iLearningGlobal - A Repeat of MLM History?
Termination of compensation plan and all distributor contracts are not uncommon things to do for MLM companies who get into financial trouble
. iLearningGlobal was one of the major companies to do that in 2010. It was announced on March 17 that iLG would cease distributing it's products via MLM and go to a more traditional retail sales model.
This article is not written to condemn the company, but to help those who are considering a career in network marketing gain a better understanding of the industry and allow them to make better long term decisions.
Ceasing its network marketing operations so suddenly would have come as a big shock to many of the reps who believed they could build a bright future with it. It's also bad for the entire MLM industry as many will lose confidence in it as a vehicle.
It's uncanny that the fledgling company suffered the same fate as the majority of startups. It did not survive the first two years.
As its name suggests, its product was knowledge and education, not consumables like conventional MLM's. In their open letter to representatives, they stated the main reason for shutting down its network marketing operations was its inability to compete with how cheaply the same knowledge and education could be delivered over the internet.
Yes, unfortunately it is pretty hard to sell something when people are readily offering it on the internet for free.
As shocking and anguishing the decision was for the independent reps, the company had every legal right to do what they did. The company said they could in their policies and procedures.
The policies and procedures clearly stated that the company had the right to terminate all agreements with their independent representatives with a 30 day written notice if it decided to go out of business or stop doing direct sales. And that's exactly what they did in March of 2010 - stop doing direct sales through MLM.
For anybody who thinks the policies and procedures document is no big deal, you are mistaken - it is a legally binding agreement between you and the company.
With this easy exit clause, it was clear the company had thought about drastic future changes to its business model.
If history is anything to go by, the business was doomed to failure. iLearningGlobal was definitely not the first company whose products were educational, several have come before it. They failed in a similar fashion.
In the late 1990's, The People's Network (TPN) merged with Pre-Paid Legal. For had it not merged, TPN would have failed and dissolved as a company, and the hard work of all distributors who built the company would have vanished overnight.
At BetterNetworker.com, Daegan Smith tells his story about how the two personal development MLM companies that he had built to the top level, Financial Freedom Society and Success University, failed under similar circumstances. Daegan paints a very clear mental picture of how his 3 years of hard work vanished right before his eyes.
While personal development is essential for long term success in network marketing, history shows that it doesn't stand up well as an MLM product in and of itself.
Consumable products will always have a place in the network marketing industry. They may be a bit mundane, not so glamorous, not so slick, but people will buy consumable products like shampoos, soaps and nutritionals for the foreseeable future.
iLearningGlobal - A Repeat of MLM History?
By: Wayne Wu
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