Today I was asked in the context of YTB Travel, “What’s the difference?” “What do I get for my five hundred ish dollars?” Great questions. For many of us saying MLM immediately raises an eyebrow as we figure we are getting sold a crappy bill of goods. To best explain the difference I think it’s best to let you in on a little secret. I have done MLM twice before both in the early 90’s. IT’S TRUE! And you know what? Even though I paid my start-up fee, no one came to my house to buy anything. I say that with self-deprecating humor. I mean what the heck did I expect? Pretty much the stuff of dreams like everyone, I wanted to get a lot of money for little to no effort. There is no business today that you can sign up for where you pay a start-up fee and then sit back and collect money with no effort.
The first business I signed up for didn’t even have a product. I still shake my head at my own naiveté when I look back. “We are just about ready to have a product, what we are doing right now is training our agents” the salesman said, “And you have the opportunity to be one of the first when we have our product” Whoohoooo. “All you need to do is pay $1000 for the first set of manuals and another $1000 for the second set if you choose to continue, OR you can pay $1500 for the whole set” WOW, I saved $500 dollars by buying the entire set today. Needless to say, I found myself 1 month later with a set of manuals on how to sell something and no product to sell except convincing more naïve people like me that they should buy the manuals as well.
Next came your typical supply of household goods company. Fill in the name for yourself, there are many out there. Once again, start-up fee and then I had to spend $100 per month buying their product. Then you go out and convince other people they should be ordering the product from you and distributing it themselves all the while buying their $100 of household products. Now, I ask you this question “How long does it take the average 25 year old male to go through $100 worth of cleaning supplies, or even a family for that matter?” I can tell you from experience that it certainly isn’t less than a month. Furthermore, do you think you could honestly convince anyone that when they surprisingly run out of shampoo or laundry detergent that they should order it from you – wait 3 days- all to save 50 cents and earn you a commission? AND…if you don’t buy your committed $100 per month of products you are no longer eligible for commission in your network ? Come on, what kind of crap business am I trying to sell here? Finally, I am not the type of guy that goes door to door invading people’s privacy trying to sell them something they don’t want, they don’t need, and I don’t believe in. Try this test. “Would you stand in front of your grandmother and feel comfortable asking her to buy your product?”
Now onto the subject of MLM itself. What is MLM besides multi level marketing? This term should not strike fear into the hearts of common people. But it does so because it is often associated with the scams mentioned above. In reality, it is simply a collection of points along the sales line. This is no different than pretty much any business model. Where the problem lies in most MLM scams is that people focus on selling franchises rather than the product itself. Picture if all Walmart did was to open stores, which were looking to sell you a Walmart store. Would that work? No. The fact is there are people in the world who want to own a business, and those that want to simply buy products. Not everyone can be an owner or their would be no consumers.
Take another familiar example of McDonalds. They run their business primarily on franchises. But what do these franchises do? They sell their product. Hopefully, there are people that like the product so much that they invest their time in understanding McDonalds business side and buy their own franchise. There is a startup cost of buying the franchise, and then an ongoing cost of purchasing materials, labor etc. From their revenues, a certain percentage goes back to the main company as part of the franchising contract. HOWEVER, let’s say your personally selected employee becomes your manager and then buys his own franchise. You no longer get any benefit out of that employee. His franchise fee goes directly back to the company. This is a two level marketing layout. Let’s assume that franchising fees are 40% of revenue, which means that each franchise kept 60% of their revenue. What if McDonalds allowed you to retain a portion of that franchising fee that your star manager pays. He still keeps his 60% but now the main company gets only say 39% of the franchising fee and you get 1%. Now you have received some thanks from the headquarters for your effort in developing that new owner. Seems civilized doesn’t it?
Now, the headquarters wants to make it’s money too so let’s say they will only accept diluting their franchising fee to 30% at the lowest and allow 5 levels under each of owner, the 10% difference would be apportioned accordingly to allow everyone to benefit in the upline from developed employees. Everybody wins. Where people start to think this is a scam is where they picture themselves at the end of the chain. BUT remember our focus is on selling our product not franchises. The bottom line McDonalds would still be selling their product and still getting 60% of their revenues and still paying 40% up the chain. 30% arrives at the headquarters and the missing 10% is proportioned amongst those who did the work to develop franchises.
Incidently, this is one of the huge differences of a good MLM versus an illegal one or “pyramid” scheme. The last guy needs to still be able to have a product to sell to make money without recruiting new franchises.
Now, after all that, how is my particular MLM Business good? Well, it’s good for me. And let me tell you how I came to that decision. First, I was looking for something I could do outside of my normal working hours. Something that would still produce income with or without me constantly being there (passive income). This is the same objective of getting a property manager for an apartment complex. Someone else manages it, you outsource things like marketing, advertising, accounting etc…or do these things yourself. It all depends what you’re willing to pay or do for yourself. These desires led me to trying to find an online start-up business.
I researched current top 100 online businesses and found a site on MLMs. YTB Travel was ranked 5th at the time and the others all had physical products to sell (we discussed that earlier ). I though “Travel? Hmmm, I know a lot about travelling” and checked out the website to find out more. The first thing you should check out is the product! Remember without a product you’re willing to promote you are finished before you start. So I looked at the travel site I would potentially be buying into. [http://www.babyducktravel.com] is mine please feel free to look and book your travel here : )
I found the site very user friendly, professional, and checked the rates….they were competitive if not cheaper than competitors (Ex. Travelocity, Orbitz).
Then I asked myself “Would I be comfortable recommending this to my family and friends?” Remember you are recommending the product NOT the business to them not everyone wants to own a business. My answer was yes. I would be very comfortable. In fact I very honestly tell them to check it out and if they find that it’s the same or better price, I would appreciate their business through me. But it’s not cheaper and not competitive, I wouldn’t book there myself so why would I ask them too? Then I looked at the business side. (check out [http://www.ytbinterest.com] ) to see my site. Sure, typical MLM marketing approach hype it up, get people excited about thousands and thousands of dollars but in the end what are you getting for your start up fee. Essentially – a franchise. You get an established online travel search engine comparable to Travelocity with your own business name on it. For under $500 (because this includes 1st months website management fees) that is a steal of a deal.
To put it in perspective, take your own knowledge of how to program a web search engine, host a website, take payment, reservations, canvass all airlines etc…and then figure out how much it would cost you to bring that concept to reality. Trust me $500 is a steal to have that already done for you. So what is the monthly catch? You have to pay $50 a month to have that website managed for you. Next step, promote your product (www.babyducktravel.com ) How you do that is up to you and I remind you that the old thinking of paying a start-up cost, doing nothing and expecting the money to come never did work but at least these days, you don’t have to go door to door harassing people. The Internet is full of online marketing potential. Thousands and thousands of sites to promote your product some are free, some have a flat fee, some charge monthly.
Marketing is the act of promoting and/or selling your product. Back in the 90’s, most MLM reps were relying on door-to-door marketing which is often an undesirable path. Telemarketing has its own bad reputation. HOWEVER, the flaw to both of these marketing strategies is not in how they are done but to whom they are targeted or not. Let’s say you are in the market for a new boat and I come and offer you an opportunity to buy a boat. Is that upsetting to you? No because you were in the market. How about a real world example that you are experiencing right now? If I was to start talking to a random person on a bus like I am now about online marketing do you think they would be upset? Probably because they may not be interested. BUT…you’re here reading this because of targeted marketing. You are here because you showed some sort of an interest in my product either the travel side or business side has spurred a little flame of interest inside you.
This is what the Internet has afforded the average joe. We now, all of us, have an easily accessible medium through which we can market our product to millions and millions of targeted and INTERESTED customers. There are many, many ways to capitalize on the internet marketing campaign. For example, my emails that I send out have a simple signature line at the bottom that reads: Book your next vacation at [http://www.babyducktravel.com]. Now wherever that email goes, wherever it gets forwarded to, it is advertising for me. I am not the first one to do this remember “get your free email account at yahoo.com”? BRILLIANT.
Finally, I would like to address a statement I saw floating around on a forum, which was essentially “Why would you want to have a travel site when Travelocity and Expedia are already so successful?” That is a completely ridiculous statement. Should “LOWES” and “MENARDS” not have even tried to compete with “Home Depot”? This is the essence of capitalism, a free market economy whereby businesses compete. Should the world just agree that eBay is the best and that’s it? No one starts an auction site because eBay is successful. Don’t let anyone tell you that you can’t compete. There are hundreds of fast food restaurants, hotel chains, car rental companies, and airlines, all of which compete for market share. Why not give a shot at getting a small portion of the Billions of dollars travel industry yourself?
So to recap why did I decide that this was different?
1. No requirement to buy your own product to receive commissions (though I will certainly book my own travel through my own site if the price is right)
2. Professional travel website in your own name which looks sharp and is competitive with other well known travel sites
3. Online product that people use every day and can be accessed 24/7 worldwide
4. Something you can feel comfortable referring to friends and family.