Company Name: Phoenix Trading
Costs: Around $50
What Is It?
Phoenix Trading is a direct marketing company that sells paper-based products with a strong emphasis on greeting cards. At one time there was actually a binary options scam going by the same name but the two don’t appear to be connected in any way.
The products from the company are pretty cool, especially if you actually do send cards or use customized stationary. Despite this, I don’t think there is enough demand for this type of product. After all, people are increasingly focusing on online communication and paper products are getting left behind. So, this would be a hard way to make money in no matter what and the MLM structure only serves to make that whole process more complex.
In general, Phoenix Trading focuses on paper-based products including cards, stationery, gift wrap and note cards. Most of the products seem to be unique to the company and many are pretty cool, like the example below.
I can see how the products would be appealing, maybe to someone with children. As for the other products…
Take the cards for example. Without a doubt, greeting cards is the main area that Phoenix Trading emphasizes and they have a huge range of the cards on their site. Yet, people don’t tend to send cards all that often, especially with all the digital communication these days. Likewise, many people are disorganized with cards, which can mean they don’t buy them until a few days before they need them.
So why not go to the hallmark store instead of starting the re-launch of a greeting card revolution? Sounds kind of like another MLM called Send Out Cards.
Both of those factors majorly decrease your chances to sell cards. The same applies to other products too, like stationary or wrapping paper. People do buy those products, but they aren’t things people buy frequently.
To a degree, this might depend on your audience. After all, the types of products listed would be much more appealing to some people than to others. Likewise, if there are a lot of places to get good quality cards in your area, this might not be a good choice for a business. But, if there aren’t, then maybe Phoenix Trading would work for you.
When looking at products, the other main things that I consider are price and quality. From the online catalog, it’s pretty hard to tell whether the products are decent quality or not. Nevertheless, I would guess that the quality of the cards is probably similar to most other cards you find in stores.
There is a decent selection of designs, especially when you look at the cards. Personally, I don’t find the cards all that interesting, but then again I don’t tend to send cards frequently anyway. I imagine that some people probably like the options, while other people won’t.
As an indication of price, the cards cost roughly $2.50 and the cost goes down to around $2 if you buy 10 or more at a time (converted from pounds, as the company specializes in the UK market).
Now, that isn’t an outrageous price for cards, but it isn’t exceptionally cheap either. Whether or not the cards are worth that price to you will depend on how often you send cards out and what you think of the designs.
First of all, I want to note that this company primarily caters for the UK, along with New Zealand, Australia and France. Most of the time I review opportunities that are available in the United States, but the size of the company and the product selection made it worth reviewing, especially as a significant proportion of my readers aren’t from the United States.
As for the business itself, it is an MLM, so the business model does focus on recruitment. Within the business, there are five ranks that you can progress through as shown below.
Like most MLMs, you increase in rank based on the sales you make and the success of your team. This gets progressively more difficult as you go up the ranks, but increasing ranks is also how you make more money. In particular, there are more bonuses associated with the higher ranks.
The general idea is to recruit other people into the company and help them develop. If you do this successfully, then you earn a certain percentage of their sales as profit. For Phoenix Trading, you can get bonuses for up to four generations down (so, the person you recruit is the first generation, someone they recruit is the second generation, and so on).
This is an approach that always sounds easier than it actually is. To be successful, you have to recruit people who are dedicated to making money from the company. Ideally, you also want those people to be selling to a different audience than you are.
Even just finding enough people to recruit can be difficult. After all, relatively few people have the time and finances to get involved in this type of business. Of those people, many wouldn’t have the dedication to keep going with the business in the long-term.
There is also one unusual aspect to the plan:
This is the part that bothers me the most. It means that if you are buying more product for yourself then your potential to make money is higher. The approach is manipulative because some distributors would feel pressured to spend more money to increase the amount they earn per sale.
Rhetoric Versus Reality
One of the worst things about MLMs is all of the rhetoric and hype that surrounds them. Distributors are frequently told that their success is based on how much hard work they put in. So, if you put more time (and more money) into your business then you are more likely to be successful.
In some ways this is true. Regardless of the type of business you are in, putting in more work will tend to contribute to a greater level of success. But, with an MLM, this is a little bit like pushing a cart up a hill – you’re trying hard, but there are so many things working against you.
One example of this is the fact that people don’t often buy the products that Phoenix Trading distributors sell. Some distributors try to get around this through ‘leading by example’. In many cases, that can mean they start sending out cards more frequently. That could include birthday, graduation, thank you and get well cards.
To me, that practice is deeply concerning.
It might be a good way to advertise the company and get more people interested, but at the same time, distributors are actively paying for the products they are using in this way. Also, there’s no guarantee that this will actually result in additional sales.
Because of this, distributors can easily end up spending much more than they intended in the process of drumming up sales.
Most distributors would argue that doing this is just part of the process. After all, you have to ‘spend money to make money’ and any method of earning money is going to take work. And yes, that’s true. But, have you ever heard the quote ‘work smart, not hard’?
If you’re following a good system, then hard work increases your success. But, with an MLM, you just end up fighting the model every step of the way. In most cases, this means you are putting in much more time and money than you should have to for the success you are achieving.
After all, there is a reason that so many people fail to make money through MLMs. For example, here’s an excerpt from an article on the negative impacts of MLMs.
Right from the beginning, MLMs are unrealistic and this is certainly the case with Phoenix Trading. Most people who become distributors will have no idea about the risks and certainly won’t realize just how hard it can be to be successful.
MLMs are often called a scam but that isn’t completely accurate. More than anything, the companies are misleading and they tend to overemphasize the chance for success. At the same time, many MLMs (like this one) target a group of people who don’t have the knowledge needed to spot the risks.
For example, I’ve talked to a number of women who joined this type of company. In many cases, they only had a rough understanding of the recruitment side of things, so they mostly focus on selling products. For some people, that is actually fine and they make a little bit of money on the side and have fun doing so.
But, what about the people who are trying to make a living from this type of company?
Well, most don’t.
Part of that issue comes from the model itself. As I mentioned earlier, you really are fighting the MLM model to try and make money – especially as recruiting friends into the company tends to be much more difficult than it seems.
Another major problem is the lack of training and support. To some degree, the concept of direct marketing does work. After all, there are many different jobs that involve selling products to others and some people are even good at convincing others to join a mailing list or a company.
Being successful at this requires a specific skill set, which in turn tends to require training and support. That’s something that companies like Phoenix Direct just don’t offer. There is some training, for sure. But, for the most part, the distributors are left on their own to try and make the opportunity work.
Most of the time, they end up turning to friends and family members in an attempt to make sales and to recruit. Doing so is often ineffective and it is an approach that can destroy friendships.
MLM VS Affiliate Marketing
Adequate training and support are an essential component of success for any business type, especially if you are fairly new to the field. Now, you can find some training for MLMs online, although you have to be very careful as there are also a lot of scams out there.
However, the MLM model is heavily flawed to start off with, so why not try a completely different way of making money instead?
I always go back to affiliate marketing as a model for making money – and it’s an approach I love for a number of reasons. One of the main reasons is that the model is simple. You make a commission from sales, in the same way an MLM distributor might, but that’s it. There’s no complex commission scheme or need to recruit others. Plus, you can promote products that people actually want to buy, rather than trying to convince them to make a purchase that they aren’t really interested in.
The real advantage of affiliate marketing comes from the way you take advantage of the online environment. This lets you make your sales through a website, without having to actually own any product. This also means that you don’t have to take advantage of friends or family.
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