Re: [CH] Chiles and Entrepreneurship
The Old Bear (oldbear@arctos.com)
Fri, 30 Jan 1998 11:01:18 -0500
At 08:20 AM 1/30/98 -0500, Doug Faust wrote:
>
>Being among those who have been following the Zemek thread
>on the CH list, a number of folks have referred to Zemek's scheme
>as an "MLM" thing. Pardon my ignorance, but what is MLM?
MLM stands for Multi-Level Marketing. It is a business scheme which
treads a thin line between marketing a product and running a "chain
letter." The difference is that a "chain letter" has no product of
commercial value attached.
MLM schemes operate by getting the customer to sign up as a re-seller.
Then the "upstream" person gets a percentage of the sales which the
reseller makes. The reseller then tries to get more resellers, etc.
In theory, it one gets enough resellers participating "downstream",
one can just sit back and collect money from the "downstream" sales.
Traditionally, MLM schemes have involved household products like
cleaning supplies, long-lasting lightbulbs, vitamins, weight loss
products, etc. More recently, the technique has be adopted by some
long-distance telephone service resellers, pager/beeper companies,
etc.
The only way people are successful in MLM programs is to be close to
the top because the numbers of resellers needed get very large very
quickly as you move down -- just like in a "pyramid scheme."
In addition, many MLMs work by requiring the resellers to put up
money for an inventory of large quantities of the product. Hence,
the upstream participants get paid right away and the reseller ends
up with a garage full of laundry soap or vitamins or hot sauce.
The give-away phrases in John Zemek's original posting were:
| Date: Mon, 26 Jan 1998 22:01:54 -0700
| From: jgzemek@juno.com (John G. Zemek)
| Subject: [CH] Gourmet Chili/Salsa Products/Program
| . . .
| Not only do we produce and market chile products, but in trying to
| spread the word without spending a lot on advertising, we have
| developed a Multi-level Marketing program for those who would like
| to not only enjoy the real 'enchantment' of New Mexico chile
| products but also to make some serious money by "spreading" the word
| about our delicious chile products.
|
| Like I said, this company is just at the beginning stages although
| the producers of our salsas and some of the other chile products have
| been doing this for many years. When I say the company is at the
| beginning stages, I mean the beginning stages! I am signed up
| directly under the founder and as of yet, there are less than 60
| people involved. . .
|
| I've been involved in several MLM programs but they all seem to be
| copy-cats of something already out there. This is something
| completely unique. Have you heard of an MLM program that markets
| chile products?
The internet provides the ability to reach -- and annoy -- a lot of
people at little or no dollar cost. It has attracted swarms of
individuals for whom Multi-Level Marketing is the next best thing to
a lottery ticket for holding out the hope of instant wealth.
The fact that Mr. Zemek says "I've been involved in several MLM
programs . . ." speaks to the eternal belief of certain individuals
that there is some holy grail of quick riches.
Cheers,
The Old Bear