Please bear with the incoming great wall of text, but having seen the recent article on ST and the recent arguments on SGForums, I can't help but feel the need to point out how Mr.Phang's business module has deviated from what we know as MLM in Singapore. I am saying deviated, but I am NOT implying that it is a scam. If you are planning to read ahead, please be aware the following is just SPECULATION and information gathered from misguided downlines. I am NOT saying any of the below are undisputed facts and neither should you have complete faith in my statements. Also, if the mods find it defamatory or crossing certain boundaries please feel free to delete. I DO NOT in any way wish to defame or damage credibilities or all parties involved.
Now I know there is a certain stigma associated with MLM (thus the need to define it and clarify misunderstandings)and while I am not exactly a fan or one of the "workerbees" of MLM, I have a fairly good idea of how it works. This is just a general definition , and I am NOT claiming to be an expert on the subject.
The general concept of MLM is such that the money is mainly contributed as a DIRECT transaction whereby money is exchanged directly for marketable products (Very Tangible and Real). These products are then sold and marketed off by the members themselves, at the same time attracting membership of new members (Their downlines).
Each member's income is made up of : <
Own sale income> +
Thus MLM's concept is made up of and
In this equation, in order for MLM to be LEGAL in Singapore, certain regulations are set in place such that the Uplines at the top CANNOT draw commission beyond a certain level of downlines. (Eliminating the concept that top feeders gain rapidly increasing incomes from introduction of bottom feeders.) The existence of a break off point prevents the "Idle blood sucking" that will happen indefinitely. Certain companies also have regulations that prevent commission drawing should an account remain inactive in its own sales. While different companies may vary slightly in policies, the government's stand is such that it is legal due to sufficient measures to ensure a FAIR and MERITOCRATIC environment whereby pioneers sitting on top of the sale pyramid CANNOT idly draw commissions, and latecomers stand a very equal opportunity to move up the hierarchy with sales and introduction of downlines. In fact, theoretically in this system the concept of sales pyramid is no longer valid, as bottom feeders can move up the top and become equally high flyers. There is NO one person allowed to feed off commission by sitting comfortably at the top.
More importantly, keep in mind that these people are selling VERY tangible products. They are doing SALES, as well as particpating in network marketing.
Now recent forum topics have people protesting against claims that Mr.Phang's module is a scam. Surprisingly people do this by coming up with claims that his products are entirely valid and true or by challenging others to find evidence that suggest otherwise. Whether the products are entirely valid or not I can definitely admit I have no idea. (Then again, can YOU claim to have absolute concrete evidence in favour of Mr.Phang?). To these people i can only say :You have COMPLETELY MISSED THE POINT.
Mr.Phang has emphasized in an article that his is an MLM company. Keep in mind the definition of the system that I have just stated above.
Having heard arguments from real downlines from SE, I can only say the company is doing a very sloppy and half-hearted job of educating them. Some still believe that the company is investing money for them to reap returns, thinking that SE is an INVESTMENT COMPANY, something which I believe Mr.Phang has so strongly denied.
This is evidence of people rushing into schemes that have ABSOLUTELY NO IDEA ABOUT. Now I *assume* Mr.Phang's module is such that : Money is injected into the scheme by joining members (Let's say $3000). Now, when asked where the $3000 went to, a SE downline answered "To the company lor, it makes the investment". This guy has ABSOLUTELY NO IDEA where the $3000 just went to. And Neither do we! In MLM the money is NOT INJECTED, but used by the member to BUY TANGIBLE products whereby he will have ownership over (after which he will transfer through SALES).
Now think about this : He is NOT BUYING products from the company in a very direct transaction. This is not like in MLM, where the products are HIS, he has ownership over what he bought, and he will sell these products and market them HIMSELF.
UNLIKE in SE, where a member claims that the company DOES have the products (I have no doubt the company actually DOES), but the point is, the member just gave $3000 TO THE COMPANY. He did NOT just buy any of the company's products AT ALL. (At least this is the info i got from their downlines) He does not own ANY of SE's products, much less sell them to other people.
If I am not wrong (which of course I very well may be) , a SE member's income equation is made up of =
+
Now Notice SALES has completely been removed from the Equation. (This applies for the downline I asked.)
Now MLM = and , HOWEVER, there is ABSOLUTELY NO SALES in the above equation.
From an Economic viewpoint, Output = Capital + Human Labor
In MLM, your role in SALES in such that you make up the Human Labor section.
However, *IF* you DO NOT DO SALES, your existence to the company is merely as simple as $3000. You are PURE CAPITAL. The downline system is such that you attract even more units of CAPITAL to the company. But you are not doing SALES at all. Some argue saying that when introducing the downlines, you are selling the product of "business partnership"
I say that is COMPLETE BULL. For all you know, your existence to the company might just merely capital. You have NO OWNERSHIP over any products of the company, much less have the RIGHT to sell business partnerships. Wake up man, this is a word game. You are merely attracting like minded people like youself to hand over CAPITAL to company. Is your CAPITAL used to buy products for YOURSELF like in MLM? *IF NOT* , Then what is your money used for? No, I am sorry to burst the bubble, but I seriously *think* you are NOT doing MLM, but a twisted capital money game where YOU, and all of YOUR downlines and uplines are Throwing Capital INTO this Moneypot. The reason for not having the need for sales quota like in MLM is because you don't even HAVE any products. (This is purely my speculation) They belong to the Company, NOT YOU. You are, as I say again, as important as just $3000 to them.
If you are not doing MLM at all, why are you suddenly being ALL pouring money into a "Business Module"? (which so many naive members themselves are SOOOO blur and clueless about). The answer is, of course, most apparent : The Sweet Deal in front of you. Who would resist the payments? The Programs, policies what not, most of you are just concerned with the sweet returns right?
Bear in mind PLEASE, *IF*this is the truly the capital throwing game I think it is, this Money Pot as I call it, is NOT a sustainable system, and NEITHER is it LEGAL in Singapore. It will reach a critical point whereby Money Injected by new downlines are NOT enough to sustain payments rewarded to old uplines.
Either way, when the cookie crumbles, PLEASE think of the new downlines who can pour up to $12k of money into their "brilliant module" . Can you imagine their pain and loss? I understand some of you are already earning more than your original investment (even though you might be clueless about the system), but this is ultimately a game of musical chairs. When the Music stops the ones who suffer are going to be those still left standing. Can you imagine the pain of having just invested your life savings in a company that crumbles and disintegrates without leaving you a cent? Do YOU want to be the upline that just introduced him to the company? Do You want to bear that burden on YOUR shoulder? This is not referring to any company in particular. It can happen to ANY such dealings.
Now the company might be completely legal and doing valid businesses. (Or otherwise.) However in any case what you are doing is not MLM, in fact most of you come up with invalid unconstructed arguments when posed the question : What exactly are you doing with that $3000? Why are you earning WITHOUT doing sales? Please be FULLY AWARE attracting downlines is NOT SALES. Saying it is will be a twist of logic and a word game so lame it is insulting the intelligence of the person you are using it on.
*Also, note that the I am comparing the system to my own definition of MLM. I am NOT saying that this system cannot be, or eventually be acknowledged as a deviation of the more widely accepted and legalised MLM in Singapore.
That is really my whole point here. What can really piss people is how they unknowingly drag another whole big bunch with them into the "business module"