President's Message - Selling Snowballs to Eskimos!
April 2003

The concept of selling snowballs to Eskimos is kind of silly; why would an Eskimo pay for a snowball when he has all the material needed to make an unlimited supply right in his backyard...for free!

It would take a really good salesman, wouldn't it! He would have to have a pretty good sales pitch, wouldn't he? And don't you think this salesman would have to be someone who was a bit of a con man who just wanted to make a buck and did not really care about what was best for the Eskimo? That's why, when we say "He (or she) could sell snowballs to Eskimos," we mean he (or she) can talk anyone into anything.

I do not know what you would have to say about your snowball in order to get an Eskimo to buy it, but I have a hunch that it would have to be something that would not be exactly the truth. In other words, you would have to make the snowball seem better than it really is.

Now if you are contemplating being in the business of selling snowballs to Eskimos, you have to consider that each time you make a sale it's a one-time deal. In other words, no matter what you promised him, after he buys his first snowball and starts to experience its "benefits" (or lack of benefits) he's going to find out you really "snowed" him and is probably not going to come back to make a repeat purchase. Eskimos are like that. They can figure out pretty quick what they ended up with once they get a chance to use it and compare it with the older model. By the way, if you are going to be in the business of selling snowballs to Eskimos, I would counsel you to not offer a money-back guarantee. And if you are successful in making a sale to your first customer, I would suggest that you consider moving immediately to the next village, because news travels pretty fast within an Eskimo village and it's doubtful that you will be able to sell another snowball in the same village before everyone starts hearing the real story about your snowballs. Your chance would be much better if you hurried to the next village before the news gets there that you are coming.

But wait! What if you told the first Eskimo that if he helped you sell the other Eskimos snowballs, you would share the commissions with him? All he would have to do is tell everyone he knows that he really likes the snowballs you sold him much better than the old ones he used to get from the backyard. The mark-up on snowballs can be really high if you charge enough for them and sell a lot! And just to make sure you sell enough, you can require him to buy five cases a month in order to qualify for his percentage. As long as the first Eskimo is making money from selling snowballs he will probably stick to his story, and if he can offer the same deal of getting those who buy snowballs from him in on the deal, you could have all the Eskimos in the village telling each other great snowball stories. And since everyone is telling the same story about how good your snowballs are, everyone is likely to believe them and buy your snowballs.

Now, that's how to sell snowballs to Eskimos! Great program, right? Well, it might seem that way until you finally sell the last Eskimo in the last village five cases of snowballs, and everyone now has a garage full. At that point, the income stream stops and everyone stops making money. As soon as that happens, people stop telling your story and you are out of business. But what do you care? You have made millions of dollars and it was a lot of fun while it lasted. So what if there are thousands of igloos stacked with melting snowballs, whose owners are financially destroyed because their life-savings are gone and their credit cards are full. You can choose to think of the Eskimo who bought your first snowballs and a few of his friends who got rich with you. Like they say, if you are going to sell snowballs to Eskimos, it's important to get in on the ground floor, because when it's over, it's really over!

Okay, by now you've got to be asking, where in the world is this taking us? This is where I am going with this: each year several dozen multi-level companies start up with a program similar to the snowball story I have just described. Out of the dozen or so that start up each year, two or three make it to "the big time" (let's say that fifty million dollars per year is "the big time"). But when one makes it to the big time, literally thousands of lives will be affected. These snowball companies often really do "snowball" and grow extremely fast, with snowballs stacking up in garages by the boxful, and with lots of stories of big money being made by the first few Eskimos to "get in" the program.

But when all the garages are full the company crashes as fast as it grew (or even faster) and that is when the people end up on our doorstep at Melaleuca and we hear the stories. Each year it's a different company, but it's the same story. The ground floor opportunity never really got off the ground floor, or if it did, it collapsed back to the ground soon after the second story was built.

These are never funny stories; they are tragic, with lives being ruined and hopes and dreams destroyed. Even more tragic is when a Melaleuca Marketing Executive is lured away to a snowball company, and gives up a solid income for a bigger, faster-growing, easier opportunity. Invariably, after a year or two, they return with broken hearts, and broken bank accounts, and have to start over in building a viable business.

How do you recognize a snowball company? Here are a few clues:

• A single product - Not always, but usually, a snowball company will have only one or two "miracle products" usually a drink or a pill.
• High prices - Usually the price of the product is extremely high. Recently we looked into a juice company's product, which appears to be a classic snowball company. They are charging $35.00 per bottle for a drink that has less than $2.00 worth of ingredients.
• Miracle cures - In order for a snowball company to sell its snowballs, they have to tell some really unbelievable stories about how good the product is.
• High purchase requirements - Since snowballs are not something people normally buy and use everyday, in order to create enough volume to keep the commission checks coming, the company requires large monthly purchases of at least one hundred dollars per month.
• Case lots - Since snowball companies require large purchases each month, but usually have only one or two products, their distributors have to buy many of the same things. If you have several bottles of the very same product in your kitchen, you can be fairly sure you are buying snowballs.
• No "Money-Back Guarantee" - Some states require multi-level companies buy back 90% of a distributor's inventory, but snowball companies usually do not offer money back to unsatisfied customers - and for good reason!

I have taken the time and space to tell this story because I want you to know there are some pretty good salesmen out there selling snowballs. I would like you to be able to know a snowball when you see one and know what ultimately happens to the companies selling them. I have been careful not to mention companies by name, because the names keep changing. But the stories stay the same. It's painful to hear them. Be careful out there!

Sincerely,

Frank