Saturday, 28 April 2007

Yawn - "Multi-Level Marketing"

Today I have been presented to. I have been presented to by NSE, or Nu Skin Enterprises, but by their "PhotoMax" division... not Big Planet or DVD Movie Magic, MaxCast or Pharmanex, NUS or Global Internetworks (all associated MLM companies). It was a fairly slick presentation, and it smelled like Amway.

I may have been presented to, but I am not sold.

The US$3k start up investment was glossed over very quickly, as was the US$100/month purchasing to stay in the scheme. That's NZ$480/month for the first year, equalling NZ$100 a week, which would buy enough weekly labour to do my cleaning, my washing, walk the dogs and have some town trips run for me. So a not-inconsiderable investment.

The NSE presenter made a big song and dance about having a potential with PhotoMax of tapping into a $85 billion dollar available slice of the image industry. Big figures look impressive, but let's look at $85b in context; PDVSA, the 9th largest oil company in the world, made revenues of $85b in 2005; Honda made revenues of $87b in 2005; Australia's government welfare spend is $88b pa; NZ's GNP is $74.5b pa; Procter & Gamble made $57b profit in 2005. So in reality, an $85b market isn't that big on a global scale. The global oil industry turnover alone for 2006 was $2,672,919,000,000 ($2,673b).

Taking Honda's example, their 144,800 employees turnover $87b, thus their average employee generates $600,000 pa (generates, not earns. This is revenue, not profit).

In comparison, NSE turned over $1.1b in 2006 for 100,000 'distributors', thus the average distributor generates revenue of $11,000 pa. However, profit is only $32.8m, which translates to $328.00 per distributor (verify the stats at

Not forgetting that this scheme costs you $4,200 to belong in the first year, Mr Average Distributor then makes a loss of $3,872... hardly the stuff that dreams are made of.

Additionally, I am not sold by NSE's IT strategy, storage or the technology (check out their offer at I agree that Global IT predictions are for more storage, backups and applications to go online, but I think there will be much cheaper options in all those areas available than PhotoMax as customer demand grows. Customers also have to undergo a paradigm shift in their levels of trust, to be secure enough to store important items on the internet rather than on their own PC's hard drive.

NSE also made a bit of a song and dance about their breakthrough MaxCast online video streaming technology. Unfortunately, I have not been able to find any technical reviews of the product, so can only assume that this is merely hype.

However, this presentation has encouraged me to have a very interesting trawl on the internet, and to have found some interesting and cautionary websites. Check out a very interesting article on Amway/Quixtar at, the American Federal Trade Commission's check list at and a nice list of 10 MLM falacies at

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