Multi-level marketing and multi-level clips



  • In this youtube video the guy explains how to use forced matrix compensation plans in MLM programs. (Already a WTF*).

    At first I thought that the guy was screencasting a Powerpoint presentation and for some reason had left his mouse cursor in plain view. But at the end of the video we can see that he is in fact screencasting a video that he obviously made himself.

    Since he used part of that underlying video he had to do some editing before posting to Youtube. So why he would edit a screencast instead of editing the underlying video is beyond me.

    * a forced matrix is basically a cascading pyramid scheme referral program where there is a fixed number of nodes per level beyond which the referral fees for a full level are spilled over to a node in the next level. It's called a matrix because the plan also has a fixed number of paying downline nodes for a frontline node.



  • @Ronald said:

    * a forced matrix is basically a cascading pyramid scheme referral program where there is a fixed number of nodes per level beyond which the referral fees for a full level are spilled over to a node in the next level. It's called a matrix because the plan also has a fixed number of paying downline nodes for a frontline node [b]someone has a woody for Keanu Reeves[/b].
    FTFY.



  • @Ronald said:

    * a forced matrix is basically a cascading pyramid scheme
    referral program where there is a fixed number of nodes per level
    beyond which the referral fees for a full level are spilled over to a
    node in the next level. It's called a matrix because the plan also has a
    fixed number of paying downline nodes for a frontline node.
    Uhhh... what? I'm not even sure what language that is.



  • @Ronald said:

    * a forced matrix is basically a cascading pyramid scheme referral program where there is a fixed number of nodes per level beyond which the referral fees for a full level are spilled over to a node in the next level. It's called a matrix because the plan also has a fixed number of paying downline nodes for a frontline node scam.

    Simplified that for you.



  • @Anonymouse said:

    @Ronald said:

    * a forced matrix is basically a cascading pyramid scheme
    referral program where there is a fixed number of nodes per level
    beyond which the referral fees for a full level are spilled over to a
    node in the next level. It's called a matrix because the plan also has a
    fixed number of paying downline nodes for a frontline node.
    Uhhh... what? I'm not even sure what language that is.

    Here is how MLM works. It starts when a guy wants to sell something, like baby diapers, but don't want to pay for advertising, so instead he offers a $1 reward to anyone who will bring in a new customer (that way he spends money on sales not direct marketing). Then someone hears about it and use their existing network to promote the deal and offer 0.75$ for new referrals (they sell the diapers, but also sell the referral). Then someone hears about that and does the same for $0.50. Etc. That's how the pyramid is built - at some point a customer may buy diapers and a bunch of people will split the cut depending on what link the customer clicked.

    In a real MLM plan this does not happen randomly. Specialized companies will setup the whole thing, keep track of links and referrals, and promote that deal as well as hundreds of others by packaging them. This ends up working like Google ads: you get involved not with a specific product but with categories of referrals, and you basically peddle them yourself using your blogs or websites. Some companies even offer rotators and email campaigns (for a flat fee not a cut of your profit).

    There is a problem with that model: any referral made above you in the pyramid brings you nothing, you only make money from people you brought in or people those people brought in. So if the action is a bit slow you and other people at your level may lose motivation, and the diapers don't get sold that fast. So instead the company that is working at the top level of the pyramid (just under the actual diapers seller) can setup the plan so nobody can collect on more than 5 referrals; the 6th referral from the same person instead goes to someone they brought in. This means that if the person who brought you in is good, their referrals will spill over on your level and you will make money by doing nothing. And the pyramid is set so you get a cut of whatever money comes from a specific number of levels below you, such as 10; this means that even if you make too many referrals and they get redirected to one of the people below you, you will still make money, plus you will make money on whatever referrals that one brings in. When the MLM compensation plan is setup that way, it's called a forced matrix because it is defined by a formula: (maximum number of referrals per level) x (maximum of levels that brings you money). In the diaper example it would be a 6x10 forced matrix.

    There are plenty of variations on that model. Some plans require people to buy a quantity of the product and resell that; other require a membership fee; other will offer sliding fees based on how many referrals you make; other require a specific monthly quota. Usually when there is a forced matrix there is a steep discount on the referral fees as you go downward in the pyramid, but it depends on the setup.

    MLM can be a scam or not, depending on who is at the top and if something is actually being sold or not. Amway or Herbalife are well-known in that business, but the biggest MLM plans are for p0rn (that's why there are so many "free p0rn" websites that are just links farms - whenever you take out the mastercard to get a subscription to CumOnMyFace everyone in the chain of links you clicked to get there will make a few pennies).


  • Winner of the 2016 Presidential Election

    @Ronald said:

    whenever you take out the mastercard to get a subscription to CumOnMyFace

    STALKER ALERT



  • @Ronald said:

    Here is how MLM works.
     

    It's a bit like coockieclicker, then.



  • @Ronald said:

    Here is how MLM works. [...]
    That's way more info about MLM than I ever wanted to know.



  • @Anonymouse said:

    @Ronald said:

    Here is how MLM works. [...]
    That's way more info about MLM than I ever wanted to know.

    Are you part of a specific ethnic group? Just sayin'.


  • Winner of the 2016 Presidential Election

    @Ronald said:

    @Anonymouse said:

    @Ronald said:

    Here is how MLM works. [...]
    That's way more info about MLM than I ever wanted to know.

    Are you part of a specific ethnic group? Just sayin'.

    Isn't everybody, technically, part of a specific ethnic group?


  • @joe.edwards said:

    @Ronald said:
    @Anonymouse said:

    @Ronald said:

    Here is how MLM works. [...]
    That's way more info about MLM than I ever wanted to know.

    Are you part of a specific ethnic group? Just sayin'.

    Isn't everybody, technically, part of a specific ethnic group?
    Not me! I'm part of a generic ethnic group!

  • Winner of the 2016 Presidential Election

    @DaveK said:

    @joe.edwards said:
    @Ronald said:
    @Anonymouse said:

    @Ronald said:

    Here is how MLM works. [...]
    That's way more info about MLM than I ever wanted to know.

    Are you part of a specific ethnic group? Just sayin'.

    Isn't everybody, technically, part of a specific ethnic group?
    Not me! I'm part of a generic ethnic group!
    Noted.


  • @Ronald said:

    @Anonymouse said:

    @Ronald said:

    * a forced matrix is basically a cascading pyramid scheme
    referral program where there is a fixed number of nodes per level
    beyond which the referral fees for a full level are spilled over to a
    node in the next level. It's called a matrix because the plan also has a
    fixed number of paying downline nodes for a frontline node.
    Uhhh... what? I'm not even sure what language that is.

    Here is how MLM works. It starts when a guy wants to [ . . . ] scam [ . . . ]

    Simplified that for you!


  • @DaveK said:

    @Ronald said:
    @Anonymouse said:

    @Ronald said:

    * a forced matrix is basically a cascading pyramid scheme
    referral program where there is a fixed number of nodes per level
    beyond which the referral fees for a full level are spilled over to a
    node in the next level. It's called a matrix because the plan also has a
    fixed number of paying downline nodes for a frontline node.
    Uhhh... what? I'm not even sure what language that is.

    Here is how MLM works. It starts when a guy wants to [ . . . ] scam [ . . . ]

    Simplified that for you!

    WAIT A MINUTE. Done properly, MLM is a legitimate way to convert marketing expenses into sales expenses and to create a value chain that stretches all the way down to the SEO experts.

    Just kidding. MLM experts are worse than people who go door-to-door to sell driveway sealing or chimney cleaning. There are days where I wonder if it would not be a good idea to bring back tarring and feathering as a payback for scammers.



  • @Ronald said:

    MLM can be a scam or not, depending on who is at the top and if something is actually being sold or not.


    You were doing good up until that point. MLM is ALWAYS a scam. Just because the scam occasionally works, doesn't make it any less of a predatory device to separate the gullible from their money. It's like Vegas, or the lottery. Just because someone, sometimes gets a big payout doesn't make it any less a giant money pit for the vast majority. By the way, the REASON it's always a scam is that there is no reason for the middle-men to exist other than to take value out of the earnings of the guy at the bottom. By comparison to a more typical sales force where the agency manager or owner may not make many personal sales, but recieves a salary, the manager is still producing value in some way. Either through administrative work or through the use and benefit of his name/reputation. Or simply by providing initial startup capital.

    However, the idea of sharing revenue downstream to motivate the bottom echelons is a pretty interesting one. I'll have to think about that some more, it might have applications in other arenas.

     



  • @Ronald said:

    [...], and the diapers don't get soiled that fast. [...]

    FTFY



  • @Ronald said:

    MLM can be a scam or not, depending on who is at the top and if something is actually being sold or not.
    MLM is, by definiton, a pyrimid scheme, and just like all pyrimid schemes only the people at the top make any significant money. In my opinion, that makes it a scam. Some may be worse than others but you're just talking about different levels of scam. There is no such thing as non-scam MLM. @Ronald said:
    Amway or Herbalife are well-known in that business
    Here are the numbers taken directly from an Amway TV commercial I saw about a year ago:  "Amway is an $8 Billion company"   "Amway helps more than 3 million people own their own business"

    Do the math. $8 Billion divided by 3 Million people. That averages out to $2,666 per person per year. That's gross. Even if you assume something ridiculous like 50% profit for the person selling Amway, that's $1,300 a year. Just over $100 a month. What a business. Making enough money to afford TV commercials doesn't make it any less of a scam.

     



  • @El_Heffe said:

    MLM is, by definiton, a pyrimid scheme

    Is that typo a clever way to avoid lawsuits by MLM companies?

    Note: to facilitate this discussion I almost posted a link to this explanation of MLM vs Pyramid Schemes but that page is a WTF itself, the structure is terrible and the arrows/bullets/subtitles icons are confusing.

    Bonus: scroll down to the "Thanks to all authors" section to see a wonderful coaster pop-in.



  • @joe.edwards said:

    @DaveK said:
    @joe.edwards said:
    @Ronald said:
    @Anonymouse said:

    @Ronald said:

    Here is how MLM works. [...]
    That's way more info about MLM than I ever wanted to know.

    Are you part of a specific ethnic group? Just sayin'.

    Isn't everybody, technically, part of a specific ethnic group?
    Not me! I'm part of a generic ethnic group!
    Noted.

    Thank you for making my banner. I have been waiting for something like this my whole life. It reminds me of the Simpsons episode where Lisa makes friends on vacation, and they decorate Homer's car with shells and starfish for her. It is perhaps even more touching than that.


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