Even Fiction Writing Experts and MLM Gurus End Up Here
They all started with nothing. They all learned they had to build their own list. And eventually, they all wound up doing the same thing, using the same basic approach. While getting very rich.
Let me tell you how I found this:
Nothing to Nothing
My first nothing to nothing story was being a staff member for 20 years in a corporate cult on the West Coast. While this was supposedly devoted to helping people improve their spiritual abilities, the core reason it existed was to make the Founder (and current CEO) rich. And it succeeded at all of these. (Staff, however, devoted their lives to the first ideal and stayed poor.)
When I finally came to my senses and left, I had no retirement or savings and was starting over in mid-life.
It took me another 12 years of research and study to sort all their teachings out. What I discovered was that there has always been a natural system for self-improvement, and while there are many, many schools of this, they all basically operate the same way – if they are actually getting results. All this cult did was to put their special trademarked terminology and slanted approaches onto something that anyone could achieve from almost any book or course series.
The cult business operation was:
- to collect mailing addresses and do bulk mailings to their members,
- to offer specialized services with trademarked and “corporate secret” mental techniques (processing),
- while requiring training in basic delivery of these services,
- and selling books and A/V products to people that they would need during their training and processing.
- (And regularly bring their customers in for high-pressure sales tactics to buy more training and services.)
They had a whole division devoted to finding new people to deliver low-cost courses and sample processing to, and then moved these along to their main delivery division where they could buy training courses and processing.
When they had bought all they could at their local organization, then high-powered sales techniques were used to get them to buy advanced training and services.
Takeaway: regular bulk mailings -> cheap low-end introductory services -> high-priced advanced services.
Nothing to Debt
With no training certificates worth anything, I got some local entry-level warehouse positions and went to get college degrees I’d missed. The idea here was that this could get me a decent paying job.
I tried every type of training I could find and was able to achieve 7 degrees in 7 years, with a few certificates thrown in as well. But the jobs I could get would require me to relocate back into a city again, and I was so relaxed with country life that I refused to pay more for rent and have a lower quality of life. (An associate of mine got a job in NYC, only to find that the cost of his commuting and higher rent was eating all the extra income he was earning. Once he moved back to a rural town with lower cost of living, he actually started saving money again although his income was a lot less. Like moving from a high-tax state to a lower-tax state. Less overhead, more profits.)
The result of all that training was that I was in debt.
Takeaway: Culturally-accepted norms pushed through media -> Free “mandatory” basic training -> high-priced advanced training
Nothing to Debt to Nothing
Just as I consolidated my credit card expenses into a personal loan I could pay off in three years (instead of thirty years of monthly payments with the credit cards), I got suckered into buying a $6,000 training package which didn’t deliver what they promised, and didn’t have to refund your money, either.
I had been clicking around online and got this “low cost” introductory offer (about $1.95 plus shipping+handing = about $7) and a cheap CD was shipped to me with a hidden monthly fee to a rinky-dink website. (Quickly cancelled.)
Later I got a phone call to qualify me, then a two-hour phone call where I was taken through their training process (like a one-on-one infomercial or webinar) and sold a bill of goods.
The guarantee was to make it all back in 90 days, but the training itself took longer than that. Built in fail. Also, their state law (Utah) only required a 3-day guaranteed return time – and their training manual took longer than 3 days to arrive. Built in scam.
Their model was Lead Gen sites, Sales Floors, Fulfillment Centers. Each of these were independent businesses and took a percentage of the total amount. Since the fulfillment centers could claim the sales floors were falsely promising to their clients, they could pass the buck back to the earlier company – well, for a while, anyway.
The other key failure was that this particular fulfillment company was charging 1/3rd more than existing companies who kept the sales floor and fulfillment in-house. So this meant unscrupulous telemarketing sales floors could be set up under various names as a business all on their own. They’d go “out of business” when slapped down, only to often show up at the same location with the same phone number and different names. (A clue to how corrupt this went – two State Attorney Generals were convicted and imprisoned for accepting bribes.)
They essentially were charging way more than what was acceptable and used high-pressure telemarketing to squeeze money out of victims through “upsells” and “add-on” services – all under the guise of helping people earn a second income. (And I’ve heard some real horror stories of seniors being victimized this way.)
And it took me a little over a year of blogging and complaining through various complaint forums (as well as being sued by them) to get my money returned.
No interest on money, so it was a net loss other than the experience. (About four years later, they were out of business and pursued by both state and federal investigations for fraud.)
Takeaway: online lead generation -> low end services -> heavy telemarketing sales -> advanced training.
2nd Takeaway: Overpriced services with poor delivery means high refunds and/or governmental investigation and legal action.
Nothing to Something, Just Not Enough (More Debt)
MLM or Network Marketing got its bad reputation from the many pyramid scams that have been run over the years. The problem went deeper than that, though. Their products had to be higher priced in order to pay all the various commissions of the upline network.
There’s a lot of different models, but the key point is that they have to have people who are devoted to a particular person to keep getting their sales.
The first problem is that the local retailers and national chains didn’t like the competition and would complain to governments about their “unfair” practices. Many MLM scenes were shut down even though they provided good services and products.
The second problem is that most people only have a limited local network. They have to get those people to become active sales people on their own and also recruit their small network to also become sales people. This is the Dunbar number limit. Malcolm Gladwell points out in Tipping Point that sometimes this could rise to as much as 250 people or more, but the average is about 150 people as a personal limit.
The third problem is that most of these people were not training in sales or marketing. Amway and other companies started selling cassettes and other training material to their networks and would sometimes make almost as much income off the training as they did in sales.
With the rise of the Internet, most MLM companies didn’t make the shift and so were now set up for a loss, since it became far simpler to find products that got the same result for less, even with shipping.
I got into an MLM scene and spent several months working out how to try to make their system work online. I couldn’t. Not with their set of products. The core way to make this work is to have a product that is cheaper than it can be gotten anywhere else, but is exclusive to that marketing network. You also have the overhead of needing to opt-in to a minimum purchase every month. Unless you can move that material, you’ll be stuck with boxes of stuff that you’ll end up taking a loss on. As long as it’s consumable, that’s not too bad. But if you aren’t making income, you might as well save money and time by not sending more money or time that direction.
The other problem is that the major bonuses are front-loaded. They all have to be achieved in the first 90 days. Because that is how long it takes for a person to keep enthused and ignore the failures they are getting. The biggest money I’ve seen were where a person was able to move his entire downline network over into a new company and so everyone in that network except the very lowest rungs were raking in the bonuses and awards for top sales. After a few months (or when the management tried to take away their downline out of jealousy) they’d then find another company and do it all again. (And this was only possible because they kept a personal mailing list of their network – more on that in a little bit.)
Takeaway: Low cost products personally sold by someone you know -> recruit you to sell to the people you know -> get you to recruit them to sell to their people.
2nd Takeaway: Commissions required for uplines network raises the cost of the product while free market competition drops the price of competition, making it unviable. Cost of product plus mandatory monthly minimums should still be less than market also-rans.
3rd Takeaway: Exclusive products can support a higher price point if they are demonstrably higher value. (Apple vs. Android/Windows)
4th Takeaway: Other company’s platforms won’t give you customer contact info. They can shut you down at any time and your business is gone. (Called “building on rented land.”)
Nothing to Something for Next-to-Nothing
I used to be heavily into Search Engine Optimization (SEO). Then Google changed the rules drastically. They had published their own best practices guide years before and the updates hadn’t changed what they said originally.
In short: Long-form content rules over gimmicks.
The work I did in making long form content as part of my MLM research showed that I could rank well for the Network Marketing I was part of, but found that it didn’t pay well enough in sales for the cost of constantly generating new content weekly.
About that time, ebooks started taking off, so I did some publishing tests and found out that I could invest the same amount of time (roughly) into creating ebooks and a certain percentage of these would sell regularly without any additional work on my part. Talk about your passive income. No ads, no monthly fees.
Those regular sales, in addition to having already paid off all debt and learning to live within my means, earned me financial freedom. So I fired my last boss. And doubled down on writing/editing/publishing. Concentrated on increasing those means I was living within.
The main problem is that without promotion, people never hear about your book and so sales never go anywhere for most authors. This is again the same Dunbar’s number problem above. Authors get their friends, family, and associates to buy their books. Unless they’ve otherwise built an audience or get their network to tell their own audience to buy that book.
This is what happened (partially) to Kiyosaki’s “Rich Dad, Poor Dad” when Amway recommended it to all its wide network. Instant bestseller. (Kiyosaki was doing other promotion as well.)
Tim Grahl made a good living by launching author’s single books. From this experience, he found out that the two types of biggest launch successes were from 1) already having a wide existing audience, or 2) having a large network who had their own audience.
But like MLMer’s, most authors have no clue about sales and marketing. The people with money will hire someone like Grahl to do their launch. Poor authors publish and hope.
Mark Dawson found some impressive results from Facebook Ads and dug in to find out just how they worked. And turned his book income to over a quarter-million per year. Ads are simply buying access to someone else’s platform. Like Google and the recent maturity of AMS on Amazon. What Dawson did was to figure out how to make these ads pay for themselves in increased income.
What Dawson still recommends is to build your own mailing list and promote to these. The initial sales get Amazon’s attention and they will promote your book for you as long as the sales stay up above a certain level. Ads run toward the end and after the first 30 days will help keep those sales high so Amazon continues to promote for you. Since the ads are revenue-positive, you can afford to keep running ads and keeping that level of sales.
While Amazon discourages free books, it’s common practice to put external links into the “look inside” preview so that people can click directly through to your offer. Many of these books are priced at .99 just to generate leads back to their site. (Amazon won’t give you their client’s emails, so people are using low cost books to get them.)
Takeaway: While there is a lot of potential to booksales, authors who have no audience or network had better learn how to promote on a revenue-positive basis.
2nd Takeaway: Amazon can be used as a lead generator to build your own list.
Nothing to Lots More – Where They All Wound Up
Recently, I pulled all my MLM research from years back to check something. About the same time, a penny dropped in the book publishing space.
The leaders in MLM used to be (2007 – 2012) Mike Dillard and Ann Seig. Both of these had many years of experience in MLM, mainly failing at it.
Mike Dillard‘s breakthrough was writing a book on how to succeed in MLM that he offered to his downline called “Magnetic Sponsoring.” Others heard of this book and he was soon making weekly trips to Kinko’s to print, bind, and ship his book out to other people to sell to their downline. And making a nice profit off that book.
Then he put it online and developed a backend to offer additional courses to MLMers. By keeping the training generic, he was able to offer this to anyone in MLM. And then made his book into a lead generator by offering a 50% affiliate commission on all sales. And tacked on giveaways with it to sweeten the deal. He also enabled affiliate sales commissions on his courses. Meaning that he could get people to sell his books and courses for him to their downlines, and train people with the data they were missing.
Soon, Dillard didn’t need to maintain an MLM presence. And became a millionaire at just over 30 years old.
Ann Seig basically duplicated Dillard’s scene. She found that her best performing downline was running training courses for his network. So she partnered with him to offer that to all the rest of her downline and then started selling his courses as part of her “Renegade Network Marketer” version of “Attraction Marketing” to any and all MLMers. She used the same set-up as Dillard, where they would get a sizable commission from selling her books and later upsales to paid courses.
Soon, she was also out of any MLM opportunity as there was less overhead with affiliate marketing.
Nick Stephenson got bit by the writing bug, publishing 6 of his original novels in three years. Once he learned how to promote ebooks effectively, he created a course to teach people what he knew. This was so successful that he recently announced that he no longer writes books as he spends his time promoting his courses and software products. And you can also earn affiliate commissions by promoting his course.
He also promotes using “reader magnets” and has a permafree book on Amazon and elsewhere titled just that. So people get a free download on Amazon and inside get a discount to buy his course. Once they’ve bought the course, they can become an affiliate and sell others on it.
Tim Grahl admitted that for all the work in promoting a book on how to launch books, he made 100x more income from the course he wrote based on the book. While he got started helping others launch their books, he sold his business and now just sells training to authors about how to launch their book.
Brian Clark, a pioneer of Content Marketing, founded his Copyblogger blog and expanded it to Rainmaker Digital with memberships, courses and then paid services. He’s never written books or compiled them out of his content (a shame.) Paying for his company’s courses and/or services also enable a person to become an affiliate.
His breakthrough course was called “Teaching Sells” and taught how people could create their own training from the content they were producing.
What These People Have in Common
All of these people started with nothing, usually in debt. And now are each at least pulling down 6- or 7-figures in personal income.
What actions do they all take?
- Free or low cost introductory content.
- Paid content that can generate affiliate commissions.
- Courses that generate affiliate commissions.
- Upsells to additional courses or products or services – that again, have affiliate commissions.
- Made so much income, they quit doing anything else.
The “there” is selling training.
And that’s where the most successful wind up.
How to Start With Nothing and Get to Lots More
As my usual, I’m going to tell you how to get started for free. I insist on my own business paying for itself. And my books on starting or expanding your author (or any online) business insist that you always get a return on your investment. So there are always free routes to achieve a result you can later invest earned income back into to improve efficiency and returns.
Some basics first:
You’re doing content marketing as a business. Get Pulizzi’s “Content Inc.” and his recommended Napoleon Hill’s “Think and Grow Rich.” Those two, plus J. B. Jones’ “If You Can Count to Four…” are the three bibles to read, re-read, and keep at hand. The ebook versions will quickly pay for themselves.
Convert this content into ebooks and get them up on Amazon and everywhere else. Make at least one of them perma-free. All of them are lead generators, and should have this linked opportunity showing up in the Amazon look-inside.
Get an offer up to sell something like a $47 book with a 50% affiliate commission. This is a paying or “self-funded” proposal that brings you people willing to pay for your services.
Set up a free private membership they can join to get access to your other materials.
Set up paid course(s) they can take, and give discount coupons to people who join your paid membership.
Continue creating content, books from that content, courses from those books. The content is updated to sell the books and course, the books sell the course, and the course requires the book as a text.
How to Do All This for Free
- Content – Start blogging – use a blogger blog to get content out there. Secure and no maintenance cost for free.
- Lead Generator – Compile and publish a book on Amazon. It costs nothing. Set it to $0 everywhere else and then get Amazon to match that price (becomes permafree)
- Affiliate Sales to Leverage Leads – Sell a higher-priced book with substantial affiliate commission. Use Gumroad. You then get the email address for every purchase.
- Give leads special value. Set up a private membership on Blogger (new blog, all pages passworded – send out the password and change it at least once a year.)
- Enroll in paid course(s). Set up a course using Thinkific.com (free to start, shift over to other terms once your income starts rolling in.)
- Re-invest income to improve efficiency. As you keep promoting this, then you can eventually get a site-hosting to run a single backend that will do all of this for you. Rainmaker Platform is one.
That’s the breakthrough and how you can do it from where you are.
If someone is having a success online, they are getting leads (from Amazon, often), using affiliate marketing to have a “funded proposal” that pays people to bring you paying leads, get these people into a private membership and then into courses.
That’s the simplicity of it all. And the examples I’ve seen.
Try it for yourself. (Test everything I say.)
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Also published on Medium.