TODAY Newspaper,
21 October 2005

I BET only few readers want to be salespersons. Why? Because before you have paid for goods or services, eight in 10 marketing staff would be likely to say "yes" and "sure, no problem" to every request.

But after your cheque has been cleared, they turn around and give excuses: "Sorry, no stock", "Can't do because of company policy", and so on.

To be fair, two out of 10 sales staff do a fine job and might even go the extra mile to ensure good service.

Still, few of us want to become sales persons unless we have no choice such as if we have been jobless for a long time.

I was a guest speaker at the Singapore Management University during a session on multi-level marketing (MLM). All the student teams came to the same conclusion that MLM wouldn't work. I would add my own question: Why should any MLM business worth its salt have a quota for its distributor?

If the goods/service is so good, then a reverse quota should be imposed. In another words, a distributor should not be allowed to sell more than a certain number of units per month since the product is selling like hot cakes.

In Singapore, there is only one MLM company I know of that does not have a quota system. So even if you sell only one unit in the year, you are still entitled to commission. The company, unlike others, also gives credit to past years' sales efforts.

This shows that this particular MLM company really believes in its products.

I met one MLM distributor who boasted of making $6,000 a month. Yet, during our three-hour talk at McDonald's, he didn't treat me to a single drink.

Is it possible that in order to generate that kind of net revenue, he had to spend up to $5,000 a month? So effectively, was he was only making $1,000?

MLM is good in theory. But it can only really work if the founders of the business are not greedy.

And when you hear of them earning a six-figure sum annually, as a distributor, you are seduced into working even harder to achieve the same for yourself. This means your efforts go toward sustaining their profits. This is a very effective trick to produce results without giving you your due CPF, annual leave, bonus and medical benefits.

The puzzling thing is that most of us don't want to be salespeople. Yet, we will willingly become an MLM "independent distributor", "wellness coach" or an "associate consultant" since we are now called an "entrepreneur" instead.

As reader Fazliana Mohd Ishak ("Selling dreams and promises", Oct 19) rightly pointed out, the market is getting saturated. According to the Income Tax Department, there were only around 500,000 taxpayers who earned more than $20,000 annually three years ago.

If there are 400,000 MLM professionals in Singapore (as claimed in one advertisement), then there remain only 100,000 prospective customers.

Last month, my friend who is a printer had a bad experience with an MLM distributor who called him up for an urgent printing job. But when my friend rushed down to meet him, he was subjected to a three-hour talk on MLM. The printing job wasn't even discussed.

It is encounters like this, among other things, that make one wonder if MLM should stand for Master in Lying and Manipulation instead.

The writer is a financial consultant and author of a book on entrepreneurship.

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