MLM = morons losing money
 

:rant:

I have had it up to my eyeballs with MLM people. Melaleuca, Quixstar/Amway, all of em. I'm sick of people pretending to be a friend, only to find that they're lubing you up for the Mystery Meeting at a restaurant to talk about "the Plan." I don't believe you when you say that you get a $5,000 check in the mail every month -- if by chance you ARE telling the truth, you got it by selling "training materials" at 400% markup to your "downline," which is an abominable misuse of trust and so-called friendship.

When I say I'm not interested, guess what? I'm not interested. I don't care to hear that "it's not a pyramid scheme," because it is. I don't want to hear that Quixstar is different from Scamway, because it's not. I don't want to hear "if it was such a bad thing, the government would've shut it down," because the government is the only thing more corrupt and misleading than your so called "business." I don't believe that you are the most closest and bestest friends with your so-called "mentor," and I don't believe he makes $45 million dollars a year simply by virtue of his winning smile and deep concern for my financial well-being.

I think you still believe the shit that these cults are shoveling into your pliant, eager, empty skull only because you've sunk a bunch of money and time into "the Plan" and are hoping beyond hope that it's not all hogwash, and that someday, the 48-pack toilet paper rolls bought by your "downline" will add up to enough money to erase the fact that your friends and family cringe every time you approach. (rants should have run-on sentences)

I don't care how much money "the corporation" makes, how much it's grown in the last 50 years, whether or not it made the Forbes 20 or 400 or whatever number. It's not a real business. It's organized thievery, and the only people who are successful are the ones who aid and abet the crime lords that run the company.

You do not make money by convincing your acquaintances to buy off-brand hand soap (don't start with your "we carry name-brand items that every family uses" spiel or I'll brain you with a shovel). You make money by convincing people to convince people to convince people to convince people that they should go to conventions and buy tapes and books. Period. They make em for a dollar, sell em to 'diamonds' for 2 dollars, who sell em to 'emeralds' for 3, who sell em to Direct Distributor Whatevertheyares for 4, who sell em to you for 7. If 500 newbies come to a convention and all buy 3 tapes and 4 books, SOMEONE is truly "realizing financial independence." That person is not you. It's the pinky-ring-wearing snake oil salesman behind the podium and his poofy haired, faux-diamond-encrusted trophy hag, who carry literal sacks of cash out of the venue and into their American-made McLuxury car.

I want to vomit.

:rant:

no, it didn't happen to me. At least not recently. It's happening to a very good friend of mine who is trying to support his family and is about to piss away a good chunk of change and time. What's worse is the in-road that his "friend" is using to suck him in. Hell, I'll just come out with it. Our drummer has a new acquaintance who allegedly plays bass, has some talent, and is looking for a gig. Well, we're sitting around with the guy the other day talking music, when suddenly here comes the spiel. I just rolled my eyes, as did mike, but nate's going through a rough patch financially and you could see that vacant far-off look come into his eyes when the dude started talking about his residual bonus checks.

I would've almost believed him if...get this.... HE DOESN'T HAVE ANY BASS GEAR BECAUSE HE HAD TO SELL IT FOR LIVING EXPENSES. Um. That extra $30k doesn't go as far as it used to, I guess. Which won't matter, because if one of us doesn't buy into his amway bullshit, the chances of even seeing him again are zero. These cultists only look for people to recruit, everyone else is an unmotivated loser in their eyes.

I want to talk to my friend about it, but if I don't cool down I'll say the wrong thing and mess things up with us and with the band. The programming quixtar's followers receive is thorough, I'll give em that much.

You *nailed* it, my friend. Motivational speaking + products to move = bad stuff.

This sort of thing seems prevalent in certain areas. We got hit up a number of times when we lived in Seattle. Hasn't happened at all in Chicago.

at my old firm (that evil place where i had employees) 2 members of my staff got sucked into quixstar. i tried to steer them away until one of the guys freaks out in a staff meeting, telling everyone that i am trying to keep him from a "real moneymaking opportunity" so that i can keep him "as an employee, making an employee's wage". he transferred to a different office a couple of months later when the glow from his new business relationships wore off. i couldn't believe it - these guys were supposed to be 2 of my better salespeople and they totally bought a cheesy salespitch.

Amen to that, noodle.

My husband got hit up awhile back by a total stranger, after a very long casual conversation in the Home Depot toilet department. This one wasn't even selling things, it was somehow based on website logins. But he was fairly livid when it suddenly dawned on him that this wasn't just a really overly friendly guy who liked talking about the vagaries of home plumbing. Pyramid schemes are a bit of a sore spot with him--as a child, his mother and father both bought into Amway completely, and it really hurt them financially.

And yet he still swears that their vitamin products are the best you can buy. :confused:

And my mother recently got sucked into an organic skin products pyramid scheme, but she pretends now that she only joined because she wanted to use the products, and figured it would be better to buy from herself than someone else. Yeah, uh huh.

There's nothing preventing Amway products from being good, it's their business practices that are destructive. Likewise, my mom has a plastic Tupperware collander that's at least 30 years old and is only now starting to deteriorate, even after being partially melted on the stove. I haven't been able to find one with as good a design (holes small enough to hold pasta, easy to clean, enough holes), even in some pretty upscale kitchenware stores.

But I'm not sure how a consumer can really know how good a vitamin product is. I just pick 'em by the taste.

Are those free ipod/mac mini etc ones MLM or just dodgy marketing stuff (getting people to sign up to stuff then cancel + selling details)?

Someone invited me to lunch and proceeded to lay out that spiel out on me a few years ago. He told me that if I recruited x people that I'd get a residual from all of them and all those that they recruited and all the ones that the recruits recruited.

So I asked him: "If all everyone is doing is recruiting new salespeople to generate downstream residuals then who's doing the selling that's generating all this residual? ... [pregnant pause/blank stare] ... Oh, I am when I buy the 'starter kit.' I see."

Check Please!

And y'know, this is one of the advantages of age, because after a while you've seen all this kind of shit and it's harder to take you in.

Which doesn't explain why the elderly are scam and telemarketing targets...

Because they're lonely and willing to talk. The longer you can keep them talking the better chance of wearing them down. :(

There's some truth to the old saw "You can't cheat an honest man" and the flip, "You can always cheat a larcenous man".

Nice. I've lost a few "friends" who invited me to "dinner" and it turned out to be MLM's. It's happened at least 4 or 5 times over the years. When I was a kid I actually was going to do one of them. I even put some money into product and stuff. Then I realized even if the product was great (and this particular product really was) it's not worth my family or friends trying to avoid me.

:mad2: My younger brother is obsessed with finding some website where he can take surveys and earn money for every survey completed. He purchased a list of sites that do this (against my MANY warnings) and then said they were a faulty source, THEN BOUGHT ANOTHER ONE!! Total spent:$80.00. Total earned: $2.00. That was three months ago.
I love my brother very much, but pretty much consider him a MLM. I don't think he'll do it again (oh my god, if he does......), hopefully he's learned his lesson. But I'm seeing more and more of this every day. The things where you mail off a buncha letters to different people and they're each supossed to send you $...
it's worthy of a big huge rant! :mad2: :thumbsdn:

nothing to add but a hearty "Preach it, Preacher Man!!!"

uh, yeah a solid amen to that..

I almost got taken in by Markowitz.. man! they're like a cult. good thing I had left my checkbook at home.

(they sell all that gawd-awful junk you see in kwik shops and such)

Well, many elderly people like to think that they are not meant any harm, particually if the person scamming them is "such a nice young man/lady." They are from a time when most people were honest, while now most people are dishonest (especially if they are trying to sell you something.) And then you have the senile elderly who can't remember what the news tells them about not helping strangers and usually fall for sob stories and money making scemes. It really makes you feel bad for them. But then again, you have MLM people who should know better and do it anyway. There wouldn't be scammers if no one fell for it, I guess. :yelsick:

I'm sorry, but if someone is gullible enough to buy into a scheme they don't understand, out of greed or desperation, they deserve everything they get.

The desperation bit might sound harsh, but if you are truly desperate (can't feed kids and family etc) surely you want to do something that will actually make you money, not just pretend to make you money. So you'd do your research and not fall for sloppy sales techniques. There's no excuse for stupidity.

Not all pyramid schemes are bad. The free*.com ones from Gratis are kick ass. I've got several things(ipod, mac mini, and 19" lcd) from them with no problem.

Here's a financial analysis of how they make money doing this:
http://people.bu.edu/jbrock/ipod_analysis.htm

Gah... one of their agents is here.

I've known a few people who've become involved with MLM stuff, and they always consider themselves that "exception to the MLM rule," the one who wasn't taken in, who doesn't annoy their friends with it, who just "do it a little on the side." That always means they're fooling themselves, or that they ran out of ambition and they're trying to wash the shame off with a chunk of steel wool.

MLM has only been pitched to me once... a co-worker approached me and asked "Have you ever heard of Equinox?"

I laughed and replied, "I've heard that they're a bunch of crooks who turn your friends into slimy salesmen." He never brought it up again.

I know two guys who have become stinking rich by most people's standards in exactly that business so vilified above. One guy makes about $200K CDN and his upline makes about $500K CDN. They did it the old-fashioned way- they worked. They approached people professionally ( I watched them do it a few times) and never misled people. It is a shame that people ruin the potential for this type of business by being either deceitful or over-zealous.

It is a dichotomy that most MLM's appeal to the average joe but the average joe has not learned how to talk to people about business or how to deal with people. SO they end up molesting their 4 friends because they are too insecure and untrained to talk to "strangers". These 4 friends, and justifiably, start to wonder wtf got into Joe and cast the whole company and process into a bad light. What pisses me off is that this is exactly the same process that rookie car salesmen, insurance salesmen, and almost any commissioned salesperson must go through, but it is the MLM people that have distorted this whole process to the point that the general population in North America is completely jaded about the opportunity. People close to the noob feel raped and then the noob starts to think that maybe his upline is a dork (in most MLM's they are) so they retire after alienating everyone around them and after having probably blown a wad of cash with a shady upline.

In a PROPERLY-RUN AND -STRUCTURED MLM you should A) not need to buy a whole ton of stuff and B) the "upline" should help you professionally approach people. The end result is someone who either learns the ropes and develops a business or someone who decides that it isn't for them and quits, but has incurred minimal startup costs and fees, and has only asked his friends once or twice, not 142 times. If I wanted to spend $30 000 to start a biz, I would buy a Mail Boxes Etc. franchise. The poor sap who sold $30K of equipment to join an MLM is either completely gullible and should sue his upline (or take him out to a deserted beach and have a chat with him and Mr. Louisville), or he spent the money on other things and the MLM is a convenient scapegoat.

I sympathise with most people because for the most part the MLM's circulating today are very dodgy or require inhibiting startup investments. The reality is that if a person is serious about an MLM opportunity, they should ask the potential upline to spend some time letting him attend meetings or go on "plans" and then they will get a sense of how legitimate the opportunity is. If the "upline" won't let the noob see anything then the guy should run. If he lets him spend some time talking to other leaders, and is able to see some plans, then he will be able to get a feel for the integrity of the upline and the MLM.

"and never misled people"

Pull the other one dude. I'm sure they still sell to people who don't have their kind of sales ability. I'm sure they sell to strangers who will go on to sell nothing and irritate their friends

If they have that kind of sales ability, they could make just as much selling legitimate items and live with the knowledge they're selling something with an actual benefit to the world.

Or course TELLING you they make that much is one way to sell you on working with them...

the problem is that most of the people who really get involved with MLM are get-rich-quick-douches. going into a professional sales environment isn't good enough for them because then they "don't control their own destiny". looking for the quick and easy path can often lead to ruin. IMO

And I'm sure some kinds of snake oil really do cure arthritis, seizures, and impotence.

Your "rich" friends are either lying about the money they make, or they have made their fortunes by scamming the new recruits. Some people DO make good money through MLMs, but they are the minority-- the guys near the top-- and their money is dirty.

Well, you will all be happy to know that I have recognized a need in the community and am willing to fill it.

From here on, I will be selling Multi-Level Marketing Prevention Kits. These kits will contain information for consumers on how to recognize and avoid multi-Level marketing scams. I encourage each and every consumer to purchase one of these kits, which will contain checklists, phone numbers of government agencies, and complaint form letters.

I will be seeking volunteers to help sell these kits. They are useful to give to friends and family who are in need of protection. As an incentive, each person who sells a kit will be paid a commision. In addition if anyone he or she sells a kit to sells a kit, he will be paid a portion of that persons commission. This is a great product to give to friends and family to help eliminate the scourge of multi-Level marketing from their lives.
.
.
.
.
.
.
.
.
.
.
.
Ok, now who thought I was serious? ;)

can i be the initial distributor in phoenix?

OK- so if someone wantes to be THAT cynical, I was not privy to their getting started, so maybe until they got seasoned they might have not handled approaching people right. But does anyone in a new profession? When you started your current job were you such a wiz on the first day that the Big Cheese was freaking out? But they soon must have become more capable because neither couple goes to a typical nine-to-five job. The more wealthy guy has a Mercedes, a Lexus, a Town & Country and a Prevost motor coach. The other guy has a nice condo, and a Town & Country (remember this is going back a couple of years- I lost touch when I moved).

They don't "sell" a lot of products. They use what they can from their own business and show others how to do the same. They sell a little bit because over the course of several years doing something like this you are bound to run into someone who will "buy the soap" but not build the biz. That is it. I don't care what people say, but that is how it is. And why would you say that they don't sell legitimate items? Are you an expert on Amway and other MLM's product offerings? Are Ralph Lauren, Calvin Klein, Jockey and Hush Puppies not "legitimate" enough brand names? Is Hugo Boss cologne not legit enough? And what would you define as beneficial- The wax and water sold in green bottles at Wal-Fart for 83 cents and called shampoo? I know one guy whose son got his hands on their liquid drain cleaner and only shat himself silly. If that had been a "beneficial" product like Drano, he'd be pushing up daisies right now. WOuld you rather that they go to work in a legit profession like car salesmen or insurance? After all, we all know no-one EVER got screwed by a car company or an insurance company...

As I mentioned before, lots of people get going in this type of business and whallop their friends because they are accessible and they don't feel comfortable talking to strangers. They get involved with a guy who either knows little about the business concepts or is a shyster, and that is where things start to go awry.

AS for lying, they may have gotten away with lying for two or three weeks, but not two years. When a guy doesn't work for two or three years and THEN goes and buys a $130 000 car, it's time to cut the shit, pastrami- they built a legit business one person at a time and can afford to buy a top-of-the line car. The assumption that they got rich off of selling kits or scamming new recruits is retarded. There are not enough dumb people in North America to sustain a company that screws new recruits for 40 years, even though our nightly news may indicate otherwise. If a "kit" sells for about $200, how in the world can one guy sell enough of these to buy $200 000 worth of cars and still not work?

Don't get me wrong- My Dad got screwed by several of these "MLM's" and still has some of the stuff in his garage from them. I know there are many more out there that are aimed at getting people in, screwing as many people as possible, then disappearing. I'm not that naive. But in THIS particular case, the facts are simply that not ALL of them are like that. I am the first to be cynical about most opportunities and I encourage people to check them out as long as it takes for you to feel that you are safe.

I know this name well. Had an aunt who fell for this scam completely. Even went so far as to rent out an office space to run this operation.
Failing points:

1. The profit model for most companies looks like this:
   manufacturer-->distributor-->retailer
   The Equinox model looked more like this:
   manufacturer-->lead guy-->distributor-->distributor-->distributor-->distributor-->and on and on
   
   The end result is that by the time you go to sell products you need to convince people to pay $300 for a water filter and tell them that you'll make a commision off any selling they do.
   
2. People into these sort of scams say that their working for themselves when it couldn't be further from the truth. Can you actually make more money than your recruiter? Or will your blood and sweat just go to paying a person for mearly introducing the idea to you? The highest gut in the chain makes money off everyone and doesn't need to do anything because its not like people below him can choose to buy from a cheaper source.

In total the Equinox scam cost my aunt $11,000. Guess she was just a little to low on the pyramid to make money.

Which ones do work then? It seems to make more sense to follow the old-fashioned route of buying directly from a manufacturer instead of feeding into an endless stream of higher ups. But I suppose if you convinced people that your MLM worked you would benefit finacially from any success they had.

so which MLM are you a disciple, er distributor for?

First off, let me apologize a bit- I had a raging migraine earlier when I typed my previous response. I didn't mean to be quite so rude. I am usually more diplomatic. :blush:

Razorfish- My only experiences have been with:

Amway (before Quixtar spun off): It is entirely possible for anyone in the up/down link to make more money than someone above them. i.e. if you sponsor someone and they really tear the business wide open, and you do so-so, he will "stop" more of the bonus cash flowing up from the dollars being bought. This is fair, and even better, cannot be influenced by your upline (in other words they can't steal volume from you and take credit). This is the case of the guy who makes about half a mil. He himself has a more profitable business than his upline in spite of the fact that his business is included in his upline's "volume"; so he makes more money.

Please note: FWIW my own brother got scammed by a guy in Amway, so I have seen both sides. He got in, then his shitass upline convinced him to buy about 6 kits right away so that he would be prepared when he started sponsoring everyone within 3 feet. He never showed a plan and would not even call his friends, so his upline moved on. Who is to blame? In this case I blame the upline more, because I feel it is incumbent upon him to work with noobs until the point of exhaustion, in order to be a positive role model, and to also not coerce someone to buy unnecessary supplies. But my brother was completely uncooperative, so in the end I feel the sponsor just about broke even, because IN THIS CASE he would have made a nominal amount of residuals off of the 6 or so kits' volume. The Sponsor should have qualified my brother better and determined that he was just not interested.

Melaleuca (sic?): A step-cousin was involved, and he tried to involve my Uncle. You HAVE to buy at least $300 EVERY MONTH in Canada. So in spite of the fact that you may be new and have no sales or downline you still have to buy this minimum. I find this is a normal approach for a conventional biz, like where I work, but for an MLM it sucks.

Tupperware: My wife looked into this. She wanted a way to create income while home on maternity leave. In order to create residual income you had to become some level whereby you had people under you. In order to attain this level, she HAD to attend a business meeting with fellow leaders and her "upline" or whatever they call them once a week. Sounds easy- except that my wife was still working and the meetings were every Friday at 1:00 PM. The most retarded thing I ever heard. Her upline was salivating because my wife led 4 people to her in less than 2 months. She had to give it up because she was making her upline wealthy and she got nothing out of it.

My Dad got into water filters about 20 years ago (NSF?) and some scent-inhibiting powder about 15 years ago. Both required him to invest several thousand dollars to qualify for deep enough discounts to be profitable. He never sold one thing, so all he had was about 50 pounds of expensive sand and 20-years' supply of water filters (which actually worked well).

The problem with all these things is that someone has to be getting shafted for anyone to make money. All players involved can't be profiting, or there's no profit being generated. What it comes down to in the end is people buying "starter kits" and overpriced stuff that can be had cheaper at Wal Mart.

It's not like the products themselves are useless - the Melaleuca vitamins really are the best vitamins we ever had in the house. Problem was, they cost about a buck a pill. I got a discount because I was a so-called distributor (or whatever they call it), but my parents were paying $60 a month to buy them from me. It's just not worth it if there's not a reasonably priced product at the end of the chain.

If people were honestly selling product as their primary function, instead of dangling a get-rich-quick pipe dream in front of their marks, I don't think anyone would really have a problem with MLM.

By defaming MLM's you are at odds with business, yes money-making, society, means that one persons loss is another persons gain, whether you call it TNT or Tupperware.

One person's loss is usually another person's gain, but it is also possible for a transaction to be a loss or a gain for both parties, because different people value goods differently, depending on their needs.

The majority of MLMs, however, are run in such a way that they encourage the gain-loss style transaction, in favor of the people at the top.

Yes, why can't we just go back to exchanging sheep?

:confused:
Was that a response to my post?

If so, you do realize that different people can value goods and services differently in dollar values, don't you? There are items that I would be willing to spend $20 on that you would only buy if the price was $10.

Not really I wrote that in between learning online german and hiding from my boss. I apologise. Yes I know but you could swap two sheep for three cows, or a blow job for a three course meal. I mean you earn $70 dollars a day for your labour time which you spend on holidays, food, cars etc. Why not do a straight swap - cut out the middle man?

The emphasis of MLMs is on making money from the pyramid, not selling product. The people on the bottom did not get into it to buy the product, they got into it to make money from the pyramid. They just don't have enough gullible friends to make it worth their while.

Yes, retail goods are marked up by 40-300%, but you're paying fair market value, and know ahead of time what you're getting, usually. With MLM, not only is the product overvalued, but it's only there to give a veneer of respectability to what is essentially a con game.

Because money is more convenient than bartering.

Is it? Who determines value? How can you base real living on something intangible? What is the price of a can of beans?

Guess again.

With MLM, there is no limit to the number of participants - a willing purchaser can always "buy one." There is no such thing as "we can't sell you one because we don't have any more." Also note that it is entirely possible to create an entire MLM pyramid without any participant selling any of the products the MLM is actually proposing to sell. Now, go back to your econ 101 textbook and answer one simple question for me. What is the price (economic value) of a commodity for which there is an infinite supply?

ZERO.

Therefore, an infinite number of MLM membership sales would increase the economy of the system containing the transactions by exactly ZERO. Let's not confuse the economic quackery that is MLM with the infinitely more dignified, GNP increasing Tupperware party.

I determine the value. I won't work for a wage unless I approve of it. I won't buy a product unless I like the price.

Money makes it much easier to track. I can say that 200 cans of beans is equal to a sheep, but what do I do if I don't want 200 cans of beans? It's a lot easier to hand over a dollar bill for a can of beans instead of working out how to divide a sheep.

Read first rule of economics: Something is worth whatever someone is willing to pay for it. People are stupid. People buy identities, not products. The tangible object is worthless (with the exception of houses etc.)

That's all very well but your choice is limited to what you are offered. So, who determines the value?

Because the people you want stuff from aren't necessarily the people who want what you've got.

I'll let you answer yourself.
Which means I, as a consumer, decide what something is worth.

Whether you pay a buck a pill, or a buck a box, you pay a buck for whatever you think is worth that buck. So if thousands of people worldwide buy products from MLM's, at what point is the assertion that they don't work become a glaring fallicy? Is it not true that free-market forces are the great leveler of the playing field? Amway did over $8 billion in sales in 1996. Certainly there are people who do not believe that their products are that much better than the Sand and Salt you buy at Wal-Mart or the local Supermarket. This is evidenced by the horrendous gross sales generated by Wal-Mart. But the reality is that there have to be thousands who do, because no company can perpetuate a lie for OVER 40 YEARS (except the National Enquirer). I only say Away because that is where the bulk of my experience is. There are other successful MLM's that must provide adequate value or eventually they would disappear. We can argue about the veracity of one business style over another until the cows come home (or the sheep come home that I traded a blowjob for- yuckkkk), but in a relatively free-market economy such as Japan and Europe, and to some extent the USA and Canada (all economic regions where Amway is thriving, but I can't speak for other MLM's) if a company sells products or services that are inherently overpriced EVENTUALLY they go bankrupt, right? Or they find another product that sells.

I also become very cynical when I see constant replies about the legitimacy of the MLM model. Do you not think that the CEO of HP makes more than the guy on the street humping printers to computer stores? Do you not believe that the chairman of Toyota makes more than the shyster/salesman selling Echo's to everybody who walks in? Is the chairman's slary not paid by the sales generated by the lowly salesman? Do you think that the mechanic at the local body shop makes more than the owner? Keeping with the Wal-Mart theme, do you think the Walton family does not make money on the sales generated by opening stores and paying staff just enough to live? So this drivel about upline reaming downline is just another case of the "outside" world distorting facts to denegrate something they themselves co-operate in every day. My current boss makes a bonus if my branch hits a monthly sales target, but I don't even get a thanks. Does this not fit that concept??? If you don't like the fact that someone higher than you makes more money than you, I guess you'll have to open your own biz, or go live on an island and spear fish to live.

No. I'll say it again. You are limited to what you are offered. Yes, you decide the price of beans. But you do not choose beans. Why does a company put baked beans on the market instead of, say, tinned cattlefish? Or ground peanuts? Who decides? Isn't what we consume the result of a board-level brainstorm? Market research is not research. It is limited to simple choices: do you prefer almonds or peanuts. There's no mention of walnuts. Do you see? We don't decide the value because we are limited. We can only choose from what is offered. Thus, if value is determined by afore-mentioned board meeting (profiteers), there is no consequential difference between a well-established plc and a badly run mlm.

Why does a company put baked beans on the market instead of, say, tinned cattlefish? Or ground peanuts?

I don't know how it is in England any more, but in the US that decision starts with a ton of research and/or actual market data. It then goes to retail buyers who attempt to understand their consumers and what they will or won't buy and how it can be sold. If an item goes on the shelf and doesn't move, that will be recognized with the assistance of real-time inventory and sales data, and it will be replaced within a quarter.

And like Mr Dent finding that the Nutrimatic machine has produced a fluid exactly unlike tea, the entire system has produced a supermarket where I am routinely offended by 98% of the shelf contents.

The problem is that the product is not the real point of the business. The point of the business is to get people to buy training materials at 400% markup, and then get those people to initiate others into the cult. Filling a basketball arena with 5,000 people and selling them motivational booklets is how scamway makes money. The lower-tier activity of selling overpriced laundry detergent through the mail only exists to give the scam a veneer of respectability.

Update: Nate and his wife went to the Mystery Meeting and emerged unharmed. This particular salesman was from his church, and apparently he really poured on the "blessing God through MLM" shtick. They couldn't get him out of the house fast enough.

You're missing part of the point here... nobody is saying that MLMs don't sell anything, or even that they don't sell a lot. The point is that MLMs make their money by A) Selling "starter kits" to suckers, and B) Aforementioned suckers alienating their friends and family by strenuously and unapologetically peddling WAY overpriced stuff to them. Amway has sold lots of product of varying quality, but much of it was sales to the sellers' friends and family who were too polite to say No.

Obviously some MLMs DO work... they just work in an unethical way that takes advantage of people who are too nice or too trusting.

Your "parallel" isn't. The owner of a body shop makes more money than his/her workers because he/she made the initial investment, and took the risk that came with it. My manager makes more money than me because he demonstrated good management skills and a strong sense of responsiblity, and was promoted. He is paid more because his skills are more valuable to the company than mine, because he can increase the productivity of may other people by doing his job well. He will be fired or demoted if he is discovered to be a fraud. But some managers make less money then those who work for them, if the more valuable skills are possessed by the workers.

Some managers are slimy bastards who manipulate people for their own gain, but they are the exception, and the system tries to squeeze them out. But MLMs encourage that sort of behavior. Will an MLM replace a financially successful individual if he/she isn't very supportive of their "downline?"

To be like an MLM, the body shop owner would have to require employees to pay an overinflated fee for their starter materials, offer a wage of exactly $0, require the employee to find their own customers, and expect them to work for nothing but a very small commission.

If ever again I'm approached by a friend or family trying to sell me MLM products, I'll whip out a $20 and tell them "If you're so desperate for cash that you'll stoop to trying to sell me overpriced junk, just ask for the cash and save us both a lot of effort."

while catching up on this thread i just had the realization that my wife is involved in what many would consider to be an MLM.

She is a distributor for Juice Plus. It has an organizational structure that would qualify it to be MLM, but there are no start up costs. These are basically vitamins (although classified as a whole food) that my wife put the family on. her sisters and various others started using the products at her recommendation and loved them. my wife realized that if she signed on as a distributor and sold only to the people who were already taking the product she makes an extra $250/month, give or take. there were no start up costs, no pressure to sign up new distributors, but there is incentive. her sister in illinois decided to sign on as a distributor. my wife gets paid for everyone her sister sells to.

intellectually i know this is MLM, but i haven't seen any of the negative elements of the classic schemes, so i'm ok with this. the lady who got her into this makes $60-70K/year just selling the product and wants my wife to do the same. we definitely won't go that route, because A) her business does better than that, B) my wife doesn't want to be a professional salesperson. so, now i am torn. should i feel slimy because i have MLM in my own family, or is this one ok? i need help people. can i show my face in public?

yeah. my sister does something with vitamins and with Mary Kay. it's multi-level, but it's product-centric. and you don't have people trying to sell you get-rich-quick kits

Products which are valued by the buyer, no start-up costs, and no pressure to sign on other distributors? That doesn't sound extremely evil. No doubt a chunk of the company's money is made by sellers who leverage guilt or insecurity against their friends and family, but that happens outside of MLMs, too... just to a lesser extent.

When I think of MLMs, I think of when I was in Junior High, and the school allowed this company to come in every year and recruit young students to sell magazine subscriptions. If we sold so many subscriptions, we got semi-worthless prize X, and if the whole school sold a very large number of subscriptions, the school received moderately valuable prize Y. So naturally kids went home and convinced their parents, older siblings, extended family, and friends of the family to subscribe to magazines they neither wanted nor needed. I never got involved myself, but talk about exploiting the innocent and unsuspecting. Yuck. That's the philosophy many MLMs follow, and it's rotten.

Sure, show your face. I show mine. MrsV does the same for some products she is a consumer of, and distributor for, candles, for example. Sounds like you're smart enough to try to reduce your expenses by moving closer to the wholesale side of the equation, we did too. No harm no foul.

The MLMs are just a business model, and as your story clearly illustrates, it is not the business model that is bad, but the way some people use it. Sure there are variations in which one is better or worse, but much more power is in the hands of the people involved. Like your wife, she used her power to invovle herself, and a couple of others in a model that is reasonable and makes sense for her and those around her. The models that are more evil, high startup costs, minimal support, etc, she's avoided.

So, really, it's about the people. Professional salespeople are NOT evil, they perform valuable necessary services all the time, all over the place.

So show your face. And when the un-professional sales fleas descend on you bearing their get-rich-quick plague, show them your face, too. Then show them the door.

When I was a kid, my school did the same thing. I sold a couple subscriptions, and got a little pom-pom ball with two googly eyes glued to it and a couple of felt feet for a base. It must have cost them all of 10 cents. I don't remember what my parents ended up buying from me.

That's a Weeple. (mislabeled as a Weeble, which is a whole different critter)

Many such scams make themselves obvious. If they are promoting the money to be made or growth of their organization, they you know it is a scam. The only thing that matters is the product. Profits without a good product (ie General Motors, AT&T, US Steel, Listerene, the big and therefore unproductive Airlines, the ISS, Carly Fiorina in the HP / Compaq merger stockholder meeting, etc) all mean scam. If they are not providing mankind with a better product, then it is a scam. It's really not difficult to be informed and smart. The minute a stock broker calls about a great stock that is going to make so much money - classic scam artist. Fight him for details on the company's product and get no engineer's attitude. Another classic scam stockbroker. Notice how we are going to fix social security by playing more money games. Scam. Why would Amway, et al be any different?

Would you please expand on your position with respect to services?

Kid rolls up and knocks on my door, offering to cut my grass. His mower, his labor, etc. He cuts, I pay, bees migrate to neighbor's dandelion farm. No product, but this surely isn't a scam.

Damn, 50 cents for one of those! Well, actually, that sounds about right. A dime in 1980 would be about 50 cents today, right? I'm impressed that you knew what I was talking about.

don't stress it BigV. TW was just looking for any excuse to post so that he could try to pee in my shoes. i am a financial advisor, investment representative, retirement planner, stockbroker, whatever you want to call me. tw doesn't like people who make an honest living providing a valuable service. or he doesn't like me. one or the other, i forget.

tw, since you've brought it up... have you decided to post in a clear and concise manner exactly why individual retirement accounts won't work. if you have i'm sure we could revive one of those threads.

I don't have to pee in any scam stock broker shoes. No, I was not thinking of Lookout123 when I posted. I was thinking of the broker who was pushing International Gaming whatever. And another who proved with dollar inspired charts that Cisco was going to triple in price. Neither could even discuss the company product lines. Classic scam artists. HoweverApparantly Lookout123 saw himself among those other scam stockbrokers. Feeling a little guilty, are we Lookout123? Well lets remind everyone of the question you could not answer. The question that make you insult me in every post:
"When are we going after bin Laden?"

Bees? What bees? Are you a bee keeper now missing a few thousand employees?

for about the hundredth time - i don't know. or care. if you could just understand - that guy from texas doesn't consult me. in fact, we don't even talk all that much... sure we exchange christmas cards and yeah, i told him that the former top New York cop would be great for homeland security, but other than that, i don't have a lot of contact with George.


there, now i answered one - would you care to try answering any of the questions i've asked you in the past?

edit: and give me a break tw. it's the cellar. i'm the only stockbroker here. you know that when you dis on stockbrokers here it is intended as a dig on me. it's no different than if i consistantly harped on the rigid, uncreative nature of engineers - it would be safe to assume i'm kicking sand at you. or commonly referring to car sales professional as salesdouches... that would refer to LJ. (except that is accurate, so that may be a bad example.)