The MLM business model has been trending, with nearly half of revenue going to commissions.

In 2020, 3.5 million distributors generated 98 billion yuan.

One in six people over 20 are MLM distributors.

Only 27% of MLM distributors receive commissions, averaging 45,000 yuan.

Avon and Tupperware have seen declining profits, with Avon's stock falling from $30 to $3 in 10 years.

Tupperware's stock value has dropped over 90% in 5 years.

Emerging markets have seen a 27.5% year-on-year revenue increase.

The COVID-19 pandemic had a mixed impact on the MLM industry, with some companies thriving and others declining.

Peloton's revenue rose 139% and its stock price jumped 434% in 2020.

The global direct selling market is expected to reach $1,125.52 billion by 2027 from $688.45 billion in 2022, growing at an 11% CAGR.

The demand for extra income is driving the direct selling market's growth, mainly in Asia-Pacific and North America.

Key players in the direct selling market include Herbalife, Amway, and Mary Kay Inc.

Millennials and Gen Z, who prioritize mental health, are most likely to join and remain in MLMs.

People with unstable psyches and irrational thinking are more susceptible to joining MLMs.

MLMs often exploit people's psychological weaknesses through manipulation.

Participating in an MLM can harm mental health and financial stability, with 99% of participants losing money.

Social media is a crucial tool for businesses, including MLMs, to reach a vast audience.

MLM companies often prioritize recruitment over sales, using manipulative tactics to exploit members.

The MLM industry has seen significant fluctuations during and after the COVID-19 pandemic.

Regulatory changes have impacted the MLM industry, affecting consultant retention and asset value.

Individuals considering MLMs should be cautious of potential financial losses and negative mental health impacts.

The MLM industry is complex and requires careful regulation to ensure fair and transparent operations.

The MLM business model has been trending, with nearly half of revenue going to commissions.

Title:

Content: [Street Industry Watch] In the Year of the Pandemic, many people joined the "marketing" to pull down the line, but nearly half of the revenue was used to pay "multi-level" commissions.
Photo Credit: Central News Agency
What we want you to know is
At the same time, the body product channel and product spokesperson can further bring the "offline", which is the start of expanding the business and crossing the threshold of receiving commissions.
But this threshold seems easy, but not everyone can climb, because whether it is old or new distributors, most of them only contribute to the commission of the supporting role......
In the summer of 2020, it is supposed to be the graduation season of college students and the time when social newcomers are pouring out of the cage, but I saw a youthful face at a few lively junctions in the business district of Banqiao, and started the work of “listing people ” for housing construction.
Single-handed advertising placard, carrying a backpack leaning against the road light pole, the other holding a thin, seemingly split reference book, on the hot sun, earning the card holder's hard hourly salary, and paving the way for future job hunting.
When a PT (Part Time, Part-time, Part-time, Part-time) job that was originally labeled as a middle-aged, second-degree employment face, there were many young faces, can not help but make people shiver in the heat of the day!
The virus has hit households and disrupted the job market, affecting youth employment.
We have to admit that the epidemic has disrupted the pace of new people entering society and seeking jobs. Although it is at a time when the virus has not really invaded the door, the job market has been chaotic.
According to the Ministry of Labor ’ s “Youth Employment Status ” report, there are about 280,000 college graduates in 2020, a decrease of 5.4% compared to 2019. This reflects not only the decrease in the number of children and the decrease in the number of college students, but also the explosion of life extension in 2020. If further deduction is further deducted, the number of people who can work (including military service) is a low of nearly 5 years (223,000), a decrease of 12% compared to 2019. And...
As of the end of January 2021, only 68.3%, about 152,000 people, of the post-secondary students who graduated in 2020 and are working people, joined the ranks of labor / agriculture / public insurance, which is not only a low point in the past five years, but also a decrease of 24% compared with the previous year.
In other words, there are many college graduates, after more than half a year of job search, still have not successfully entered the workplace; the pressure of job search and living economy, so that they have to make very choices in this extraordinary period.
The job market is cold, and marketing continues to expand its organization, becoming a potential employment option for new people in society.
In 2021, the virus officially "invaded the door" in May, before graduating from college in the new year.
The alert of the epidemic, so that this year's job market has a cold wind, but also the unemployment rate in July this year (4.53%), blowing up the same period of high in the past decade, recently graduated social fresh people, inevitably have to face the fear of graduation, namely unemployment.
However, there is a saying in the workplace: Despite the economic downturn, business jobs such as insurance and distribution are always recruiting.
If this is not true, we can try to turn off or turn on the query function of the above industries on the job search platform to achieve a full personal experience.
However, in 2020, the number of people registered for the personal insurance business survey (85,000) increased by 5% compared to the previous year, and the number of new entrants to the marketing business is also a million people.
This is the type of occupation that people need to earn life, some people are joining is no retreat, but some people are carrying a dream forward, but the dream is very rich, the reality is very bones, when we dream in the winter, do not forget to pragmatically understand the mode of operation of the industry.
Today, let ’ s talk about selling!
Most people's stereotypes of marketing remain in the "brainwashing" of marketing conferences, constantly inculcating that this is a "personal business," getting rid of being hired as social animals, and directly attacking the freedom of wealth, and in addition, trying to give individuals the self-esteem and ability to think independently, suggesting that "thinking for themselves, not having to discuss with others."
Perhaps, some people have experienced this process of marketing to pull members off the line, some people join, some people feel that it is a "cult", but making money, quality of life, and self-empowerment (Self-empowerment) these material and psychological skills, is indeed for most people have a certain hypnotic effect.
However, most of our understanding of marketing is just the “recruitment ” discourse, and we do not have a deep understanding of how it works.
Perhaps, when we understand the logic of the industry, we can better understand why the so-called brainwashing conference is a starting point for marketing recruitment.
Multi-level marketing requires multiple distributors as sales and marketing channels
According to the Fair Trade Commission ’ s “Multi-level Marketing Business Development Survey ”, nearly 3.5 million distributors (each“ individual ” who joined members or purchased goods is an independent distributor) of 314 marketing entities (such as Anli, Ruxin, etc.) in 2020 generated a turnover of 98 billion yuan, a slight increase of 5% over the previous year. In contrast to the population over 20 years of age (more than 19.4 million people), about one in six people join the ranks of distributors.
Since all distributors replace all types of retail channels, they not only have the function of the channel, but also have the function of marketing, that is, word-of-mouth marketing, so whether they emphasize themselves as retail (sales) orientation, product recommendation (head-pulling) orientation, or emphasis on membership, they are ultimately based on "people" and "organizational hierarchy".
And the product channel and marketing costs saved by the marketing business are converted into the commission of the distributor.
Therefore, when we contact distributors and ask them why they are involved in the marketing industry, they will almost unanimously reply, "The product is great!"
Distributors continue to pay for new members by pulling down the line, expanding the organization and expanding the commission
That being said, it ’ s one thing to see how great a product is in the domain of a distributor, and constantly adding new blood is the highest goal for continuous marketing, expanding the organization, and increasing revenue and commission revenue.
Similarly, according to the Fair Trade Association report, the number of new entrants to the market in 2020 is about 1 million, and for the past five years, the number of new entrants has remained at around 1 million each year.
And in 314 marketing businesses, 96% of the joining system is to take "conditional join", of which, the most important is "order goods" (62%), "pay a deposit or membership fee" (59%), so "conditional join" is not only contributing to the marketing business and the top level of the sales (the one who pulls you in), but also contributing to the level of the commission.
In contrast, if someone joins, someone exits. The number of MLM merchants who quit in 2020 is about 450,000, and the number of exits in each of the past five years has been around 400,000 to 500,000.
The main reason for exiting is “non-renewal of contract ” (83%), which means no longer operating, no longer consuming, and the product is no longer considered“ great ”.
However, in this process, there will always be new blood distributors who will contribute to the expansion of the organization and the commission generated after the consumption of the product.
Whether old or new distributors, most are only supporting players who contribute commissions
As has been mentioned, the distributor at the same time with the product channel and product marketing (endorsement) people, their own recognition of the product, use, and purchase, to become a new member of the body and teaching.
Of course, once you can further bring in new members, new distributors, or offline, it is the beginning of expanding your business and crossing the threshold of receiving commissions.
It seems that the threshold is easy, but not everyone can climb it.
According to a survey conducted by the Fair Trade Association, 222 of the 314 marketing businesses (about 70%), and more than 60% of its distributors will make stable orders to the company; however, only 27% of all marketing companies (about 960,000 people) receive commissions, and the average commission per person is 45,000 yuan.
Therefore, most distributors who order goods either maintain their status as distributors by buying products, or sincerely recognize and continue to use the products; and by bringing in new distributors, order sales, and achieve a commission threshold, and can earn a stable salary or even become rich in this industry, not only are rare, but also the successful cases seen in various conferences or education and training survivors. "The Beautiful Misunderstanding We Have".
It doesn ’ t matter if the product is worth the price
In addition to the threshold, this kind of personal marketing and sales channels, to achieve the "multi-level" (that is, constantly expanding the organization down the line) of the business of distribution, not only eat personal interpersonal skills, "multi-level" commission distribution will indirectly increase product prices.
According to a survey conducted by the fair society, the import cost of the pyramid scheme business accounts for only 28% of the turnover, but the commission accounts for 44% of the turnover, in other words, the real cost of selling a commodity of $100 is only $28, $44 is used as the commission of the pyramid scheme business, and the remaining $28 is the administrative expenses and profits of the pyramid scheme. Whether the essence of a product is value for money is one thing, the marketing business will compress its own profits, expand its commission expenditure, and recruit and expand the organization with a strategy of large is beautiful, so that we can find: there are so many people who have joined the ranks of marketing!
Marketing has always been a very special industry, in which a small number of people have been able to earn their fair share of commissions, and become the mainstay of business operations, but the vast majority of people are only a supporting part of this multi-level marketing structure, and by paying membership fees, buying and using products, they become a part of the source of commissions.
Back to the intention of writing this article, no matter how difficult the job search for new people in society during the epidemic, I hope that by understanding the operation mode of an industry, I can assess whether to use the marketing industry as the first job to enter the society.
Through the Fair Commission report, we have gained a profound understanding, no matter how many of these people successfully earn high commissions and create successful careers, this data is hinting at us: if this industry is the main occupation, not only requires a certain degree of interpersonal relationships and skills, there may be a period of social novices can not understand life or career experience.
Source: Ministry of Labor “Youth Employment Status ”, Fair Trading Commission“ Multi-level Marketing Business Development Survey ”
Extended reading
Editorial responsibility: Ding Zhaojiu
Editor ： Weng Shihang
Tags:

In 2020, 3.5 million distributors generated 98 billion yuan.

One in six people over 20 are MLM distributors.

Only 27% of MLM distributors receive commissions, averaging 45,000 yuan.

Avon and Tupperware have seen declining profits, with Avon's stock falling from $30 to $3 in 10 years.

Title:

Content: 'Direct Selling' - Avon, Tupperware - Is Extinct

Nov. 18, 2022 11:25 AM ETHLF, MED, NTCO, NUS, PRI, TUP, USNA3 Comments
Robert FitzPatrick
394 Followers

Summary

  • Direct Selling became obsolete generations ago. So how is it that millions today get recruited for "income opportunity" in "direct selling" and billions are traded on "direct selling" stocks?
  • Avon and Tupperware are cited by "multi-level marketing," or MLM, promoters as "proof" that MLM, e.g., Amway, Herbalife, is "direct selling."
  • Usable data on actual income and churn rates of MLM "direct sellers," market saturation, and retail sales to actual customers are not provided.
  • In fact, Avon and Tupperware for years have been walking dinosaurs, still trying to do "person-to-person" sales to end-users with commodity products, while MLMs hype "unlimited" income.
  • The shrunken and devolved state of Avon and Tupperware today reveals that direct selling is extinct. MLM is not, and never was, direct selling.

It is generally accepted that "direct selling" was killed off generations ago by mass merchandising, big box stores, mail-order and then the internet, among other societal changes. The "Fuller Brush man" is long gone. No one's at home. No one wants or needs or has time for a "personal" salesperson. Everything's in stores or online. And, even when "direct selling" still lived, no one ever went into that tough line of work thinking they would get rich from it.

Yet, each year, millions are recruited, and pay thousands, for the "opportunity" to work as "direct sellers," with promises and expectations of "unlimited" income. The number involved today is many, many times greater than ever worked in that "extinct" field decades ago. Billions are being traded on Wall Street for shares of "direct selling" companies. How can this be?

In my book, Ponzinomics, the Untold Story of Multi-Level Marketing, I document the death of "direct selling" and the 1945 invention of "multi-level marketing," or MLM. I describe how "MLM" falsely assumed direct selling's revered old identity. I trace MLM from its Adam, a little California-based company called "Nutrilite," to today's "industry" led by Amway, Herbalife (HLF) down 64% YTD, Nuskin (NUS) down 31%, USANA Health Sciences (USNA) down 49%, Primerica, Inc. (PRI) down 13%, and Medifast (MED) down 45%. MLM's financial solicitations for consumers to become "direct sellers" have reached into – and led to losses for – virtually every household in America.

In the newly invented "MLM," the main source of revenue shifted from end-user customers to the salespeople themselves who are incentivized to "be their own customer" by buying their own products. Obviously, no one makes money purchasing their own inventory, but MLM offered a unique reason to do so – "unlimited" income potential.

No More Need to Knock on Doors

All MLM "direct sellers" can potentially gain "unlimited" income by recruiting an "endless" chain of other "direct sellers." No need to pound the pavement and get rudely rejected at front doors any more. Each "direct seller" on the chain has to meet a quota to "qualify" for future rewards from their recruits who, in turn, are their "own customers" and recruiters too, ad infinitum. The chain can grow without continuous personal effort. The qualifying quota can usually be met by just making a personal monthly purchase of inventory. "Commissions" on all these transactions, all the way down to the "last ones in," flow up the chain. In the MLM pay plan, most of the total commissions go to the top 1%. So, all new "direct sellers" try mightily to recruit (and buy) their way to those top ranks. Of course, only a tiny few can ever be at the top.

Some people argued this is a pyramid recruiting scheme, inherently unfair and deceptive, and a counterfeit of direct selling. In the design and the pay plan, bottom ranks – the vast majority – will inevitably lose. They said constantly adding salespeople in any area destroys profitable retail selling potential, if any exists to start with. They cited data on 90-99% loss rates and huge churn rates among new "recruits" and asked, where are the retail "customers"?

While offering no data on retail customers or salespeople losses or market saturation, MLM promoters offered "proof" that MLM is direct selling by pointing to two long-established and respected direct selling companies in their ranks, Avon and Tupperware (TUP). Both companies were members of the Direct Selling Association, DSA, and both were "direct selling" icons, Avon for its "ladies" and Tupperware for its "parties." To any pyramid scheme accusations, MLM promoters indignantly countered: "Are you calling Avon and Tupperware pyramid schemes?"

Walking Dinosaurs

The truth for both companies is very different from the MLM-spin. Avon and Tupperware used to have differentiated products and real consumer demand. Their salespeople made money from their own retail sales. But moving into the 21st Century, Avon and Tupperware became walking dinosaurs, vestiges of the extinct era of "direct selling." They were still trying to base their businesses on their historical brands and on person-to-person retail sales to real customers, as direct selling companies always used to do.

Despite MLM's citing Avon and Tupperware, and thereby bestowing legitimacy on the "MLM" members of the Direct Selling Association, deep differences between those icons of the old era and MLM burst into public view in 2013-14. The two companies publicly quit the Direct Selling Association, charging ethics violations and DSA-member connections to pyramid schemes.

Avon's Long Good-Bye

Avon had been a true direct seller for decades before MLM was invented. But as the door-to-door model faded, Avon began a long decline. In 2000, Avon began shifting its focus to "incentivizing" salespeople to recruit more salespeople and getting them to buy inventory, MLM-style. In 2009, during the Great Recession, Avon ran its most expensive ad in history, on television during the Super Bowl. The ad never mentioned any Avon products! It only solicited "salespeople." Still, global revenue dropped continuously over the next 10 years. Avon stock value fell from over $30 to just over $3.

Finally, Avon split off its faltering North American business and sold it to the Korean company, LG Household & Health Care. Avon claimed to have 250,000 sales representatives in North America. The remaining global business was later sold to the Brazilian MLM, Natura (NTCO) down 50% YTD, which also owns the retailer, Body Shop. Though Avon global was much larger, Avon shareholders traded 3 shares of Avon for just one in Natura.

The Korean-owned segment of Avon in North America is now classic MLM, selling the proverbial MLM "income opportunity" along with "health" supplements, make-up, jewelry, clothing, scented candles, even toothpaste.

On the Canadian Avon website, Avon promotes the "income opportunity," urging prospects in large bold black type: "Think big. Sell Avon part-time, full-time, you decide how much! It’s your business, your way!"

A disclosure (legally required in Canada, but not in the USA) appears midway down a long webpage in tiny, barely visible gray lettering: "The 2020 earnings of a typical Avon Leadership Representative was between $0 and $2,620 in commissions and bonuses." That's $0 to $50 a week, before subtracting all costs! And the "disclosure" does not break out how much of that tiny return comes from personal sales or the "downline."

Avon quietly rejoined the Direct Selling Association. The Brazilian company, Natura, which took over Avon's global business in 2020, has lost over 60% of its stock value in the last year.

Tupperware on the Brink

Tupperware was one of the first "party plan" companies, which are technically a small subset of MLM. They employ an "endless" recruiting chain, but are more rooted in retail sales transacted at "parties." Tupperware used to have a popular brand with innovative, differentiated products. But, as true direct selling began to disappear, Tupperware went into decline. It added MLM-type "health and beauty" commodities to bolster recruiting appeal but then deleted them. This year, it began also selling its products in Target department stores. Its kitchen-related goods are generally not distinct from other brands. A 10-months "Income disclosure" for Canada (not published in the USA) showed that half the "party planners" were classified "inactive," earning less than $30 for the period on average. 94% of the "active" ones reportedly received about $12 a week on average, before expenses.

In the last 5 years, the stock value of Tupperware has dropped over 90%. Its latest financials warned investors the company may violate loan agreements, setting off speculation Tupperware might declare bankruptcy.

The shrunken and devolved state of Avon and Tupperware, the most famous brand-icons of "direct selling," makes citing them as a defense of "multi-level marketing" as extinct as their old business model.

This article was written by

394 Followers
Robert L. FitzPatrick is the author of the new book, Ponzinomics, the Untold Story of Multi-Level Marketing (2020),the first comprehensive history and analysis of the "MLM" phenomenon, addressing its political influence, propaganda techniques and use of cult persuasion. FitzPatrick is an expert in examining and revealing deception and fraud in Ponzi schemes, pyramid schemes and bogus home-based businesses. He served as expert or consultant in more than 30 court cases involving pyramid schemes and multi-level marketing. He is co-author of False Profits (1997), an examination of the values and beliefs that support the delusions of pyramid schemes. He was featured on NBC Dateline, ABC World News, and CBS 60 Minutes, the documentary film, Betting on Zero and the podcast, The Dream.He has been quoted in many newspapers around the world, including the New York Times and Wall Street Journal. His booklet, Pyramid Nation, has been translated to Chinese and used by government regulators in writing China's first laws on pyramid schemes. His booklet, "The 10 Big Lies of Multi-Level Marketing", has been translated into four languages and posted on numerous websites. His White Paper, "The Main Street Bubble", which details the extensive influence-buying of the direct selling industry was featured in a CNBC Documentary, Selling the American Dream. In 2005, he delivered a seminar to in Colombo, Sri Lanka to central banking representatives from that country as well as India, Bangladesh, Bhutan, Maldives and Nepal. Robert FitzPatrick has developed informational resources for consumers, journalists, academics and regulators including a multi-media PowerPoint presentation and a statistical analysis of the losses suffered by participants in pyramid selling schemes. He also published a widely read booklet on the landmark federal case brought against the Amway Corporation. He is a expert network member of GLG Research, and Coleman Research Group, as well as other networks of experts who are referred to clients for consultation, speaking and report writing. In this capacity, he has provided expert consultation to financial many analysts who sought information about multi-level marketing companies and pyramid and Ponzi schemes. Robert FitzPatrick co-founded and serves as president of Pyramid Scheme Alert, the first international organization to expose and prevent pyramid scheme fraud. He personally responds to hundreds of consumer and news media inquiries each year. He has served as consultant and expert witness for Attorney General or State Attorney offices in four states, the US Dept. of Justice, and in numerous cases involving distributor fraud and pyramid schemes. Robert FitzPatrick is not an investor in multi-level marketing companies. He has never owned and never plans to own stocks of multi-level marketing companies. He has never been compensated based on any stock's performance. He does not offer investment advice and he is not an attorney.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: This article is for educational purposes only. It discusses fundamentals of the "direct selling" business model and the evolution of "multi-level marketing."

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Tupperware's stock value has dropped over 90% in 5 years.

Emerging markets have seen a 27.5% year-on-year revenue increase.

Title:

Content: JBD Announces Full-Year Results for 2023
HONG KONG, March 20, 2024 / PRESS RELEASE – Xinwengao.com / — Goldstar Holdings Limited and its subsidiaries (“Goldstar ”,“ Group ” stock code: 03315.HK) today announced the results for the year ended 31 December 2023.
Performance Steady Development
The Group recorded total revenue of RMB1.417 billion in the year, down 7.4% year-on-year, mainly due to the lack of effective demand in the Chinese market. With its leading position in the field of secure payment, the Group successfully expanded into emerging markets around the world, recording revenue of RMB319.9 million, an increase of 27.5% year-on-year.
Among them, the revenue of the embedded software and secure payment products business segment in global emerging markets increased by 27.2% year-on-year to 296.7 million yuan.
According to the changes in market demand, the Group strategically adjusted its product structure and increased the proportion of high value-added products in a timely manner, while continuously optimizing supply chain management, and recorded a gross profit of RMB 420.1 million during the year, with a gross profit of 3.3 percentage points year-on-year to 29.7%.
Thanks to the Group's strategic promotion and refined management, operating expenses decreased by 10.1% year-on-year.
In addition, exchange earnings declined year-on-year, and the Group recorded a net profit of RMB151.2 million, down 6.1% year-on-year. The net interest rate remained stable at 10.7% and remained stable in profitability.
The Group maintains a stable dividend policy and the Board recommends a 2023 Final Dividend of 10 HK cents per share and a Special Dividend of 4 HK cents per share. If approved by the General Meeting, the Final Dividend will be 14 HK cents per share, with a full-year dividend payout ratio of 79%.
Future outlook: using cutting-edge technology to generate new models and new kinetic energy
Recently, the Chinese government has launched measures to improve the bank card acceptance environment, further improve the multi-level and diversified payment service system including bank cards, leading institutions such as the People's Bank of China, China UnionPay, NetLink Clearing Company have responded positively, and China's payment industry is expected to usher in new changes and new opportunities.
Juli Development UMV Platform
UMV, a digital platform developed by the Group, uses artificial intelligence, privacy computing, big data analysis and cutting-edge algorithm models to build a one-stop, full-process digital integrated service platform, reshape the value chain of traditional business models of financial institutions, and realize on-demand business models of safe payment products to 10 million levels, creating an innovative ecosystem of safe payment industry chain.
Strengthen the layout of new business areas and expand core competitive advantages
In response to the call of "self-reliance with green and low-carbon technology", the Group has created diversified and safe payment zero-carbon solutions through the combination of environmental protection products such as environmental protection cards and metal cards and digital card issuing platforms, and helped global financial institutions to build sustainable development competitiveness.
Seizing the pilot opportunities of China's continuous promotion of digital RMB R & D, the Group makes full use of the channel resources of the digital RMB industry alliance to promote the construction of digital currency in multiple forms, scenarios and applications.
Continuously promote multi-domain expansion of security certification technology
The Group ’ s telecommunications products have completed system docking on the operator side of digital currency and digital identity authentication applications, and have actively established strategic cooperative relations with a number of operators.
The Group will continue to promote the expansion of safety certification technologies and solutions to telecommunications, transportation, Internet of Things, automotive communications and other fields, and promote multi-domain integration applications.
Expanding the global market and enhancing international competitiveness
The Group will actively participate in market activities such as global industry conferences and exhibitions to further enhance its international market influence.
The Group will pay close attention to the differentiated payment needs of various countries and regions, adopt local marketing strategies, actively explore emerging markets, fully tap potential customers, and continue to expand its global business footprint.
Looking to the future, the Group will closely follow the development trend of digitalization in the banking industry, unswervingly promote the digitalization and platformization development strategy, empower core business development with scientific and technological innovation, and promote new development models and new momentum with cutting-edge technologies.
About JINBANGDA (Stock Code: 03315.HK)
Founded in 1993 and listed on the Main Board of the Hong Kong Stock Exchange in 2013, Jin Bangda is one of the leading fintech companies. With more than 30 years of successful experience and global leading technology, Jin Bangda provides global customers with embedded software, secure payment products and digital equipment in the field of smart and secure payment. Provide data processing services, system platforms and other overall solutions to customers in a wide range of fields.
Official website: www.goldpac.com
Wechat public number: Jin Banda
Source: Press Releases Network Partners – Xinwengao.com

The COVID-19 pandemic had a mixed impact on the MLM industry, with some companies thriving and others declining.

Title:

Content: My channel
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layoffs, losses, plunging stock prices, the winners of the epidemic are mired in the mud
layoffs, losses, plunging stock prices, the winners of the epidemic are mired in the mud
Peloton
In the heat of the COVID-19 economy, there are few companies like Peloton.
Because people are unable or unwilling to go out to the gym, consumers are scrambling to buy their fitness equipment for use at home.
More importantly, sign up for its online courses. Peloton achieved its first single-quarter profit in 2020, with a 139% increase in revenue and a 434% jump in stock price.
But the boost was short-lived. With gyms reopening, course subscriptions and equipment sales plummeting, the company ’ s prospects have also shrunk.
Peloton posted a worse-than-expected fourth-quarter loss at the end of August, with CEO Barry McCarthy writing in an earnings statement to shareholders: “Sellers will focus on our fourth-quarter financial performance, resulting in lower revenue, negative gross margin and deeper operating losses overall. ”
They will say that this is a threat to the viability of the business. "
Even in trouble, however, McCarthy sees the company ’ s prospects as good, claiming that Peloton has made significant progress in turning losses into profits and curbing the pace of cash burn.
But investors don ’ t share his belief.
Shares have fallen more than 90% since the end of 2020 and are now worth less than half of what they were at the start of the year.
Peloton is not the only representative of how big winners of the pandemic economy have become losers in the aftermath of the pandemic.
Many companies have convinced themselves and their shareholders that they will be able to continue to grow once the pandemic subsides, but this has proven to be wrong.
Here are some of the other big table players in 2020 that are now losing in 2022.
Wayfair
The pandemic forced people to stay at home and has allowed millions of people to start working from home ever since.
Many people choose not to commute or go on vacation to save their money in order to buy furniture and other items to beautify their homes.
But the rush to buy household goods has stopped.
Consumers have changed their purchasing priorities, especially as the price of essentials such as food and gasoline hit record highs, forcing many households to cut back on purchases of non-essentials.
Now, any such purchase is more likely to be for something like a long-delayed trip plan than for more home needs.
The shift in spending has affected most retailers, including giants like Walmart and Target.
But for companies that are hobbled by this shift, perhaps online homeware retailer Wayfair is more typical.
The company announced that it would lay off 5% of its staff.
The CEO also acknowledged that the company is optimistic about its continued growth potential.
In an open letter to employees announcing the layoffs, CEO Niraj Shah said, “We have significantly grown our business to keep pace with e-commerce growth in the household category.
The tailwinds of the pandemic have accelerated the adoption of e-commerce, and I personally have worked hard to hire a strong team to support this growth. “But this growth has not materialized as expected this year.
Our team is too big for the environment we ’ re in right now, and unfortunately we need to adjust. ”
It ’ s not just that the company isn ’ t growing as fast as Peloton. Wayfair ’ s business has turned into a recession and turned into a loss.
Revenue fell 14% in the first six months of this year, with a loss of $697 million, compared with a profit of $149 million in the same period in 2021.
Wayfair ’ s stock surged 482% between the end of March 2020 and March 2021, and is now largely fully recovered.
Shopify
The Canadian software company that helps retailers sell online is also on the rise as businesses are forced to switch to e-commerce due to the pandemic.
But last month, its founder and CEO announced that it would lay off 10% of its workforce because its “bet on continued growth is not paying off. ”
In a memo announcing the layoffs, CEO Tobi Lutke said, “Shopify has always been a company that has placed a big strategic bet on ourselves that merchants need, and that ’ s how we succeeded. ”
""
He said the company ’ s e-commerce growth had been steady and predictable before the outbreak, but the initial outbreak led to an unanticipated spike in sales.
He said, “Is this surge a temporary effect or a new normal? ”
So, in line with our expectations, we decided to bet more: we believed that the volume of transactions in the e-commerce channel would jump permanently over the physical channel for five or even 10 years. “At the time, we couldn ’ t be sure, but we knew that if there was a chance of that happening, we would have to scale up the company to match it. ”
The good times don ’ t go away as quickly as some of the other winners.
But they have certainly begun to retreat.
While revenue in the first six months of this year was up 18% from last year, Shopify ’ s costs, including research and development, have nearly doubled.
The company also suffered a $1 billion book loss on its equity investments in the second quarter, resulting in a $2.7 billion loss from a $2.1 billion annual net profit during the period.
The company ’ s share price will remain at its current level in 2021, but has fallen 75% this year.
Zoom
The challenges facing this online conferencing platform are different from some of the other past pandemic winners.
There are still millions of people working remotely, at least for the short term, and Zoom remains profitable.
But profits plunged 71% in the first half of the year due to higher costs.
The company ’ s earnings have been better than expected and its stock price remains slightly above pre-pandemic levels.
Zoom reported weaker-than-expected earnings at the end of August and gave investors disappointing financial results, causing the company ’ s share price to fall 17% on the day of its results.
Zoom ’ s stock has fallen 56% this year and 86% since its peak in late October 2020.
Some of the blame for the stock price decline can be attributed to investors, who were ahead of schedule, driving the stock price up 765% from its peak at the end of 2019 to 10 months later.
In addition, every profit on the fight against the coronavirus is seen as a positive for Zoom: after Pfizer announced a successful clinical trial of the coronavirus vaccine in November 2020, Zoom ’ s share price plunged 25% in two days.
Netflix
Netflix has had a lot of success long before the coronavirus outbreak.
Even in the face of increasing streaming competition, the platform performed well in 2019, with two original films, Martin Scorsese ’ s The Irishman and Noah Baumbach ’ s Marriage Story, attracting audiences and Academy Award Best Picture nominations.
Season 3 of The Crown returns with a new cast member.
With these lineups, Netflix ’ s stock rose 21% during 2019 and its revenue grew 28%.
Worldwide subscribers to the service increased by 27 million that year.
But as the pandemic shut down, business took off. Netflix netted 16 million subscribers in the first three months of 2020 and surpassed 200 million subscribers for the first time at the end of the year.
Netflix ’ s share price has also soared, more than doubling its market value from early 2020 to a record high of $691.69 in November 2021.
But the competition intensified.
The company lost 200,000 users worldwide in the first quarter of this year, the first decline in users in 10 years and a far cry from the 2.5 million increase previously forecast.
In the second quarter, it lost another 970,000 subscribers.
The company has also been losing investor support. Netflix ’ s share price has fallen by nearly two-thirds so far this year, even as it bounced back from a 12-month low in May, when investors expected more serious subscriber losses.
Epidemic Stock Revenue
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Peloton's revenue rose 139% and its stock price jumped 434% in 2020.

The global direct selling market is expected to reach $1,125.52 billion by 2027 from $688.45 billion in 2022, growing at an 11% CAGR.

Title:

Content:
Global Direct Selling Establishments Market On Trajectory Of Substantial Growth, Projected To Reach $1,125.52 Bn By 2027

(MENAFN- EIN Presswire)

Direct Selling Establishments Global Market Report 2023 : Market Size, Trends, And Global Forecast 2023-2032

The Business Research Company's Direct Selling Establishments Global Market Report 2023 – Market Size, Trends, And Global Forecast 2023-2032

The Global Market Report for Direct Selling Establishments by The Business Research Company, detailing market size, trends, and providing a global forecast for the years 2023 to 2032.” - The Business Research Company

LONDON, GREATER LONDON, UK, December 12, 2023 /EINPresswire / -- The global direct selling establishments market is positioned for remarkable expansion, characterized by a segmentation based on type, products, and price range.

Market Size and Growth Projection: The market size for global direct selling establishments is set to burgeon from $688.45 billion in 2022 to $763.85 billion in 2023, exhibiting a robust compound annual growth rate (CAGR) of 11%. Looking ahead, the market is anticipated to soar to $1,125.52 billion in 2027, sustaining a CAGR of 10.2%.

Driving Factors: The escalating demand for additional income avenues, particularly in developing and underdeveloped countries, stands out as a primary driver for the direct selling establishments market. The Associated Chambers of Commerce and Industry of India (Assocham) forecasts the Indian direct selling industry to reach $2,169 million by 2021, underscoring the growing significance of direct selling as a viable part-time income source. Promoting self-employment and financial independence, direct selling addresses the need for supplementary income opportunities, a trend expected to propel market growth.

Explore comprehensive insights into the global direct selling establishments market with a detailed sample report:

Major Players : Key players in the direct selling establishments market include Herbalife, Amway, Mary Kay Inc., Infinitus, Tupperware, Vorwerk, Natura, JoyMain, DXN, and Belcorp. These industry leaders play a pivotal role in shaping market dynamics through innovative approaches and product offerings.

Market Restraints: The surge in demand for online shopping poses a challenge to direct-selling establishments, as e-commerce platforms often entice consumers with discounts. To adapt, some direct selling platforms have shifted their business models to incorporate e-commerce channels, addressing the evolving market landscape. The competition from online portals and changing consumer preferences is influencing strategic shifts within the direct-selling industry.

Emerging Trend : Artificial Intelligence (AI): Artificial Intelligence (AI) is emerging as a transformative trend in the direct selling establishment market. AI applications are revolutionizing customer interactions, enabling personalized marketing strategies, and optimizing inventory management. Technologies like chatbots and AI-powered software, such as Ventaforce, are enhancing operational efficiency and customer service in the direct selling industry.

Regional Insights: In 2022, Asia-Pacific led the direct selling establishments market, with North America securing the second-largest position. The geographical coverage of the direct selling establishments analysis encompasses Asia-Pacific, Western Europe, Eastern Europe, North America, South America, the Middle East, and Africa.

Access the complete report for an in-depth analysis of the global direct selling establishments market:

Direct Selling Establishments Global Market Report 2023 from TBRC covers the following information:
.Market size date for the forecast period: Historical and Future
.Market analysis by region: Asia-Pacific, China, Western Europe, Eastern Europe, North America, USA, South America, Middle East and Africa.
.Market analysis by countries: Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA.

Trends, opportunities, strategies and so much more.
The Direct Selling Establishments Global Market Report 2023 by The Business Research Company is the most comprehensive report that provides insights on direct selling establishments market size, direct selling establishments market drivers and direct selling establishments market trends, direct selling establishments market major players, direct selling establishments market competitors' revenues, market positioning, and market growth across geographies. The direct selling establishments market report helps you gain in-depth insights on opportunities and strategies. Companies can leverage the data in the report and tap into segments with the highest growth potential.

Browse Through More Similar Reports By The Business Research Company:
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Ecommerce & Other Non-Store Retailers Global Market Report 2023
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Department Stores & Other General Merchandise Stores Global Market Report 2023
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The demand for extra income is driving the direct selling market's growth, mainly in Asia-Pacific and North America.

Key players in the direct selling market include Herbalife, Amway, and Mary Kay Inc.

Millennials and Gen Z, who prioritize mental health, are most likely to join and remain in MLMs.

Title:

Content: What are the limits you must set to avoid labor exploitation?

  • Labor exploitation is a recurring theme in corporate jobs, therefore, we must learn to set limits.

  • A large number of Millennial and Gen Z employees quit their jobs, prioritizing their mental health.

  • The INEGI indicates that there are about 44 million micro, small and medium enterprises in Mexico.

A TikTok user revealed her secrets to oppose the labor exploitation and how to learn set boundaries in your workspace.

Currently, many of the organizations face a big problem: staff retention. Much could be speculated about this, however, it could be simpler than it seems.

Work environment for new generations

For the new generations, it is not enough to have a job in an important organization. Studies such as Mazars indicate that the tranquility of a healthy work environment is as important as receiving a good salary.

This is what Mazars pointed out: “he qualifies the ‘human atmosphere’ as important as the salary they are offered to decide to take a position or not […] Zillennials prefer to work in places where there are ‘facilitating managers’, or Human Resources leaders, who create an optimal work environment, fostering relationships and trust between teams”.

This, in part, has caused an increase among entrepreneurs, since the fact that corporate jobs are increasingly stressful, many opt for the option of entrepreneurship.

The Business Demographics Study conducted by the Inegi declares that there are about 4.4 million of micro, small and medium enterprises, while a study by the Association of Entrepreneurs of Mexico (ASEM) in the latest Radiography of Entrepreneurship in Mexico 2020 mentioned that the majority of those who start a business are young people between the 26 and 35 years old, including 35 percent; they are followed by the adults among the 35 and 45 years, with 31 percent. This says a lot about the growing interest of young people in finding their own source of income.

On the other hand, we have that, according to the Millennial and Gen Z 2022 survey, prepared by Deloitte, according to the Mexicans surveyed, 32 percent of millennials and 37 percent of Gen Z have a second part-time paid job or full-time. In addition to this, 34 percent and 39 percent, respectively, indicated being stressed most of the time.

This, in a sense, reflects that economic problems and the speed with which the postmodern world operates do not give people space to take care of their mental health.

What are the limits you must set to avoid labor exploitation?

With the intention of contributing to this “abuse” ending, a user shared the way in which an employee should set limits in his work. The objective is to avoid labor exploitation that, at this point, is becoming more and more common.

This initiative is part of a wave of videos that promote mental health around work. The user named Ana develops content on this topic and recently she shared a video where she shows how you can prevent your bosses from taking advantage of you.

This was what he shared after, at the beginning of his video, a voice-over sounds that says “Ana, this has to be ready for tomorrow.”

“By tomorrow I can have A completed. Or a quarter of A, B, C and D. Or if you want everything complete it would have to be next week. so i would like tounderstand how you want to refocus the scope to have a first version for tomorrow”.

And although ideally this can work, many pointed out that the consequences of standing up for your rights could lead to dismissal, even if it was unjustified. However, this was what the user commented on in a second video.

@anna.lb7 Reply to @eileen0103 Too bad it seems so normalized (and accepted) to ignore mental health at work. #saludmental #trabajo #cuidadeti #confiaenti #amorpropio #saludmentaleneltrabajo #limites #valores #banderasrojaseneltrabajo ♬ Funny – Gold-Tiger

In this second video, he advises you to stand firm in your position and ask for a report on your performance, because in this way, there should be no impediment for you to continue with your work.

Now read:

The lies of the workers with their bosses can become labor fraud

Job rotation is no longer an option for millennials; 43% want to stay

“He wants to scare me into resigning”; points out work pressure in the call center

Only 75 private institutions are certified by the NOM of labor equality

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People with unstable psyches and irrational thinking are more susceptible to joining MLMs.

Title:

Content: Usually, speaking about the financial pyramid, it is understood the involvement of people in business, where the basis of income is the attraction of new participants with a financial contribution, said Roman Sidorchuk, Professor of the Department of Marketing at Plekhanov Russian University of Economics, to the correspondent of IA REGNUM.
Pyramid
“For this kind of participation, mainly“ recruited ” people with a “disturbing ” psyche, who are dominated by an irrational type of thinking.
Given the fact that in these circumstances, behind the proposals of the organizers there is always a deception in the involvement of the participant, it is impossible to talk about marketing, which is usually guided by certain ethical standards (for example, the ethical code ESOMAR, the European Community of market researchers and public opinion).
Here we should talk about the methods of social engineering, when the goal is not to meet the needs of the consumer, as in marketing, but the psychological manipulation of people in order to commit certain actions.
In this regard, the methods of this kind of manipulation will constantly change, adapting to the interests of the potential audience.
The use of computer games is a convenient format for manipulation.
Moreover, people who are often fixated on computer games experience depressive and restless states, and become more malleable to the external influence of the gaming community, ” the expert believes.
As reported IA REGNUM, in Russia there is a new type of financial pyramids, said the head of the Department of combating unfair practices of the Central Bank of the Russian Federation Valery Lyakh.
See also: Bank of Russia warned about the emergence of gaming financial pyramids

MLMs often exploit people's psychological weaknesses through manipulation.

Participating in an MLM can harm mental health and financial stability, with 99% of participants losing money.

Title:

Content: Terrible Things People Do For Money: What You NEED To Learn

0

You can laugh if you want. But, growing up, I was into professional wrestling. It was something that my dad was a fan of. So, naturally, this is what we did to bond.

Anyway, there was this wrestler named Ted DiBiase whose gimmick was “The Million Dollar” man. And, he had an amazing catchphrase; “Everybody’s got a price.”

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Q4 2021 hedge fund letters, conferences and more

This Hedge Fund Thinks Nintendo Is The Next Apple

Apple's influence over the stock market and tech world appears to be waning, at least in terms of mindshare. While it's true that Apple stock has soared alongside other tech favorites over the last couple of years, tech news sites are no longer overflowing with daily headlines about the iPhone. Apple Stock Is Surging, And Read More

For some of us. That actually might be true.

Questionable Acts People Would Do For Money

A survey of 1,000 conducted by OnePoll.com found that 6% of people would commit murder for $1 billion. Treason, armed robbery, mugging with a weapon, or assisting in suicide are some of the crimes committed by one in ten people.

What about a million bucks? In addition to credit card fraud, one in ten would smuggle drugs over the border or even star in an amateur pornographic video. In exchange for $100,000,000, a quarter of people would steal a bike, forge a signature, lie to police and donate sperm or eggs without their partner’s knowledge. Meanwhile, a demented one in ten would kick a kitten or puppy. And, that same figure would take performance-enhancing drugs to win a sporting event or beat up a stranger.

For $100,000? 25% of people would steal a street sign. It’s also enough for one in five people to forge a signature or take from a restaurant or hotel. One in ten say they would enter into a sham marriage, perform a sexual act on a stranger, falsify tax returns, or snatch a purse for the same amount.

In exchange for $10,000, one in five will steal a street sign, shoplift or flash a stranger. On the other hand, one out of ten people would lie under oath, steal a bike or spend counterfeit cash for the same price.

What would people do for a thousand bucks? 15% of people were willing to shoplift or bet on a fixed sporting event.

Why Do Good People Do Bad Things?

Some people may not have much in terms of a moral compass. I would actually think that most of us are the opposite. Committing a heinous crime not only cheapens life. What’s more, there are additional costs that far outweigh the monetary value.

For serious crimes, you have legal expenses, as well as the probability of going to prison. Also, even if you aren’t charged with a crime, that money can be seized.

And, let’s be real here. Would really trust someone to offer you a large sum of money to commit a crime? There’s a good chance it’s a scam or set it up, such as the fake website Rent-A-Hitman. Even if the offer was real, that’s definitely someone you do not want to associate with.

Still, even decent and law-abiding citizens may do bad things.

Researchers from the University of Utah and Harvard found that even the prospect of money encourages unethical behavior.

“Were were interested in why good people would do bad behavior,” Kristin Smith-Crowe, a management professor and co-author of the study told CNBC.

“We certainly found that the love of money is corrupting and just the mere exposure to it makes people do bad things,” Smith-Crowe said.

“The study didn’t ask people to do horrible acts, there were more mundane like stealing office supplies,” Smith-Crowe added. For example, taking home a ream of paper from work when your printer at home is empty.

The Worst Ways to Make Money

So, with all that being said, that got me thinking. What are the worst ways to make money? And, no. I’m not talking about unspeakable acts like murder or hurting an animal. My focus is on seemingly legit, yet risky, illegal, dangerous, and unprofitable ways to make some extra cash.

Taking online surveys.

There is no shortage of online surveys. With some surveys, you’re asked your opinion on current events or to perform an act of kindness. Most often, however, surveys want your feedback on a product or service.

However, whenever you see a survey that promises decent money in hardly any time, buyer beware. While these surveys do pay, the cost is minimal. I’m taking from a couple of cents to a couple of dollars. Is it really worth your time to make that little amount of money?

A better option would be picking up a second job, even if it’s a minimum wage job you do on the weekend. If that’s not an option, consider a focus group or qualitative research study if you want a well-paying survey.

I should also add that online surveys aren’t the worst idea for certain demographics. For example, a stay-at-parent could do these surveys while their kid(s) are napping.

Medical testing and selling bodily fluids.

“Paid medical testing is neither a scam nor a low-reward opportunity; it’s possible to make actual money if you devote yourself to being a full-time pincushion for science,” writes Jon Skindzier for Ask Men. “No, this idea comes with its own unique set of drawbacks like vomiting, chills, seizure, death — stuff like that.”

“Six subjects in London, for example, suffered organ damage and life-threatening complications while testing an arthritis treatment in 2006,” he adds. “The real question isn’t whether or not you can make money this way; it’s how much bodily harm you’re willing to risk in the process.”

Stying in the “ick” zone, this is also true of selling bodily fluids. Processes are long, complex, and time-consuming, but the pay is low.

It’s possible for women to sell their eggs too. In addition to taking up time, this procedure can also be rather painful since fertility shots are often necessary. It is true that donations are not a dependable way of making money, and very often they are restricted by time constraints.

Multilevel marketing companies (MLMs).

If you haven’t personally been invited, I guarantee someone you know has been. Invited to what? Those “parties” where a friend or acquaintance is selling essential oils, pet care products, jewelry, children’s books, etc.

It turns out, that this is a MLM program.

As the FTC notes, “Most people who join legitimate MLMs make little or no money. Some of them lose money. In some cases, people believe they’ve joined a legitimate MLM, but it turns out to be an illegal pyramid scheme that steals everything they invest and leaves them deeply in debt.”

The FTC has also reported that 99% of people who take part in multiple-level marketing lose money. Why? Because MLM companies require their members to purchase products in advance with the hope of reselling them at a profit.

While there are some legit MLMs, Avon springs to mind, if you aren’t a salesperson or have the upfront costs you might want to consider alternatives. Freelancing, affiliate marketing, or drop shipping might be some viable options that are better suited to your budget and/or skills.

Using click-bait to sell links.

The majority of bloggers earn their living from advertising, affiliate sales, and more. Click-bait links, those that lead nowhere, to the wrong site, or make your browser a mess, aren’t sold or bought by them. Overall, there is little money to be made from these bottom-feeding methods.

How can you make money from a blog then? Partner with trusted affiliate programs such as ClickBank, ShareASale, or Commission. From there, you can set up ads with Google AdSense.

Those fake links will eventually get noticed by your readers, and they will stop reading your articles.

Sign spinning.

We’ve all seen them on the sidewalks holding signs advertising particular businesses. No matter the weather, at least one is always trying to attract customers. Because you are required to stand all day long, the job is extremely tiring as well.

Additionally, the pay is usually low. And, the practice has been criticized for causing distractions among drivers.

If you’re looking for part-time or a side hustle, you might want to explore more fulfilling options. If you’re a dog person, then consider dog walking or sitting. Do you like cruising around town? Maybe deliver food or rideshare.

Day trading.

Unless you have a lot of experience in investing, day trading in the stock market is highly risky. As a new investor, you should stick with mutual funds until you gain more experience.

While it isn’t as exciting or profitable, at least you’ll be able to make money as you learn the ropes.

Selling pirated materials.

Many pirated electronic books or digital copies of Hollywood blockbusters can be found and downloaded online either for free or for a small fee. Sound appealing, right? After all, it’s cheaper than going to the theater or buying an original copy. And, these are major corporations that can take the hit.

Well, it’s not as harmless you may have assumed. In 2022, it’s expected that the movie and TV industry will lose $51.6 billion to online piracy. Additionally, piracy can land you in trouble with local, state, and national authorities as well as your Internet provider.

Online gambling.

I know a couple of people who boast about the money they made gambling — either in-person or online. My first question? “Yeah, but how much did you lose to win that money?”

Trying to make money with gambling of any kind is always a bad move. In addition, online gambling is more accessible 24/7, making it easier to become addicted to it than in-person gambling. If not treated, you can literally lose everything.

If you have a gambling addiction, please got professional help. And, even if you don’t, look for other alternatives to make money where the societal and financial cost isn’t as high.

Work-from-home scams.

Online money-making offers that seem too good to be true probably are. The scammer capitalizes on your desperation to obtain your personal information so that they can steal your identity or use the money to set up a job for you. In cases where something seems fishy, such as poor spelling or grammar in an advertisement or on a website or a request for you to send money, you should be cautious.

That’s not to say that there aren’t legit work-from-home opportunities. In fact, here are 12 work-from-home jobs that will help you earn a million dollars in less than 10 years.

Recycling.

Once again, we are seeing an extremely time-consuming effort for very little result. In addition, lots of recycling must be done before profits can be made. It is usually necessary to obtain recyclables from others before profits can be made. It simply does not make sense to move and clean substantial quantities of items unless you have the storage space and means to accomplish this.

I can personally attest to this. I thought years ago that instead of just recycling my cans, why not make some money off of them. For months I crushed and stored cans until I had several big bags. I took them to the scrap yard and got like $20. It wasn’t even worth the gas going back and forth.

Final Words of Advice

You have to know which opportunities are worthwhile and which ones aren’t if you’re looking to start a new side hustle or just make money online. You can find better alternatives to all these bad ideas on our list of 101 passive business and income ideas.

Article by John Rampton, Due

About the Author

John Rampton is an entrepreneur and connector. When he was 23 years old while attending the University of Utah he was hurt in a construction accident. His leg was snapped in half. He was told by 13 doctors he would never walk again. Over the next 12 months he had several surgeries, stem cell injections and learned how to walk again. During this time he studied and mastered how to make money work for you, not against you. He has since taught thousands through books, courses and written over 5000 articles online about finance, entrepreneurship and productivity. He has been recognized as the Top Online Influencers in the World by Entrepreneur Magazine, Finance Expert by Time and Annuity Expert by Nasdaq. He is the Founder and CEO of Due.

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Social media is a crucial tool for businesses, including MLMs, to reach a vast audience.

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Content: MenuWallOpinions
Articles

Social Media: The great connector and its hidden truths

File photo

Sat, 22 Apr 2023 Source: Maxwell Investments Group

The Internet has undeniably changed how we live, work, and communicate. Since its inception, it has played a pivotal role in transforming lives and societies across the globe.

From revolutionising access to information to connecting people worldwide, the Internet has broken down barriers and created once unimaginable opportunities. Its evolution from a static network to a dynamic hub of diverse content created by everyone has been astounding.

In recent years, the rise of social media has become a particularly significant phenomenon. Boasting an impressive 4.7 billion users as of 2021, which accounts for 59% of the world's population, social media has become an integral part of our lives and has an immense impact on businesses and individuals.

Initially, the Internet was primarily a static network where users could access information but had limited means to contribute or interact with the content. However, as the technology evolved and became more accessible, users began to create and share their content, giving rise to a more interactive and collaborative space. This shift has been most evident in the emergence and growth of social media platforms.

Social media platforms have gained traction at an exponential rate, offering a space for users to connect, share ideas, and communicate with others from all corners of the world. The statistics are staggering, with billions of users engaging on various platforms daily. This unprecedented level of connectivity has led to a profound impact on how we live, work, and even perceive the world around us.

The widespread adoption of social media has transformed how businesses and individuals interact, opening doors for new opportunities, marketing strategies, and revenue streams.

As a result, companies are increasingly leveraging social media platforms to reach, engage, and retain their target audience. Simultaneously, individuals use these platforms for personal growth, networking, and connecting with friends and family.

However, the rise of social media usage also comes with its own set of challenges and concerns. Privacy, fake news, and cyberbullying have become more prevalent, demanding greater attention from governments, businesses, and users.

The Internet's journey from a static network to a dynamic hub of diverse content, powered by the rise of social media usage, has indelibly changed our lives and societies.

As we embrace the possibilities and face the challenges of this digital landscape, it is crucial to remain vigilant and informed about the potential impacts and opportunities.

I. THE EMERGENCE OF SOCIAL MEDIA

The rapid rise of social media has been nothing short of a global phenomenon, with individuals and businesses embracing its numerous benefits and applications. As a result, social media has become an integral aspect of our digital lives by allowing users to create, share, and exchange information, ideas, and thoughts through online communities and networks.

A. Definition and Purpose

Social media is a computer-based technology that facilitates sharing ideas, thoughts, and information by creating virtual networks and communities. By design, social media platforms are interactive and user-driven, allowing people to engage with others, share their experiences, and express themselves in various ways.

The ultimate purpose of social media is to connect people, foster relationships, and facilitate communication between individuals, groups, and organisations.

B. User Demographics

Social media platforms tend to attract diverse users, with some platforms skewing towards specific demographics. Social media users generally tend to be younger, better educated, and relatively wealthy compared to the broader population.

This is particularly true for platforms like Instagram, Snapchat, and TikTok, which have a younger user base. However, as social media continues to grow and evolve, it is increasingly being adopted by older age groups and users with varying socioeconomic backgrounds.

C. The Growth of Social Media Platforms

The growth of social media platforms has been exponential, with over 128 sites in existence today. Among these platforms, Facebook remains the largest and most influential, boasting over 2.8 billion monthly active users as of 2021. Other major platforms include Instagram, Twitter, LinkedIn, Pinterest, and Snapchat, each with unique features and a user base.

The rapid expansion of social media has been fuelled by advancements in technology, particularly the proliferation of smartphones and mobile internet access. As a result, social media has become more accessible, allowing users to connect and engage with others anytime, anywhere.

Social media's emergence has profoundly impacted various aspects of our lives, from personal relationships to business practices. It has revolutionised how we communicate, access information, and share experiences, ultimately transforming how we interact with the world around us. As social media continues to evolve and grow, it will undoubtedly continue to shape our societies and businesses in new and exciting ways.

II. SOCIAL MEDIA IN GHANA

In recent years, Ghana has witnessed significant growth in social media usage, with the number of users reaching an impressive 8.8 million. This surge in social media adoption has changed how Ghanaians communicate and interact with one another and has created many opportunities for businesses and the broader economy.

A. The Rise of Social Media Users in Ghana

The number of social media users in Ghana has grown exponentially, reaching 8.8 million people as of 2021. This increase in adoption can be attributed to the rapid expansion of mobile phone usage and affordable internet access, which have made social media platforms more accessible to a larger population.

As a result, social media has become an integral part of daily life for many Ghanaians, who use these platforms to connect with friends and family, share experiences, and access information.

B. WhatsApp: The Most Widely Subscribed Social App in Ghana

Among the numerous social media platforms available, WhatsApp has emerged as the most widely subscribed app in Ghana. With its user-friendly interface, free messaging and calling features, and end-to-end encryption, WhatsApp has become the go-to app for Ghanaians to communicate with friends, family, and business contacts.

In addition to its popularity for personal use, WhatsApp has also been embraced by Ghanaian businesses as a powerful marketing and communication tool. Businesses leverage the app to connect with customers, share updates and promotions, and provide customer support, ultimately enhancing their reach and engagement.

The widespread use of social media in Ghana has profoundly impacted the country's social, cultural, and economic landscape. As more Ghanaians continue to embrace these platforms, it is expected that social media will continue to play a critical role in connecting people, fostering business growth, and shaping the country's future.

III. THE BENEFITS OF SOCIAL MEDIA

The remarkable growth of social media has brought many benefits for individuals and businesses alike. These platforms have transformed how we communicate and share information and have become essential personal and professional growth tools.

A. The Personal Benefits of Social Media

For individuals, social media offers countless advantages, such as:

1. Staying connected with friends and family: Social media platforms enable people to keep in touch with loved ones nearby, bridging distances and fostering a sense of closeness.

2. Networking for job prospects: Professional networking sites such as LinkedIn have become indispensable tools for job seekers and employers, helping connect talent with opportunities and build professional relationships.

3. Self-expression and creativity: Social media platforms allow individuals to express their thoughts, ideas, and creative endeavours, allowing users to share their passions and interests with a global audience.

B. The Business Benefits of Social Media

Businesses have also reaped the rewards of social media usage, utilising these platforms for a range of functions, including:

1. Locating and interacting with customers: Businesses can harness the power of social media to connect with their target audience, engaging with existing customers and attracting new ones through targeted campaigns and content.

2. Promoting products and services: Social media offers a cost-effective and efficient way to promote products and services, allowing businesses to reach a broad audience and generate buzz around their brand.

3. Tracking consumer trends: Social media platforms provide businesses with invaluable insights into consumer preferences, enabling them to stay ahead of the competition and tailor their offerings to meet evolving customer needs.

4. Providing customer support: Businesses can leverage social media to offer swift and efficient customer service, addressing queries, concerns, and feedback in real-time and improving overall customer satisfaction.

C. The Blending of Social Interactions on E-Commerce Sites and Client Communication

The advent of social media has also led to a convergence between e-commerce and social interactions. Online retailers increasingly incorporate social media features into their websites, allowing customers to share product recommendations, reviews, and experiences with their networks.

This integration of social media and e-commerce not only enhances the shopping experience for customers but also helps businesses to foster a sense of community and trust, ultimately driving sales and fostering brand loyalty.

Social media has emerged as a powerful tool for personal and professional growth, offering many benefits for individuals and businesses. As these platforms continue to evolve and expand, their influence on how we connect, communicate, and conduct business is expected to grow even further.

IV. THE HIDDEN RISKS AND DARK SIDE OF SOCIAL MEDIA

While social media undoubtedly benefits individuals and businesses, it also harbours a darker side that cannot be ignored. When misused or overused, these platforms can lead to adverse consequences, both for users and society.

A. The Impact on Mental Health and Well-being

Increased time spent on social media can contribute to a range of mental health issues, including:

1. Anxiety: Constantly comparing oneself to others online can exacerbate feelings of inadequacy and anxiety, leading to a negative self-image.

2. Lack of sleep: Excessive use of social media, particularly before bedtime, can disrupt sleep patterns, leading to poor sleep quality and insomnia.

4. Depression: Overusing social media platforms can contribute to feelings of isolation and loneliness, increasing the risk of depression.

B. The Perils of Online Behaviour

Social media platforms can also be a breeding ground for harmful behaviours and practices, such as:

1. Trolling: Malicious users, or 'trolls', often target others online, posting inflammatory and offensive comments to provoke a response.

2. Privacy breaches: Sharing personal information on social media platforms can put users at risk of privacy breaches, leading to identity theft and other cybercrime.

3. Fake news: The rapid dissemination of false information on social media platforms can have significant consequences, influencing public opinion.

4. Cyberbullying: The anonymity provided by social media can encourage users to engage in harmful behaviour, such as cyberbullying, causing emotional distress and even leading to tragic consequences.

C. Baccarella et al.'s (2018) Honeycomb Framework

In their 2018 study, Baccarella et al. introduced the honeycomb framework to explore the dark side of social media. This framework consists of seven building blocks, each with its potential dark sides or risks:

1. Identity: While social media allows users to create and maintain an online persona, it can also contribute to creating fake profiles and catfishing.

2. Conversations: While online discussions can foster connections, they can also enable trolling and cyberbullying.

3. Sharing: The ease of sharing content online can lead to the rapid spread of fake news and misinformation.

4. Presence: The ability to track users' online activity can result in privacy concerns and stalking incidents.

5.Relationships: Social media facilitates relationship-building but can contribute to superficial connections and diminished face-to-face interactions.

6.Reputation: Online reviews and feedback can help businesses improve, but they can also be manipulated or falsified, leading to an inaccurate portrayal of a brand's reputation.

7.Groups: Online communities can provide support and connection but also foster echo chambers and radicalisation.

While social media offers many advantages, it is crucial to remain aware of its hidden risks and potential dark side. By using these platforms responsibly and educating users about potential dangers, we can mitigate the negative impacts and harness the full potential of social media for the betterment of individuals and society.

V. REAL-WORLD EXAMPLES OF SOCIAL MEDIA'S DARK SIDE

The dark side of social media is not merely a theoretical concept but manifests in real-world incidents with far-reaching implications. Here are a few examples that demonstrate the potential dangers of social media platforms.

A. Reddit: Threats, Bullying, and "Internet Witch Hunts"

1.Reddit, a popular online community platform, has often faced criticism for hosting controversial content and enabling aggressive behaviour. The site has become notorious for "internet witch hunts", where users band together to expose and vilify individuals for perceived wrongdoings, often without verified information. This can lead to harassment, public shaming, and, in some cases, irreversible damage to the targeted person's reputation and well-being.

2.The platform has also seen incidents of threats and bullying, with users posting harmful content and engaging in targeted harassment. Reddit has implemented policies to address these issues, but the sheer volume of user-generated content can challenge effective moderation.

B. Sharing Incorrect Content and the Risk to Reputation

1. Incorrect information can spread rapidly on social media, with potentially dire consequences. In 2013, a false tweet about an explosion at the White House caused a temporary stock market crash, wiping billions of dollars in market value within minutes.

2. Businesses can also suffer reputational damage when incorrect content circulates on social media. For example, in 2017, United Airlines faced a public relations crisis when a video of a passenger being forcibly removed from an overbooked flight went viral. The incident sparked widespread outrage and led to a significant drop in the company's stock value.

C. Relationship-Related Risks: Online Harassment, Stalking, and Cyberbullying

1. Social media platforms can facilitate the development of relationships but can also become breeding grounds for harmful behaviours such as online harassment, stalking, and cyberbullying.

2.The case of Amanda Todd, a Canadian teenager who took her own life after being tormented by cyber bullies, highlights the devastating impact that online harassment can have on an individual's mental health.

3. Social media stalking is another serious issue, with perpetrators using platforms to monitor, intimidate, and harass their targets. In a high-profile case in the UK, a stalker used social media to torment his victim for years, leading to her suffering from anxiety, depression, and post-traumatic stress disorder.

These real-world examples underscore the importance of understanding and addressing the dark side of social media. By raising awareness of these risks, promoting responsible online behaviour, and implementing effective platform moderation, we can work towards creating a safer and more positive online environment for all.

VI. ROUNDING UP

The Internet of Things and social media has undoubtedly revolutionised how we communicate, connect, and engage with the world around us. With an astounding 4.7 billion users across more than 200 social media sites globally, it is evident that these platforms have become an integral part of our daily lives. Users spend nearly three hours daily browsing, sharing, and interacting on social media.

While the benefits of social media are undeniable, offering opportunities for individuals and businesses alike to network, share ideas, and stay informed, it is crucial to remain aware of the hidden risks and potential hazards associated with these platforms. As explored throughout this article, social media can have a dark side, manifesting in privacy breaches, cyberbullying, and the spreading of misinformation.

As users, we must educate ourselves about the potential dangers of social media and engage in responsible online behaviour. This includes being mindful of the content we share, our interactions, and our time on these platforms. By doing so, we can work towards creating a more positive, inclusive, and safe online environment for all.

In addition, governments, regulators, and social media companies need to work together to establish and enforce policies that mitigate risks and promote user safety.

This may involve investing in more effective moderation tools, implementing stricter privacy settings, and promoting digital literacy programs that empower users to navigate the online world safely and responsibly.

In conclusion, social media has indelibly transformed the landscape of communication and information sharing. By striking a balance between its advantages and addressing its inherent risks, we can harness the full potential of these platforms while minimising the negative consequences of their misuse.

I hope you found the article enjoyable.

I always appreciate the feedback. If you have any topics you'd like me to cover or share my thoughts on, don't hesitate to suggest them. You can schedule a time via my Calendly at calendly.com/maxwellampong or connect with me through various channels on my Linktree: https://linktr.ee/themax.

Wishing you a fantastic week!

References

Kemp, S. (2022). Digital 2022: Global Overview Report. Datareportal. Retrieved from https://datareportal.com/reports/digital-2022-global-overview-report

Statista. (2022). Number of social media users worldwide from 2010 to 2021. Retrieved from https://www.statista.com/statistics/278414/number-of-worldwide-social-network-users/

Baccarella, C. V., Wagner, T. F., Kietzmann, J. H., & McCarthy, I. P. (2018). Social media? It's serious! Understanding the dark side of social media. European Management Journal, 36(4), 431-438.

Pew Research Center. (2021). Social Media Use in 2021. Retrieved from https://www.pewresearch.org/internet/2021/04/07/social-media-use-in-2021/

O'Keeffe, G. S., Clarke-Pearson, K., & Council on Communications and Media. (2011). The impact of social media on children, adolescents, and families. Paediatrics, 127(4), 800-804.

Kumar, S., Tiwari, P., & Zymbler, M. (2019). Internet of Things is a revolutionary approach for future technology enhancement: a review. Journal of Big data, 6(1), 1-21.

Bartleby Research. (2022). The internet is the greatest invention of the 20th century. Retrieved from https://www.bartleby.com/essay/The-Internet-Is-The-Greatest-Invention-Of-PKE6GYEJFLL5#:~:text=Open%20Document-,The%20Internet%20is

Statista Research Department. (2022). The Statistics Portal. Retrieved from https://www.statista.com/aboutus/our-research-commitment

Pfeffer, J., Zorbach, T., & Carley, K. M. (2014). Understanding online firestorms: Negative word-of-mouth dynamics in social media networks. Journal of marketing communications, 20(1-2), 117-128.

Buckels, E. E., Trapnell, P. D., & Paulhus, D. L. (2014). Trolls just want to have fun. Personality and Individual Differences, 67, 97-102.

Hardaker, C. (2010). Trolling in asynchronous computer-mediated communication: From user discussions to academic definitions.

Pai, P., & Arnott, D. C. (2013). User adoption of social networking sites: Eliciting uses and gratifications through a means–end approach. Computers in Human Behavior, 29(3), 1039-1053.

Dentzel Z. (2017, 12). How the internet has changed everyday life. Retrieved from https://www.bbvaopenmind.com/en/articles/internet-changed-everyday-life/

Santora, J. (2022, June 20). 133+ social media sites you need to know in 2022. Retrieved from https://influencermarketinghub.com/social-media-sites/

Walsh S. (2022, August 12). The top 10 social media sites & platforms 2022. Retrieved from https://www.searchenginejournal.com/social-media/biggest-social-media-sites/#close

Pew Research Center. (2022, October 7). Social media fact sheet. Retrieved from https://www.pewresearch.org/internet/fact-sheet/social-media/

Sasu D. D. (2022, November). Social media in Ghana - statistics & facts. Retrieved from https://www.statista.com/topics/9778/social-media-in-ghana/#topicHeader__wrapper

Columnist: Maxwell Investments Group

MLM companies often prioritize recruitment over sales, using manipulative tactics to exploit members.

The MLM industry has seen significant fluctuations during and after the COVID-19 pandemic.

Regulatory changes have impacted the MLM industry, affecting consultant retention and asset value.

Title:

Content: Educational Development Corp.: Growth Risk Might Be Overblown

Moat Investing
1.46K Followers

Summary

  • EDUC is the exclusive US co-publisher of educational children's books produced by famous Usborne Publishing by leveraging multilevel marketing (MLM) strategy.
  • It has strong fundamentals, fair valuation, and a compelling growth story that is being ignored by the market.
  • We arrived at a target price of $12.4 to $14.6 without incorporating any future growth and expansion in operating margins.

Investment Idea

Educational Development Corporation (NASDAQ:EDUC) has an attractive value proposition, strong financials, and optionality of significant growth ahead due to structural changes caused by COVID. On top of that, the valuation is reasonable, and management has skin in the game (owns 23% of shares outstanding). For these reasons, we remain bullish.

Business Overview

EDUC is the exclusive US co-publisher of educational children's books produced in the UK by Usborne Publishing, and EDUC also exclusively publishes books through their ownership of Kane Miller.

The business operates in two segments:

Home Business Division (Usborne Books & More or "UBAM") -(95% of revenues) - This segment sells books through consultants directly to consumers using a multilevel marketing model (MLM). Consultants sell books by hosting home parties, social media, and hosting book fairs with schools and public libraries.

Publishing Division – (5% of revenues) - Sells books to bookstores, toy stores, and other retail outlets.

If you would like to get the gist of our thesis, you can watch our YouTube video below.

Value Proposition

The children's books market is very competitive and fragmented. There are more than 135 publishers of children's books in the US. EDUC is competing with Scholastic and Pearson, which have extensive resources to run marketing campaigns and are well-positioned in both online and offline distribution channels. Although EDUC has a little moat, they have some strengths to their business model that will allow long-term value creation.

They have an exclusive and long-term relationship with Usborne. Therefore, clients of the Usborne in the US must acquire their books via EDUC. Also, there is a consensus that Usborne books are high quality and among the industry's best.

Their sales are a function of the number of active sales consultants. Commissions paid to consultants are a variable cost, and they are only paid when sales are made. Although this makes SG&A grow as the top line grows, since it's not a fixed cost to the business, it allows EDUC to achieve significant operating leverage. Also, it allows them to scale quickly and have flexibility.

Direct sales strategies like multilevel marketing are commonly referred to as pyramid and Ponzi schemes. However, the table below shows that it does work sustainably and increases revenue growth over the long run despite the negative press.

Source: S&P Capital IQ

Why might EDUC be mispriced?

There are multiple factors. Firstly, it's a micro-cap. This usually means there is limited analyst coverage, and due to the stock's illiquidity, there is low institutional interest. These factors, coupled with others, leave the company under the market radar despite its business is doing well and has promising perspectives.

Second, there is negative press around the MLM business models. The MLM model deployed by EDUC is vastly different from dodgy tactics used by other players. For example, many MLM models require the seller to purchase the inventory from the company before selling. However, this reduces the risk for the company and puts extra pressure on the seller, which can be left with expensive inventory that cannot be sold or returned. In the case of EDUC, there is no requirement to hold inventory.

Third, markets might be believing that the business's tailwinds are temporary due to COVID. Amidst Covid, schools were closed, and parents were working from home; this drove home-based learning and benefited EDUC. Additionally, unemployment rates soared, and many were left looking for work. This allowed EDUC almost to double its consultant count from 33 to 60 thousand. We believe the post-pandemic work from home trend will persist, supporting their sales. Furthermore, the active consultant might not fall back to the pre-pandemic level as these roles are usually part-time work which fits nicely with the trending gig economy.

The evidence speaks louder than words

There are also some clues from the management that revenue generated amidst pandemics might be sticky.

Management increased its dividend per share from $0.20 to $0.32. A dividend increase should be seen as a signal that a business is in solid financial shape and management is confident about its future.

Management increased capital expenditures to $4.15 million from $0.64 in 2020. This expenditure was primarily associated with equipment purchases to increase daily shipping capacity. These are some early signs that management is expecting positive growth going ahead. Additionally, this also improves their margins as amidst Covid they paid a premium for extra shifts.

EDUC has increased its inventory; the inventory build-up is approximately 60% of its total assets. This has been in anticipation of an increase in the sales, as it takes a four to six-month lead-time to have a title printed and delivered to them.

Source: Koyfin

Value Investing Approach: Asset Value

To calculate the actual asset value of the company, we tried to replicate the business from scratch. Therefore, below you will find the last reported balance sheet, where we have made some adjustments.

The value of the land recorded on books was $4.1 million. They own a 40-acre complex at 5402 South 122nd East Ave, Tulsa, with 400,000 square feet of office and warehouse space. They also own a facility located at 10302 East 55th Place, Tulsa, that has 105,000 square feet of usable space. According to our channel checks with realtors, the average price per square foot of their land lies between the range of $100 to $115. To remain conservative, we took the average price square feet to be $85. Therefore, we estimate the value of its land to be $42.9 million.

They also have a network of around 55,000 active consultants. To construct such a network from scratch is both costly and time-consuming. We estimate the replication cost of this network to be around $27.5 million ($500 per consultant). This is also roughly five months of sales commission cost incurred by EDUC in the fiscal year 2021.

The rest of the items are taken on book value.

Based on the above adjustment, we arrive at the total asset value of 106.7, and the fair value per share to be $12.4

Source: Moat Investing

Value Investing Approach: Earnings Power Value

This approach allows us to value EDUC without incorporating any growth. Here, we consider the business's historical figures (last five years) to get the normalized earnings and operating margin. To calculate the sustainable earnings, we smoothed out the company revenues for the previous five years to $131 million and then calculated the firm's average operating margin (6.5%) to arrive at the sustainable Operating Income of $8.5 million.

We add back the expenses typically spent on growth, and we estimate around 4.5% of sales is spent on growth marketing, i.e., promotion, advertisement, and discounts. Hence, we add this back as this expense is not required if the firm was not aiming to achieve growth.

We assume the normalized tax rate to be 26% and the estimated cost of equity at 9%. Therefore, we estimate Earning Power Value of the operating business to be $134 million. To that, we add the non-operational cash ($1.8 million), and we subtract long-term debt (10.8); we arrive at an implied market cap of $125.6 million or $14.6 price per share, with 12.3% upside potential, without incorporating any growth or expansion in operating margins.

Source: Moat Investing

Risks to Our Investment Case

  • Stringent regulation regarding MLM companies. For instance, the requirement to treat consultants as employees. This could have implication when it comes to taxation, wages paid and welfare concerns for workers. This could, in turn, shrink the bottom line or, worse, business model tatters.
  • The most straightforward risk is consultants quitting or switching to find other employment as the US economy improves. However, within our valuation model, we have smoothed the growth of revenue in the last five years, which is a function of l consultants recruited. Even if there is some mean reversion in terms of consultants working with EDUC due to the COVID base effect, our thesis would be less impacted.
  • As highlighted earlier EDUC’s inventory level is a significant portion of its asset. Whatever reason they become unsalable (i.e., change in taste or controversy in terms of published content) could impact our valuation.
  • Oil prices have increased significantly since last year (see below). Shipping costs are amongst the most significant component of its COGS; further rise in oil prices (consequently increasing shipping cost) could make it difficult for EDUC to remain profitable.

Source: Trading Economics

Conclusion

EDUC has an attractive value proposition, strong financials, and optionality of significant growth ahead due to structural changes caused by COVID. On top of that, the valuation is reasonable, management has skin in the game (owns 23% of shares outstanding), and investors are not even paying for any future growth at current prices. For these reasons, we remain bullish.

This article was written by

1.46K Followers
We are a group of experienced investors that like to dig deeper into stocks to find growth stories at a reasonable price with strong economic moats. We also aim to conduct high-quality analysis by deep diving into valuations, key business drivers, risk/reward, and different future scenarios.
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Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Individuals considering MLMs should be cautious of potential financial losses and negative mental health impacts.

Title:

Content: Multi-level Marketing scheme "disguised as an advocacy organization" draws criticism

Here's another multi-level-marketing scheme to be aware of. It's called "Trades of Hope" and Hannah Alonzo describes it as an MLM scheme "disguised as an advocacy organization." Here's how the Trades of Hope website pitches the business to potential "partners" and "advocates" (that's what they call folks who join the MLM to sell merchandise and recruiting additional sellers for their downline):

"Create job opportunities for women leading their families out of poverty and human trafficking by shopping ethically made home decor!"

The company works with "Artisan partners" across the globe, who create the products that are then sold by folks who sign up for the MLM. Trades of Hope describes their relationship with the artisans:

We pay our Artisan partners 100% of their asking price (they set the price!) for a product order before you even see that product on our website! We are in a business partnership with them. Not a charity. Our Artisans receive 3 to 6 times what they would normally make in their region. The Fair Trade communities that are helping them get their product to market follow guidelines of checks and balances to give back, not just to the Artisan, but to their community as a whole as well. This includes things like wells, children's schools, education for adults, land, and developing homes. It is life changing. Fair Trade is about providing a living wage for those in extreme poverty and giving them a chance for a better life.

If the business just worked with artisans to sell their products to the public, I'd have no problem with it, and would actually see it as a positive thing. However, Trades of Hope doesn't simply support artisans—its business model is based on recruiting sellers who then recruit other sellers, which makes it a typical MLM. The recruitment page of the Trades of Hope website clearly states: "Enjoy The Rewards and The Partner Does All The Work!" The problem is, though, that very few people are actually "enjoying the rewards," as it's been shown time and again that 99% of people who participate in MLMs lose money.

Over on Reddit, in the terrific subreddit r/antiMLM ("Stop MLM schemes from draining your friends dry. Multi Level Marketing (MLM) schemes are a drain on our society. Its participants either build the pyramid taller or get squashed by it.") I found some interesting discussions of Trades of Hope. Here's some insight from a former member:

I escaped from them. It's basically an MLM. You don't need to keep product on hand, you have a personal seller website and you pressure people to host parties. Their schtick is that they sell items made by people in developing countries so they use a lot of guilt and religious crap to pressure people into buying the items. We were told to post things on Facebook like "help this family out of poverty one bracelet at a time" etc. I finally noped out after realizing that their method is stupid and sustainable development can be found in ways that don't require me to guilt my friends and family into having stupid online parties. As MLMs go, the buy in is $150 so people don't lose their houses over this. The website is $12 or $13 a month. So not like lularoe requiring $4000+ buy ins but it's def an MLM, there's a lot of pressure to recruit and maintain a downline.

If you want to learn more about Trades of Hope, Hannah Alonzo recently posted a terrific deep dive into the company. Her analysis includes a critique of the company's recruitment structure, as well as critical commentary on how the entire operation oozes with "White savior complex."

The MLM industry is complex and requires careful regulation to ensure fair and transparent operations.