OCALA BUSINESS JOURNAL SPECIAL REPORT/Network Marketing: ‘A relationship business’ Click on the links to see full Articles
Paul Shala
American Dream
http://news.google.com/newspapers?nid=1356&dat=20031029&id=YrtNAAAAIBAJ&sjid=pQ4EAAAAIBAJ&pg=5683,5996235
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Networkrs, marketing industry quicly gaining new buyers,sellers
Network Marketing: ‘A relationship business’
https://www.gainesville.com/article/LK/20090226/News/604244513/GS
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Critics doubting industry’s legitimacy and seekers of easy money have it all wrong, say network marketing insiders
Ocala Star-Banner (FL)-February 26, 2009
Readability: 9-12 grade level (Lexile: 1110L)
Author: JEFF BROOKS, Special to Ocala Business Journal
OCALA – It’s an industry marked by voracious critics and passionate supporters. In multilevel marketing, or network marketing, the preferred term for those in the business, there is no middle ground.
You love it or hate it.
Depending on who is talking, it’s a way to make legitimate money in an economy dominated by layoffs and unemployment, or a pyramid scheme.
Multilevel marketing is a plan that requires participants to sell a product and enlist several other people to sell the same product.
Participants make a profit on the products they sell and a cut on the products sold by people they enlist.
According to the the Florida Attorney General’s Office and the Federal Trade Commission some multilevel marketing plans are legitimate while others are illegal pyramid schemes where commissions are based on the number of distributors recruited.
The difference is, in the illegal schemes, most of the product sales are made to these distributors, not to consumers in general. The underlying goods and services, which vary from vitamins to car leases, serve only to make the schemes look legitimate.
Both agencies say those considering multilevel marketing should consider several things before investing, including researching the company, asking for references, asking about safeguards such as buying back unsold merchandise, be wary of too-good-to-be-true claims and start small.
“Most people get into network marketing on a part-time basis,” said Doris Wood, chair and president emeritus of the California-based Multilevel International Association (http://www.mlmia.com) “If they work, if they sell the product and sponsor people and teach the people they sponsor to sell, they would make decent money. If they do what I just said they can expect to make more than they would at any ordinary job.”
Nonsense, says Dr. Stephen Barrett, who runs MLM Watch (http://www.mlmwatch.org), a multilevel marketing watchdog.
“Almost every company is making misleading claims about their products,” Barrett said. “You can’t run a multilevel company at a profit without tricking people. They’re selling products you can get cheaper somewhere else. The only way to get people to buy them is make them think they’re better products. Since they’re not better you’re cheating them by inviting them to make more money. It’s not a competitive industry.”
Barrett said he has looked at the offerings of over 250 companies and purchased 50 distribution kits to get an inside look.
“I wouldn’t go so far as to say the whole industry is a fraud,” Barrett said, “but I have never seen a company that ran honestly, not one.”
Paul Shala is an independent representative for 2 Year Success, which sells wellness and nutritional products and vitamins. He’s been involved in multilevel marketing for 18 years.
“We hear quite a bit of this misrepresentation,” Shala said. “It’s been proven in a court of law that multilevel marketing is a legitimate business. When you exchange a product for money it’s a perfectly legitimate business.”
Legitimate or not, Barrett said most people who get involved in multilevel marketing won’t make any money.
“It’s a product-based pyramid scheme,” Barrett said. “They’re selling a product, but what they’re really selling is an opportunity. If most of the money is coming in from selling distributorships, the people who come in at the bottom are very unlikely to make money. Ninety-nine percent of the new distributors lose money.”
According to Barrett, it’s simple to determine how much money a person can make by asking a few questions, including what’s the average monthly gross income of distributors who have been involved for less than a year, what percentage of distributors drop out and what percentage of distributors end up making a substantial income?
Good luck getting the answers, he says.
“They won’t tell you,” Barrett said. “This industry is operated on secrecy. The only companies that ever disclosed things like that are the few companies that the government has ordered to do so.
“If the industry makes an honest disclosure of what a person coming is in likely to make, the industry would collapse.”
Charlie Krazit has been an Amway independent business owner since 1978. He’s heard arguments like Barrett’s many times.
“We’ve heard that for years,” Krazit said. “What you’ll find is people that say that are very, very misled about they see what’s going on. We get paid based on the volume of business. As you build the business you create volume. As you build a team it can be quite lucrative.”
Krazit said if people stick with the program they can make between $50,000 and $60,000 within a couple of years.
“It does take work,” Krazit said. “It does take a commitment to do the things you need to do to make it work. Not everybody can build a network business. I would say if I talked to 10 people we could easily register, three, four people. Depending on how sincere they are about making some money, they may stay in. Over time we’ve found that the majority of people don’t stay because it takes effort.”
Shala tells people if they do it right, with the right company, it takes between two and five years to start making $50,000 and up a year. Shala does admit that not everyone who joins multilevel marketing makes money.
“It’s just like any other business,” Shala said. “4, 5 percent make money. A lot of people don’t understand and don’t stick with the program. They get into the wrong program to begin with and do it wrong and do it with the wrong people. This is a sorting business. We sort people out. We’re good at asking a lot of questions to screen people to see if they’re cut out for this type of field.”
Wood, who has been in the industry for 51 years, said it’s tough to say how much can be made because “some people are quick learners.”
“I’ve known distributors that make anywhere from $300 to $400 a month to I don’t want to tell you how high,” Wood said. “Let’s just say they go over $100,000 a year.”
Baloney, Barrett says.
“If what you have is a pyramid scheme where the only customers are distributors, then the people at the bottom have to be running at a loss,” Barrett said. “And there are more people at the bottom than the top.”
At one time that may have been the case, Wood said, but no longer.
“We don’t have that,” Wood said. “This is the first time I’ve heard ‘pyramid scheme’ in five years. A pyramid scheme has nothing to do with network marketing.”
As unemployment numbers continue to rise, many believe multilevel marketing, an estimated $120 billion-plus industry, will see increased growth. According to Shala, costs to start in multilevel marketing range from $200 to $500 and the hours are good, maybe 25 a week.
“With the economy the way it is network marketing should boom again,” Wood said. “We’ve always had good growth, but when we have a downturn in the economy there’s always a boom because people will begin to listen to the opportunities that are available.
“Network marketing is the last stranglehold of the free enterprise system.”
Section: Ocala Business Journal
Record Number: a1ed6eb43dc6ae80dabb4fbd1c4755b317728e53Copyright (c) 2009 Ocala Star-Banner
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Network Marketing: ‘A relationship business’
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Ocala Star-Banner (FL)-February 26, 2009
Readability: 5-6 grade level (Lexile: 930L)
Author: MARIAN RIZZO, Special to Ocala Business Journal
OCALA BUSINESS JOURNAL SPECIAL REPORT
Word-of-mouth is key for direct sales entrepreneurs
Drs. Manal and Riadh Fakhoury have busy schedules. While Riadh spends long hours at his chiropractic clinic, Manal gets up about 6 a.m., gets kids off to school, keeps the books for Riadh’s practice and then goes to her own job as clinical coordinator for the pharmacy department at Ocala Regional Medical Center.
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If that’s not enough, the Fakhourys also support several local charities, drive their children to sports events and music lessons, and take an occasional family vacation.
In May 2006, the Fakhourys took on yet another activity and became recruiters of members for National Companies, a Fort Lauderdale-based organization also known as Team National. The company helps its members save money on items they would normally purchase as well as earn money for recruiting more members.
So, why does a successful, busy couple add one more challenge to an already full schedule?
“Because we believe in the company,” says Manal. “When you believe in something, it’s very easy to share.”
“First of all, it makes sense,” she says. “It’s good to be a good steward of your money. Even people with high incomes like to save money. Even more important than that, my membership, plus my income, is willable to my children. To my young children at the age of 11 and 14, I say, ‘This is your business. I’m just doing it until you’re old enough to take over.’ That is the most exciting part to me. It has not been life-changing for me, per se. I already earn a substantial income. But for numerous people, it has dramatically changed their life.”
For the Fakhourys, the commitment merely involves a seven-minute phone call and a few meetings. Basically, it only takes about seven minutes to share the concept, says Manal.
Members can earn savings and income in four ways: e-commerce, which is online shopping for members only; group buying, where prices have been negotiated with major industries; a members-only Web site that offers information and networking opportunities; and a business exchange through which local businesses sell their products at a discount.
“Basically, it allows people to leverage their buying power,” she says. “A large corporation with a lot of people can find better pricing than an individual can. Corporate America has done it for years.”
As platinum presidential directors of Team National, the Fakhourys have recruited members from all over the United States.
“The company does not advertise,” says Manal. “It’s a relationship business, word-of-mouth advertising, one friend referring another friend. It’s now called relationship marketing. That’s the proper up-to-date term.”
But, relationships sometimes can suffer when people find out you’re selling something, as Paul Shala has learned. A direct salesman of nutrition products, Shala says there have been times when he’s sensed people were avoiding him.
“The reason people get into our business is to make money,” says Shala. “You approach what we call your ‘warm market,’ your friends, relatives, people you work with, your neighbors, people you do business with. Most people still build their business with those people. Two reasons people get involved with us is because they like us and they trust us. Once you find out that they’re not cut out for you, then you leave them alone, but you can’t know what their needs are unless you ask them. If they run away, then that’s their problem.”
Previously a real estate investor, Shala says he lost most of his properties during the last recession in the 1980s. He decided to change businesses and developed a nutrition formula of vitamins and minerals. When it became too costly to keep a large inventory, he turned to established companies for those products. In turn, Shala takes care of advertising through newspapers, postcards, brochures, DVDs and, of course, the Internet. Direct sales people can help keep prices down, because the products don’t have to go through multiple agents to reach the stores, says Shala.
“It all started out with word-of-mouth advertising,” Shala says. “That’s what network marketing means, word-of-mouth.”
Formerly of Kosovo, Shala moved here in 1974. His wife, Rosa, is a stock and insurance broker. Shala says he didn’t lose heart when his real estate business failed. He just regrouped and found something else to do.
“What I try to keep teaching people is someone who is smart does not have to wait until they go bankrupt before they do something,” says Shala. “The smart thing is to follow the richest people in the world, what they’re doing. And several of the richest people in the world are doing what I’m doing now. Warren Buffett owns at least three companies like mine. We’re in the same industry doing the same thing.”
While some people balk at the concepts of multilevel marketing or pyramid sales, Shala says there’s nothing wrong with those terms.
“‘Multi’ means more than one. Level means you get paid off the efforts of other people,” he says. “Every corporation, churches, government organizations – they all run on a pyramid structure. What we try to avoid is the word ‘scheme.’ It’s not a pyramid scheme. It’s a pyramid structure.”
Lillian Yocum prefers to use the term “direct sales consultants.”
A sales director for the Dallas-based Mary Kay Cosmetics Company, Yocum says each consultant operates independently.
“It’s not multilevel. It’s just you and the company, no middle person at all,” she says.
In addition to earning income on the sales of Mary Kay products, consultants also earn automobiles from Mary Kay’s own fleet of cars. Some might even be seen driving the familiar pink Cadillac associated with Mary Kay.
“That’s the top trophy,” says Yocum. “You have to sell a lot of lipstick.”
While some people get involved in direct sales to supplement an existing income, this is a full-time job for Yocum.
“When I joined, my reason was to stay home with my children, but still help with the family income,” says Yocum. “Mary Kay’s philosophy is putting God first, your family second and your career third, so I was very impressed with that.
“I kind of weave my business into my personal life,” she says. “I start out early in the morning. The first thing I do is call some of my consultants to see how their week is going. I also do skin care classes and makeovers. I put in between 30 to 35 hours a week.”
Yocum said the recent dip in the economy has not adversely affected her business.
“As a matter of fact, my sales were better in January than a lot of other months,” she says. “They say that our field, the cosmetics industry, is recession-proof. We keep a full inventory and I order every single month. It’s the American dream to be your own boss and set your own hours and have a tax write-off.”
Section: Ocala Business Journal
Record Number: 3497411d49854f593deddab264eea4e9c21fbc98Copyright (c) 2009 Ocala Star-Banner
About Paul Shala,
Paul has been a dedicated entrepreneur since 1980; first 10 years in traditional business and in 1990 started in (MLM)/ Network Marketing & Wellness Industry. Paul has assisted Thousands of People to achieve Passive/Residual Income, as a result he earned a
Founding Member position in two of the fastest-growing MLM companies and became a million dollar producer in another.
In 2001 Paul launched his own Private Label Nutritional and Skincare Network Marketing Company thus adding additional leadership experience. Paul has been been featured in “Your Business at Home” magazine, the “Ocala Star Banner Business Journal”, and other articles. As an x-ceo of an mlm/network Marketing Company & an Industry Veteran, Paul has aligned him self with several industry experts with decades of experience helping MLM enterprises to launch successfully. Professionals that have developed correct strategies for MLM companies. Starting an MLM enterprise is difficult and leaves no room for mistakes. Like a good game of Chess, each move you make should be governed by an overall strategy, allowing you to focus your time and energy on the correct details. Individual moves that add up to a win. We can help you construct a good game strategy, putting you in a position to succeed. Connect Paul directly. Paul has been living in Florida since 1996.
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