Post by Dave Smith - www.the-future-is.co.ukPost by Stewart Robert HinsleyThe second part is the selling of distributorships. A few people make a
lot of money this way, but Kleeneze is often promoted as if this is a
reasonable prospect for the average participant. This is MLM, and is
inherently flawed.
Prove it...examples.
That it is promoted this way :-
Perhaps I misunderstood you, but I thought you claimed that average
participant could make lots of money.
That it is flawed :-
It can be shown mathematically that at any one time the mean number of
direct downlines is less than one. From this it can also deduced that
the mode and median numbers are 0 or 1. (I'd guess that the mode is 0
and the median 1, but it depends on the exact topology of the tree.)
Therefore, if the network is static, the majority of people in the
network receive little or no residual income from their downline.
I do not find it plausible that the network can grow to a degree that
the majority of current and near-time entrant members of the network can
have large downlines. According to the last annual report from Kleeneze
PLC the annual turnover growth of Kleeneze UK (the MLM business) was
negligible (barely above inflation). This is still better than I
expected.
Alternatively, using a gross commission rate given by yourself, and
figures from the Kleeneze PLC annual report, about 2% of participants
could make an income averaging £50,000, provided everyone else got
nothing. You have led me to believe that the net commission rate is
considerably lower, so this 2% is a significant over estimate. Even if
one were to assume 100% turned of the 2% every year one would have to
participate for an unreasonable length of time (working for nothing)
before receiving the high level of income. Thus it is not a reasonable
prospect for the average participant.
Indeed, since there are 16,900 participants, if "hundreds of people are
earning massive incomes" then thousands are earning approximately
nothing.
Post by Dave Smith - www.the-future-is.co.ukIf the system is followed everyone can make some good money.
not everyone can make a hughe amount of money - mainly because their not
prepard to put in the required effort.
According to what one reads on the net, in many MLM schemes the majority
of participants lose money. I didn't believe that Kleeneze fell into
this category (and in fact believed that losing money on Kleeneze is
difficult), but the low barriers to entry of the catalog sale business
means that competition should bring the returns on catalog sales down to
whatever is the lowest return potential participants will accept. As the
analysis above shows that catalog sales are the major component of the
income for the majority of members, I conclude that not only does not
everyone make 'good money', but at the most only a minority can make
'good money'.
You have convinced me that there is a non-negligible risk of losing
money through participation in Kleeneze, instead of merely working for a
pittance.
As for your claim that everyone could make a 'huge amount of money' if
they were prepared to put the required effort, where does all this money
come from? Perhaps it's your turn to provide evidence that the money is
available, with verifiable figures.
Post by Dave Smith - www.the-future-is.co.ukPost by Stewart Robert HinsleyEven though Kleeneze are not directly responsible for
the worse excesses, their business model tacitly encourages them, and I
place Kleeneze with tobacco and gambling companies as unethical
businesses in which I will not invest, or otherwise patronise.
On what grounds?
There is a degree of subjectivity in opinions of what's ethical and
what's not ethical. For example I consider the National Lottery
unethical, and obviously many people differ.
There's a rough continuum between single-level referral marketing, which
would generally be considered to be ethical, and outright frauds like
Women Defrauding Women, which are almost universally considered
unethical. There is a subjective element in where the line is drawn, and
I draw it with most, if not all [1], MLM schemes, including Kleeneze, on
the unethical side of the line.
The grounds on which I consider Kleeneze unethical is that participation
in the pyramid is sold on the basis of returns which cannot be achieved
by the average participant, and that there is a cost for participation
in the pyramid. Kleeneze PLC do not appear to have taken steps to
prevent this occurring.
[1] I'm told that some MLM schemes are de facto buying clubs. If the
products are competitive in price and quality, and participants are not
led into buying products that they would not otherwise have done, then
these may lie on the ethical side of the line.
--
Stewart Robert Hinsley