The REAL Truth about MLM & Network Marketing

So recently John Oliver who has his own showon HBO did a video on multilevel marketing and network marketing that prompted hundredsof emails and messages to be sent our way saying, “Pat, what do you think about whatJohn Oliver said about network marketing?” And Mario and I went and watched the videoand I went through.

And one of the things I love about comedians, let me tell you what I love about comedians.

Sometimes I enjoy watching a comedian's pointof view about a political thing more than CNN, MSNBC and Fox.

Here's why.

A Jon Stewart, which I love.

Jon Stewart would sit there and talk abouthow terrible Republicans were because of something they did.

And all the Republicans would get upset athim.

Then the next thing he would do a video onliberals, and Democrats.

So you could always see that he would giveboth sides, which was great.

Even though Jon leaned a little bit left, he still was willing to give both sides of his beliefs.

And I like that.

I think comedians have the opportunity todo that.

They have the way to say things that are funny, which many people want to say, and they can get away with it because at the end of theday, they say what? I'm just a comedian! I didn't mean anything by it.

I'm just a comedian.

So it's cool.

I was a bit disappointed with John Oliverbecause his method on how great he is on the comedian side, he could have taken this thingon multilevel marketing and network marketing to give both sides.

But I thought he only gave one side of it.

And today what I want to do with you is Iwant to completely break it down.

I want to cover six things with you on today'svideo about network marketing.

One is, what is network marketing? What is MLM? Why is it that everybody, somehow, some wayat some point of their lives had some kind of an affiliation whether they're a clientor joined or father or mother or brother, somehow, some way you've been touched by anetwork marketing company.

So what is network marketing? We'll cover the comment criticisms.

We'll cover the different types of compensationplans network marketing companies have, different types of products, the benefits of it, andif you're going to do it, which companies you should consider getting involved in.

Not necessarily a company; I won't give acompany.

But I will give things that you ought to bethinking about.

So first of all, what is network marketing? Let me tell you what is network marketing.

Network marketing is not an industry.

This is the one thing that most people don'tknow about.

And before I get into explaining to you whyI'm explaining network marketing and getting deep into it the way I am is I used to workat Bally Total Fitness, many years ago, when I got out of the Army at 20 years old.

One thing MLMers and network marketers willdo is they love targeting gym salesmen, because people who work at a gym know everybody.

We know the nightclubs, we know the folksthat sell the drugs.

We know the girls.

We know the.



we know everybody.

We know everybody.

I mean, if you want to get into anything, talk to people that sell memberships at a gym.

We are connected with everybody.

Everyone comes to the gym and the best guysat the gym are connected with everybody.

So everyone was trying to recruit me and everybodyelse to a network marketing company.

So eventually, one of my friends told me aboutthis one thing.

And you know, back in the day it was VHS, video.

And he gives me this video.

I had no idea what network marketing was.


I had just come out of the Army.

And in the Army, one of our sergeants whowas an E-8 was making $150, 000 per year in a legal network marketing company, meaninga legal, what do you call it? It was called pre-paid legal back in the day.

And was making 150 and everybody knew aboutit.

It was legit, he was making 150, so he wasmaking 60 as a master sergeant, but he was making 150 as a network.



So I knew there was something there, butI didn't fully know about it.

Long story short, I get this video one day, I'm ticked off at my job, I go at night, it's 2:00 in the morning.

I put the video in.

I just came home from a nightclub and I'mso pissed off.

I put the video in.

An hour and a half into it, it was a one anda half hour video, I said, “I'm interested.

” I called the guy.

I got started.

It was $1500.

I got involved.

I put it on my credit card.

And then I had a certain guy I was workingwith.

They called it the upline.

He changed seven different companies.

So at that time, you just follow and you dowhatever, because I was 20 and he was older than me.

So hey, we're going to go to the next one, this one's going to be better.

And we're going to go to the next one.

This one's going to be better.

So we went from selling these websites toall of a sudden it was this your own thing that people can click on and it was some dentalplan benefits, and it was an online sales store that.



all these things.

And then finally I said, don't call me.

Don't touch me.

Don't talk to me.

Don't approach me about anything to do withany of this stuff, because I'm so annoyed.

Because friends thought of you as only sellingsomething.

I'm 20, 21 years old at this time.

So I said, “I'm going back to pure, traditionalbusiness.

” And I went to Morgan Stanley Dean Witter.

That's when I got my Series 7, 66, 31, 26life and health, all that stuff.

I went purely financial.

But what I did do during that time, when Ileft it, I said, there is something very attractive about this that turns people on.

Why is that? And I investigated the entire industry tofind out exactly what worked and what didn't work.

And that's what I'm presenting to you heretoday.

So what is network marketing? Here's what network marketing is.

Network marketing is not an industry.

Direct marketing is not an industry.

Even MLM, multilevel marketing is not an industry.

It's a philosophy of marketing.

that's all it is.

It's a philosophy of marketing.

Marketing is a certain strategy you use toget the customer's attention that he eventually ends up buying your product.

That is all network marketing is.

Let me explain.

There are about 150 different ways you canmarket your product.

I'm just going to give you an example of about14 of them here.

You can go direct marketing.

What is direct marketing? Direct marketing is for me to sell my productby going directly to Mario.

So I'm going directly to consumer.

Or I'm going directly to the business.

I'm going direct.

Mario, I have this product.

Let me show it to you.

Will you buy? Yes, $600.

I exchange merchandise for product.

I leave.

I make $200 on the product.

That is direct marketing and I make $200 onthe sale I made.

You have email marketing.

For many years, oh my gosh, people who didemail marketing were called the biggest con artists because you kept getting all these, “this is only an elite thing that I'm doing that only seven people are going to be a partof.

And you have the opportunity to be part ofthe seven.

” And people are like, “Oh my gosh, I've gotto be part of it.

” And I thought it was very effective.

A lot of people said, “These are con artists.

” They're purely con artists.

It's a marketing method.

There's a creative part to it.

Some do email marketing.

Some do telemarketing.

It's a philosophy of marketing where peopleare in a call center.

They run big call centers of people that youknow nothing about, and they make calls and have people buying.

You throw enough against the wall, people.



but it works.

It's effective for some people, and it works.

The other one is affiliate marketing.

What's affiliate marketing? Affiliate marketing is hey, let us put thison your website.

If somebody clicks on it, we'll give you $3.

If somebody buys the product, we'll give you$25.

That's affiliate marketing.

Another one is network marketing.

What is network marketing? I am marketing my product to who? To my network.

That's all it is.

I am marketing my product to my network.

That's network marketing.

Network marketing isn't all these juice andall these other companies.

No it's not.

Network marketing is marketing to my network.

Multilevel marketing is what? So network marketing could be when ING Directback in the days would say, “If you help somebody else open up an ING Direct account, we'llgive you $25.

That's network marketing.

But, multi-level marketing says the following.

If you find somebody else who refers ING andthey open up an account, we'll pay him $25, and we'll pay you $5.

Now it becomes a level.

So it's multilevel.

Multilevel marketing.

We'll pay two generations, that's where thelevel comes in.

Then you have guerrilla marketing.

Guerrilla marketing is you know some guyswould come out with their own CD and they want to go out there and do guerrilla marketingin the streets, just hitting a ton of people at the same time.

It's effective.

Some call that a very con and deceptive wayof doing it.

It's effective.

Many major hip hop people that you respectin the world started with guerrilla marketing.

Many movie guys that started off with theirfirst short film, they started off with guerrilla marketing.

Now the world respects them.

Behavioral marketing.

Let me study this person's behavior who goeshere and sometimes people say, hey, you know what's the weirdest thing that happened today? I went on this website and just two days agoI clicked on a website to buy furniture and today every website I go to this furnitureis coming.

There's something weird going on.

No, it's called behavioral marketing.

Hey, that's a little bit deceptive.

It's marketing! And people buy the product because they'resimply seeing your fingerprints of where you touch and they're going to it.

Next one is digital marketing.

What's digital marketing? Social media.

It's very, very effective.

Now social media, some people could say, Iam so sick and tired of seeing this video ad of you know, he keeps coming up.

Every time I watch a video, this guy keepscoming up.

This guy keeps coming up.

This guy keeps coming up.

It works.

Digital marketing.

Celebrity marketing.

Hey, I used this product.

It changed my life.

And it's a celebrity.

I am a famous, I use this thing.

Athletes do it all the time.

MJ, Hanes, LeBron, you know, shoes.

Everybody, celebrity marketing.

Shaq is doing cars.

Shaq is doing cars he doesn't even fit in.

That's celebrity marketing is that it is, right? Then you have cross marketing.

Hey, real estate with accounting.

Let me do you know, magazines and newspapers.

Cross marketing.

I'm going to find a product and team up withthis guy and we cross market our products to each other.

Next, tradeshow marketing.

Some people go do tradeshows.

That's all they talk about.

I am very successful at tradeshows.

And some people would say, “I would neverdo a tradeshow.

It's so annoying.

” There are many successful tradeshow marketers.

Then you have T.



A lot of people do T.



If there's anything that's the highest levelof manipulation, it's T.



You know why? Hey, if you drink this beer, you're goingto get laid.

What do you think beer companies do? I mean, tell me there's anything lower thanT.


marketing on what some people do.

Hey, take this pill, and erections may lastfor the rest of your life.

And everybody in the world's going to wantto see your erection.

And you're going to be the man! And you're going to feel.



and we're like, Oh my gosh, give me one of those things.

I want an erection that lasts a lifetime.

And at the end someone says, if your erectionlasts a lifetime, go see your doctor.

Give me a break! That is manipulative, but it works.

Why are people buying Viagra so much? Because it's called T.



How come no one's taking shots at T.


marketing? I'd love to see somebody do that.

And then you have radio.

Which, radio nowadays, I think there's onlythree people that listen to the radio today.

Is it three or is it four people that listento the radio? Mario, how many people listen to the radiotoday? It's three people.

Mario knows [laughing] – radio's not whatit used to be.

But people do radio marketing.

I think the best people in radio marketingare those who sell radio.

Because it is a dying industry and I haveto tell you some of the best sales people in the world are those who sell radio time.

You are good! And you've got me to spend some money.

I spent $100, 000 on radio in 2009, 2010, Ithink I did.

And it didn't work.

But I spent 100 grand on it.

So now, all that said and done, network marketingand multilevel marketing and direct marketing is a philosophy of how you market your product.

And do you know why companies do network marketing? Let me explain to you why companies do networkmarketing.

Here's why.

Because the cost, the cost acquisition toget the customer is cheaper.

I don't have to do a T.


ad and spend $400, 000.

I simply get it cheaper and have somebodyelse go sell it, and I can pay more to the field or whatever it is.

There's still a problem there that I'm goingto get into, that I don't like what they do in network marketing.

But there's a reason why people do networkmarketing.

Cost is cheaper to get the consumer.

Now, this is network marketing.

This is what we're talking about with networkmarketing.

A lot of times people like to say, “It's anotherpyramid scheme.

” By the way, here's what a pyramid scheme is, so everybody understands and they stop saying it.

Every time somebody says “pyramid scheme, “you sound uneducated.

And I'll tell you why.

Because in a pyramid scheme, a product doesn'texist.

There's a reason why Amway, Herbalife hasn'tgone out of business yet, and they're still in business, and you know, you have Beckhamwho wears an Herbalife shirt, and you have the Orlando Magic that play in the Amway arena.

There's a reason for that.

That's not accidental.

If they were a pyramid scheme, they wouldbe closed down.

In a pyramid scheme, I remember when I wasworking at Bally's, a guy approached me and he showed me this thing, and he said, hey, you pay $500 to me.

I keep $200 of it, $100 of it goes to theguy above me, and $100 goes above me.

But you go out there and get five other peoplethat pay $500, and they get five other people, and then you get five other people, you'regoing to make $100, 000 a month.

I said, “What's the product?” There is no product! That's the great thing about it.

There is no product!” You're a con artist! He was a con artist.

Six months later, he went to prison.

I think he did five years in prison for doingthat.

That's exactly what needs to happen to peoplethat run pyramid schemes.

Here's another one.

When people say it's a Ponzi scheme.

Most people don't even know the history ofPonzi scheme.

Ponzi scheme came from a guy who's name wasCharles Ponzi.

Again, I'm trying to give you some historybecause I wanted to find out if this business is good or bad, I had to find out everythingabout this business.

Charles Ponzi was a con artist who was anItalian businessman.

I want to say in the '20s? Was it '20s or '30s? Something like that, in the '20s.

And he did business in the U.


and he didbusiness in Canada.

What he would do is he would come to you andtell you if you give me $100, I'll return it to you with $150 in 60 days, and I'll giveyou $200 within 90 days.

He was the first original Bernie Madoff typeof guy, who made I think $10 million during that time, which is a lot of money.

Before there was Bernie Madoff, there wasCharles Ponzi.

So that's why people say, “This is a Ponzischeme.

” But in a Ponzi scheme, there is no product.

Money just moves.

And when money only moves, with no products, you're going straight to prison.

And by the way, you belong in prison whenyou do things like that and try to rip off people.

There's nothing cool.

If capitalism ever gets a bad name becausepeople try to win in the game of capitalism with shortcuts, and they try to hurt people, those people belong in prison.

That needs to happen.

This is not something that you need to goout there and abuse.

It needs to happen.

If somebody goes out there and fights in UFC, and you go out there and in your gloves you put rocks in there, it used to happen backin the days in boxing so you can punch somebody and nobody feels the rock, the guy feels it, he breaks his jaw, hey man, that's cheating.

You need to go out there and get out of theentire boxing world.

So I'm not okay with that.

So in today's message, I'm going to get veryneutral.

I'll give you both sides as well.

So this is types of marketing.

Products that we have.

We have telecommunication.

Back in the day there used to be a companycalled Excel.

The founder of Excel, I believe started withcalling cards.

He eventually ended up having a horse thatwas in the Kentucky Derby that raced in the Derby.

If you go find that about the founder of Excel.

His net worth is somewhere around two to fourbillion dollars.

I don't know the exact number, but it's aroundtwo to four billion dollars.

Because calling cards were very, very bigand guess who wanted calling cards? Everybody wanted calling cards in the '80s.

But it didn't do well.

Then in the '90s there was ACN.

They were competing with Qwest, 499 servicewith I think it was 4.

9 cents a minute type of thing and then that went away.

And then you have some other companies.

Technology is by far the worst type of companyto even consider being a part of because it changes so quickly.

There was a company called FutureNet thatcame out with a set top box.

And they were selling it for $600.

So people would come to your house and theywould sit there.

And they would sit this on top of the T.


and say, “Watch this.

” While you're watching T.


the next thingyou know you chat on the bottom on AOL with anybody else.

And people were amazed by it.

Everybody was buying this for $600, this companycalled FutureNet came out.

And they were selling so many of them.

They were doing so well.

Eventually, Sears came out and sold the sameexact system for $99 and they went out of business like this [snap].

So technology, wasted time.

Energy, it happens, if you've got a good storytoday, there's ways of doing it for gas and other things.


There's a lot of different water stories.

I remember one time one water story guy cameout to introduce his product to us.

Great guy.

Phenomenal guy.

Very nice guy.

But he took us to a restaurant with my dad, and my dad at that time was having heart problems, and he told my dad, he said, Look, you wantto look younger? You want to look younger? Let me tell you how you ought to look younger.

He starts spraying on my dad's face the water.

My dad, he doesn't like it when people touchhim, let alone spray water on his face, without asking permission.

My dad, in Assyrian cursed him out in everysingle possible word you can think about in Assyrian.

He said we are getting the f out of here rightnow.

And I said look, we've got to go and I tookmy dad out.

But there's water companies that they sellthe machine for 4500 bucks.


My wife, let me tell you about my wife.

I said, “Babe, you want to buy MAC? No, babe.

My wife likes three companies.

ULTA, which is not a network, it's a traditionalcompany, ULTA that competes with Sephora, they have these big 8, 000 square foot places.

They do a very good job, ULTA does.

She likes ULTA, she likes Youngblood and shelike Arbonne.

I believe Youngblood and Arbonne are networkmarketing and she's never joined either one of them.

But she loves their products.

So it works very well on the skin side.

Coffee, tea, berry – there's a lot of thoseNoni companies.

And you have the coffee companies that areout there.

Legal – I think it's Legal Shield, it usedto be Pre-paid Legal.

Nutritional, you have Amway, you have Shaklee, you have Melaleuca, you have Herbalife, you have many of them there.

Travel, there used to be a big travel companyback in the '80s and '90s that was doing because travel agencies where you used to buy yourproducts nowadays it's all online.

There's actually a good story for a travelcompany today that gives discounts.

So you buy discounted rates and it's veryeffective.

Now how you sell it is the problem.

I went to a travel meeting one time with afriend, Diana, and we sat in the room, and the speaker gets up and he says, “Look, letme tell you why I love our company.

I recently got a divorce a year ago, and whenwe go on these trips, in our company we have a divorce trip, and on these divorce tripsthat you go together, guess what happens on these divorce trips? You know what happens on these divorce trips.

Everybody's divorced! Everybody's in the market.


Talking about sex and all this and young guysare like, “I'm going to go to a divorce party.

” I'm like, first of all, great marketing effortto convince young guys to go out there for the sex part.

It's like the military recruiters that wouldsay, Hey, they moment you put your uniform on, everyone wants to have sex with you.

It's effective.

And it's actually somewhat true.

It's a little.



you know, I don't like that approach, but some people take that approach.

That was a travel experience I had.

Nevertheless, the industry, there's a lotof effective ways.

There's weed.

This one's funny.

Where it's you know, we have a weed networkmarketing.

Truly, it's a weed network marketing company.

You have sex toys.

Mario knew about one very, very well, backin the day.

Sex toys company, and literally when I tellyou sex toys, it is literally sex toys.

So you get together and everybody shows thesex toys and then there's some extra-curricular activity that sometimes happens.

Watch, how many people are going to searchright now, sex toys MLM.

[laughter] and you'll see a bunch of them.

You'll send them a link, send a message toMario and he'll send you a link.

Mario, we're proud of you.

And then the last one is financial products.

And let me tell you one thing about financialproducts.

Gary Keller wrote a book called The One Thing.

Gary Keller, the founder of Keller Williams.

He wrote the book called The One Thing.

If you go online and type in Keller Williamsand you type in MLM, you'll see a bunch of accusations of saying this is a network marketingcompany.

Which, by the way, anybody that's been partof Keller Williams that I've worked with, and I asked them, is it a network marketingcompany? Yes, they're are components of us, they have150, 000 licensed agents in America, no real estate company has more licensed agents thanKeller Williams.

They got criticized for the longest time.

No one cares today.

They earned saint status.

As a matter of fact, the multi-million dollarhome that I just recently bought, is bought from an agent that works for Keller Williams, and she is absolutely the most ridiculous real estate agent I've ever bought a homefrom.

And I've bought them from.



she's the most amazing one I've ever boughta home from.

She's with Keller Williams.

And it's a network marketing company.

And by the way, New York Life, a lot of peoplelike to bash New York Life.

You go online and you type in New York Lifepyramid scheme and network marketing and MLM.

All these negative things that have come up, and you'll see one thing about New York Life is New York Life last year did $27 billionin revenue.

I think they got roughly 12, 000 employeesand they're net revenues last year was around $2 billion.

This was New York Life.

But today, nowadays anybody and everybodycould bash anybody.

But these are some of the things.

And by the way, there's many out there aswell on companies, philosophies.

I run a financial firm myself, and I can tellyou for myself, there is a component of network marketing that I LOVE, because it's so effective, because I can pay a higher comp to my guys if I choose to.

Now with that being said, let me get intoa few things when you think about network marketing that has the bad rep.

What gives network marketing a bad rep.

So let me go through the criticisms of networkmarketing, myself.

So here's where it is.

Let me pull this up.


So, a few things about MLM and network marketingthat you've got to think about that's a bad rep.

One, people that join everything, it is extremelyannoying.

No one likes it.

You lose friends.

Every other day you want to sell a new product.

Just so you know, people get tired of it.

I experienced it at 20 years old.

Every single one of my friends said, “Listen, I don't want to do anything with it.

” So from 20 to 21, there was a period whenmy friends said, I don't want to do anything.

That's why I said I would never touch anythingagain that has to do anything with network marketing.

I don't want to do it.

I went straight to Morgan Stanley Dean Witterand I chose the financial industry to be a part of.

But originally, there are a lot of peoplethat want to join everything and anything and they tell people, hey, you should jointhis.

I found this thing.

It's too much.

It's like becoming a, you're prostitutingproducts.

You're becoming promiscuous with everybody.

You want to sleep with everybody.

It's a turn off.

And there's a lot of that in network marketingthat's a turn off.

Second one.

They have something new to sell every singlemonth.

Similar to the other one I told you about.

One month they're selling you some travelproduct.

The next month it's a Tahitian Noni that'sgoing to change your life.

The next day it's a water that you're goingto drink that you're going to be younger, ten years.

Every day there's something new to sell.

Number three.

inventory in garage.

That's very problematic.

Now let me tell you why it's problematic.

Overselling a product that the person cannotafford and shouldn't buy.

Hey, come buy five thousand dollars-worthof products.

Why are you doing that? That person doesn't need it, and number two, if you don't have a track record of selling a lot of products, why would someone be doingthat? Why would someone be doing that? I think a person, if you're going to sella product, sell them on a product that someone's going to use.

Get to like the product.

You've got to like the product.

Then they will tell you if they want to buymore products and you can show them other elements of the product that's effective.

Saying go buy $5, 000 worth of products tosucceed that they never use that end up on eBay which they paid $5, 000 for and they sellit on eBay for $600, that's a rip-off.

That's not something you ought to be doing.

And sometimes in network marketing that doeshappen which is a bad rep.

The next one.

This is the one that's very annoying to mostpeople.

Get rich quick message.

This whole thing about you know, you're goingto be a millionaire in no time, and we're going to go out there and become millionairesin the next six months and 12 months and all this stuff.

People don't like that.

It's deceptive.

It's not something you ought to be doing.

Misrepresentation, such as, this is the cureto cancer.

We have the cure to aging.

This makes you happy.

If you eat this, you will have more energy.

It will improve your sex life.

It will improve this.

That's great.

It's too much.

This whole cure thing of misrepresenting anything, it's way too much.

And it happens a lot, a lot.

Misrepresentation happens way too much inthe world of network marketing.

It gives it a bad product.

Here's the other one that's very concerning.

When a guy comes up to you and sells you thecompany like this, “Hey, who cares what the product is? We have the best compensation plan.

” Listen.

Run away as far as possible.

When they sell compensation plan first, productsecond, I have a problem.

When they sell compensation plan first andproduct second, we have a very, very big problem.

It's got to be product first, then compensationplan.

You first got to buy into the product.

But there are a lot of people that sell compensationplan first.

As a matter of fact, you'll see a lot of videosand you'll see a lot of people present and they'll say, “We have this.



” and youstill don't know what the product is.

“Here's how much money was made with this.

” No, no, no.

It's not a good approach and it gives theindustry a bad rep.

Next, too many fake scripts.

Look, I remember one of the reasons why Ididn't like going to church, one of the reasons why I was an Atheist for 25 years.

Let me tell you why I was an Atheist for 25years.

I was an Atheist and an agnostic, it wouldalways change.

And I wouldn't like going to church.

Here's why.

People had the best scripts in the world.

Oh praise the Lord, my brother! God bless you! You know John 3:16? Oh my gosh! And I remember this one guy one time pulledme aside and he says, there's nothing more annoying than a Christian man who's learnedthe script but never lives it themselves.

This one guy I met in Pasadena.

And in the world of business and especiallynetwork marketing, there are people that know the script.

It sounds the same, but there's no resultsand nothing going on.

It's too much scripted without anything reallyhappening in their lives.

It's very obvious and people can read it.

Next, red flags to pay attention to.

You know I already told you about no realproduct.

So there was a company called ZeekRewardswas a company that came out that would tell you, and I remember one guy came and met withme at Maggiano's.

Very, very smart guy.

This guy came and met with me.

He was a very open guy.

Here's what he told me about ZekeRewards.

They ended up going out of business, but notonly going out of business; the owner owes people I think $600 million, the attorneygeneral shut them down.

If you go online and type them up you'll seeit.

It's companies like that that give bad repto all these industries.

I mean, people like that don't need to bein the business world, right? So you have ZekeRewards comes out and tellspeople you can bid, bid, bid and you put $1, 000, you're going to make interest and it's goingto be $2, 000 and $5, 000.

And this guy's telling me in Maggiano's andhe said, “Pat, I know this company's not going to last for another two years.

” He says, “But we can do this and maybe wecan make a million dollars in the next six, 12 months.

I don't have the desire to do anything likethat.

I have this next big business opportunityto share with you.

This was.



and it went out of business.

Not effective.

Not effective.

So you've got to make sure there's a realproduct.

And then last but not least, is the obviousone.

If you just make money from recruiting, that'sthe pyramid scheme.

There was a company back in the day, it wascalled 2×2.

net and what it did was it allowed you to buy seven spots.

Let me tell you what seven spots is.

You literally would buy your own position, then you would buy two other positions and you would buy two other positions and it was$420 per position.

I never got involved, but I studied it.

I had to find out exactly what was going onin the marketplace.

So one position.




The Attorney General came.



guys were rolling in Lamborghinis.

Every single place you saw, there was a Lamborghini.

Green Lamborghini, purple Lamborghini.

Everywhere you saw Lamborghinis, with 2×2.

netsticker on the side.

They eventually went out of business.

Why? Because you can't just buy multiple spots.

That is not the real way of doing business.

And their only product was a portal, and that'snot how the money was being made.

Eventually it got shut down.

There's got to be real, tangible product, and you cannot make money from just recruiting people, when they pay $420 and make 200 bucks, that cannot happen if there's not a real product that's taking place.

So now that being the common criticisms.

So now let's talk about the truth about MLMand network marketing which is an area I would have liked for John Oliver to have touchedup on, which we will hear in the video.

Number one.

Out of 100 people in network marketing, youknow how many people make it? Is it 50? 40? 20? How many is it? How many people do you think make it in networkmarketing? One make it.

One in a hundred make it in network marketing.

No matter what anybody tells you, everybodywants to brag that in our company more people make it.

And let's define what is making it.

Making it is not making $17 an hour.

Making it is not making $100 an hour.

Making it is making a full-time salary whereyou can actually pay your bills and live off of it, etc.


That to me is making it.

You're making 50, 60, 80, 100 thousand dollarsa year income, you can survive off of.

Now here's a challenge.

A lot of people will watch and say, “Oh mygosh, why would I ever do it if it's only one in a hundred?” Here's the truth.

In real estate, the famous Tom Ferry who'sthe real estate guy that trains everybody and people pay tens of thousands of dollarsto go learn from Tom Ferry.

He says it himself.

In real estate, 87% of real estate agentsfail within five years.

Think about that.

They put five years of their life in realestate and it fails.

How much money do you think they lost in thatfive years? How much marketing dollars? Five years! Now here's a question.

How about we go knock real estate? How about we go and do videos and knock realestate? Does that mean real estate doesn't work? No! Real estate is hard work.

Real Estate is hard work.

But it works.

And even those 13% that make it, what partof the 13% do you think actually make decent money? You think all of them make six figures? No way.

A small portion make six figures.

Most of them make 20, 30, 40, 50, 000 dollarsper year.

And some of them are cops and government workersthat sell real estate part time.

They sell two properties a year.

The average real estate agent, the averagereal estate agent, do you know how many properties the average real estate agent sells per year? It's one to two, per year.

One to two.

There are a lot of rock stars that sell ahundred per year.

I know a guy named Tom Hopkins who broke therecord in Chatsworth and sold 365 in a year.

He wrote a book called How to Master the Artof Selling.

But most real estate agents sell one propertyper year.

Are we going to say real estate doesn't work? Of course it works.

But, there's a part of that that you hearwith network marketing.

Not many make it.

Next one.

It's a ton of work.

This is what people in network marketing andMLM are afraid of saying.

And if you want to change your reputationof your industry, stop saying that you're going to be a millionaire in two, three, four, five years, if you only do this, this that.

It's a ton of work in network marketing.

It's a TON of work.

You're not going to work 40 hours a week.

It's a lot of work in network marketing andMLM.

But here's a challenge.

Having kids is a lot of work.

We got three kids right now.

Our youngest one that's six months old, sheturns six months this week.

We're up two, three times per night.

My wife was saying this morning, she says, “Pat, you know what I wish I had for Christmas?” “What?” “One night where I can sleep six hour straight.

” Now, are people going to stop having sex andmaking babies? No.

But it's a lot of work.

Network marketing is a lot of work.

So whether you're watching this because you'reconsidering it, or whether you're watching this because you hate it and you're a critic, or whether you're watching this because you're in it, the truth is, stop saying it's easyto become a millionaire, because it's a lot of work.

If you're thinking about it, you want to doit, you need to work a lot, and if you're a critic, you're going to say whatever youwant to say.

But that's exactly what it is with the marketplace.

Next, three, they oversell.

It's too much overselling.

It's way too much overselling.

You know what it's like.

It's like the guy that goes on a date witha girl and oversells himself.

You know what you're doing for yourself? You're setting yourself up for failure.

Why would you tell the girl you're the greatestthing since sliced bread and you know my second cousin was Jesus and the other side was MartinLuther King, and my father's related to Lincoln, Honest Abe, and I'm just this fantastic guy, it's who I am.

And she's going to be like, “Oh my gosh.

Honey, mom, you won't believe who I met.

” And then you're disappointing her the nextday and there's a breakup.

No, look, I got problems.

Don't oversell it.

If you're going to do network marketing, tellpeople it's hard work.

It's this, it's that, it's this.

However, if you make it, life could be this.

Will you do it? Yes.

Okay, then go ahead and do it.

Presented that way, you will be amazed howmuch more approachable and open people would be versus giving this whole gimmick on howeasy it is.

Next, number four.

Focus on your customers.

I think the problem with network marketingis it's so focused on reps, selling, that no one focuses on the customers.

That's a problem.

It's a problem.

Customers are extremely important to yourbusiness.

So take care of your customers.

Treat them right.

Show them a good time.

Actually get what's right for them.

Somebody asked me the other day and they said, “Pat, why is sales so easy to you?” I have a very simple thing with sales.

Sales is a piece of cake to me.

Here's why sales is a piece of cake to me.

Because in my mind, any time I sell, I askthe one question.

One question.

If I was that person, would I buy from thisperson.

And if I can say yes, I can easily sell.

If I can't say yes, I can't sell.

That's the problem.

This is why if you don't believe in your productyou cannot sell that product.

You've got to know your number one peopleare your customers.

If you're in network marketing and you wantto have an edge on everybody else, why don't you treat your customers a million times betterthan anybody else treats them.

And look what will happen.

Why don't you go to your company and say, “Let's focus on our customers a million times better than anybody else does it.

” Look at what happens to your company.

Why don't you bring it up.

Why don't you talk about it? Because they are right when they say no onefocuses on the customers, because no one treats the customers right.

All they're worried about is the next commissionthat's coming in.

Not all the time.

Those that grow, they are customer focused.

Those that don't, they're not customer focused.

They're purely on profit focused.

Number five, the abusive way of marketingon social media.

Remember that one kid that sent me a messageon Facebook, and I responded back to him.

I said, “Listen, I can tell you're in multilevelmarketing.

” I said, copy pasting this script and sendingit to everybody, without doing the research on the person doesn't work.

And he responded back to me, this knucklehead, and you know what he said? He said, “Well, you have no clue what you'retalking about because many people are saying yes to it.

Just because you got it doesn't mean.



” And I was like, wow, at least you'rebeing honest about what you're telling me.

You have that much audacity to tell me.

But I can tell you, you've got to make sureyou're not abusive and you're not the annoying marketer.

You know, be a smooth operator.

Be gentle about it.

Don't be this overbearing, annoying salespersonthat no one wants to do business with.

You just don't want to be that person.

And sometimes that happens in that world.

Next, scams do exist.

It's very important to know this.

Scams do exist.

ZekeRewards was a scam.

They do exist.

There are scams out there.

Not everybody's a scam.

Now here's the challenge.

Do you remember back in the day, a guy inhigh school.

We talked about this the other day.

A guy in high school dates a girl.

And the girl breaks up with him.

Do you remember what the guy used to go telleverybody what she is? She's a [whisper].

Why? The guy had to say it because the guy hasto justify why she left him, right? And you know what's crazy? Do you know what's crazy? Most people believed it.

Most people believed it.

And you know, today, if you think about highschool right now, and right now make a list of three girls in high school that had a reputationof being a you know what, two of them are probably wrong.

Maybe one of them is right.

But the other two, an insecure boyfriend toldeverybody what's not true.

You know that.

I know that.

You know how that works.

Guys are the most insecure people in the world.

They're going to go out there and say somethinglike that and the next thing you know, boom, we have to adjust because we're so powerful.

I'm a part of it.

We're a part of this community.

So that doesn't mean that's the case.

So a lot of people like to say, “Oh real estate'sa scam.

Keller Williams is a scam.

New York Life is a scam.

This company's a scam.

That company's a scam.

” That is like you being the insecure guy thata girl left you or you couldn't hack it because it was so hard but you called it that.

But the truth is, there are some scams outthere.

There are some scams out there.

Fortunately, eventually they get caught, andthey get shut down.

The government is not set up in a way to allowscams to last for a long time.

They have a life span.

A person cannot be a criminal all their lives, not finding a way in prison.

Many criminals end up in prison.

You can't just go on like that for the restof your life.


I wish more people would talk about this.

I wish more people would talk about number8.

I think I'm on #7 right now.

I wish more people would talk about #7.

It is this.

If you are going to do network marketing, here's the timeline.

It's a 10-year commitment.

It's not six months, or I'm going to giveit a shot for one year.

Nope, not going to work.

It's a 10-year commitment.

Do you know why it's a 10-year commitment? Because anything you do is a 10-year commitment.

Any business you do is a 10-year commitment.

Working out doesn't happen overnight.

People say, “Oh, Pat got swole.

” I've been working out since I was 14 yearsold.

My body has a memory.

My muscles have a memory.

This didn't happen accidentally.

I've been training since 14.

That's 24 years.

This didn't happen accidentally.

So if you're going to do anything with networkmarketing, or MLM, 10 year rule.

One year rule? Go to another business.

As a matter of fact, if you want to followone-year rule? Go get a job.

Go get a job.

Two year rule? Go get a job.

Five year rule? Go get a job.

10-year rule? You can be an entrepreneur and a businessowner.

And if you want to give network marketinga shot, it's 10 years.

#8, you need to understand that network marketingis a very easy target for comedians.

For media, for everybody.

Why? Think about it this way.

Comedians and media, there are typically threedifferent things that are very, very easy to target.

And you can't be naive and fall for it.

One of them is capitalism.

It's very easy to bash capitalism.

If you want to listen to any comedian or media, they love bashing capitalism.

Why? Because almost everyone I know tried a businessat a time and they failed.

And they have to say, that girl's a you knowwhat.

It's their out.

Capitalism is hard.

Running a business is hard.

It comes with anxiety attacks.

It comes with panic attacks.

It comes with challenges at times.

It comes with you almost losing everything.

It requires you work 80 hours a week.

Most people don't want to do that.

So why is it easy to knock capitalism? Because capitalism at times, people can failand it doesn't work and they have to bash it.

Now let's take capitalism out.

You don't have this video to watch.

You don't have Twitter.

You don't have Facebook.

You don't have anything to watch because aninventor invented capitalism.

A capitalist invented all these products.

Now another one that media likes to take shotsat is church, religion.

It's very easy.

It's very easy to take shots at churches.

Why? You know, churches, there's a part of it thatI can see being annoying.

You go to a church, you sit up there and thepastor gets up, “If you don't do this, you're going straight to hell.

And if you do this, you're going straightto this, ” And I already know I'm going to hell, man.

I just want to have a shot at heaven.

You know, sometimes these pastors get up, “We're going to hell and let me tell you what hell looks like! Fire burning everywhere.

You're skin's going to be burning!” Man, I know my skin's going to be burning.

I just want a second chance.

Can I get a second chance? Please.

There's a reason why churches get bashed.

They're a target.

They're an easy target.

And network marketing is also an easy target.

You know why? Because anything you paint as perfect, isan easy target.

Capitalism's not perfect.

Church is not perfect.

Network marketing's not perfect.

You paint it perfect, you're an easy target.

Stop painting it as perfect.

Stop painting your business as being perfect.

It's not perfect.

There's problems.

I can't go out on double dates with couplesthat say the following, ” We have zero problems in our marriage.

” Awesome.

We will never have dinner again.

Because we do.

My wife and I have problems.

We fight regularly.

We fought yesterday on Thanksgiving.

And you know what's crazy? We're very comfortable about it.

We're very comfortable about it.

I don't care.

I didn't marry you.

I married my wife.

I don't need to convince you my marriage isperfect.

I have health issues sometimes.

I have things I need to work on sometimes.

I have issues I've got to work on with mesometimes.

Paint it as real.

If you paint it as perfect, people are annoyedby perfection.

So network marketers, do yourself a favorand stop painting yourself as being perfect.

Because you are not perfect.

The more imperfections you talk about, themore people are willing to forgive you and listen to what you've got to talk about.

You open up the door for people to want tolisten to you.

Next, there are tax benefits.

There are tax benefits.

But here's a problem sometimes with networkmarketers.

They have no clue how to manage their money.

And because they have no clue how to managetheir money, the first thing they do is spend all their money and buy some nice things.

The company goes out of business and theylose everything, and now they owe the IRS money, it takes 15 years to pay a lien, youcan't get a decent job.

You can't get financing on a house.


So if you are in the world of network marketing, if you're a leader or CEO running a company, teach your people on how to manage their financeswell.

Be disciplined with them on them paying theirquarterly taxes.

Talk to them what to do with their savingsand set some money aside.

Don't just get them to buy stuff because themore stuff they buy, the more they're locked into your company.

It's like, hey, the more people lease cars, they have to stick.

It's our retention plan because they haveto work hard.

C'mon, man.

Don't treat people like that.

They have families.

If you're going to do it, people perform betterthe more savings they have, the more valuable they are to your company.

I want you to have a couple hundred thousanddollars in cash savings.

Slow down before you buy that.

You need to have some savings in place.

Take that route with people that you're developing.

#10, here's number 10.

And this is the part that some people aregoing to like, and some people are going to hate.

Network marketing actually works.

It actually works.

It is a 35 billion dollar a year business.

It has created a lot of jobs.

I'm down the street, every time I go homeon this freeway here, I see Mary Kay to my left.

You know how many women I've met that talkabout Mary Kay and the way that she changed their lives? Do you know how many? Do you know how many men I've met that whenthey bring up the name Rich Devos and Jay Van Andel have never been part of Amway? Every time somebody's brought up the nameof Rich Devos and Jay Van Andel, who actually had a chance to work with them directly – youshould see what they talk about.

People get emotional saying this man changedmy life.

You know how many times people bring up thename Art Williams, and they say, “This man completely changed my life.

” Who touched Art Williams, he changed my life.

In a completely different way, how many people, endless amount of people have said this? So what's the point? What's the point? It works.

I think the industry is an industry that canbe very effective.

I think the people in the industry are socompetitive sometimes that they try to paint it too perfect, and it backfires on them.

And I think the industry collectively, whetheryou guys are part of this organization called the DSN, collectively the industry needs topivot a little bit and start deciding how they want to brand themselves for the nextfive, 10, 15, 20 years.

You've got a big opportunity to make adjustmentstoday.

There are some guys that are positively affectingthe marketing place in a very good way, and I like the fact that that's taking place.

So now, let me go into compensation plans, on what you have.

Typically in the world of network marketing, you have three comps.

You have linear, you have binary, you havea matrix.

Let me give you my problems with a coupleof these, and you'll see what it is.

And you can be the judge of it.

Remember, I didn't make this video to makeyou happy, because network marketers are not going to like this video.

And people who don't like networking marketingare not going to like this video.

And a part of this video, network marketersare going to like, and a part of this video, people who hate network marketing are goingto like.

I'm trying to give you both arguments, whichis what you're supposed to do, as a talk show host or somebody that's teaching classes, not leaning to one side, which is what John Oliver did.

Linear has the longest lifespan.

Here's why.

Because in linear you actually have to work.

If in linear you don't work, you get passedup by somebody and someone can absolutely pass you up, and you can make no money inlinear.

You've got to work in linear.

But guess what? Linear lasts.

Amway's linear.

Herbalife is linear.

Many of these companies that last, Nu Skinis linear.

Arbonne is linear.

Avon, these are linear companies that theyhave.

Amway I think last year did nine and a halfbillion dollars.

Avon did 10 billion dollars or some numberlike that.

Linear works.

You can go get 50 recruits direct to you.

That works.

Binary, problematic.

Most people that watch this, who are partof some binary companies, they will message me.

And they'll say things.

And you can say whatever you want.

All good, because there's a lot of binarycompanies with decent products.

Here's a problem with binary.

Binary is where people will say, guess whatyou've got to do? All you've got to do is there's a breakawayleg.

You'll hear some people brag about how manypeople they have on their team.

I have 6, 000 people on my team.

They have 6, 000 people on their team becausethey're upline is a killer, and that guy put 6, 000 on one leg, and that leg took away, breakaway leg, and they forgot to match the other leg.

So they have 6, 000 on one side and they havethree on the other side, three cousins.

They don't have a big organization.

They just know how to sell you on what theydid, right? So binary is 1/3, 2/3 to get a check.

So for instance, if you get two recruits onone side, and four recruits on the other side, you cycle a hundred dollars.

1/3, 2/3.

So every time you get two, four, two, four, you get $100, $100.

So you get 20, 40, $1, 000.

Two hundred, four hundred, $10, 000.

Two thousand, four thousand, $100, 000.

And then there are binaries that are 50/50.

That you got to get three, three, even onboth sides.

As much as I'm not a fan of binary, becauseI'm a math guy, and I grew up being the kid that just was absolutely bored in the Army, I went and got a trigonometry math analysis book and all I did was mathematical formulas, because I love math, 50/50 has more of a shot of making it than 1/3, 2/3.

Guys, if you call me and tell me to sit downwith you again, I get so many requests from CEOs saying, I want you to sit down and breakdown our comp plan, I'm not doing it.

I run a very, I'm happy with my business, I don't need your $100, 000 to study your comp plan.

Not right now, I'm running a financial firmfor myself.

50/50 is more likely to make it than 1/3, 2/3.

Then the last one is matrix.

Matrix, you've got to be a little bit carefulabout, because matrix, this is how it goes.

Hey, you get recruited and anybody that thecompany recruits next goes under you.

So that's the first recruit.

Recruit number two goes here.

Number three here.

Number four here.

Number five here.

Six, seven, eight, nine, 10, 11, 12, 13, 14, 15, 16, 17, 18, so this is how it goes.

So they say, if you get recruited and anybodyin the company recruits next, you get a check, Six dollars, eight dollars, 60 dollars, 80dollars, 600 dollars, eight hundred dollars a month.

Yes, it works.

It only works, generally, if you're in thefirst four levels.

After that, it's pretty much over with.

Why? Because here's how math works.

Math goes 3, 9, 27, 81, 243, 729, 2100, 6300, 18, 900 – you get the idea.

55, 000, 165, 000, then you lose it.

So then you have nothing else going on withyour legs.

So matrix is fine if you're above this level.

After this level you've got nothing goingon with matrix.

So that's the problem that I have with matrix.

If a company is linear, at least you haveto work to make it.

I am a fan of for any system that you haveto work to make money.

These two, they sell the lazy aspect of networkmarketing, I am not a fan when people sell the lazy aspect of network marketing.

I'm a very big fan of a leader who's willingto tell the truth that you've got to work hard to make it in the business.

That's how you get people with credibilitythat are actually willing to take a look at your business model to be a part of it.

Now again, we've gone very deep into it.

People ask me what company should I be a partof.

Let me tell you what I haven't covered yet, Mario, tell me what I haven't covered yet.

Benefits, that's the only thing I haven'tcovered, right? Common products, I covered that.

I covered that, that.


Let's see here, the good and bad.

Okay, so now.

Benefits of why people get involved in networkmarketing.

Which I think, I think it's a very good thing.

I think it's a very good thing, these 11 things.

Again, I would like John to talk about thisa little bit, because there is some good in network marketing as well.

And here's what it is.

#1:Any organization that gets people to readbooks, I'm all for.

If I'm part of a speaking, what is that speakingthing that teaches people how to speak? What's it called? You know what I'm talking about, the speakingthing.

Toastmasters! If they make you read, I'm all for it.

If you go to a leadership martial arts guy, and you pay 200 bucks a month to learn martial arts, and the guy makes you read two booksa month, I'm all for it.

Okay, now what books? Obviously, I'm talking like elevating yourmind.

I'm not talking about go read 50 Shades ofGray.

I'm not for it.

I'm talking about books that really elevateyour mind.

If there's one thing I can tell you abouta lot of people that become successful.



by the way, there are a lot of celebritiesand a lot of politicians that you know their names.

If I give you their names, you will say, “noway.

” That at one point, were in network marketing.

Many of them you would admire.

They just don't advertise it.

Many of them, you admire.

Many, many of them are in Hollywood, they'rein sports, they're in T.


, they're governors, they're senators, some even presidents, atone point they were part of network marketing.

Whatever gets you to read books, and elevateyour thinking, I'm for it.

I support it.


Good people to be around.

You know, sometimes people are down, you wantto be around other people, it's good to be around other people that elevate you, theylift you up.

It eliminates shyness.

There are some people that are very shy aroundother people.

It's good to be around other people, becauseit opens you up.

You get some people that are very timid.

Network marketing will open you up in thebusiness.

#3:Better positive attitude.

There's a lot of people that are better positiveattitude.

Oh my gosh! I'm so excited! And it impacts every aspect of your life.

#4: Audacity.

It teaches audacity.

You kind of have to talk to strangers, andI don't care what it is, anybody that's got the audacity to talk to strangers, it's goingto benefit you in whatever other career you do.

Let's just say you get involved in networkmarketing, and you never stick around.

But you're in it for three to five years andyou pick up some of these good habits.

Your next company, you're going to excel.

Someone's going to say, Oh my gosh, he's amazing! He's so great! Because at some point, you had to be in networkmarketing and learn audacity.

Next, leads into other businesses.

You know, if you fail in network marketing, you're going to at least say, if I want to make money, I've got to be an entrepreneur.

You may just go become a realtor and makea lot of money as a real estate agent.

You may go become a financial, you may gointo a completely different business, but you learned the freedom aspect comes fromentrepreneurship so you do it.

Next, increased work ethic.

I'm all about people working hard.

I'm all about people increasing their workethic, especially the younger generation.

#7, helps with public speaking skills.

If you want to move up, you've got to learnhow to speak.

I did a video once called, what is it? How to speak like Casanova? What was it called? Something about public speaking.

What was the name of it? Different types of public speakers? Let's put the thumbnail here, whatever itis.

Dennis, let's remember to put the thumbnailso you know what it is.

Rebecca, let's put the link as well, so peoplecan see it.

Public speaking, if you're going to move up, you need to be a better public speaker.

I used to be terrible.

I used to be terrible.

Eventually when you give many, you get goodat it.

Communication improves.

Recognition is next, where you learn how torecognize other people, and you get recognized.

There's a part of the recognition aspect thathappens in a business.

It instills a lot of confidence, #10.

And then number 11 is the fact that thereare a lot of people that either had a death in the family, or they got a divorce, or somethingbad happened in their lives and they need to be around a positive environment.

Network marketing offers that.

Simple as that.

And, I would rather have somebody, let's justsay churches are all a con.

Let's just say every single church in theworld is a con artist.

Let's just buy that argument.

Now let's take it from there.

Let's just say that is what it is.

And let's just call churches that God doesn'texist.

It's just a non-profit organization.

How many churches have saved marriages? How many millions of marriages have been savedby churches? How many millions of churches have given aperson a place to live, while they didn't have a place to live? How many? I don't care what denomination we're talkingabout.

How many churches have helped a man or a woman, a woman lost her husband to another younger girl that he left, and she was suicidal andwent to a church and she didn't commit suicide.

And she's still living.

Sometimes network marketing attracts peopleand they come in and they stick around because it's positive.

They say, “I've got a better life.

I don't need to give up my life.

” So there's a lot of positive to it as wellto keep in mind.

And then, last but not least, Pat, if I'mgoing to get involved with a company, and I'm considering it, what should I be thinkingabout? Let's go through it.

#1, find an industry and a product that'sgoing to be around for 30 years.

Because, my assumption is, you want to bea legitimate person, doing network marketing the right way, where you're not changing companiesevery other year.

You don't want to do that.

You don't want that reputation.

The people that make the most money in networkmarketing typically chose one company and stayed in it the longest.

That's the key.

If I meet guys that say, “I made 10 million.

I made seven million.

” Oh really what company? “I've been with this company for 22 years.

” Oh wow.

And I've met a lot of them.

Believe me, I know many of them that makefive million plus, many of them.

And they'll generally be with one company20 years, 25 years, 22 years, 17 years, 16 years, 11 years, seven years.

They've been with one for a long time.

So if you're going to do it the right way, choose a product that's going to be around 30 years from now.

This is why I don't recommend technology.

Because it changes all the time.

You've got to choose a product that's goingto be around 30 years from now.

Number two, avoid companies that have majormarkups.

I have a problem with major markups in networkmarketing companies.

Let me explain what I mean by this.

Sometimes companies, to pay bigger bonuses, say this product costs $5 to make.

They sell the product for $50, and they haveto use that $45 to pay bonuses.

You don't have to sell the product for $50.

You can sell this product for $20, and you'regoing to be fine.

You know, normally the product needs to be40%.

So if it's 10 bucks, $4.

Makes sense? Not $40, which is what some network marketingcompanies do.

And the market doesn't help you.

I'll tell you why.

There was a company a few years ago that wasselling a Noni drink for $40 a bottle, and you would do an autoship.

I know this because my sister was a part ofit at some point.

And you would do an autoship and you wouldbuy 10 bottles a month, whatever the number was.

But they sold $40 a bottle.

And they were blowing up.

And then all of a sudden Costco came out withidentical same story, for $9.


And you know what happened to them? They had to say, “Well, no, our noni berriescome from a special place because.



” C'mon.

You really think you're going to convinceme that your berries come from a different place? It's Tahitian.

It's the same exact thing.


99, $40? And then all of a sudden, everybody startedwalking away.

They took a big hit.

Today, no one talks about that company.

You haven't heard about that company since2007, 2008.

That's right.

So markups, be very careful and find out whatit cost to make the product.

#3, choose the right group of people to berunning with, because it's very important.

When I say choose the right group of peopleto be running with, look at the top, on who it is.

Do you share common values? Do you share common principles? What do they stand for? How stable are the people? Really, you've got to watch that, and is ita community that you can run with for a long time? Are they fun? Do you connect with them? Do you have commonalities? Do they stand for.



look for that, because, look, I can tellyou one thing.

A lot of people are with their families onweekends.

You're going to spend more time with the peopleyou work with sometimes, than your own family.

You may as well like the people you work with.

So pay very close attention to the cultureand the group of people that they have.

# 4 is timing of the company.

So timing's got four different levels.

You've got survival, the first two years.

Then you have formulation, which is two tofive years, two to seven years, then you have explosion, which is seven years to fifteen.

And then you have plateau, year 15 and on, then they come back up again.

It depends on what you want to do.

If you want an established company that'sbeen around for a long time, and you don't want a lot of, you know, explosion is notgoing to happen, because the company after the fifteenth year, the explosion part's alreadygone.

It's gone already, typically.

But if you want a stable company, go witha company that's been around 20+ years.

If you want a company that is about to gothrough an explosion, choose three to seven years, to be a part of.

If you can be in seven to fifteen, you'rein a good sweet spot.

First two years, avoid.

And I know, when I say this, the first twoyears to avoid because if you can hack it through the first two years, great, but thefirst two years is like 95% chance the company's not going to be around.

So the first two years.

And some people tell you other feedback.

This is purely my feedback.

I may be wrong.

I'm giving you my feedback.

This is my counsel.

#5, a compensation plan with longevity.

Not a compensation plan that's good for today.


Company needs to profit.

Rule #1, company goes out of business, youlose reputation.

Company needs to stick around long term.

They've got to have a strong compensationplan.

#6, a worthy cause.

Like you know if somebody is, earlier todayMario and I were talking.

Actually, last night we were talking duringdinner and we mentioned three social media names.

Remember that? I won't say the names right now.

But I mentioned three names.

And I said, Let me ask you a question.

All of these three on social media.

Tell me the most authentic person out of thesethree, that you believe.

You don't have to like them.

Who do you like the most? And everybody said the same name.

I said, “Why?” He said, I believe him.

I believe what he says is authentic.

And a company that has a real cause, you willknow, based on how authentic the people are at the top.

If they overdo it in a way that's not, youwill know it.

By the way, it doesn't take a lot to figurepeople out.

It's pretty easy.

Just pay attention on how many times theytalk about it.

If they talk about it all the time, and there'sdeep rooted stories to back up why they believe in that, then there's some validity to it.

Okay, so last but not least, if you can bepart of a company, where you can own a piece of the company, because the one thing aboutnetwork marketing, look, the guy who ran Excel, the company, many, many people made a lotof money.

Amway's made many, many people a lot, a LOTof money.

You got Keller – they made a lot of money.

Lots of money.

If you can find a way to be part of the company'sequity plan, where you can own a piece of the company in case it goes public, or incase the company gets acquired or something, even better for you, because you participatein that.

I'm not talking bonuses, I'm talking profitsharing, purely equity, those are two things I'd be looking for, if I were you.

And at the end of the day, you've got to workyour tail off or else none of this stuff exists.

So today in this video, I probably said somethings you don't like.

And I probably said some things you agreedwith.

It's irrelevant.

I wanted to give you both arguments, for youto be able to find out for yourself, whether you're a critic, whether you're in it, whetheryou're somebody that's thinking about getting in it, or whether you own and run the companyor you're one of the leaders at the top, I hope something here you got to figure outa way to improve your game plan or change some of your beliefs and opinions about theindustry of network marketing.

With that being said, here's what I want youto do.

This is the type of a video that you may knowsomebody that's either in network marketing, or somebody that's thinking about gettinginto network marketing, share this video with them.

I would love for this video, purely out educationalpurposes spread like wildfire for people to change and adjust their ways in the networkmarketing world that's hurting a lot of people, and number two, for people that have put a”blanket” opinion about this industry to say, yes, you know what, that makes a lot of sense.

I never saw the industry from this point ofview.

So both ways, I think there's a lot of waysthe industry can make adjustments and improve in.

And I'm doing something that I haven't donerecent in the videos is, Mario suggested, he said, “Pat, I think we need to turn thisone into a PDF so you can download and print out and read and do whatever you're goingto do with it.

” So you need to visit PatrickBetDavid.

com, okay you'll go to PatrickBetDavid.

com, and if you find this video, you need to find thisvideo, on the bottom of this video, there will be a PDF.

Click on the PDF, download it, you'll needto subscribe your email to the newsletter that we send on a weekly basis, download thePDF, use it in any way you want, and if you want to share it with other people as well, tell them about the link.

They can download it as well.

And then they can train it any way they wantto do it.

Now if you saw this video on a complete differentwebsite, because it's going to be shared on many different websites, and you come backto PatrickBetDavid.

com, there's a search side that you can go and click on, just type inthe word, MLM or network marketing.

This video will pop up and go to the bottomand you'll see the link.

You can still get it.

And if you haven't subscribed to this channelyet, please do so.

We are going to get this channel, our goalis to get to a million subs by the end of 2017.

There's a lot of different videos on thischannel.

This is purely an entrepreneurship channel.

This is the only video we've ever done onnetwork marketing or MLM.

We have 350 videos on this channel, the onlyvideo we've ever done on network marketing, MLM is this video because this was highlyrequested after what John Oliver said, so we decided to do this video.

So be sure to subscribe to this channel ifyou haven't done so.

By the way, we're already getting a ton ofpeople that are sending us new pillows because we have a new contest.

We need a new pillow for 2017.

So if you're somewhat competitive and youthink you can send us a creative pillow to replace this pillow that we've made, if weuse your pillow, we will give you love and say that you sent the pillow in the entireyear of 2017, I'll be using your pillow in every single video that we have.

You can send a new pillow to 5001 Spring ValleyRoad, Suite # 1155 East, Dallas, Texas, 75244.

You see it on the screen as well.

Send it our way before the end of the year, and we may possibly consider using your pillow on 2017's videos.

With that being said, if you have any questions, thoughts, comment on the bottom.

With that being said, have a great day everybody.

Thank you, bye bye.


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