MLM: The Saturation Theory? Not to Worry! Part 2
An Introduction to Network Marketing
By Jeffrey A. Babener
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Arizona and Texas-based Allen Baytes, an industry veteran of many recruiting campaigns, agrees: "There is no such thing as saturation. In a country with 250 million people, network marketing only scratches the surface of available prospects." Baytes is publisher of the Baytes Report , a network marketing industry journal, and has served over the years in both corporate and distributor capacities with network marketing companies.
Several years ago, the saturation theory was tested in a famous court case involving a company named Go-Re-Mar. The company's program was challenged as a pyramid scheme with the claim that its sales force would ultimately run out of new recruits. But, as the court noted, that's not the way things work in the real world. The U.S. Court of Appeals, while injecting some humor in its opinion about this brassiere-hawking company, made its position perfectly clear:
"The sole evidence to support the Commission's holding that the plan is inherently unfair and deceptive is a mathematical formula, which shows that if each participant in the plan recruited only five new recruits each month and each of those in turn recruited five additional recruits in the following month, and this process were allowed to continue, at the end of only 12 months the number of participants would exceed 244 million, including presumably the entire staff of the FTC. The Commission concludes that this, in effect, is the impossible dream and that the siren song of Symbra'Ette must be stilled. We find no flaw in the mathematics or the extrapolation and agree that the prospect of a quarter of a billion brassiere and girdle hawkers is not only impossible but frightening to contemplate, particularly since it is in excess of the present population of the Nation, only about half of whom hopefully are prospective lingerie consumers. However, we live in a real world and not fantasyland.
"As indicated by the record, the fact is that Symbra'Ette, which commenced business in 1963, did not reach its peak in distributorships until 1972 when it had attracted some 3,635 distributors. The record does not indicate the geographical distribution of these vendors, and we have no study or analysis in the record which would realistically establish that some recruiting saturation exists which makes the entry of additional distributors and the recruitment of others potentially impossible in any practical sense. While the Commission need not establish actual deception by the testimony of disappointed entrepreneurs, it has failed entirely to establish a potential threat. Not all Americans aspire to the calling in issue and not all who are attracted will continue indefinitely."
The fact is, as long as there is a market for a product, there will be new opportunities for distributors. For example, in a ten-year period, Amway developed a whole new market for its products in the Japanese marketplace, racking up several billion dollars a year in sales.
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