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State of the Industry

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State of the Industry


Presented at the MLM Legal conference spring 2012

By Rod Cook Bsc., M.A., MBA


It's no secret that our economic world is in a recessionary mindset and people think the world is in financial chaos at this time. The news media is greatly to blame.  I'd like to share with you some 'strictly personal' thoughts about this (so called) catastrophe - - -  These thoughts are backed by research and facts driven by personal experience.

The Wall Street - Main Street financial crisis started with symptoms of panic - followed by an infection of fear - and then distrust which cause distrust.  Fear and a credit crunch at the same time are going to deepen this recession way past the early 2000’s recession.

Nervous investors and worried baby-boomers + retirees have seen their portfolios and their 401k's murdered - panic selling resulted. Guess some of those folks critical of Network Marketing may be rethinking their options.  They have virtually no alternatives during a recession spin down. Work at Walmart as greeter at the front door is not an option.  Why not?  There are not enough Walmarts!

 There will be no Depression, Global financial action is going to stop that!  The economy is not at risk of falling into another Great Depression most experts agree - but certainly, the nation could be facing its worst economic downturn since 1929 - with a prolonged and painful but a recession is looming and I don’t think a single person in this room wouldn’t agree.  However here are a few projections on the recession predicted by experts:

            1. Unemployment could rise from 6% to over 15%.  Many small businesses will fail - many employees will  lose their jobs

            2. Home prices could go down for the next 2-3+ years, and in some areas, could drop 30-40 % from current prices.  An index on this is cost of new home construction in an area.


Back to the American people’s search for alternatives - As some people find themselves out of a job - or their earnings dwindle - they will look for ways to earn money, not just additional income. They will start their own Home Businesses and look for ways to promote them.  Historically tracking back to the 1970’s, our MLM – Network Marketing as an Industry does well in these times.

 Insert 1974-75 Graph on Recession
UPSIDE - However, during all the financial and emotional carnage, there will also be opportunities to prosper, and many new millionaires will emerge. Already, savvy investors are starting to 'buy up' shares - at bargain prices - in good solid companies, for example. We could also see stronger banks / financial institutions - 'unfrozen' markets - greater transparency / regulation - and international supervision - being four of the major keys to recovery.  Since I broker buying and selling MLM Companies, I have been approached by Investors with over $500 million dollars looking to buy operating MLM – Network Marketing companies.  That should raise the spirits of people in this room! 

Let me give you both a blessing and a burden at the same time.  Yes, you as MLM - Network Marketing Company owners are part of the greatest opportunity in the world, in my opinion.  You aren’t constrained by territorial boundaries or restrictions that inhibit 'others' from growing their (traditional) businesses. Your opportunity today is only limited by your own vision/desire and determination for helping unfortunate Americans achieve a better life.  My life motto is: Do Good – Make Money!  Today this country needs you to help the less fortunate – less visionary people of this nation.  Using your MLM – Network Marketing Company feel free to borrow my motto but if you focus on the “Doing Good” part first history has proven that that during this recessionary period you will prosper.

Focus on communicating that an MLM -  Network Marketing home business means there are 'built-in protections' that cannot be found in most jobs, businesses and professions. You are part of an industry that doesn’t 'depend' on the same infrastructure that traditional businesses do. This Industry depends on our organizations - which are people - people of like-mind that can dream big dreams and who are dedicated to sharing with others and who receive great rewards for helping to 'enhance the lives' of others. 

Some recessionary hints to you MLM Business Owners and your pay plans.  During a recession you have to be clear to the new MLM recruit or prospect how they can get their money back.  You have to make sure what you offer you deliver.  Look at MLM Pay Plan income accelerators for the new Distributors.  The greatest survival rate of MLM Companies during the last recession were ones that gave a clear path to “money back earnings” and then into profit for the person.  Remember during this period you have a duty to these people, the money they gave you may have left them with hungry children. 

 Slide 1: Effects of recession on MLM – Network Marketing Companies

 Slide 2: MLM Pay Plan Modifications for         recessions                                                                                                                                                        

Slide 3 – 6 : Companies that boomed because of mods Slide 2

 Slide 7-10:  Hungry children companies that did high flying MLM Compensation Pay Plans 

Ladies and Gentlemen I leave you with the vision above.   Do Good – Make Money Thank you!

About Rod Cook B.s., M.A., M.B.A.: Rod is recognized as THE major researcher in the MLM - Network Marketing world on economics and MLM Compensation pay plans.   Rod keeps a list of  over 1500 U.S. MLM companies (plus over 100 foreign companies operating in the U.S.) on his MLM Company World Directory (see www.mlmwatchdog.com) this alone is a research tool no one else has as far as what MLM compensation pay plans survive.  As the MLM WatchDog, Rod can pick up a telephone and call a company owner and get a true reading.  His reputation for honesty, integrity, and painfully blunt "telling it like it is" makes him an industry icon.  Rod says, "MLM is the last chance for the little guy in America and for that matter the WORLD and I defend it to the death!"

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Tags - MLM compensation pay plans and recession, Key words: MLM Boom, recession, economy, MLM, Network Marketing, U.S., world recession, MLM Boom, recession proofing,  end.


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