You basically answered your own ‘what if’ question. Of course there’s competition since there are no boundries, but you’re correct in assuming that there are approximately 300 million people in this country, and hold on to this because it’s gonna turn your thinking upside down - the no boundry protection IS A BENEFIT over franchise businesses. Sit back and take a breath for a second, then come back and I’ll explain - - -

OK, ready? It should come as no surprise that franchises are ANTI-competitive. The other side of the equation of having a protected territory, is that you’re also LIMITED. Now if being protected/limited is your thing, more power to ya. I’d rather have the competition and the freedom to expand. Is someone in Manhattan going to go out of their way to go to a McDonalds in Queens? Of course not, unless they have a reason to already be there. But a Manhattan MLMer can easily hook up with one in Queens and then have a Queens “branch”. I have people in Ohio and Colorado in Burnlounge, and I’m talking to people in other states - could I do that with a franchise business? No. So both sides have their positives and negatives - it’s just a matter of your own preferences. There are people who have become successful in MLM who would have NEVER been able to buy into a franchise before that. In my opinion, protected territories are for the weak.

As far as your numbers scenario is concerned - the stronger will do better, just like any other non-territorial outside sales job out there. I’ve been in the insurance business for 20 years, and personally I couldn’t care less about territorial protection, because I know that I’m better than most of the agents in my area. I literally haven’t pressure-closed a sale since like 1988. I know what I’m doing, and people buy from me for that reason. And if someone right down the street from my office is doing better than me and he’s doing right by the people he’s selling, more power to him, he deserves it.

I dealt with a guy today who was referred to me for health insurance for himself, his son and his mother. Ready to write me 3 checks. This is gonna sound like a contradiction, but because I know what I’m doing, I convinced him to stick with the company they have, just make some changes to the current coverages and save over $2600 per year in premiums. He was shocked, because he knows that I’m not going to make any money off of him even though I gave him valuable advice and spent time with him going over everything. Hey, it happens…

Most people can’t hack making a living completely in sales, ESPECIALLY straight commission. I can’t shut up, so it suits me. As I’ve said before, a lot of what you personally look for in a career, a group of people looking in the same direction, same goals etc. is the exact same as MLMers. Most MLMers are the most positive people you’ll ever meet. The fact that some do better than others (or some do better than most) is also no different than your job, unless of course everyone in your company is being paid the same amount. Should someone with 1/5 of the experience you have, 1/5 of the education you have, brand new to StarStyle make the same money as you do? Of course not.

I don’t claim to know more about MLM than you give me credit for. I’ve never said that. You’re the MLM expert, not me.

I disagree with your statement “Most of the people in MLM sign up people they already know, not complete strangers.”

First, you want me to sign-up, and we’re complete strangers. Yes, we were brought together by this blog, but we’ve never met and you continue to espouse the benefits of MLM. I’m not going to look back through the old posts, but didn’t at one point you make me an offer to try it out myself.

Second, a friend of my father is a Mary Kay rep in the Boston area. The last three times I ran into her, she approached other women at the events we were both attending and asked them if they’d ever considered becoming a Mary Kay consultant. She did not know any of the woman prior to meeting them that day.

Third, many BurnLounge events are held at nightclubs where they try and recruit new members. Not that that’s bad, it’s just a fact.

So, your argument doesn’t hold up. If BurnLoungers truly tried to sign-up just the people they know, you wouldn’t have the number of members the company argues it has today.

I get your explanation. It sounds good in theory and I’m sure in practice on some levels. I’m not saying that what you’ve outlined here for us isn’t real. I’m sure it is.

However, my thinking is that it’s working for a small percentage of the top members of the company who got in early. The success is not distributed or managed equally, and that’s my concern.

Here’s something for you. Say you have 20 BurnLoungers within a 10-mile wide radius who all started off in the beginning. They are at the top level. Out of those 20, 10 are really active. Out of those 10, they’ve each signed up 10. So, now you’ve got 10 BL top level moguls with 10 people each. Maybe the market stretches out to 100 miles, which means the pool of prospective BurnLoungers diminishes as you travel away from major cities, where the population actually consumes more music than their semi-rural or rural brethren.

Doesn’t it stand to reason, especially with the general (and non-scientific) rule of six degrees of separation, that at some point those 100 will be vying for the next group of 1,000? What if 3 out of the original ten have stellar teams that are signing up more than the other 7 because of that overlap, interacting with people who’ve already been approached on numerous occassions. There is no territory protection; it’s all about increasing the number of moguls, and has little if anything to do with selling music.

You argue that BurnLoungers will buy music from each other, which to me is just another way of propping up a failing business. At what point have all the current BurnLoungers filled their Zune players? What’s left to buy?

Additionally, what if those three teams at 33 strong begin to bump up against the other 77? How many people are actually interested in joining BurnLounge? There are an estimated 300 Million people in this country (I think that’s true…didn’t research that exact number), not all of the age or wits to be able to deal with a BurnLounge store. In the last year, there are far less than what one would predict if BurnLounge was an idea that you could quit your day job for.

Who are the ones actually selling music? As far as I know, the discussion from BurnLoungers always centers around the profits from sign-ups and never around the profits from product sales. I’m concerned that it’s more about making commissions off the sign-ups than it is about selling a product.

FYI, no, I don’t do this just for kicks. And, if someone is laughing at me, that’s fine. I’m okay with that. This is my opinion, and I’m sticking to it until someone shows me the real numbers being generated. To date, no one has ever done that, so I’m a disbeliever until I see the facts. How many people have signed up for BurnLounge? How much music is the company selling? What’s the churn rate? Where’s the growth? How are the new products doing in the marketplace?

I want to hear from BurnLounge customers about the great experiences they’ve had using BurnLounge. I don’t hear a peep. I want to hear from BurnLounge executives who can tell me when BurnLounge will be profitable and what the growth strategy is. I hear nothing. I see nothing. I read nothing. Why? Doesn’t anyone want to provide an honest answer? Where are the facts?

This argument is not about MLM, Barry. It’s about BurnLounge as a business model. It’s about digital music distribution. I could care less about MLM. How people want to make their money isn’t important to me. What I do care about is using the business of music and artists careers to build a shaky business model that may one day fall in on its interdependent self. The entrepreneurial road is littered with companies like this one that are truly visionary in practice, but in reality, their business model can sink at any moment and ruin many unsuspecting lives.

Tony Z.

**Say the BurnLounger you signed up begins to beat you to the punch everywhere you go together. He/she starts signing up more people than you. “Hmmm…,” you wonder. “My commissions are getting smaller, because I’m not signing up people directly. He’s signing up people in my chain. Sure, I’m getting a percentage of his commissions for doing nothing, but I’m not getting the full value of that person. I’ve diluted my own profits, because now I’m just letting someone else do the work. Sure I get something, but I don’t get the total fee and now I’m losing money being out here, competing with my own sign-up.”**

What you tried to portray as a negative is a TOTAL positive!!! Your whole example is so ridiculous, and I’m not just saying that because you’re not a fan of this company, but because you claim to know more about MLM than I give you credit for, yet your example shows how little you actually understand. Burnloungers running around a club trying to find people to sign up - gimme a break. Most of the people in MLM sign up people they already know, not complete strangers.

Let’s say just for demonstration purposes that you get 10% commission from all of the people you personally sign up, and only 5% from the people they sign up and the people below that sign up. Yes, the people that your personally sponsored people sign up make more than you do, and you only make half as much. BUT, let’s say that person signs up 4 people, and of those people, they each sign up say 3 each, and then those people only sign up 2 each. You’re now making 5% off of 40 people - FORTY… And of those 40, you probably would have never met ANY of them on your own. They may live in states where you’ve never been. Now thru this, the company is only paying out 25% in commissions on your downline - 10%, 5%, 5%, 5%. Most companies pay 60% back out in commissions. So this example is just scratching the surface.

I tried to make that as simple as I could, and if you still don’t get it, do yourself a favor and close down this thread because ANYONE who actually understands MLM is laughing at you.

You misunderstanding is so blatent that sometimes I wonder if you’re doing this intentionally, like just for kicks.

Here’s another case of pure ridiculous - **Let’s get back to franchising. People need food. They don’t need music. If I buy a McDonald’s franchise license, I’m virtually guaranteed someone is going to walk through that door, unless my francise is in the desert, hundreds of miles from civiliation. People don’t need music, nor do they need concert tickets.**

TONY, PEOPLE DON’T NEED GREETINGS CARDS, GIFTS, CANDLES, SPORTS MEMORABILIA, NICKNAKS, COACH PURSES OF THOUSANDS OF OTHER THINGS THAT ARE FRANCHISED EITHER - BUT PEOPLE BUY THOSE THINGS, DON’T THEY? It’s amazing the level you’ll go to in your effort to find the worst case scenarios.

First, since you don’t have the territory protections of a franchisee, there could be 5 current BurnLoungers within a radius of 300 feet at a Burnlounge event, in any given location, trying to sign-up newcomers and/or trying to get people to buy music.

Okay, you were responsible for signing up one of the other four in the room. So, now you have the advantage. But, do you? So, you and yours are a total of two people to attack the market of potential customers within that 300 ft. range, and you’re still competing with other Burnloungers not in your up or downstream for their attention.

The pool of customers is limited by the fact that a high percentage of them did not come to the event to purchase anything or get involved with BurnLounge. So, that leaves your pool of people to pick from infinitely smaller. Maybe 10% of the audience is interested in the pitch.

Say the BurnLounger you signed up begins to beat you to the punch everywhere you go together. He/she starts signing up more people than you. “Hmmm…,” you wonder. “My commissions are getting smaller, because I’m not signing up people directly. He’s signing up people in my chain. Sure, I’m getting a percentage of his commissions for doing nothing, but I’m not getting the full value of that person. I’ve diluted my own profits, because now I’m just letting someone else do the work. Sure I get something, but I don’t get the total fee and now I’m losing money being out here, competing with my own sign-up.”

Okay, so that may not a perfect example, because you’re still getting something; Just not as much as you would if you signed those new BurnLoungers up yourself.

But, let’s see what happens when the other four have no links to your chain. Then you’re competing directly with four others in the space. If they sign up ten new BurnLoungers and you end up with none, then you’re in the negative.

You spend 5 hours trying to sign-up people, but that 5 hours is now over. You would say it didn’t cost you anything, but it did, because you’re working. You’ve now basically worked for free. If you work, the expectation is that you’re rewarded financially. If you sign up four people in 40 hours, how is that profitable for you? I’ll work forty hours and make many times more than the Burnlounger. When are you profitable, Barry? When does the time plus the effort you put out turn into profitability?

First, you can’t live on sign-up fees alone. And second, the profit margin in a digital download is so razor thin, you have to sell tens of thousands of tracks a month to make any real money. We’ve already gone through that exercise.

Let’s get back to franchising. People need food. They don’t need music. If I buy a McDonald’s franchise license, I’m virtually guaranteed someone is going to walk through that door, unless my francise is in the desert, hundreds of miles from civiliation. People don’t need music, nor do they need concert tickets. Over 800 music stores have closed in the last two years, because people don’t need to walk into the store anymore when they can just download it online FOR FREE! How can BurnLounge compete with 1 Billion songs a month being downloaded for free? How can BurnLounge compete with iTunes?

If they so desire, one can go to iTunes, which works on both Mac or PC and download music to one of 100 Million iPods that exist in the marketplace. Zune…please! That’s a joke today. Maybe someday MS will catch up, but it looks like it’s going to take years and millions in a marketing spend to get that to happen. Apple’s iTunes is alread profitable. They have employees who work everyday and make decent salaries with benefits and vacation time, and they reach tens of millions of consumers, where BurnLounge hasn’t even reached mass adoption yet (and probably never will).

The BurnLounge platform only allows for the download of DRM”d Windows Media files, which cuts your market down so much, that there just aren’t the number of people with players to justify the effort. If there are 40K BurnLoungers and about 10 million or so Windows Media enabled players on the market, with many of them connected to Napster, Rhapsody and other services, I don’t see the money rolling in to a BurnLounger anytime soon, unless it’s based on signing up 1,000 new people everyday.

“How can it help me in the long run to sign up folks to compete with me for the same market share? How can signing up competitors be a good business model?”

And that’s what I responded to, his direct question. Nobody said anything about 3 guys being in a club going after the same person. So Kevin’s question proves he’s clueless about the MLM industry as a whole, and you *AGAIN* proved that you don’t pay attention to what you’re responding to.

Hold on, gimme a minute to go back up to your post to shred it a little more - - - -

OK, I’m back. Yes Tony, you’re right in that buying a franchise gives you some territorial rights - but at an often HUGE cost. You’re immediately behind a HUGE 8-ball. If the business fails you probably go bankrupt. In some cases you lose everything. Creditors crying in the streets… I’ve seen it before - people take their pension in a lump sum, buy a business that fails some time later, now they’re financially screwed and practically starting over at the age of 60 (that’s the type of the-sky-just-fell scenario that you seem to attach yourself to, just thought I’d show you that I do pay attention to what you say here). You’ll never see such a scenario in MLM, yet the reward can be greater on the MLM side if your timing was right and you work hard. I won’t go into why, because I’ve already lost you this far into this post anyway…

OK, what else - BRB - - - - Who said anything about China? Not me. But MLM happens to be big overseas, especially in Asia.

I never once said you don’t have marketable skills Tony, I said that when it comes to MLM you’re completely clueless even though you’ve said things about what you look for in a career that follow the MLM industry to an absolute T, and that you’re a complete pessimist when it comes to things you don’t understand and that you mock those that you don’t agree with. There’s a difference.

Okay mister, here’s one for you. You’re in a nightclub hanging out with two other Burnloungers who are not members of your team. All three of you are soliciting anyone in the nightclub who will listen, they should become a member of your team and not the other one’s team. Now, how is that not competitive?

With a franchise, yes, you do pay a franchise fee. With that franchise fee, you gain some rights and control over your territory. You are guaranteed that no one can open up another franchise within a certain distance from yours, unless you are in an incredibly high traffic area, for example, Times Square. There are two McDonald’s in Times Square, but they are at lease 50,000 feet from each other. And, food is a necessity, not a frivolous purchase.

Sure, you get into BurnLounge for 600 bucks a year, but you have to compete with other BurnLoungers who could be standing right next to you for those sign-up fees you so covet.

I haven’t yet heard one BurnLounger talk to me about how many songs they’ve sold. It’s all been about signing up other BurnLoungers. So, since you started posting here, how many tracks have you sold, Barry? How are you doing competing with iTunes? Rhapsody? Napster? Ruckus? Of course, 1 Billiion songs are traded each month on file sharing networks, but BurnLounge is immune to that, aren’t they? Sorry, I forgot, they’re the new user generated download revolution.

Where are all the new products, Barry? The phone service, the ticket sales? How are those shaping up?

Barry, BurnLounge didn’t even have a booth at the biggest indy music conference in the world, SXSW. Why? Sure, they sponsored a party, but noboby was talking about it. The SnoCap/MySpace partnership will take artists away from even thinking about BurnLounge. And, there are 20 other companies out there providing tools for artists to sell their products to fans.

BurnLounge is burned out, Barry. It was supposed to be based on music, giving the artist back some control, but all they’ve given is dollars around signing up other BurnLoungers, and no real choice on which player to use. There are 100 million iPods in the marketplace. You tell me how many of those iPod owners are going to download third party software to crack a WMA file and convert it to MP4/AAC.

I would NEVER buy phone service through BurnLounge when I can go direct to Verizon or AT&T. I would never buy music from BurnLounge when I can get it from iTunes, downloaded directly into my computer without a glitch. I would never buy tickets from BurnLounge, mainly because I just found StubHub.com. That’s the new way to purchase tickets instead of using Ticketmaster.

Barry, you’re fighting a failed concept. It’s not about MLM anymore, it’s about products and service. It’s about presenting a great concept and executing. To me, BurnLounge will always be a house of cards. Moving into China? Please! What BurnLounge executive has any experience in the Chinese market. You show me an Amercian MLM company with the wherewithal to make it in the Chinese marketplace, especially one like Burnlounge that doesn’t have the capital to even approach that enormity of that market. While we’re 300 Million here in the U.S., China is 1 Billion plus. The largest market in the world, and half don’t even know what digital music is.

Anyway, I gotta go take a shower and get to my real job, where you know, I don’t sell anything according to you. Except for the fact that we’ve now had Fergie, Mary J. Blige and The Game and Kanye West on StarStyle, and upcoming are Fall Out Boy, Snoop Dogg, Ne-Yo and Gwen Stefani. Our sales department is closing deals with major online retailers. We have deals with Fox, Fremantle, Disney and more. And, I’m working on Sony/BMG and MTV. But, yeah…I don’t know what I’m doing. I have no clue. I might as well quit my night classes at NYU now and burn my three Dean’s List certificates. Maybe I’ll go work in a restaurant at night as a waiter, because that’s the only marketable skill you think I have.

Tony

Sorry Kev, you’re wrong. Dead wrong. PLEASE EXPLAIN TO ME HOW THE PEOPLE YOU SIGN UP ARE YOUR *COMPETITORS* KEVIN(????) How Kevin? You sign someone up, THEY’RE NOW ON THE SAME TEAM AS YOU ARE KEVIN!!! You’re working together now Kevin! You’re now making money for each other Kevin! I mean, that is like the single most basic aspect of MLM, and you, and OF COURSE Tony, think the people you sign up are “competitors”… It’s just unbelieveable and ridiculous that you could look at it that way, that you 2 can be so corn-fused about this. This is like a bad trip in The Twilight Zone. It’s the most simple concept, and you just can’t get it. The very fact that you would even consider them competition is the best possible example one could give to demonstrate your lack of knowledge in this industry. And I’m sure that glass-half-empty attitude spills over into every other part of your lives. Negative negative negative. How you 2 make it from day to day must be a story in itself. I’ll betcha one thing - it ain’t by selling anything.

Tell ya what - instead, go open up a franchise business of some sort - see what less than an IMMEDIATE $50,000 - $100,000 downstroke in franchise fees and inventory and retail space gets you (especially in NY Tony) with NO guarantee of making a dime. You 2 are like the delerious leading the blind about this. Oooooh - $195. Try $150,000… I guess those people are just ’sad sacks” too, right?

It’s no secret that the majority of the people in this country who are in sales are not capable of earning their entire living that way. And sure, MLM is no different. But the MLMers didn’t put down $100K either.

I don’t care what MLM company it is, if you join one of these companies and you WORK IT, you’ll likely make money. You work more, you’ll make more - you work less, you’ll make less - just like ANY other sales opportunity. You two of course have no idea what that means, because you’re obviously not selling.

Let the numbers speak for themselves. And, I don’t think I ever posted about Alex Arnold, but it’s true he was involved in Excel, which went bust, and now he’s back at it again. It’s a sad world we live in when someone with his reputation is pulling the same scam twice.

I want to see the numbers too. I’ve cited some Alexa traffic stats, but I know they are skewed because users must have the Alexa toolbar to register the hits.

Even still, BurnLounge was no where to be found at SXSW. They may have sponsored an event, but where were they in the exhibit hall? They weren’t. That’s my point. For a company that claims to be for the artist and the individual, they had very little if any presence at the largest independet music festival in the world.

Tony