The REAL Truth about MLM & Network Marketing

The REAL Truth about MLM & Network Marketing


So recently John Oliver who has his own show
on HBO did a video on multilevel marketing and network marketing that prompted hundreds
of emails and messages to be sent our way saying, “Pat, what do you think about what
John Oliver said about network marketing?” And Mario and I went and watched the video
and I went through. And one of the things I love about comedians,
let me tell you what I love about comedians. Sometimes I enjoy watching a comedian’s point
of view about a political thing more than CNN, MSNBC and Fox. Here’s why. A Jon Stewart, which I love. Jon Stewart would sit there and talk about
how terrible Republicans were because of something they did. And all the Republicans would get upset at
him. Then the next thing he would do a video on
liberals, and Democrats. So you could always see that he would give
both sides, which was great. Even though Jon leaned a little bit left,
he still was willing to give both sides of his beliefs. And I like that. I think comedians have the opportunity to
do that. They have the way to say things that are funny,
which many people want to say, and they can get away with it because at the end of the
day, they say what? I’m just a comedian! I didn’t mean anything by it. I’m just a comedian. So it’s cool. I was a bit disappointed with John Oliver
because his method on how great he is on the comedian side, he could have taken this thing
on multilevel marketing and network marketing to give both sides. But I thought he only gave one side of it. And today what I want to do with you is I
want to completely break it down. I want to cover six things with you on today’s
video about network marketing. One is, what is network marketing? What is MLM? Why is it that everybody, somehow, some way
at some point of their lives had some kind of an affiliation whether they’re a client
or joined or father or mother or brother, somehow, some way you’ve been touched by a
network marketing company. So what is network marketing? We’ll cover the comment criticisms. We’ll cover the different types of compensation
plans network marketing companies have, different types of products, the benefits of it, and
if you’re going to do it, which companies you should consider getting involved in. Not necessarily a company; I won’t give a
company. But I will give things that you ought to be
thinking about. So first of all, what is network marketing? Let me tell you what is network marketing. Network marketing is not an industry. This is the one thing that most people don’t
know about. And before I get into explaining to you why
I’m explaining network marketing and getting deep into it the way I am is I used to work
at Bally Total Fitness, many years ago, when I got out of the Army at 20 years old. One thing MLMers and network marketers will
do is they love targeting gym salesmen, because people who work at a gym know everybody. We know the nightclubs, we know the folks
that sell the drugs. We know the girls. We know the. . . we know everybody. We know everybody. I mean, if you want to get into anything,
talk to people that sell memberships at a gym. We are connected with everybody. Everyone comes to the gym and the best guys
at the gym are connected with everybody. So everyone was trying to recruit me and everybody
else to a network marketing company. So eventually, one of my friends told me about
this one thing. And you know, back in the day it was VHS,
video. And he gives me this video. I had no idea what network marketing was. Nothing. I had just come out of the Army. And in the Army, one of our sergeants who
was an E-8 was making $150,000 per year in a legal network marketing company, meaning
a legal, what do you call it? It was called pre-paid legal back in the day. And was making 150 and everybody knew about
it. It was legit, he was making 150, so he was
making 60 as a master sergeant, but he was making 150 as a network. . . So I knew there was something there, but
I didn’t fully know about it. Long story short, I get this video one day,
I’m ticked off at my job, I go at night, it’s 2:00 in the morning. I put the video in. I just came home from a nightclub and I’m
so pissed off. I put the video in. An hour and a half into it, it was a one and
a half hour video, I said, “I’m interested.” I called the guy. I got started. It was $1500. I got involved. I put it on my credit card. And then I had a certain guy I was working
with. They called it the upline. He changed seven different companies. So at that time, you just follow and you do
whatever, because I was 20 and he was older than me. So hey, we’re going to go to the next one,
this one’s going to be better. And we’re going to go to the next one. This one’s going to be better. So we went from selling these websites to
all of a sudden it was this your own thing that people can click on and it was some dental
plan benefits, and it was an online sales store that. . . all these things. And then finally I said, don’t call me. Don’t touch me. Don’t talk to me. Don’t approach me about anything to do with
any of this stuff, because I’m so annoyed. Because friends thought of you as only selling
something. I’m 20, 21 years old at this time. So I said, “I’m going back to pure, traditional
business.” And I went to Morgan Stanley Dean Witter. That’s when I got my Series 7, 66, 31, 26
life and health, all that stuff. I went purely financial. But what I did do during that time, when I
left it, I said, there is something very attractive about this that turns people on. Why is that? And I investigated the entire industry to
find out exactly what worked and what didn’t work. And that’s what I’m presenting to you here
today. So what is network marketing? Here’s what network marketing is. Network marketing is not an industry. Direct marketing is not an industry. Even MLM, multilevel marketing is not an industry. It’s a philosophy of marketing. that’s all it is. It’s a philosophy of marketing. Marketing is a certain strategy you use to
get the customer’s attention that he eventually ends up buying your product. That is all network marketing is. Let me explain. There are about 150 different ways you can
market your product. I’m just going to give you an example of about
14 of them here. You can go direct marketing. What is direct marketing? Direct marketing is for me to sell my product
by going directly to Mario. So I’m going directly to consumer. Or I’m going directly to the business. I’m going direct. Mario, I have this product. Let me show it to you. Will you buy? Yes, $600. I exchange merchandise for product. I leave. I make $200 on the product. That is direct marketing and I make $200 on
the sale I made. You have email marketing. For many years, oh my gosh, people who did
email marketing were called the biggest con artists because you kept getting all these,
“this is only an elite thing that I’m doing that only seven people are going to be a part
of. And you have the opportunity to be part of
the seven.” And people are like, “Oh my gosh, I’ve got
to be part of it.” And I thought it was very effective. A lot of people said, “These are con artists.” They’re purely con artists. It’s a marketing method. There’s a creative part to it. Some do email marketing. Some do telemarketing. It’s a philosophy of marketing where people
are in a call center. They run big call centers of people that you
know nothing about, and they make calls and have people buying. You throw enough against the wall, people. . . but it works. It’s effective for some people, and it works. The other one is affiliate marketing. What’s affiliate marketing? Affiliate marketing is hey, let us put this
on your website. If somebody clicks on it, we’ll give you $3. If somebody buys the product, we’ll give you
$25. That’s affiliate marketing. Another one is network marketing. What is network marketing? I am marketing my product to who? To my network. That’s all it is. I am marketing my product to my network. That’s network marketing. Network marketing isn’t all these juice and
all these other companies. No it’s not. Network marketing is marketing to my network. Multilevel marketing is what? So network marketing could be when ING Direct
back in the days would say, “If you help somebody else open up an ING Direct account, we’ll
give you $25. That’s network marketing. But, multi-level marketing says the following. If you find somebody else who refers ING and
they open up an account, we’ll pay him $25, and we’ll pay you $5. Now it becomes a level. So it’s multilevel. Multilevel marketing. We’ll pay two generations, that’s where the
level comes in. Then you have guerrilla marketing. Guerrilla marketing is you know some guys
would come out with their own CD and they want to go out there and do guerrilla marketing
in the streets, just hitting a ton of people at the same time. It’s effective. Some call that a very con and deceptive way
of doing it. It’s effective. Many major hip hop people that you respect
in the world started with guerrilla marketing. Many movie guys that started off with their
first short film, they started off with guerrilla marketing. Now the world respects them. Behavioral marketing. Let me study this person’s behavior who goes
here and sometimes people say, hey, you know what’s the weirdest thing that happened today? I went on this website and just two days ago
I clicked on a website to buy furniture and today every website I go to this furniture
is coming. There’s something weird going on. No, it’s called behavioral marketing. Hey, that’s a little bit deceptive. It’s marketing! And people buy the product because they’re
simply seeing your fingerprints of where you touch and they’re going to it. Next one is digital marketing. What’s digital marketing? Social media. It’s very, very effective. Now social media, some people could say, I
am so sick and tired of seeing this video ad of you know, he keeps coming up. Every time I watch a video, this guy keeps
coming up. This guy keeps coming up. This guy keeps coming up. It works. Digital marketing. Celebrity marketing. Hey, I used this product. It changed my life. And it’s a celebrity. I am a famous, I use this thing. Athletes do it all the time. MJ, Hanes, LeBron, you know, shoes. Everybody, celebrity marketing. Shaq is doing cars. Shaq is doing cars he doesn’t even fit in. That’s celebrity marketing is that it is,
right? Then you have cross marketing. Hey, real estate with accounting. Let me do you know, magazines and newspapers. Cross marketing. I’m going to find a product and team up with
this guy and we cross market our products to each other. Next, tradeshow marketing. Some people go do tradeshows. That’s all they talk about. I am very successful at tradeshows. And some people would say, “I would never
do a tradeshow. It’s so annoying.” There are many successful tradeshow marketers. Then you have T.V. marketing. A lot of people do T.V. advertisement. If there’s anything that’s the highest level
of manipulation, it’s T.V. marketing. You know why? Hey, if you drink this beer, you’re going
to get laid. What do you think beer companies do? I mean, tell me there’s anything lower than
T.V. marketing on what some people do. Hey, take this pill, and erections may last
for the rest of your life. And everybody in the world’s going to want
to see your erection. And you’re going to be the man! And you’re going to feel. . . and we’re like,
Oh my gosh, give me one of those things. I want an erection that lasts a lifetime. And at the end someone says, if your erection
lasts a lifetime, go see your doctor. Give me a break! That is manipulative, but it works. Why are people buying Viagra so much? Because it’s called T.V. marketing. How come no one’s taking shots at T.V. marketing? I’d love to see somebody do that. And then you have radio. Which, radio nowadays, I think there’s only
three people that listen to the radio today. Is it three or is it four people that listen
to the radio? Mario, how many people listen to the radio
today? It’s three people. Mario knows [laughing] – radio’s not what
it used to be. But people do radio marketing. I think the best people in radio marketing
are those who sell radio. Because it is a dying industry and I have
to tell you some of the best sales people in the world are those who sell radio time. You are good! And you’ve got me to spend some money. I spent $100,000 on radio in 2009, 2010, I
think I did. And it didn’t work. But I spent 100 grand on it. So now, all that said and done, network marketing
and multilevel marketing and direct marketing is a philosophy of how you market your product. And do you know why companies do network marketing? Let me explain to you why companies do network
marketing. Here’s why. Because the cost, the cost acquisition to
get the customer is cheaper. I don’t have to do a T.V. ad and spend $400,000. I simply get it cheaper and have somebody
else go sell it, and I can pay more to the field or whatever it is. There’s still a problem there that I’m going
to get into, that I don’t like what they do in network marketing. But there’s a reason why people do network
marketing. Cost is cheaper to get the consumer. Now, this is network marketing. This is what we’re talking about with network
marketing. A lot of times people like to say, “It’s another
pyramid scheme.” By the way, here’s what a pyramid scheme is,
so everybody understands and they stop saying it. Every time somebody says “pyramid scheme,”
you sound uneducated. And I’ll tell you why. Because in a pyramid scheme, a product doesn’t
exist. There’s a reason why Amway, Herbalife hasn’t
gone out of business yet, and they’re still in business, and you know, you have Beckham
who wears an Herbalife shirt, and you have the Orlando Magic that play in the Amway arena. There’s a reason for that. That’s not accidental. If they were a pyramid scheme, they would
be closed down. In a pyramid scheme, I remember when I was
working at Bally’s, a guy approached me and he showed me this thing, and he said, hey,
you pay $500 to me. I keep $200 of it, $100 of it goes to the
guy above me, and $100 goes above me. But you go out there and get five other people
that pay $500, and they get five other people, and then you get five other people, you’re
going to make $100,000 a month. I said, “What’s the product?” There is no product! That’s the great thing about it. There is no product!” You’re a con artist! He was a con artist. Six months later, he went to prison. I think he did five years in prison for doing
that. That’s exactly what needs to happen to people
that run pyramid schemes. Here’s another one. When people say it’s a Ponzi scheme. Most people don’t even know the history of
Ponzi scheme. Ponzi scheme came from a guy who’s name was
Charles Ponzi. Again, I’m trying to give you some history
because I wanted to find out if this business is good or bad, I had to find out everything
about this business. Charles Ponzi was a con artist who was an
Italian businessman. I want to say in the ’20s? Was it ’20s or ’30s? Something like that, in the ’20s. And he did business in the U.S. and he did
business in Canada. What he would do is he would come to you and
tell you if you give me $100, I’ll return it to you with $150 in 60 days, and I’ll give
you $200 within 90 days. He was the first original Bernie Madoff type
of guy, who made I think $10 million during that time, which is a lot of money. Before there was Bernie Madoff, there was
Charles Ponzi. So that’s why people say, “This is a Ponzi
scheme.” But in a Ponzi scheme, there is no product. Money just moves. And when money only moves, with no products,
you’re going straight to prison. And by the way, you belong in prison when
you do things like that and try to rip off people. There’s nothing cool. If capitalism ever gets a bad name because
people try to win in the game of capitalism with shortcuts, and they try to hurt people,
those people belong in prison. That needs to happen. This is not something that you need to go
out there and abuse. It needs to happen. If somebody goes out there and fights in UFC,
and you go out there and in your gloves you put rocks in there, it used to happen back
in the days in boxing so you can punch somebody and nobody feels the rock, the guy feels it,
he breaks his jaw, hey man, that’s cheating. You need to go out there and get out of the
entire boxing world. So I’m not okay with that. So in today’s message, I’m going to get very
neutral. I’ll give you both sides as well. So this is types of marketing. Products that we have. We have telecommunication. Back in the day there used to be a company
called Excel. The founder of Excel, I believe started with
calling cards. He eventually ended up having a horse that
was in the Kentucky Derby that raced in the Derby. If you go find that about the founder of Excel. His net worth is somewhere around two to four
billion dollars. I don’t know the exact number, but it’s around
two to four billion dollars. Because calling cards were very, very big
and guess who wanted calling cards? Everybody wanted calling cards in the ’80s. But it didn’t do well. Then in the ’90s there was ACN. They were competing with Qwest, 499 service
with I think it was 4.9 cents a minute type of thing and then that went away. And then you have some other companies. Technology is by far the worst type of company
to even consider being a part of because it changes so quickly. There was a company called FutureNet that
came out with a set top box. And they were selling it for $600. So people would come to your house and they
would sit there. And they would sit this on top of the T.V.
and say, “Watch this.” While you’re watching T.V. the next thing
you know you chat on the bottom on AOL with anybody else. And people were amazed by it. Everybody was buying this for $600, this company
called FutureNet came out. And they were selling so many of them. They were doing so well. Eventually, Sears came out and sold the same
exact system for $99 and they went out of business like this [snap]. So technology, wasted time. Energy, it happens, if you’ve got a good story
today, there’s ways of doing it for gas and other things. Water. There’s a lot of different water stories. I remember one time one water story guy came
out to introduce his product to us. Great guy. Phenomenal guy. Very nice guy. But he took us to a restaurant with my dad,
and my dad at that time was having heart problems, and he told my dad, he said, Look, you want
to look younger? You want to look younger? Let me tell you how you ought to look younger. He starts spraying on my dad’s face the water. My dad, he doesn’t like it when people touch
him, let alone spray water on his face, without asking permission. My dad, in Assyrian cursed him out in every
single possible word you can think about in Assyrian. He said we are getting the f out of here right
now. And I said look, we’ve got to go and I took
my dad out. But there’s water companies that they sell
the machine for 4500 bucks. Skin. My wife, let me tell you about my wife. I said, “Babe, you want to buy MAC? No, babe. My wife likes three companies. ULTA, which is not a network, it’s a traditional
company, ULTA that competes with Sephora, they have these big 8,000 square foot places. They do a very good job, ULTA does. She likes ULTA, she likes Youngblood and she
like Arbonne. I believe Youngblood and Arbonne are network
marketing and she’s never joined either one of them. But she loves their products. So it works very well on the skin side. Coffee, tea, berry – there’s a lot of those
Noni companies. And you have the coffee companies that are
out there. Legal – I think it’s Legal Shield, it used
to be Pre-paid Legal. Nutritional, you have Amway, you have Shaklee,
you have Melaleuca, you have Herbalife, you have many of them there. Travel, there used to be a big travel company
back in the ’80s and ’90s that was doing because travel agencies where you used to buy your
products nowadays it’s all online. There’s actually a good story for a travel
company today that gives discounts. So you buy discounted rates and it’s very
effective. Now how you sell it is the problem. I went to a travel meeting one time with a
friend, Diana, and we sat in the room, and the speaker gets up and he says, “Look, let
me tell you why I love our company. I recently got a divorce a year ago, and when
we go on these trips, in our company we have a divorce trip, and on these divorce trips
that you go together, guess what happens on these divorce trips? You know what happens on these divorce trips. Everybody’s divorced! Everybody’s in the market. Hey. Talking about sex and all this and young guys
are like, “I’m going to go to a divorce party.” I’m like, first of all, great marketing effort
to convince young guys to go out there for the sex part. It’s like the military recruiters that would
say, Hey, they moment you put your uniform on, everyone wants to have sex with you. It’s effective. And it’s actually somewhat true. It’s a little. . . you know, I don’t like that approach,
but some people take that approach. That was a travel experience I had. Nevertheless, the industry, there’s a lot
of effective ways. There’s weed. This one’s funny. Where it’s you know, we have a weed network
marketing. Truly, it’s a weed network marketing company. You have sex toys. Mario knew about one very, very well, back
in the day. Sex toys company, and literally when I tell
you sex toys, it is literally sex toys. So you get together and everybody shows the
sex toys and then there’s some extra-curricular activity that sometimes happens. Watch, how many people are going to search
right now, sex toys MLM. [laughter] and you’ll see a bunch of them. You’ll send them a link, send a message to
Mario and he’ll send you a link. Mario, we’re proud of you. And then the last one is financial products. And let me tell you one thing about financial
products. Gary Keller wrote a book called The One Thing. Gary Keller, the founder of Keller Williams. He wrote the book called The One Thing. If you go online and type in Keller Williams
and you type in MLM, you’ll see a bunch of accusations of saying this is a network marketing
company. Which, by the way, anybody that’s been part
of Keller Williams that I’ve worked with, and I asked them, is it a network marketing
company? Yes, they’re are components of us, they have
150,000 licensed agents in America, no real estate company has more licensed agents than
Keller Williams. They got criticized for the longest time. No one cares today. They earned saint status. As a matter of fact, the multi-million dollar
home that I just recently bought, is bought from an agent that works for Keller Williams,
and she is absolutely the most ridiculous real estate agent I’ve ever bought a home
from. And I’ve bought them from. . . she’s the most amazing one I’ve ever bought
a home from. She’s with Keller Williams. And it’s a network marketing company. And by the way, New York Life, a lot of people
like to bash New York Life. You go online and you type in New York Life
pyramid scheme and network marketing and MLM. All these negative things that have come up,
and you’ll see one thing about New York Life is New York Life last year did $27 billion
in revenue. I think they got roughly 12,000 employees
and they’re net revenues last year was around $2 billion. This was New York Life. But today, nowadays anybody and everybody
could bash anybody. But these are some of the things. And by the way, there’s many out there as
well on companies, philosophies. I run a financial firm myself, and I can tell
you for myself, there is a component of network marketing that I LOVE, because it’s so effective,
because I can pay a higher comp to my guys if I choose to. Now with that being said, let me get into
a few things when you think about network marketing that has the bad rep. What gives network marketing a bad rep. So let me go through the criticisms of network
marketing, myself. So here’s where it is. Let me pull this up. Okay. So, a few things about MLM and network marketing
that you’ve got to think about that’s a bad rep. One, people that join everything, it is extremely
annoying. No one likes it. You lose friends. Every other day you want to sell a new product. Just so you know, people get tired of it. I experienced it at 20 years old. Every single one of my friends said, “Listen,
I don’t want to do anything with it.” So from 20 to 21, there was a period when
my friends said, I don’t want to do anything. That’s why I said I would never touch anything
again that has to do anything with network marketing. I don’t want to do it. I went straight to Morgan Stanley Dean Witter
and I chose the financial industry to be a part of. But originally, there are a lot of people
that want to join everything and anything and they tell people, hey, you should join
this. I found this thing. It’s too much. It’s like becoming a, you’re prostituting
products. You’re becoming promiscuous with everybody. You want to sleep with everybody. It’s a turn off. And there’s a lot of that in network marketing
that’s a turn off. Second one. They have something new to sell every single
month. Similar to the other one I told you about. One month they’re selling you some travel
product. The next month it’s a Tahitian Noni that’s
going to change your life. The next day it’s a water that you’re going
to drink that you’re going to be younger, ten years. Every day there’s something new to sell. Number three. inventory in garage. That’s very problematic. Now let me tell you why it’s problematic. Overselling a product that the person cannot
afford and shouldn’t buy. Hey, come buy five thousand dollars-worth
of products. Why are you doing that? That person doesn’t need it, and number two,
if you don’t have a track record of selling a lot of products, why would someone be doing
that? Why would someone be doing that? I think a person, if you’re going to sell
a product, sell them on a product that someone’s going to use. Get to like the product. You’ve got to like the product. Then they will tell you if they want to buy
more products and you can show them other elements of the product that’s effective. Saying go buy $5,000 worth of products to
succeed that they never use that end up on eBay which they paid $5,000 for and they sell
it on eBay for $600, that’s a rip-off. That’s not something you ought to be doing. And sometimes in network marketing that does
happen which is a bad rep. The next one. This is the one that’s very annoying to most
people. Get rich quick message. This whole thing about you know, you’re going
to be a millionaire in no time, and we’re going to go out there and become millionaires
in the next six months and 12 months and all this stuff. People don’t like that. It’s deceptive. It’s not something you ought to be doing. Misrepresentation, such as, this is the cure
to cancer. We have the cure to aging. This makes you happy. If you eat this, you will have more energy. It will improve your sex life. It will improve this. That’s great. It’s too much. This whole cure thing of misrepresenting anything,
it’s way too much. And it happens a lot, a lot. Misrepresentation happens way too much in
the world of network marketing. It gives it a bad product. Here’s the other one that’s very concerning. When a guy comes up to you and sells you the
company like this, “Hey, who cares what the product is? We have the best compensation plan.” Listen. Run away as far as possible. When they sell compensation plan first, product
second, I have a problem. When they sell compensation plan first and
product second, we have a very, very big problem. It’s got to be product first, then compensation
plan. You first got to buy into the product. But there are a lot of people that sell compensation
plan first. As a matter of fact, you’ll see a lot of videos
and you’ll see a lot of people present and they’ll say, “We have this. . . ” and you
still don’t know what the product is. “Here’s how much money was made with this.” No, no, no. It’s not a good approach and it gives the
industry a bad rep. Next, too many fake scripts. Look, I remember one of the reasons why I
didn’t like going to church, one of the reasons why I was an Atheist for 25 years. Let me tell you why I was an Atheist for 25
years. I was an Atheist and an agnostic, it would
always change. And I wouldn’t like going to church. Here’s why. People had the best scripts in the world. Oh praise the Lord, my brother! God bless you! You know John 3:16? Oh my gosh! And I remember this one guy one time pulled
me aside and he says, there’s nothing more annoying than a Christian man who’s learned
the script but never lives it themselves. This one guy I met in Pasadena. And in the world of business and especially
network marketing, there are people that know the script. It sounds the same, but there’s no results
and nothing going on. It’s too much scripted without anything really
happening in their lives. It’s very obvious and people can read it. Next, red flags to pay attention to. You know I already told you about no real
product. So there was a company called ZeekRewards
was a company that came out that would tell you, and I remember one guy came and met with
me at Maggiano’s. Very, very smart guy. This guy came and met with me. He was a very open guy. Here’s what he told me about ZekeRewards. They ended up going out of business, but not
only going out of business; the owner owes people I think $600 million, the attorney
general shut them down. If you go online and type them up you’ll see
it. It’s companies like that that give bad rep
to all these industries. I mean, people like that don’t need to be
in the business world, right? So you have ZekeRewards comes out and tells
people you can bid, bid, bid and you put $1,000, you’re going to make interest and it’s going
to be $2,000 and $5,000. And this guy’s telling me in Maggiano’s and
he said, “Pat, I know this company’s not going to last for another two years.” He says, “But we can do this and maybe we
can make a million dollars in the next six, 12 months. I don’t have the desire to do anything like
that. I have this next big business opportunity
to share with you. This was. . . and it went out of business. Not effective. Not effective. So you’ve got to make sure there’s a real
product. And then last but not least, is the obvious
one. If you just make money from recruiting, that’s
the pyramid scheme. There was a company back in the day, it was
called 2×2.net and what it did was it allowed you to buy seven spots. Let me tell you what seven spots is. You literally would buy your own position,
then you would buy two other positions and you would buy two other positions and it was
$420 per position. I never got involved, but I studied it. I had to find out exactly what was going on
in the marketplace. So one position. . . $2800. The Attorney General came. . . guys were rolling in Lamborghinis. Every single place you saw, there was a Lamborghini. Green Lamborghini, purple Lamborghini. Everywhere you saw Lamborghinis, with 2×2.net
sticker on the side. They eventually went out of business. Why? Because you can’t just buy multiple spots. That is not the real way of doing business. And their only product was a portal, and that’s
not how the money was being made. Eventually it got shut down. There’s got to be real, tangible product,
and you cannot make money from just recruiting people, when they pay $420 and make 200 bucks,
that cannot happen if there’s not a real product that’s taking place. So now that being the common criticisms. So now let’s talk about the truth about MLM
and network marketing which is an area I would have liked for John Oliver to have touched
up on, which we will hear in the video. Number one. Out of 100 people in network marketing, you
know how many people make it? Is it 50? 40? 20? How many is it? How many people do you think make it in network
marketing? One make it. One in a hundred make it in network marketing. No matter what anybody tells you, everybody
wants to brag that in our company more people make it. And let’s define what is making it. Making it is not making $17 an hour. Making it is not making $100 an hour. Making it is making a full-time salary where
you can actually pay your bills and live off of it, etc. etc. That to me is making it. You’re making 50, 60, 80, 100 thousand dollars
a year income, you can survive off of. Now here’s a challenge. A lot of people will watch and say, “Oh my
gosh, why would I ever do it if it’s only one in a hundred?” Here’s the truth. In real estate, the famous Tom Ferry who’s
the real estate guy that trains everybody and people pay tens of thousands of dollars
to go learn from Tom Ferry. He says it himself. In real estate, 87% of real estate agents
fail within five years. Think about that. They put five years of their life in real
estate and it fails. How much money do you think they lost in that
five years? How much marketing dollars? Five years! Now here’s a question. How about we go knock real estate? How about we go and do videos and knock real
estate? Does that mean real estate doesn’t work? No! Real estate is hard work. Real Estate is hard work. But it works. And even those 13% that make it, what part
of the 13% do you think actually make decent money? You think all of them make six figures? No way. A small portion make six figures. Most of them make 20, 30, 40, 50,000 dollars
per year. And some of them are cops and government workers
that sell real estate part time. They sell two properties a year. The average real estate agent, the average
real estate agent, do you know how many properties the average real estate agent sells per year? It’s one to two, per year. One to two. There are a lot of rock stars that sell a
hundred per year. I know a guy named Tom Hopkins who broke the
record in Chatsworth and sold 365 in a year. He wrote a book called How to Master the Art
of Selling. But most real estate agents sell one property
per year. Are we going to say real estate doesn’t work? Of course it works. But, there’s a part of that that you hear
with network marketing. Not many make it. Next one. It’s a ton of work. This is what people in network marketing and
MLM are afraid of saying. And if you want to change your reputation
of your industry, stop saying that you’re going to be a millionaire in two, three, four,
five years, if you only do this, this that. It’s a ton of work in network marketing. It’s a TON of work. You’re not going to work 40 hours a week. It’s a lot of work in network marketing and
MLM. But here’s a challenge. Having kids is a lot of work. We got three kids right now. Our youngest one that’s six months old, she
turns six months this week. We’re up two, three times per night. My wife was saying this morning, she says,
“Pat, you know what I wish I had for Christmas?” “What?” “One night where I can sleep six hour straight.” Now, are people going to stop having sex and
making babies? No. But it’s a lot of work. Network marketing is a lot of work. So whether you’re watching this because you’re
considering it, or whether you’re watching this because you hate it and you’re a critic,
or whether you’re watching this because you’re in it, the truth is, stop saying it’s easy
to become a millionaire, because it’s a lot of work. If you’re thinking about it, you want to do
it, you need to work a lot, and if you’re a critic, you’re going to say whatever you
want to say. But that’s exactly what it is with the marketplace. Next, three, they oversell. It’s too much overselling. It’s way too much overselling. You know what it’s like. It’s like the guy that goes on a date with
a girl and oversells himself. You know what you’re doing for yourself? You’re setting yourself up for failure. Why would you tell the girl you’re the greatest
thing since sliced bread and you know my second cousin was Jesus and the other side was Martin
Luther King, and my father’s related to Lincoln, Honest Abe, and I’m just this fantastic guy,
it’s who I am. And she’s going to be like, “Oh my gosh. Honey, mom, you won’t believe who I met.” And then you’re disappointing her the next
day and there’s a breakup. No, look, I got problems. Don’t oversell it. If you’re going to do network marketing, tell
people it’s hard work. It’s this, it’s that, it’s this. However, if you make it, life could be this. Will you do it? Yes. Okay, then go ahead and do it. Presented that way, you will be amazed how
much more approachable and open people would be versus giving this whole gimmick on how
easy it is. Next, number four. Focus on your customers. I think the problem with network marketing
is it’s so focused on reps, selling, that no one focuses on the customers. That’s a problem. It’s a problem. Customers are extremely important to your
business. So take care of your customers. Treat them right. Show them a good time. Actually get what’s right for them. Somebody asked me the other day and they said,
“Pat, why is sales so easy to you?” I have a very simple thing with sales. Sales is a piece of cake to me. Here’s why sales is a piece of cake to me. Because in my mind, any time I sell, I ask
the one question. One question. If I was that person, would I buy from this
person. And if I can say yes, I can easily sell. If I can’t say yes, I can’t sell. That’s the problem. This is why if you don’t believe in your product
you cannot sell that product. You’ve got to know your number one people
are your customers. If you’re in network marketing and you want
to have an edge on everybody else, why don’t you treat your customers a million times better
than anybody else treats them. And look what will happen. Why don’t you go to your company and say,
“Let’s focus on our customers a million times better than anybody else does it.” Look at what happens to your company. Why don’t you bring it up. Why don’t you talk about it? Because they are right when they say no one
focuses on the customers, because no one treats the customers right. All they’re worried about is the next commission
that’s coming in. Not all the time. Those that grow, they are customer focused. Those that don’t, they’re not customer focused. They’re purely on profit focused. Number five, the abusive way of marketing
on social media. Remember that one kid that sent me a message
on Facebook, and I responded back to him. I said, “Listen, I can tell you’re in multilevel
marketing.” I said, copy pasting this script and sending
it to everybody, without doing the research on the person doesn’t work. And he responded back to me, this knucklehead,
and you know what he said? He said, “Well, you have no clue what you’re
talking about because many people are saying yes to it. Just because you got it doesn’t mean. . .” And I was like, wow, at least you’re
being honest about what you’re telling me. You have that much audacity to tell me. But I can tell you, you’ve got to make sure
you’re not abusive and you’re not the annoying marketer. You know, be a smooth operator. Be gentle about it. Don’t be this overbearing, annoying salesperson
that no one wants to do business with. You just don’t want to be that person. And sometimes that happens in that world. Next, scams do exist. It’s very important to know this. Scams do exist. ZekeRewards was a scam. They do exist. There are scams out there. Not everybody’s a scam. Now here’s the challenge. Do you remember back in the day, a guy in
high school. We talked about this the other day. A guy in high school dates a girl. And the girl breaks up with him. Do you remember what the guy used to go tell
everybody what she is? She’s a [whisper]. Why? The guy had to say it because the guy has
to justify why she left him, right? And you know what’s crazy? Do you know what’s crazy? Most people believed it. Most people believed it. And you know, today, if you think about high
school right now, and right now make a list of three girls in high school that had a reputation
of being a you know what, two of them are probably wrong. Maybe one of them is right. But the other two, an insecure boyfriend told
everybody what’s not true. You know that. I know that. You know how that works. Guys are the most insecure people in the world. They’re going to go out there and say something
like that and the next thing you know, boom, we have to adjust because we’re so powerful. I’m a part of it. We’re a part of this community. So that doesn’t mean that’s the case. So a lot of people like to say, “Oh real estate’s
a scam. Keller Williams is a scam. New York Life is a scam. This company’s a scam. That company’s a scam.” That is like you being the insecure guy that
a girl left you or you couldn’t hack it because it was so hard but you called it that. But the truth is, there are some scams out
there. There are some scams out there. Fortunately, eventually they get caught, and
they get shut down. The government is not set up in a way to allow
scams to last for a long time. They have a life span. A person cannot be a criminal all their lives,
not finding a way in prison. Many criminals end up in prison. You can’t just go on like that for the rest
of your life. #8. I wish more people would talk about this. I wish more people would talk about number
8. I think I’m on #7 right now. I wish more people would talk about #7. It is this. If you are going to do network marketing,
here’s the timeline. It’s a 10-year commitment. It’s not six months, or I’m going to give
it a shot for one year. Nope, not going to work. It’s a 10-year commitment. Do you know why it’s a 10-year commitment? Because anything you do is a 10-year commitment. Any business you do is a 10-year commitment. Working out doesn’t happen overnight. People say, “Oh, Pat got swole.” I’ve been working out since I was 14 years
old. My body has a memory. My muscles have a memory. This didn’t happen accidentally. I’ve been training since 14. That’s 24 years. This didn’t happen accidentally. So if you’re going to do anything with network
marketing, or MLM, 10 year rule. One year rule? Go to another business. As a matter of fact, if you want to follow
one-year rule? Go get a job. Go get a job. Two year rule? Go get a job. Five year rule? Go get a job. 10-year rule? You can be an entrepreneur and a business
owner. And if you want to give network marketing
a shot, it’s 10 years. #8, you need to understand that network marketing
is a very easy target for comedians. For media, for everybody. Why? Think about it this way. Comedians and media, there are typically three
different things that are very, very easy to target. And you can’t be naive and fall for it. One of them is capitalism. It’s very easy to bash capitalism. If you want to listen to any comedian or media,
they love bashing capitalism. Why? Because almost everyone I know tried a business
at a time and they failed. And they have to say, that girl’s a you know
what. It’s their out. Capitalism is hard. Running a business is hard. It comes with anxiety attacks. It comes with panic attacks. It comes with challenges at times. It comes with you almost losing everything. It requires you work 80 hours a week. Most people don’t want to do that. So why is it easy to knock capitalism? Because capitalism at times, people can fail
and it doesn’t work and they have to bash it. Now let’s take capitalism out. You don’t have this video to watch. You don’t have Twitter. You don’t have Facebook. You don’t have anything to watch because an
inventor invented capitalism. A capitalist invented all these products. Now another one that media likes to take shots
at is church, religion. It’s very easy. It’s very easy to take shots at churches. Why? You know, churches, there’s a part of it that
I can see being annoying. You go to a church, you sit up there and the
pastor gets up, “If you don’t do this, you’re going straight to hell. And if you do this, you’re going straight
to this,” And I already know I’m going to hell, man. I just want to have a shot at heaven. You know, sometimes these pastors get up,
“We’re going to hell and let me tell you what hell looks like! Fire burning everywhere. You’re skin’s going to be burning!” Man, I know my skin’s going to be burning. I just want a second chance. Can I get a second chance? Please. There’s a reason why churches get bashed. They’re a target. They’re an easy target. And network marketing is also an easy target. You know why? Because anything you paint as perfect, is
an easy target. Capitalism’s not perfect. Church is not perfect. Network marketing’s not perfect. You paint it perfect, you’re an easy target. Stop painting it as perfect. Stop painting your business as being perfect. It’s not perfect. There’s problems. I can’t go out on double dates with couples
that say the following, ” We have zero problems in our marriage.” Awesome. We will never have dinner again. Because we do. My wife and I have problems. We fight regularly. We fought yesterday on Thanksgiving. And you know what’s crazy? We’re very comfortable about it. We’re very comfortable about it. I don’t care. I didn’t marry you. I married my wife. I don’t need to convince you my marriage is
perfect. I have health issues sometimes. I have things I need to work on sometimes. I have issues I’ve got to work on with me
sometimes. Paint it as real. If you paint it as perfect, people are annoyed
by perfection. So network marketers, do yourself a favor
and stop painting yourself as being perfect. Because you are not perfect. The more imperfections you talk about, the
more people are willing to forgive you and listen to what you’ve got to talk about. You open up the door for people to want to
listen to you. Next, there are tax benefits. There are tax benefits. But here’s a problem sometimes with network
marketers. They have no clue how to manage their money. And because they have no clue how to manage
their money, the first thing they do is spend all their money and buy some nice things. The company goes out of business and they
lose everything, and now they owe the IRS money, it takes 15 years to pay a lien, you
can’t get a decent job. You can’t get financing on a house. Boom. So if you are in the world of network marketing,
if you’re a leader or CEO running a company, teach your people on how to manage their finances
well. Be disciplined with them on them paying their
quarterly taxes. Talk to them what to do with their savings
and set some money aside. Don’t just get them to buy stuff because the
more stuff they buy, the more they’re locked into your company. It’s like, hey, the more people lease cars,
they have to stick. It’s our retention plan because they have
to work hard. C’mon, man. Don’t treat people like that. They have families. If you’re going to do it, people perform better
the more savings they have, the more valuable they are to your company. I want you to have a couple hundred thousand
dollars in cash savings. Slow down before you buy that. You need to have some savings in place. Take that route with people that you’re developing. #10, here’s number 10. And this is the part that some people are
going to like, and some people are going to hate. Network marketing actually works. It actually works. It is a 35 billion dollar a year business. It has created a lot of jobs. I’m down the street, every time I go home
on this freeway here, I see Mary Kay to my left. You know how many women I’ve met that talk
about Mary Kay and the way that she changed their lives? Do you know how many? Do you know how many men I’ve met that when
they bring up the name Rich Devos and Jay Van Andel have never been part of Amway? Every time somebody’s brought up the name
of Rich Devos and Jay Van Andel, who actually had a chance to work with them directly – you
should see what they talk about. People get emotional saying this man changed
my life. You know how many times people bring up the
name Art Williams, and they say, “This man completely changed my life.” Who touched Art Williams, he changed my life. In a completely different way, how many people,
endless amount of people have said this? So what’s the point? What’s the point? It works. I think the industry is an industry that can
be very effective. I think the people in the industry are so
competitive sometimes that they try to paint it too perfect, and it backfires on them. And I think the industry collectively, whether
you guys are part of this organization called the DSN, collectively the industry needs to
pivot a little bit and start deciding how they want to brand themselves for the next
five, 10, 15, 20 years. You’ve got a big opportunity to make adjustments
today. There are some guys that are positively affecting
the marketing place in a very good way, and I like the fact that that’s taking place. So now, let me go into compensation plans,
on what you have. Typically in the world of network marketing,
you have three comps. You have linear, you have binary, you have
a matrix. Let me give you my problems with a couple
of these, and you’ll see what it is. And you can be the judge of it. Remember, I didn’t make this video to make
you happy, because network marketers are not going to like this video. And people who don’t like networking marketing
are not going to like this video. And a part of this video, network marketers
are going to like, and a part of this video, people who hate network marketing are going
to like. I’m trying to give you both arguments, which
is what you’re supposed to do, as a talk show host or somebody that’s teaching classes,
not leaning to one side, which is what John Oliver did. Linear has the longest lifespan. Here’s why. Because in linear you actually have to work. If in linear you don’t work, you get passed
up by somebody and someone can absolutely pass you up, and you can make no money in
linear. You’ve got to work in linear. But guess what? Linear lasts. Amway’s linear. Herbalife is linear. Many of these companies that last, Nu Skin
is linear. Arbonne is linear. Avon, these are linear companies that they
have. Amway I think last year did nine and a half
billion dollars. Avon did 10 billion dollars or some number
like that. Linear works. You can go get 50 recruits direct to you. That works. Binary, problematic. Most people that watch this, who are part
of some binary companies, they will message me. And they’ll say things. And you can say whatever you want. All good, because there’s a lot of binary
companies with decent products. Here’s a problem with binary. Binary is where people will say, guess what
you’ve got to do? All you’ve got to do is there’s a breakaway
leg. You’ll hear some people brag about how many
people they have on their team. I have 6,000 people on my team. They have 6,000 people on their team because
they’re upline is a killer, and that guy put 6,000 on one leg, and that leg took away,
breakaway leg, and they forgot to match the other leg. So they have 6,000 on one side and they have
three on the other side, three cousins. They don’t have a big organization. They just know how to sell you on what they
did, right? So binary is 1/3, 2/3 to get a check. So for instance, if you get two recruits on
one side, and four recruits on the other side, you cycle a hundred dollars. 1/3, 2/3. So every time you get two, four, two, four,
you get $100, $100. So you get 20, 40, $1,000. Two hundred, four hundred, $10,000. Two thousand, four thousand, $100,000. And then there are binaries that are 50/50. That you got to get three, three, even on
both sides. As much as I’m not a fan of binary, because
I’m a math guy, and I grew up being the kid that just was absolutely bored in the Army,
I went and got a trigonometry math analysis book and all I did was mathematical formulas,
because I love math, 50/50 has more of a shot of making it than 1/3, 2/3. Guys, if you call me and tell me to sit down
with you again, I get so many requests from CEOs saying, I want you to sit down and break
down our comp plan, I’m not doing it. I run a very, I’m happy with my business,
I don’t need your $100,000 to study your comp plan. Not right now, I’m running a financial firm
for myself. 50/50 is more likely to make it than 1/3,
2/3. Then the last one is matrix. Matrix, you’ve got to be a little bit careful
about, because matrix, this is how it goes. Hey, you get recruited and anybody that the
company recruits next goes under you. So that’s the first recruit. Recruit number two goes here. Number three here. Number four here. Number five here. Six, seven, eight, nine, 10, 11, 12, 13, 14,
15, 16, 17, 18, so this is how it goes. So they say, if you get recruited and anybody
in the company recruits next, you get a check, Six dollars, eight dollars, 60 dollars, 80
dollars, 600 dollars, eight hundred dollars a month. Yes, it works. It only works, generally, if you’re in the
first four levels. After that, it’s pretty much over with. Why? Because here’s how math works. Math goes 3, 9, 27, 81, 243, 729, 2100, 6300,
18,900 – you get the idea. 55,000, 165,000, then you lose it. So then you have nothing else going on with
your legs. So matrix is fine if you’re above this level. After this level you’ve got nothing going
on with matrix. So that’s the problem that I have with matrix. If a company is linear, at least you have
to work to make it. I am a fan of for any system that you have
to work to make money. These two, they sell the lazy aspect of network
marketing, I am not a fan when people sell the lazy aspect of network marketing. I’m a very big fan of a leader who’s willing
to tell the truth that you’ve got to work hard to make it in the business. That’s how you get people with credibility
that are actually willing to take a look at your business model to be a part of it. Now again, we’ve gone very deep into it. People ask me what company should I be a part
of. Let me tell you what I haven’t covered yet,
Mario, tell me what I haven’t covered yet. Benefits, that’s the only thing I haven’t
covered, right? Common products, I covered that. I covered that, that. Okay. Let’s see here, the good and bad. Okay, so now. Benefits of why people get involved in network
marketing. Which I think, I think it’s a very good thing. I think it’s a very good thing, these 11 things. Again, I would like John to talk about this
a little bit, because there is some good in network marketing as well. And here’s what it is. #1:Any organization that gets people to read
books, I’m all for. If I’m part of a speaking, what is that speaking
thing that teaches people how to speak? What’s it called? You know what I’m talking about, the speaking
thing. Toastmasters! If they make you read, I’m all for it. If you go to a leadership martial arts guy,
and you pay 200 bucks a month to learn martial arts, and the guy makes you read two books
a month, I’m all for it. Okay, now what books? Obviously, I’m talking like elevating your
mind. I’m not talking about go read 50 Shades of
Gray. I’m not for it. I’m talking about books that really elevate
your mind. If there’s one thing I can tell you about
a lot of people that become successful. . . by the way, there are a lot of celebrities
and a lot of politicians that you know their names. If I give you their names, you will say, “no
way.” That at one point, were in network marketing. Many of them you would admire. They just don’t advertise it. Many of them, you admire. Many, many of them are in Hollywood, they’re
in sports, they’re in T.V., they’re governors, they’re senators, some even presidents, at
one point they were part of network marketing. Whatever gets you to read books, and elevate
your thinking, I’m for it. I support it. #2. Good people to be around. You know, sometimes people are down, you want
to be around other people, it’s good to be around other people that elevate you, they
lift you up. It eliminates shyness. There are some people that are very shy around
other people. It’s good to be around other people, because
it opens you up. You get some people that are very timid. Network marketing will open you up in the
business. #3:Better positive attitude. There’s a lot of people that are better positive
attitude. Oh my gosh! I’m so excited! And it impacts every aspect of your life. #4: Audacity. It teaches audacity. You kind of have to talk to strangers, and
I don’t care what it is, anybody that’s got the audacity to talk to strangers, it’s going
to benefit you in whatever other career you do. Let’s just say you get involved in network
marketing, and you never stick around. But you’re in it for three to five years and
you pick up some of these good habits. Your next company, you’re going to excel. Someone’s going to say, Oh my gosh, he’s amazing! He’s so great! Because at some point, you had to be in network
marketing and learn audacity. Next, leads into other businesses. You know, if you fail in network marketing,
you’re going to at least say, if I want to make money, I’ve got to be an entrepreneur. You may just go become a realtor and make
a lot of money as a real estate agent. You may go become a financial, you may go
into a completely different business, but you learned the freedom aspect comes from
entrepreneurship so you do it. Next, increased work ethic. I’m all about people working hard. I’m all about people increasing their work
ethic, especially the younger generation. #7, helps with public speaking skills. If you want to move up, you’ve got to learn
how to speak. I did a video once called, what is it? How to speak like Casanova? What was it called? Something about public speaking. What was the name of it? Different types of public speakers? Let’s put the thumbnail here, whatever it
is. Dennis, let’s remember to put the thumbnail
so you know what it is. Rebecca, let’s put the link as well, so people
can see it. Public speaking, if you’re going to move up,
you need to be a better public speaker. I used to be terrible. I used to be terrible. Eventually when you give many, you get good
at it. Communication improves. Recognition is next, where you learn how to
recognize other people, and you get recognized. There’s a part of the recognition aspect that
happens in a business. It instills a lot of confidence, #10. And then number 11 is the fact that there
are a lot of people that either had a death in the family, or they got a divorce, or something
bad happened in their lives and they need to be around a positive environment. Network marketing offers that. Simple as that. And, I would rather have somebody, let’s just
say churches are all a con. Let’s just say every single church in the
world is a con artist. Let’s just buy that argument. Now let’s take it from there. Let’s just say that is what it is. And let’s just call churches that God doesn’t
exist. It’s just a non-profit organization. How many churches have saved marriages? How many millions of marriages have been saved
by churches? How many millions of churches have given a
person a place to live, while they didn’t have a place to live? How many? I don’t care what denomination we’re talking
about. How many churches have helped a man or a woman,
a woman lost her husband to another younger girl that he left, and she was suicidal and
went to a church and she didn’t commit suicide. And she’s still living. Sometimes network marketing attracts people
and they come in and they stick around because it’s positive. They say, “I’ve got a better life. I don’t need to give up my life.” So there’s a lot of positive to it as well
to keep in mind. And then, last but not least, Pat, if I’m
going to get involved with a company, and I’m considering it, what should I be thinking
about? Let’s go through it. #1, find an industry and a product that’s
going to be around for 30 years. Because, my assumption is, you want to be
a legitimate person, doing network marketing the right way, where you’re not changing companies
every other year. You don’t want to do that. You don’t want that reputation. The people that make the most money in network
marketing typically chose one company and stayed in it the longest. That’s the key. If I meet guys that say, “I made 10 million. I made seven million.” Oh really what company? “I’ve been with this company for 22 years.” Oh wow. And I’ve met a lot of them. Believe me, I know many of them that make
five million plus, many of them. And they’ll generally be with one company
20 years, 25 years, 22 years, 17 years, 16 years, 11 years, seven years. They’ve been with one for a long time. So if you’re going to do it the right way,
choose a product that’s going to be around 30 years from now. This is why I don’t recommend technology. Because it changes all the time. You’ve got to choose a product that’s going
to be around 30 years from now. Number two, avoid companies that have major
markups. I have a problem with major markups in network
marketing companies. Let me explain what I mean by this. Sometimes companies, to pay bigger bonuses,
say this product costs $5 to make. They sell the product for $50, and they have
to use that $45 to pay bonuses. You don’t have to sell the product for $50. You can sell this product for $20, and you’re
going to be fine. You know, normally the product needs to be
40%. So if it’s 10 bucks, $4. Makes sense? Not $40, which is what some network marketing
companies do. And the market doesn’t help you. I’ll tell you why. There was a company a few years ago that was
selling a Noni drink for $40 a bottle, and you would do an autoship. I know this because my sister was a part of
it at some point. And you would do an autoship and you would
buy 10 bottles a month, whatever the number was. But they sold $40 a bottle. And they were blowing up. And then all of a sudden Costco came out with
identical same story, for $9.99. And you know what happened to them? They had to say, “Well, no, our noni berries
come from a special place because. . .” C’mon. You really think you’re going to convince
me that your berries come from a different place? It’s Tahitian. It’s the same exact thing. $9.99, $40? And then all of a sudden, everybody started
walking away. They took a big hit. Today, no one talks about that company. You haven’t heard about that company since
2007, 2008. That’s right. So markups, be very careful and find out what
it cost to make the product. #3, choose the right group of people to be
running with, because it’s very important. When I say choose the right group of people
to be running with, look at the top, on who it is. Do you share common values? Do you share common principles? What do they stand for? How stable are the people? Really, you’ve got to watch that, and is it
a community that you can run with for a long time? Are they fun? Do you connect with them? Do you have commonalities? Do they stand for. . . look for that, because, look, I can tell
you one thing. A lot of people are with their families on
weekends. You’re going to spend more time with the people
you work with sometimes, than your own family. You may as well like the people you work with. So pay very close attention to the culture
and the group of people that they have. # 4 is timing of the company. So timing’s got four different levels. You’ve got survival, the first two years. Then you have formulation, which is two to
five years, two to seven years, then you have explosion, which is seven years to fifteen. And then you have plateau, year 15 and on,
then they come back up again. It depends on what you want to do. If you want an established company that’s
been around for a long time, and you don’t want a lot of, you know, explosion is not
going to happen, because the company after the fifteenth year, the explosion part’s already
gone. It’s gone already, typically. But if you want a stable company, go with
a company that’s been around 20+ years. If you want a company that is about to go
through an explosion, choose three to seven years, to be a part of. If you can be in seven to fifteen, you’re
in a good sweet spot. First two years, avoid. And I know, when I say this, the first two
years to avoid because if you can hack it through the first two years, great, but the
first two years is like 95% chance the company’s not going to be around. So the first two years. And some people tell you other feedback. This is purely my feedback. I may be wrong. I’m giving you my feedback. This is my counsel. #5, a compensation plan with longevity. Not a compensation plan that’s good for today. Longevity. Company needs to profit. Rule #1, company goes out of business, you
lose reputation. Company needs to stick around long term. They’ve got to have a strong compensation
plan. #6, a worthy cause. Like you know if somebody is, earlier today
Mario and I were talking. Actually, last night we were talking during
dinner and we mentioned three social media names. Remember that? I won’t say the names right now. But I mentioned three names. And I said, Let me ask you a question. All of these three on social media. Tell me the most authentic person out of these
three, that you believe. You don’t have to like them. Who do you like the most? And everybody said the same name. I said, “Why?” He said, I believe him. I believe what he says is authentic. And a company that has a real cause, you will
know, based on how authentic the people are at the top. If they overdo it in a way that’s not, you
will know it. By the way, it doesn’t take a lot to figure
people out. It’s pretty easy. Just pay attention on how many times they
talk about it. If they talk about it all the time, and there’s
deep rooted stories to back up why they believe in that, then there’s some validity to it. Okay, so last but not least, if you can be
part of a company, where you can own a piece of the company, because the one thing about
network marketing, look, the guy who ran Excel, the company, many, many people made a lot
of money. Amway’s made many, many people a lot, a LOT
of money. You got Keller – they made a lot of money. Lots of money. If you can find a way to be part of the company’s
equity plan, where you can own a piece of the company in case it goes public, or in
case the company gets acquired or something, even better for you, because you participate
in that. I’m not talking bonuses, I’m talking profit
sharing, purely equity, those are two things I’d be looking for, if I were you. And at the end of the day, you’ve got to work
your tail off or else none of this stuff exists. So today in this video, I probably said some
things you don’t like. And I probably said some things you agreed
with. It’s irrelevant. I wanted to give you both arguments, for you
to be able to find out for yourself, whether you’re a critic, whether you’re in it, whether
you’re somebody that’s thinking about getting in it, or whether you own and run the company
or you’re one of the leaders at the top, I hope something here you got to figure out
a way to improve your game plan or change some of your beliefs and opinions about the
industry of network marketing. With that being said, here’s what I want you
to do. This is the type of a video that you may know
somebody that’s either in network marketing, or somebody that’s thinking about getting
into network marketing, share this video with them. I would love for this video, purely out educational
purposes spread like wildfire for people to change and adjust their ways in the network
marketing world that’s hurting a lot of people, and number two, for people that have put a
“blanket” opinion about this industry to say, yes, you know what, that makes a lot of sense. I never saw the industry from this point of
view. So both ways, I think there’s a lot of ways
the industry can make adjustments and improve in. And I’m doing something that I haven’t done
recent in the videos is, Mario suggested, he said, “Pat, I think we need to turn this
one into a PDF so you can download and print out and read and do whatever you’re going
to do with it.” So you need to visit PatrickBetDavid.com,
okay you’ll go to PatrickBetDavid.com, and if you find this video, you need to find this
video, on the bottom of this video, there will be a PDF. Click on the PDF, download it, you’ll need
to subscribe your email to the newsletter that we send on a weekly basis, download the
PDF, use it in any way you want, and if you want to share it with other people as well,
tell them about the link. They can download it as well. And then they can train it any way they want
to do it. Now if you saw this video on a complete different
website, because it’s going to be shared on many different websites, and you come back
to PatrickBetDavid.com, there’s a search side that you can go and click on, just type in
the word, MLM or network marketing. This video will pop up and go to the bottom
and you’ll see the link. You can still get it. And if you haven’t subscribed to this channel
yet, please do so. We are going to get this channel, our goal
is to get to a million subs by the end of 2017. There’s a lot of different videos on this
channel. This is purely an entrepreneurship channel. This is the only video we’ve ever done on
network marketing or MLM. We have 350 videos on this channel, the only
video we’ve ever done on network marketing, MLM is this video because this was highly
requested after what John Oliver said, so we decided to do this video. So be sure to subscribe to this channel if
you haven’t done so. By the way, we’re already getting a ton of
people that are sending us new pillows because we have a new contest. We need a new pillow for 2017. So if you’re somewhat competitive and you
think you can send us a creative pillow to replace this pillow that we’ve made, if we
use your pillow, we will give you love and say that you sent the pillow in the entire
year of 2017, I’ll be using your pillow in every single video that we have. You can send a new pillow to 5001 Spring Valley
Road, Suite # 1155 East, Dallas, Texas, 75244. You see it on the screen as well. Send it our way before the end of the year,
and we may possibly consider using your pillow on 2017’s videos. With that being said, if you have any questions,
thoughts, comment on the bottom. With that being said, have a great day everybody. Thank you, bye bye.

100 comments

  1. I've was involved in it for a few years, on the whole it really is a dreadful thing to get into. It destroys relationships

  2. Yeah they change from company to company non stop, it is very rarely passive income because you constantly have to rebuild it.

  3. When I saw the REAL truth in the title and the fact that it's over an hour long, I was like "oh dear…"

    Sir, you've met and exceeded all my expectations!

  4. Have you ever read the book The Business of the 21st Century by Robert Kiyoshi? If you have, what do you think of his book?

  5. Fuck PHP fuck MLMs never go to MLMS specially PHP they don’t even tell you wtf your selling just tell you recruit wtf is that ???

  6. Love how authentic your content is. It's great to hear another channel stating the real facts about Marketing. I’ve also started a vlog which is the first step into the most raw and uncut insight into what issues people really face in business. Would be great if you could check it out!

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  8. Bra, I rate your channel on par with the MBA I have done. I would even go as far as to say your channel is the depth that the degree lacks. Not bashing MBA's but the honesty and straight forward reality you are providing are usually not openly shared. Thanx

  9. My friend came to me with this amazing business, by the time I was listening to him I found out he is talking about MLM. He's been told about thousands of dollars he's about to make as a side job but this video made us both rethink the idea and we are thankful for that.
    خیلی خیلی سپاسگزارم. کاره تو عالیه.
    PS: My farsi still in progress, hope there are no mistakes

  10. Great little video you got here. I've been an Amway member for 16 years, not active but I do buy their household and nutritional products for myself and my family members. I've also been a broadcast engineer for a quarter of a decade and I'm seeing the end days of radio and terrestrial tv come to an end. Hence, my other brick and mortar business has dwindled down to nothingness. I've just joined a new network marketing business called Success Factory that's been getting a lot of bad press, but I guess with all new businesses and market distruptors, there will be the haters. Check out Success Factory and let me know what you think. I'd love to sign you on my rapidly growing team, but that's another story for another day. Thanks Patrick. I appreciate this video.

  11. The problem with MOST of these companies is not which marketing tactic they use, its the fact that the company makes its money, selling its REAL product to its sales people. These sales people pay money to join the company. They receive the product. The company could care less if that product makes it to customers. Once a new "consultant" goes through thier network, which is friends and family, and they do pity purchaces of subpar products. After awhile this dries up. Thier sales slow down, and the companies pressure them into purchasing new inventory. You need the newest styles, you need to have a bigger variety they say. You end up paying out of pocket for crap you wont sell. All the events they pressure you to go to, they dont comp those. Air fare, lodging, meals, all out of pocket. This is why 99% fail. You know how the ones who succeed do it? They dont sell, they recruit. Thier downlines use up thier pity purchases, prey on vunerable people with promises to get rich with little effort from home. Like you said, the pyrimid comes from recruitment.

    Bottom line is, they skirt the law, because a product exists. It is only to make it legal, as most of the time, the product is irrelevant, as the company gets its main profit from recruitment, and flooding garages with garbage inventory. Like i said, it doesnt matter if product reaches consumer, thus, it makes the product only good for legality's sake.

  12. Oh my gosh!! I have learned so much from you!! Thank you. I was about to join Amway. Now you explain clearly to educate me. Thank you. You truly are amazing.

  13. Not a fan of MLM's due to the negative connotations associated with them, as you allueded to in this video. However, I've only been watching you for about a year, and I can definitely tell you've always been genuine. Great video and information. Keep it up! 💪

  14. Hey there,

    Really Good Video.

    What other types of marketing do you do?

    Currently I am looking at other good strategies

    Thanks again

    https://youtu.be/crf-wv6rGrs

  15. This was a very informative video, I watched it before i went to one of those (private meetings) so I would be aware of things to listen for. Something funny I noticed, the author in this video said ( He is all for network marketing companys that make your read books) and then later in a line ( Network Marketers are going to dislike and like this video.) Well when I wen't to this meeting they where handing out books to everyone and telling us that we have to read these books that they could be ( more informative than an academic curriculm) and give you the guidance you need to being succesfull. This seemed like a great technique into brainwashing younger adults into thinking that a few self-help books is all the education you fill need to be sucessfull in there business.

  16. It only took me 10 years to realize that mlm is pushy sales person. Network Marketing seemed more friendly. Best landing page that got me 250 leads, I just started

  17. M L M Business me free joining karne ke like call and whatsApp Mobile Number 8800431447

  18. I was military for 14 years and now run a traditional small bussiness. I am also part of an awesome network marketing organization you touched on in this video. I appreciate the real talk and unbiased approach to your presentation. I especially liked your argument on the pro's and con's. Thanks for the content, a wealth of information and history. I appreciate you brother, keep doing what you do!

  19. This video is on target, the truth shall set you free! Nobody forces anyone to get into MLM. You make your own decisions. And if you don't put in the work or the time and you don't make money it's no bodies fault but yours, don't blame the companies or MLM you joined. It's a cop out so look in the mirror and ask yourself did I do everything to make this work, did I put in the time and I bet the answer would be NO! Stop Bashing and take responsibility for your own actions and admit you did not give it your best! That's what I did.

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  21. The problem with Network Marketing is exactly what the word "network" represents. You are only marketing to your network, you rely on friendships, families, people who you "know". No Problem with that, but more often than not, MLM products are not "needs", but wants. Things we dont need.

    Everyone has been somewhat harrased by MLMers. They prey on fragile individuals, in Asia, MLM products are mostly health or beauty related. "IT will cure your sickness", and with the aggresive marketing method those MLMers used, people are bound to fall for it.

    MLM is not a pyramid scheme, but it's a bad one in my books.

  22. PHP is a scam, stop trying to defend your "company" its a pyramid scheme I know alot of my friends are trapped in it now, its sad to see them post on instagram about how anyone can be an entrepreneur, get 5 likes, and never make their money back, they are now laughing stocks, making this guy rich

  23. +99% of all people who get involved in MLM do NOT make money. The MLM know this and while there is a "product", the emphasis is on RECRUITING people underneath you. The "product" is way to keep the pyramid scheme "legal".

  24. A pyramid scheme can have a product. If the product is basically only being sold to people enrolled as distributors then it can also be a pyramid.

  25. There was a time when I was working at this very large company and one of my friends said they had an opportunity for me to make a bunch of money. I just had to spend 500 dollars and then later I would make a few thousand, once other people signed up. I asked what I was buying and she said nothing. I was young at the time, so I talked to my dad about this and he explained that this "opportunity" was an illegal pyramid scheme. I went back to work and declined to participate. A month later 20 or so people got fired for being involved in this gambling. I was so happy I declined!

  26. WOW, GREAT VIDEO! I can't believe you broke it all down in an hour! Very impressive and informative. The "trick" is to get people to actually listen to your words of great wisdom and experience! I have one question regarding the Matrix Compensation Plan as you said they don't work after the 4th Level, why is that?… I am involved in a Network Online Business Marketing Company that creates sales funnels and email marketing tools and the compensation plan is a 3×10 Forced Matrix (is there a difference in forced versus regular?)
    Thanks for the information. MakeMoneyOnPassive. Com aka Kevin

  27. 95% of the people here are gonna say "great information!" and "what a guru!" and then go back to doing the same thing. Only 5% are gonna apply what was learned. That is the reality, that is why only few prosper. People like their ears tickled but not take responsibility.

  28. Sadly, too many distributors make a poor representation of their companies. There is a way to do it without being sleazy. So many people who I want to help change their lives reject the opportunity, not because they’re idiots, but because other idiots have made people fearful of a system that would have a positive impact without them. Be honest about the imperfections of your business. Tbh, I have a higher chance of being recruited this way because I see, “Oh this person is actually honest unlike what I’ve read. Maybe this company’s not so bad after all.” In short, it’s a great opportunity that is being ruined by idiots.

    STOP RUINING IT FOR EVERYONE ELSE THAT WANT TO ACTUALLY HELP PEOPLE GROW.

  29. After working for a network marketing company for a year, I would like to add some cons about it that Patrick couldn't mention:
    1. Yours and your network's presence alone cannot build the reputation about company when there are so many other networks to tell the lies and destroying the reputation of the same company you're working for

    2. You recruit 500 people in 2 years only 50 would work

    3.Business runs on trust….if you tell great things about products you haven't tried yourself you're gonna lose the trust of your customers….because you will be a salesperson….trying each of their products is not your job

    4. When working for a network marketing company your ways of selling and marketing the stuff are very limited….you can't make selling deals with stores to increase sales you cannot add anything by your choice….there's a strict policy of sales by such companies

  30. 222 k views? Phew. I will bring this video to 1 bilion views. Trust me, just give me time. Freaking incredible what you did here (and in the PDF). There are so many hateful opinions, misleading information as well as overselling mindsets of people inside the Network Marketing philosophy that it's unbelievable. I will translate it to every possible language I know and post everywhere I can. Gee, I am stunned. Thank You Patrick. Wish you all the best 😉

  31. Ya I worked for a network marketing company selling AT&T services…… it was soliciting. A god damn hustle funny thing is, the manager of the multilevel marketing company hand his previous manager set him up with the “partnership” and he paid him $600 to do so. So his marketing company funnels the profit to his previous manager and so on and so fourth…. that’s a scam. Because the account owner with AT&T which is unknown were to close the account…. no one will have any service to sell….. found out through AT&T…. it’s a scam. And ur just trying to justify this bullshit….

  32. The ONLY thing I didn’t like about this video is that he didn’t state he owns a network marketing company, I attend network marketing meetings all the time just because of the positive environment like he said and because business is business. But why not mention you started one? He did a big emphasis on famous people being involved in MLMs 🤨 I love your videos Pat ! No hate here 👍

  33. Everyone bashing this video is probably doing it from the computer at their "JOB" while looking over their shoulder to make sure the supervisors don't see them on YouTube.

  34. I believe that people that are in network marketing are in a business model. So they can be called entrepreuners

  35. okay, network marketing is a "philosophy". I get it, it's literally your strategy to sell a product to a "customer". What's the product? Crazy how people can't see such obvious red flags

  36. I love this video! I work for an MLM and you are right on the nail! There are things that are difficult to chew on, but its the truth and its making me realize that i joined the right company! 40year+ company who is a linear!!

  37. The thing I love about Patrick is that even in his long videos, he crams so much info and relevant back story that you can'y help but listen.

  38. 12:00 Fellow network marketers… Here is what to say when people ask you "Is this a pyramid scheme?"
    In a pyramid scheme there is no product/service to promote or refer people to. In network marketing, you provide services to people you know through word of mouth.

  39. Really appreciated this video! You spread the knowledge that many of us dont even realize were looking for. Keep it coming!

  40. Loved this video! 100% accurate on both sides. I am affiliated within network marketing structure. What I got from this was that my company embodies all the positive points that you made; product, necessity, ownership, hard work, linear pay structure, etc.. All of the negatives were company/individual traits of how you want to market your business. Do you want to lie to get people to recruit, or become a recruit, make it seem easier than it is, don't care about your customers, etc. Good business practices are absolutely necessary to succeed in businesses of any marketing philosophy.

  41. Mlm are basically products that are too expensive to operate on the free market, that why they operate by selling that product by using emotional pressure on your family and friends.

  42. Darn. I should have listened to this 6months ago. Good thing I stopped it already. It never felt totally right. Will continue with my traditional businesses. Great Information Pat.

  43. Recent court rulings now force MLM companies to make sure their distributors sell products to retail customers as opposed to strictly recruitment of others to sell products. The problem most mlm'ers face is the ability for people to search for similar products at a lower price elsewhere. That's when autoships drop, sales slow down, and people drop out. It's a constant grind to maintain a team.

  44. Let's be honest it is a pyramid scheme lol the product is to mask the scheme these companies have huge lobbyists so the fed keeps there hands off

  45. Most huge companies practice anti competitive schemes and practice fraudulent behavior in capitalism just look at the 2008 financial crisis, capalatism breeds things like this, I believe it's better than socialism but let's not act like capitalism doesnt create horrible people who scam and defraud people

  46. This is great and authentic information. I have been struggling with a decision to join WFG. I noticed you didn't mention them or Primerica and wondering why that is?

  47. Very insightful video Patrick! Excellent job.
    Just wondering if you've ever come across the term Customer Direct Marketing (normally Melalueca's name comes up when I google about this term). According to them its different from MLM….

  48. I just love this man and the way he's giving infos 😍. Actually I'm working in network marketing and depending to ur video thanks god I'm in the right place cause the campany evoids all th inconvénients and have all the advantages u had tlk about 😍. Thank you very much for making me more motivated abt wht I'm going 😊😎💪. Nothing is easy. Work hard and get the best result 😍

  49. Your simply the best @pat david. Your the most honest and intelligent person in this world. All the way from Norway, hope to meet you personally in the future🙌🙌🙌🙏 thank you.

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