Why mlm VoIP sales usually don't work.

A fair and balanced critique of mlm and why it might not be the best choice long term for a home based voip or wireless sales business.

[part one | part two | part three]

In addition to the basic flaw of not actually focusing on selling a product and the enormous amount of managers that share in any sales revenue made by the actual selling sales rep, the multi-level process becomes overly optimistic on how much money could be made if the three reps you sign up simple sign up three more each, etc., etc..

And this focus becomes the core of the meetings that you attend.  Meetings that detail huge sums of income by creating a organization of reps under your position.  Income that's potentially there for the taking, all you need is a few reps in your down-line that are "active".  The hype and exaggerated numbers capture new recruits, who quickly become disenchanted with the process and drop out, never selling enough to pay back their initial start up rep fees.

• Most new recruits (new reps) drop out without making any money.  In 1995, Excel Communications, a fast growing communications company, reported to regulators a 86% turnover rate of distributors and a 48% drop-out rate among all customers (With VoIP accounts today the retention rate of customers is significantly better than this.)
• The managers that are at the top are usually engaged in recruiting, that is building their down-line, and forgo selling any product.  In some cases, these "stars" are given special deals and bring an initial group with them during the formation of the company.

Control of your own destiny.  That's what they say, but does it really happen?

MLM (multi-level marketing) is sold as the best option for owning your own business and attaining real economic independence, but this is especially false if the organization forbids its distributors from carrying additional lines and/or choosing the best ways to advertise and market, other than  the ways they suggest with tacit approval. (These suggested avenues for marketing may include sources that have a financial alliance with the upline and/or mlm company and may not be the best choices to be limited to.)  In general, some mlm companies go as far as to require participation with rigid adherence to their model sales plan, buying advertising and training material from specific approved sources, taking away independence, individuality and ultimately control.  *Training" may end up being more about the commission structure in the multi-level marketing scheme and recruiting than actual product sales and knowledge.  Now, this is not true with all mlm companies, but care should be taken to keep independence with your business, if not you may become a captive to the organization.

That having been said, giving a balanced view, there are lots of satisfied customers, who are not distributors, using the mlm companies' VoIP services.  And there are some "heavy hitters" who do make a substantial monthly income.  These points are valid and good, so why is that not sufficient enough to validate being successful as a new marketing rep? 

What about the success stories?

The "heavy hitters" that joined, in many cases, have already built up their organization (down-line) and have brought them over to the company as "their group".  They make a substantial amount of money off of start up and initiation bonus commissions. They can even receive extra incentives, because they are valuable to the mlm start-up company.  Their main business is not the product, but the organization.  They are motivational gurus and think less about the product that they sell, than the business their in which is inspiring people.

• Top reps have their own personal websites outside of the companies' replicated website.  They have created a business sales funnel and have in place an organization that allows them to generate significant amounts of income without ever directly selling any product.
• Successful network marketers (mlm) are focused on building an organization of reps who follow their leadership.

These heavy hitters may use multiple marketing avenues including multiple websites, video marketing, article marketing, social media, buying leads,  and paid online ads on other websites which drive large amounts of targeted leads to their website.  That's a good thing and is partly why they are successful, they essentially have their own business wrapped up with the mlm voip business and if things go south, it's the "their business", the one that is the organization, that they will take and keep with them.  Unless you also have a "your business", you are faced the choice of moving with them or starting from scratch.