Book 2, chapter 13. Network marketing

In 1994, MLM, multi level marketing or network marketing came to materials department where I was working. Everyone was influenced by this great new idea and rushing to sign up to join Cosway products. In Malaysia at that time, there were more than 500 MLM companies offering products like cosmetics, kitchen appliances, jewelries and health products. Every year about 20 companies went bottoms up and they were immediately replaced by another 20 new MLM companies. Cosway Products was one of the first companies to offer ordinary super market items including food products and imitation jewelry.

The company was very innovative and the product lines kept on growing with additions like moon cakes and mobile phones. Every one was very excited with Cosway and their way of helping the little guy’s dreams come true. They promised to teach us how to establish and create residual income for our future financial security and to achieve financial freedom. All MLM companies promised to generate huge residual incomes now or in our twilight years. Many people including me were taken for a ride! Smile!

The idea was simple:-

1) Become a consumer of Cosway products. Switch brands and buy the cheaper detergents from Cosway’s distributors and save money. Try one or two other products like moon cakes while you are there. How about a cheap Motorola mobile phone?

2) If you like the products, introduce all your friends to use them. Keep on getting these products for them from the Cosway stockist.

3) After 3 months, if it is working for you and your friends and you are saving money on ordinary super market items, sign them up as full members and down lines and enjoy discounts and earn further bonuses and credits. (fly-buy points, kachingo, bonuses, whatever…were designed to motivate new members.)

4) Introduce all your neighbours, whanau, church group members and colleagues to use Cosway products.

5) After two more months of gestation period, begin to sign all these people up as Cosway members as your down lines’ downlines. Keep trying for 3 years and build your business to the fifth level. Eventually you will get them all. Some will sign on the dotted line, sometimes just to get rid of you! So, be tenacious and grow a thick skin!

6) You are now in business! This is an MLM or network marketing business which will pave the way for you to achieve future success and financial freedom for all of you suckers out there. It will generate residual income of 5000 to 15000 ringgit a month in 3 to 5 years for you for ever! You can goyang kaki and retire to play golf in NZ after working hard for only 5 years.

7) Get ready, study more brain washing techniques and buy motivational books on MLM from your Cosway up line Gregory Tan and attend meetings in KL and Sydney to learn more about this wonderful, wonderful way to get rich by using other people’s efforts!

8) Run private coaching classes for your downlines. Single out the smartest and most hard working ones and spend time teaching them one-on-one at home on how to con their friends and relatives into signing up for this business. If they are really smart, they can figure it out. (that you are in the biggest con game and scam in the world!) There is no need to tell anyone the truth.

9) Teach them all that you know about the MLM way of creating wealth and financial independence. After you have made copies from your tapes and books, sell all the originals to your downlines (to recover your money).

10) Encourage them to go out and recruit all their relatives, colleagues, friends and enemies.

11) Tell them a lie: say that you are considering resigning from Shell to do this MLM thing full time as a trainer for Cosway products. Lie to them that your income from Cosway is approaching the salary from SSB already! If they work hard, they can also achieve financial freedom like you! Keep lying and tell bigger and bigger lies!

12) Continue to lie to your down lines and pretend to be very busy and doing well, even if you are not. Spend a little money to catch the suckers! One is born every minute! Lease an expensive car, park it in your driveway for all to see how successful you are. Throw free Cosway parties for all your downlines (each down line must bring a friend to your party) and invite an up line from KL to come and give a motivational talk to them at your own house. The home environment will project a trust worthy image to strangers whom you or your down lines are going to sign up as members in the near future.

13) Continue to use Cosway products because you need to buy $100 worth of detergent a month in order to continue your membership and keep the dream alive for ever.

14) Very soon your own residual income will sky rocket into the clouds. Never mind about your down line’s income. They are the soldiers, worker bees and sacrificial lambs required to prop up this bubble, business, franchise, pyramid scheme, ponzi-scam, or whatever you might choose to call it.

In general, one percent of the people involved in network marketing are successful. The rest are just worker bees needed to keep this 1% happy and successful. This is true for Avon, Am-way, Tupperware, Forever Living Products, Cosway, Nu-skin products, Herbal tea, Omega trend and the other 9999 companies out there…This is the reason why so many people are involved with MLM. They are all dreamers going for the 1% chance to get rich without the effort. To me 1% is just too low a chance to get rich, almost like lotto! If I buy a Lotto ticket, I might also strike it rich and I don’t have to work hard like the downlines in MLM. These 99% people are brain washed to think that one day they too will be rich like us, the up line. Why not? They are doing a lot of work to make their dreams come true. They are getting into business for the first time in their miserable lives. They are motivated and some of them actually believe that THEY CAN DO IT!

Here is the mathematics:

Membership cost $60 a year. Most average Shell employees have about 20 friends, 30 relatives, 300 colleagues and 50 church members. This is equal to 400x60=$24,000 in membership fees alone for the company, from just one source, you! Imagine if 1% of these first layer down line again sign up their friends and colleagues outside Shell as members. The Cosway company will get another

4x400x60=$96,000. What happens if 1% of the second layers down lines again sign up their friends and acquaintances? This is growing to a whopping 16x400x60=$384,000. What about Cosway’s membership requirement to purchase $100 ringgit worth of goods every month?

This work out to:

400x100x12=$480,000 per year for the first layer

4x400x100x12=$1,920,000 per year for the second layer and

16x400x100x12=$7,680,000 per year for the third layer.

Need I say more? All of a sudden we are talking big money here. So, what is a couple of free air tickets to Sydney for a Cosway conference?! (Vincent Chin was sent to Sydney for a conference). Chicken feed for the MLM company, really!

In fact you and I should just start our own MLM company in Malaysia right now! Never mind the profits from selling the products. Just the membership fees alone, about $400K is worth working hard for two years in KL. We can set our director’s fees at 100K each and wind the company up as soon as we see signs that the bubble is about to burst. Then we migrate to NZ, Canada and do the same scam there again! How about it?!

(reminder: they don't serve free curry rice in our jails in NZ!)