Skybiz, Amway and Network Marketing

Around the turn of the millennium, I found myself changing my career from being a freelance computer consultant to that of a community worker, and it has been so to this day. There were many reasons behind the change, discussed in my book “Outside the Camp” and, while these days I am officially retired and not far off from drawing my state pension, it is community work (mostly unpaid) that exercises a significant part of my time, interest and attention. One of the notable changes as a result of my career change was that I went from earning a lot of money to earning a lot less.

Something I did not talk about in my book was a short lived venture I undertook during this transition period and the likely reason was the experience was raw one and even to this day and having long ago moved on there is a degree of pain, even though the lesson learnt was a salutary one. In a nutshell, I was seeking some money earner to supplement my income and stumbled across a newspaper advert that seemed right up my street. The name of the organization was “Skybiz” and it was about selling websites. At that time building websites was a specialist activity but here was product where someone with little computer experience could build their own websites, without much difficulty. The potential seemed huge. A check on the Internet indicates the enterprise folded long ago and did so under a cloud related to dubious ethical dealings.

I was attracted to the scheme, not just because it seemed to me to be a potentially good way to make money but it suited my needs and circumstances at the time and involved the sort of development that I was already interested in – the development of websites, although the marketing side was not my special forte and so it turned out. I was warned early on that this was merely another pyramid scheme and that it bordered on illegal, since it was a prime example of an organization that compels individuals to make a payment and join. In exchange, the organization promises its new members a share of the money taken from every additional member that they recruit, and where the product itself is inconsequential. Those involved in promoting the scheme and getting me on-board assured me this was not about pyramids but rather it was about Network or Multi-Level Marketing (MLM), which took advantage of the power of ordinary people to network among friends, family and acquaintances in order to promote and sell an exciting product that was in the fore of the Internet revolution taking place. MLM is a marketing strategy in which the sales force is compensated not only for sales they generate, but also for the sales of the other salespeople that they recruit. This recruited sales force is referred to as the participant’s “downline”, and can provide multiple levels of compensation and this was often related to the number of people in the downline.

To cut a long story short, despite investing significant time and money in trying to get my new business off the ground it did not amount to much and other than giving some valuable experience I did not earn anything. One thing I am grateful for is that no-one as far as I was aware took up the offer with any serious intent of making it their business due to my influence. What became clear early on was that those who were in driving seat promoting the business (some of who were my mentors) showed little interest in the product itself. Their main interest was signing up others to buy the product who will then sell that same product to other people. Regarding the product, it was a means for ordinary people to develop their own web presence at a time when this often meant employing those who were expert in web development. It was at a time when connecting to the Internet was via dial up modems via the telephone service, and was expensive and slow, but was about to change dramatically with fast and cheap Internet communications. As I reflect, as a product this had potential but alarm bells started to ring when it dawned on me that selling the product to those who would do the same was the business, not the product itself.

Looking back at it now, the idea of giving common people the tools to create their own web presence, which they could then maintain themselves, was one that particularly appealed to me, and while that was the idea behind the scheme I signed up to, it was not something those promoting and benefiting from the scheme seemed all that interested in, compared to their relentless pursuit to profit by signing up new members. From a technical point of view the idea was something with huge potential and given I can write about the experience, relatively painlessly and with minimal expense, and on my own website such that the world can see, is testimony to the fact that the website idea for the common man was something that indeed had great potential. As for selling to those who could sell to others down the line (as in a pyramid), my efforts were disastrous and not long after I decided to cut my losses and move on.

I mention this realizing what the good book says about there being nothing new under the sun is true and my own experience should be a warning to others who might be similarly inclined. What triggered my writing about my experience was an article I stumbled across by someone with a similar experience as me. The scheme is a well known one, under the name Amway (the American way), and unlike Skybiz is still going strong with, as far as I am aware, many good people signed up. As far as I can make out, while the MLM idea remains strong, unlike Skybiz the product involved is a lot more important. But when I read the article, the same concerns I had all those years ago hit me. It seems to me that while there are a few who do very well out of the business and some who do okish, the majority don’t do well at all. And if not Amway, there are many other variations on the theme where similar considerations arise.

It could be that what I have written would go over the heads of most but also it might strongly resonate with a few. We have seen in recent years how the Internet has revolutionized the ability of people to communicate. It also makes sense that as a marketing concept networking, even if not MLM, is worth considering, as it takes out the middleman and has the potential to enable ordinary people to make an honest living by selling products and services that people may want. It can also fit in with people’s circumstances, e.g. stay at home mums. But there are pitfalls as I and many others have found out, and while I can not say don’t do MLM, especially when I don’t know about the organisation or product involved, I would urge caution for those thinking along these lines, that they take these concerns and salutary warnings into account before being possibly conned into following a false dream that can only end in tears.

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