MLM = morons losing money

[Catwoman]

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.

[Perry Winkle]

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

[hot_pastrami]

Originally Posted by grant

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.

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.

[Guyute]

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.

[Undertoad]

"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...

[lookout123]

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

[hot_pastrami]

Originally Posted by Guyute

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.

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.

[richlevy]

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.
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Ok, now who thought I was serious?

[lookout123]

can i be the initial distributor in phoenix?

[Guyute]

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.

[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.

[lookout123]

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

[Guyute]

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.

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).

[mrnoodle]

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.

[Catwoman]

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.