Beta Organization Commission based upon the organization’s participation. This income is determined by the Redemption Value and is earned by recruiting other distributors to increase the distributor’s organization volume.
There are two additional compensations available to a distributor. The Delta Fast Start Bonus and the Omega Direct Commission. As a new distributor is enrolled by an existing distributor, the existing distributor may receive the Delta Fast Start Bonus on nine generations for eight weeks.
If Value Certificates worth$50,000 are issued for an advertising campaign, and all the Value Certificates are redeemed, the Redemption Volume number will be 100%. If Value Certificates worth$50,000 are issued during an advertising campaign and $45,000 of the Value Certificates are redeemed, the Redemption Volume number will be 90%. The advertising campaign would be considered a 90% success, and the compensation would be paid at the 90% number.
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