[Razorfish]

Originally Posted by hot_pastrami

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

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.

But in THIS particular case, the facts are simply that not ALL of them are like that.

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.