14-07-2017, 04:58 PM
Boon, thank you for sharing.
Actually I am not invested in Best World nor have I performed any due diligence. The reason I am curious about Best World is because:
1) Best World's exposive growth rate
2) I watched Betting on Zero (Bill Ackman on Herbalife) sometime back
3) Most importantly, I learnt very recently that someone I know has about 30% of his portfolio in Best World. !!
As I do not foresee myself having the spare time nor interest to do deep research on Best World, I thought of tapping into fellow VBs to get some valuable insight. And as such, mentioned by someone, indeed I do not understand the MLM business, nor know the difference between "export" and DS model. Please pardon my incompetence. Is anyone kind enough to educate me?
With regards to investing, I believe it is healthy for investors to have a dose of skeptism. One of the biggest risk of S-Chips is fraud. One of the biggest risk of AEM is key customer risk (Is Intel really the key customer?). And one of the biggest risk of countless MLMs is the wrong focus on business model (recruitment instead of product). There are already plentiful of assumptions being made in investing decisions. Rather than assume, if I can gather from anecdotal evidence to evaluate the risks and eliminate assumptions, it will definitely improve my research analysis and emotional control. If being "too naïve" can provide me with a comparative edge, then it shall be.
And so I thought of revenue per registered distributor/member as a metric to track. Feels better to include dormant distributors.
If BWL focus on member recruitment and there is no real demand for its products, the company will experience high turnover of its members. Revenue per member will more or less be stagnant as members will likely to purchase only the starter set. There will be a tipping point whereby this metric will indicate the reality.
Beauty products are consumables. If BWL beauty products are indeed good, there is likely recurring sales from the same consumer. Disregarding the incompetent distributors, distributors should be able to increase their individual sales over time as they build their sales contacts/channels gradually.
It would even be better if this metric could be evaluated per country.
One interesting thing that stood out to me from Boon's post, BWL's sales is seasonal. Q1 being the weakest, while Q4 being the strongest.
Why are sales of beauty products seasonal? This is interesting to learn the reason behind.
Oh, and I am not referring to BWL in China only.
And, come to think of it, I suppose the best way to determine their business model is to scuttlebutt and conduct interviews, or even pretending and try to sign up as a distributor.
Actually I am not invested in Best World nor have I performed any due diligence. The reason I am curious about Best World is because:
1) Best World's exposive growth rate
2) I watched Betting on Zero (Bill Ackman on Herbalife) sometime back
3) Most importantly, I learnt very recently that someone I know has about 30% of his portfolio in Best World. !!
As I do not foresee myself having the spare time nor interest to do deep research on Best World, I thought of tapping into fellow VBs to get some valuable insight. And as such, mentioned by someone, indeed I do not understand the MLM business, nor know the difference between "export" and DS model. Please pardon my incompetence. Is anyone kind enough to educate me?
With regards to investing, I believe it is healthy for investors to have a dose of skeptism. One of the biggest risk of S-Chips is fraud. One of the biggest risk of AEM is key customer risk (Is Intel really the key customer?). And one of the biggest risk of countless MLMs is the wrong focus on business model (recruitment instead of product). There are already plentiful of assumptions being made in investing decisions. Rather than assume, if I can gather from anecdotal evidence to evaluate the risks and eliminate assumptions, it will definitely improve my research analysis and emotional control. If being "too naïve" can provide me with a comparative edge, then it shall be.
And so I thought of revenue per registered distributor/member as a metric to track. Feels better to include dormant distributors.
If BWL focus on member recruitment and there is no real demand for its products, the company will experience high turnover of its members. Revenue per member will more or less be stagnant as members will likely to purchase only the starter set. There will be a tipping point whereby this metric will indicate the reality.
Beauty products are consumables. If BWL beauty products are indeed good, there is likely recurring sales from the same consumer. Disregarding the incompetent distributors, distributors should be able to increase their individual sales over time as they build their sales contacts/channels gradually.
It would even be better if this metric could be evaluated per country.
One interesting thing that stood out to me from Boon's post, BWL's sales is seasonal. Q1 being the weakest, while Q4 being the strongest.
Why are sales of beauty products seasonal? This is interesting to learn the reason behind.
Oh, and I am not referring to BWL in China only.
And, come to think of it, I suppose the best way to determine their business model is to scuttlebutt and conduct interviews, or even pretending and try to sign up as a distributor.