| PC Dave |
02-24-2004 11:43 AM |
Multi-Level Marketing, e.g. Amway. "Associates", usually bored housewives wanting spending money, are recruited at meetings similar to religious revivals in building enthusiasm for the product. They sign up in the "downline" of the people hosting the meeting (who all show tons of enthusiasm, say they're achieving financial independence working an hour a day from home, etc), and they drop, typically, several hundred $$ on inventory of whatever the product is (plus an initiation fee), convinced by the success stories at the meeting that they can easily sell it to friends, neighbors, church members, etc., and then sign up their own "associates" underneath them. Via complex formulas, part of each new associate's revenue goes to the chain above them.
Most people who sign up make a desultory effort to sell to a few friends; when they get resistance, and realize they're not going to get rich anytime soon, they give up and eat the cost of the product and "initiation fee". A small percentage are good at it, and do keep the game going, selling product and signing up others, etc. If you're somewhere near the top, there's a lot of recurring revenue coming your way every month.
Amway's the best known, but there are others, typically selling food supplements, cosmetics, pre-paid legal services, etc. - anything that can easily be sold in a sales pitch in someone's home. It's a pretty formulaic business, and there are some people who've successfully started several of these companies, but for the low-level recruits it's seldom the path to their dreams they were promised.
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