Questions About MLM/Networking

[jut703]

III. Earnings Scheme
Now, no MLM orientation is complete without a primer on how exactly you’ll make money from joining. The speaker begins this part by highlighting that there is a massive opportunity for Unicity to grow. Compared to Thailand where they have Php 9 billion worth of sales, the Philippines only has a measly Php 500 million, and we have the potential to grow up to Php 10 billion. Basically, what this statement says is, “our company is still in the early part of its life cycle, the market isn’t saturated yet, it’s the best time to join”.

Unlike most other MLMs, their business model doesn’t make extravagant promises such as doubling your money in two weeks. Rather, you get a 5% incentive from the purchases of all your downlines. You can have up to 9 vertical levels of downlines (unlimited horizontal levels as is common), and you get 5% from all of them regardless of level. That means for each purchase, a maximum of 45% is given out to all your uplines as incentives. Pretty sustainable, considering that these supplements are usually sold at 3-5x their cost (maybe even more).

Oddly, they use their own unit of currency, which they call PV. 1 PV is roughly 80 pesos, and I wonder why they don’t just use the local currency to make things simpler. To be able to earn incentives, you have to make a purchase of 50 PV or roughly P4,000 worth of Unicity products per month. Any less than that and you’re not qualified for incentives for that month. It makes sense for their business model, as this ensures that there’s always a steady influx of revenues to be used for incentive payouts.

For you as member though, it means that your incentives have to be greater than P4,000 a month to cover your cost. With the simple business model described above, and the assumption that your downlines will also only get the minimum P4,000 worth of products monthly, you need 8 downlines to break even. Of course, they say that you shouldn’t mind the P4,000 monthly minimum spend, as you’ll be using it to buy their supplements anyway since those are good for you. For people like me who don’t plan to use any of those supplements, it’s not a very convincing argument.

But wait, there’s more! If your initial purchase is 500 PV or more (P40,000), you get an incentive of 25% for the first purchases of your first level downlines, and 8% for their succeeding purchases as well as the purchases of your 2nd-9th level downlines. Basically, this is their way of getting you to pour in a bigger amount from the get-go.

Based on their computations, with the assumption that you have 3 levels of downlines with 5 members each (and each downline having 5 more downlines themselves), you stand to earn P1.8 million per month. With the additional incentives, you can earn up to P4 million a month.


IV. Summary and Conclusion
So there you have it for Unicity. It’s a company that wants to help people achieve happiness by giving them time, money, and health. Put differently, they offer you an opportunity to earn so much money with their business model at a much quicker pace than if you were an ordinary employee or entrepreneur. You will do so by recruiting people and selling supplements that have ridiculously good claims, you’d wonder why they’re not in the mainstream market yet despite being around for over a decade. The sale of the supplements per se isn’t what’ll make you rich, but the clever incentive scheme where you will earn an incentive from the sales/consumption of every person you recruit.

In this respect, Unicity isn’t fundamentally different from the other MLMs we’ve seen before. There are two things that make it unique though. First, it’s currently filled with members who are all established individuals. Considering that the pioneers are corporate bigwigs and entrepreneurs, it’s natural that their first downlines are also people of the same mold. I think this is the reason that many people are getting drawn in – “if Mr. Bigshot believes in Unicity, it must be truly awesome, and an ordinary guy like me should believe in it as well.”

However, sooner or later, if you don’t want the recruitment to stagnate, you’ll have to trickle down to the middle-class and the masses. This is not unlike other MLMs I’ve seen who conduct provincial road shows because they’ve saturated the Manila market. My concern with this though is that the company has a monthly purchase requirement of P4,000 pesos. Even if they wanted to, not everyone has P4,000 to spare, lest they risk being unable to pay their utilities or their children’s schooling. Of course, Unicity is a long, long way from that – and I’m sure the current members think, “we’ll cross the bridge when we get there”.

Which brings me to my second point – it’s unique because it’s still rather early in its life cycle. What they said about massive opportunities is probably true – so much of the market is untapped right now, that you’re sure to make big money if you’re able to set up a strong network of downlines. Inevitably, Unicity will decline, but if you join in now, when that decline comes you’d already have made so much money it wouldn’t matter.

Great, so maybe I should join in now and strike while the iron is hot.

Err, perhaps not. As with entrepreneurship, network marketing isn’t for everyone. Personally, I don’t find recruiting people and selling them health supplements (or the promise of financial freedom in 5 years) much fun at all. I don’t want to be doing something I don’t like only because of the money. I’m grateful for the privilege of being able to earn a decent living doing something I enjoy. Contrary to what MLM-ers often proclaim, I quite like the corporate world.

Additionally, building your network to the point that it becomes a passive source of income takes tremendous commitment. Instead of having my weeknights for exercise or a social life, I’ll be spending it recruiting people. Just the thought of it stresses me out. And again, because I don’t consider the task enjoyable, I don’t think I’ll be any good at it.

Also, I don’t think my personal network is a good fit for those products. A huge chunk of my network consists of people my age - people who have no need for medicinal supplements. Most of them are networking skeptics as well, and I’m certain that trying to recruit them will surely put a strain on our friendship, something I value far more than money. There are ways around it (like targeting people who aren’t from your circle), but again it’s not something I’d be fond of doing.

The rest of my network of older folks is comprised mostly of entrepreneurs. Some might buy into the benefits of Unicity’s health products, but I’m sure most won’t be too keen on the networking aspect. These are traditional businessmen who’ve spent the vast majority of their lives building their enterprises, so I’m having difficulty visualizing them recruiting people and giving talks about health products.

Lastly, being a successful networker isn’t aligned with my personal career goals. I admire the people who recruited me not because they’re adroit networkers, but because they’re accomplished individuals who’ve achieved so much in their respective corporate careers. I dream to be as competent and experienced as they are, to be able to climb high up the ladder myself. I also dream of being an entrepreneur one day, like many of the people I work with. I try to learn as much about starting and growing a business through my interactions with them. These are the things I’m willing to devote blood, sweat, and tears for; networking, not so much.

Of course, just because it’s not for me doesn’t mean it won’t be a good venture for others. I didn’t make this article to dissuade people from joining Unicity or any other MLM. I’m sure that others will see things differently from how I saw it, and will find value in networking. If there’s anything I learned, it’s that not all networkers are out to scam you or make money out of you – some truly believe in the products and the business model. The guys who invited me are admirable and brilliant people, and I’m sure they have their reasons for joining. I greatly appreciate though that they respect my choice even if it’s not the same as theirs – I wish that more networkers would be this considerate.

Hopefully, this lengthy piece gives anyone reading it a better understanding of the MLM world. I admit it’s far from perfect, and I’m sure others will have many more brilliant insights to add, from both networkers and skeptics alike. At the very least, this could serve as a starting point for more discussion and discourse.

[dreamur]

^Very well said. The Lehman brothers were also very successful in convincing top executives and big-time bankers to invest in subprime mortgages. And we all know that the rest is history.

[cast_no_shadow]

Nice one Jut! Nga pala kausap ko tito mo yesterday, all the praises about you! Hehe

Pardon if I miss it, how much is the "initial fee" they require you prior to joining? Or buying worth 4k of product will already suffice as membership?


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[unmarked]

in my opinion what's really wrong about their pitch is 'ganito lang kadali kumita' or that get rich quick attitude. it is counter to what we all know is most true, tried and tested formula that financial independence/freedom is a painstaking process and involves a lot of hard work, patience and perseverance. Yung portrayal of 'bling' in their ads is annoying.

[jut703]

^Very well said. The Lehman brothers were also very successful in convincing top executives and big-time bankers to invest in subprime mortgages. And we all know that the rest is history.

I don't think the Lehmann Brothers meant to deceive, it was just that their scheme was too risky and eventually folded.

Likewise, these Unicity guys are well-meaning and aren't setting up their recruits to fail. It's just that success isn't assured for everyone in this line of work, just as in any other career path.

Nice one Jut! Nga pala kausap ko tito mo yesterday, all the praises about you! Hehe

Pardon if I miss it, how much is the "initial fee" they require you prior to joining? Or buying worth 4k of product will already suffice as membership?


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Nako baka kung anu ano na pinagkukwento nun about me hahaha.

500 pesos lang yung initial fee. The bulk really comes with your initial purchase. 4k to get incentives, 40k to get the 12.5% incentive for your first-level downlines.

in my opinion what's really wrong about their pitch is 'ganito lang kadali kumita' or that get rich quick attitude. it is counter to what we all know is most true, tried and tested formula that financial independence/freedom is a painstaking process and involves a lot of hard work, patience and perseverance. Yung portrayal of 'bling' in their ads is annoying.

None of that in Unicity. They didn't claim it was easier, just that it was much quicker than traditional career paths. Noone ever shares the nitty gritty details though on how financial freedom in 3-5 years is possible.

I'd be interested to see a success story where their path from start to financial freedom was laid out in detail, like how many recruits they had in month 1, month 2, etc. Then how much did these recruits consume on their own, how many recruits of their own did they have. Then how much they earned in commissions.

I wanna see how painstaking the process is. I wanna see how hard it can be. I want to be challenged. I don't want someone telling me it's so easy. I want someone to show me how hard it is, so I can see for myself if I'm up to the task.


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[_Cathy_]

Nice one Jut! Nga pala kausap ko tito mo yesterday, all the praises about you! Hehe

Pardon if I miss it, how much is the "initial fee" they require you prior to joining? Or buying worth 4k of product will already suffice as membership?


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40 k if I remember it right

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[jut703]

40 k if I remember it right

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You don't have to start with 40k. It's just that doing so gives you the highest incentive/rebate (12.5% vs 5%).


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[niky]

You don't have to start with 40k. It's just that doing so gives you the highest incentive/rebate (12.5% vs 5%).


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Lot of money to gamble if you're not doing it full-time.

So the rebate is worth 5k extra income? What's the total income off of 40k of product? (if you can share)

[jut703]

Lot of money to gamble if you're not doing it full-time.

So the rebate is worth 5k extra income? What's the total income off of 40k of product? (if you can share)

Am just on the road now, but you can read the earnings scheme I posted earlier in the thread.


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[niky]

Am just on the road now, but you can read the earnings scheme I posted earlier in the thread.


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Starting to look through.

A bit rosy of them to believe you can recruit a hundred and fifty people willing to fork over 40k... I'd say with dedication, you can make a network of about 30-50 each at 4k... but it'll be close to a full-time job to do that!