Planning to Join a Multi Level Marketing / Networking?

Before we persuade ourselves to join any MLM company, we need to at least understand that its concept is opposite to what a business concept is. 

You see, if we are to venture into business, one of the factors that we need to consider is the location, where as much as possible the location we choose have less competitor.

Where in MLM, assuming that the product is consumable such as supplements, beauty products, foods, or whatever, instead of mainstream advertising, the company uses the method of direct selling to those who become a member or join the company. The problem sometimes is that the product that you need to buy or consume regularly to be an active member exceeds your usage, so now you have the option to either sell, or give it to whoever might need it, but if you sell it, you might as well persuade that person to join since you will gain more via points/commission or whatever they call it. Thus, instead of having a potential customer or buyer, you are encouraging the person to become your competitor of the business, therefore next time if that person joins, he/she doesn't need to buy from you anymore, instead, that person becomes like you, and he/she will likely do the same as what you did and so on.

This type of system allows you to earn a commission from those people you recruited and even earn more if those recruited under you also do the same and so on, but the products required to be bought in a regular basis to be an active member is as good as only for personal usage. Unless you only want to become a consumer, the driving force for you to earn becomes the recruitment, which poses a problem sometimes because for you to persuade other people to join, you tend to exaggerate the product result. Well, I guess it will not become a problem if you join because you need the product, and need to maintain it on a regular basis, in this case, joining will be to your advantage, but I think many who were persuaded to join MLM did not join mainly because of the product, rather because of the potential to earn as quickly as possible through recruiting.

I’m not saying that MLM is not good in general, in fact, it's good training for someone to learn how to sell something, i.e how to overcome rejection, how to overcome shyness, etc. In Robert Kiyosaki Book " The Cashflow Quadrant", multi-level marketing is one of the options should someone wish to venture into business with little capital. According to him, there are three main types of business systems commonly used today.

1. Traditional C Corporation - Where you develop your own system
2. Franchises - Where you buy an existing system
3. Network Marketing - Where you buy into and become part of the existing system.

Each business has strengths and weakness, yet, each ultimately does the same thing. In the case of network marketing, one of the advantages perhaps is that it's a lot cheaper than developing your own system (building a business) and/or buying a franchise. On top of that, if you do it right, your network of people will increase, and should the time come where you have enough passive income to create or develop your own system, at least, you've already established a broad base of people where you can share, offer and market the system you developed.

Disclaimer: This is just my own opinion based on how I understand MLM. I maybe wrong

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How Expensive is Jollibee Food Corporation (JFC)? Updated 3rd Quarter

Jollibee Foods Corporation (JFC) was incorporated on January 11, 1978. JFC's principal business is the development, operation, and franchising of quick-service restaurants under the trade name "Jollibee". In the Philippines, JFC also has, as subsidiaries, Fresh N' Famous Foods, Inc., which develops, operates and franchises quick-service restaurants under the trade names "Chowking" and "Greenwich"; Red Ribbon Bakeshop, Inc., which develops, operates and franchises restaurants under the "Red Ribbon" trade name; Mang Inasal Phils., Inc. (MIPI), which develops, operates and franchises restaurants under the "Mang Inasal" trade name; and Perf Restaurants, Inc., which franchises restaurants under the "Burger King" trademark in the Philippines.

JFC also has subsidiaries and affiliates overseas which develop and operate its international brands, "Yonghe King", "Hong Zhuang Yuan", "San Pin Wang" brands under the SuperFoods Group, "12 Hotpot", "Jinja" and "Dunkin' Donuts".

On October 13, 2015, the Company's wholly-owned subsidiary, Bee Good! Inc., entered into an agreement with Smashburger Master LLC to acquire 40% of "Smashburger", a fast casual better burger brand in the US. In April 2016, JFC acquired the remaining 30% share in MIPI, making the latter wholly-owned by the Company.

By the end of 2015, there were 916 Jollibee stores nationwide, of which 459 were franchised and 457 are Company-owned. In international operations, Jollibee had 139 stores with 32 stores in the US, 72 in Vietnam, 13 in Brunei, one in Hong Kong, two in Singapore, and 19 in the Middle East.

As of Dec 22, 2016, JFC was last traded price at PHP 185.50. This is 5.95 times higher compare to their recorded book value as according to their September 2016 financial report. This is expensive for most value investor since, a PBV of more than 3 is considered expensive.

In terms of P/E, the company recorded a trailing P/E of 40.24 meaning, for every 1PHP earning last 2015, investors of this company are willing or is paying 40.24PHP which is quite expensive. With a 40.24 P/E and with a negative growth since EPS dropped from 5.03 to 4.61 from 2014 to 2015 respectively, the company trailing PEG ratio would also be negative which means, investors of this company are paying 40.24PHP for every 1PHP income last 2015 even though, the company grows negatively from 2014 to 2015.

In terms of income, the first 9 months net income attributable to parents this year increases by 13.75% in comparison to last year first 9 months net income.

Disclaimer: Trade or invest at your own risk.