MLM - Scam or Good Business?

The strange thing about being invited around to my 'long lost friends' house for a chat, was why all of a sudden did he want to meet me?

What's the worst that could happen? I was trying to remember whether he had been recruited into that religious cult who had been stood outside the local shops!

Anyway, he did say nibbles and a few drinks! So off I went, leaving my telephone number with the missus, just in case!

When I arrived it was nice to see a couple of old faces, looking equally puzzled at our sudden recall to the ranks of close friends! It was not long before the penny started to drop, a couple of catalogues strategically placed on the coffee table and next to the bowl of Pringles!

Now I had seen these catalogues coming through the door on a number of occasions, advertising items not easily found in shops but nevertheless essential household products, so I was aware of the company being well established.

My new 'best friend' opened the evenings debate on his new business opportunity- KLEENEZE. It was a well rehearsed speech, the advantages of having a passive income, especially for those approaching their golden years. How it was not pyramid selling or some opportunity, where you have to buy the stock before trying to flog it to your family and friends.

Ok, so my interest was drawn towards the idea of having a passive income when I finally retired from the 'job'. I had read a couple of books on the subject, one in particular 'Rich Dad, Poor Dad'. In it the cashflow quadrant was mentioned and multi-level marketing was in the passive income quadrant.

The opportunity had a number of income streams, the first being retail. This involved delivering and collecting catalogues around your local area. On collecting the catalogues, you would then process the orders from them. This was a numbers game, the more catalogues you delivered the more orders you received. He stated on average, £1 per catalogue delivered is what you would expect to receive in orders. Retail profit on orders received was 21%. If you had orders over £800 per month you receive another 10% in commission. Apparently, this increased with your monthly sales increasing.

I worked out the following quickly in my head before the cheap french wine clouded my judgement!

Deliver 100 catalogues a day over 5 days (well I did not want to work the weekend!) = 500
Collect catalogues with average orders = £500
Retail profit 21% = £105

Repeat this over a 4 week period:
Retail Profit = £420
Monthly Sales = £2000
Monthly Sales Profit = £200
Total = £620

So if I spent an hour delivering the catalogues and probably 2 hours collecting them, that would equate to a 15 hour week. give myself a couple of hours to process the order and then deliver the goods, so a conservative estimate of 20 hour week. In a sales period of 4 weeks, a total of 80 hours. that works out at about £7 per hour.

The extra £620 per month could come in handy as well, I was beginning to get a bit more interested in this opportunity.

He then mentioned the bit about the opportunity which really appealed to me and what I was actually trying to achieve.

If I recruited other 'distributors' into my team! The commission earned from their retil would be added to my monthly sales commission! Now my cogs were going into overdrive.

One distributor doing the same as me.

Monthly sales = £2000
My monthly sales = £2000
The monthly commission now goes up to 15% = £600 (£200 goes to your distributor)
My commission = £400 + £420 = £820 per month!

Now we are getting into the type of business I want.

How many distributors could I sponsor? Another 1 or 2, both doing the same, I could be looking at giving up my job!

Apparently, Kleeneze also give away extra incentives, cruises, cars, and extra commission.

The business model itself not appear too complicated, deliver catalogues, collect them, process the orders and deliver the goods. Sponsor other distributors and help them to achieve the same, brilliantly simple and I could earn money without delivering catalogues!

Now I could see the benefits of Multi-level marketing and it was good to destroy a couple of the myths involved with the business.

This was not a pyramid scheme, buying a product for £5 selling it on for £6 for profit, eventually the product being advertised for double the initial purchase price and not surprisingly unable to sell the product!

All distributors were self employed, but still given full support of their sponsors and Kleeneze. Other companies offered similar business models, but on closer inspection, came no where near the commission and incentive package of Kleeneze's.

This was not a scam, the company having been established back in 1927! Also founder members of the Direct Selling Association, which offer protection from pyramid schemes.

Looking on their website, they look a very professional outfit, video presentations and lots of testimonials.

If you are looking for another income, consider a multi-level marketing opportunity. If the thought of receiving a passive income appeals to you, this is a good business model to follow.

Perhaps, I was glad he had chosen to rekindle our long lost friendship! It certainly gave me something to seriously consider.

For More Information visit:

www.lobbythornton.com