MLM = morons losing money

[BigV]

Originally Posted by tw

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

lawn gets mowed, dandelion blossoms cut off and chopped into pretty yellow green mulch with the rest of the tall grass, bees sad and hungry, buzz next door to greener or yellower pastures.

sorry, no pic available.

Now, without the flowery language, are you interested in explaining your thoughts on services with respect to your earlier post?

Originally Posted by tw

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?

[Guyute]

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...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...

I am not missing any point. I still cannot understand how you think someone can create long-term residual income by peddling kits? The idea as you mentioned is a conundrum. You cannot create residual income with a one-time purchase. Pointe finale. The object of most MLM's is to create long-term residual income through personal sales, consumption, and development of a downline sales force who sell and also consume their own products. Only a complete retard would try to create long-term walk-away business by selling an intro kit, THEN moving on to the next kill, because the intro kit is actually designed to showcase a small number of representative products, creating further interest. So instead of showing someone how to buy, from catalogs and online, thousands of items which can interest many people from many walks of life, for the rest of their life, even if they choose not to become a distributor, Mr. Kit-Peddlar buys kits that contain literature, guides and sample packs, the sale of which force him to be present at EVERY TRANSACTION. This "sell kits to get rich" idea or "get-them-in-to-sell-them-my-training aids" approach is pretty naive. Come on Pastrami (and Mr Noodle's reference to training materials), only a masochist would accept that as a future. The whole idea is to creat walk-away income, not "have-to-be-there-even-more-than-before" income. The B part of the statement is also not true, because the vast majority of people end up with very little business being generated by their family.

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....

I would like to see the number of managers who make less than their subordinates. I now do not have a migraine; I can recognize BS when I see it. This may be true in a very, very limited basis. Realistically, show me how many people would assume more responsibility for less money? Come on. I am 35, not 12. I was trying to illustrate a direct front-line employee/owner-or-CEO relationship as it would exist in a situation relating to salary/compensation, in response to others insinuating that the guys at the top of MLM's always reap what others sow. This is not always true, whereas in a "traditional" company it is almost entirely the rule.

BTW- Stating that your manager can increase productivity more than you can through effective management of several subordinates, thus increasing his value- explain to me how this differs from an upline/downline relationship in an MLM?

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?"

There you go again- What is so unethical about the idea? As others have said, it is the people that get involved that proceed unethically. You get that in EVERY business sector, not just MLM's so let's stop that BS, too. Yeah, there are probably dozens of other companies building MLM's that are shady, but not all. But not all people in an MLM end up screwing people. To villify MLM's while companies like Enron exist is so cynical it defies description. Again, I can't speak for most MLM's. If any given MLM encourages this, I would be the first to say "throw them to the wolves". However, the facts remain that almost every company in existence has employees who manipulate others for their own gain, so to insinuate that all MLM's have cornered the market on this is inflammatory, baseless, and wrong. Will a person be replaced if they are not supportive of their downline? Who's to say? That depends on the company. But who would continue to perform under a twit like that? Some would if they have support further up the line. Unfortunately MLM's are a microcosm of life, just like any other business model, so you get the slimeballs, just like any other business.

[lookout123]

You cannot create residual income with a one-time purchase.

actually, we do that in the financial services industry every single day. FWIW

[footfootfoot]

Bees
Bees
Bees

Killer Bee Killed

YOU GOT TO FIGHT THE POWER!
FIGHT THE POWER!
FIGHT THE POWERFUL BEE!

[hot_pastrami]

Originally Posted by Guyute

I still cannot understand how you think someone can create long-term residual income by peddling kits?

Let's see what the FTC has to say about MLMs:

Originally Posted by FTC

In pyramids, commissions are based on the number of distributors recruited. Most of the product sales are made to these distributors - not to consumers in general. The underlying goods and services, which vary from vitamins to car leases, serve only to make the schemes look legitimate.

Joining a pyramid is risky because the vast majority of participants lose money to pay for the rewards of a lucky few. Most people end up with nothing to show for their money except the expensive products or marketing materials they're pressured to buy.

The FTC's article doesn't state that ALL MLMs are completely bad, just as I haven't, but they give strong warnings that many MLMs are scams with a legitimate face painted on.

Originally Posted by Guyute

The B part of the statement is also not true, because the vast majority of people end up with very little business being generated by their family.

In my experience, friends and family are the most common targets for MLM sellers, and that behavior is encouraged by the MLM company. You say that it's not so, but you provide no evidence, so I'll continue to trust my own experience ahead of your unsupported statements. Many sites can be found to support either side of that argument, but I was unable to find one that seemed unbiased.

Originally Posted by Guyute

I would like to see the number of managers who make less than their subordinates. I now do not have a migraine; I can recognize BS when I see it. This may be true in a very, very limited basis. Realistically, show me how many people would assume more responsibility for less money?

It's not the majority, and I didn't claim that it was. But it happens. My brother was a manager for a tech company, and several of his employees made more than he did, because their technical skills were harder to find than his managerial skills. Despite what you may have been led to believe, managers are not always a company's greatest asset. Employees are generaly strongly discouraged from discussing salary with one another, so you'd probably be unaware of this phenomenon even if it were to happen in your own workplace.

Originally Posted by Guyute

Stating that your manager can increase productivity more than you can through effective management of several subordinates, thus increasing his value- explain to me how this differs from an upline/downline relationship in an MLM?

Someone who is good at recruiting (manipulating) people but poor at supporting them after they sign up would make a poor manager, but a perfect MLM candidate.

Clearly we have very different codes of ethics, you and I. I feel that it is wrong for anyone (company or individual) to take advantage of another person's trust, desperation, etc... particularly for their own selfish gain. Most MLMs are built on a foundation of exactly that. Yes, so are many corporations... and yes, those companies are evil too.

Labelling something as "BS" just because you disagree doesn't make it so.

[Beestie]

For his next act, hot pastrami will try to un-brainwash a Scientologist.

[wolf]

My secretary and one of my friend's kids are Partylite Candle Nazis. I have a lot of fucking candles to burn in the house, but have thusfar avoided the pitch to become one of the pod people.

I also have one degree of separation from a Mary Kay Commando. I don't have any great need to buy makeup that isn't in one kit of brown, green, and black, so I think I'm safe.

[Guyute]

Lookout, LOL you got me. I should have qualified my statement to include in an MLM context, but I didn't. Good point. Kudos to you for having that ability.

Let me reiterate- my experience with MLM's is almost entirely due to the time I spent with two successful Amway distributors. I do not in any way purport myself in any way to understand or have more than a cursory knowledge of most other MLM's except Tupperware.

Pastrami,
When I read the entire article you pulled this quote from, the preceding comment to your quote reads:

Some multilevel marketing plans are legitimate. However, others are illegal pyramid schemes.

then your excerpt:

In pyramids, commissions are based on the number of distributors recruited. Most of the product sales are made to these distributors - not to consumers in general. The underlying goods and services, which vary from vitamins to car leases, serve only to make the schemes look legitimate.

So together as one complete paragraph, this is not the fire and brimstone condemnation I expected. Amway/Quixtar is not a pyramid. Commissions are based on monthly totals of dollars sold, and a sliding scale of percentages is applied to create the income. As I said before, no-one in their right mind would try to sell kits from a company such as Amway to create long-term income. Some may try, but that is individual; The kit only opens the door to the several thousand items available. Also, no one person in Amway's business model is guaranteed to make more than their downline. No one. Thus the "pyramid" assertion is false.

[quote]Clearly we have very different codes of ethics, you and I. I feel that it is wrong for anyone (company or individual) to take advantage of another person's trust, desperation, etc... particularly for their own selfish gain. Most MLMs are built on a foundation of exactly that. Yes, so are many corporations... and yes, those companies are evil too.
QUOTE]

Actually, pastrami, I don't feel that we are so diametrically opposed in views. I do feel that, for the most part, the vast majority of MLM's are built on what you described. I feel it is despicable to treat people in this manner. My whole point is that IN MY EXPERIENCE AND OPINION, Amway is not built on this ethos. The corporation is very committed to creating a professional, transparent and long-term opportunity. Unfortunately, due to their exposure, and the fact that they have existed for so long, they have had more than their fair share of crooks and slimeballs infest their ranks. Unfortunately the bad apples are all that people remember. The reality is that these people usually don't last too long, but their scent lingers. I agree with the FTC website, and I have stated some of their warnings myself previously. Again, I re-state my position that I in no way base my comments on these MLM's that I have no knowledge about.

[mrnoodle]

sorry guyute. i have too much experience with amway and its representatives over the last 15 years to buy a word of it. Yes, people make money. but they make it by selling the kit and training materials. in the long term, the amount of money you get from all the fabulously overpriced merch will start to add up, but only after you have a sufficient downline of misled people looking for a pot of gold. for anyone in amway to make money, there must be a substantial base of people who are not making money. those people on the lowest tier supply the funding for everything else.

this fact is disguised under an onslaught of psychobabble and motivational pseudo-religious claptrap that keeps the fish on the hook when otherwise he would've wiggled off long before and gotten a real job.

[kerosene]

This has been such an interesting thread! I'll bet all you intelligent folks would love to make some extra money on the side, and maybe even quit your dayjob to focus on your own business! Haha, just kidding.

Seriously, perth, do you remember those friends of ours we knew a long time ago who were always on the next scam? I don't want to mention their names, but I believe they did so well that they were able to sell their brand new home for another home, only this one was a trailer. Not ripping on folks who live in trailers, but these guys were always pitching something to us. We got so tired of saying no, we just stopped hanging out with them. And, not surprisingly, they never called us anymore, after they realized we didn't want to join in their *success* or buy their products. Plus, they had this kid who just looked really creepy.

Do you guys remember Cutko? Espiol? I got sucked into one of these "interviews" once when I was 19, but since then, the pattern always seems the same. Mine was some sort of life insurance. How does a nineteen year old waitress sell life insurance?

I know there is a difference between the true MLM scams and businesses like Avon, Pampered Chef, etc. Somehow, I think some of the same problems exist with these, like the tendency to alienate and make uncomfortable your family and friends.

My cousin has a tendency to get sucked into these. She tried to hook me with Espiol and Equinox. She was SO convinced she was going to make it rich. Now she "sells" Pampered Chef. Not to knock the products, because they are good, usually, but I hate getting invited to a friend's house only to get trapped into an hour's worth of guilt tactics designed to sell kitchen products. Usually, if I really need a magic pancake flipper, I will go to Bed Bath and Beyond and buy one. I refuse to buy any of this stuff from my cousin, partially because I have no need for Pampered Chef, partially because she is really fucking annoying, and partially because I expect a barrage of born-again jesus-obsession babble to go along with-scratch that-dominate the conversation. (Yes, she is one of those, too)

[Guyute]

No need to be sorry, mrnoodle. Oh well. To paraphrase pastrami,

...I'll continue to trust my own experience...

I have seen the end of the rainbow where they don't live off of kit sales, so I'll just agree to disagree.

[wolf]

Originally Posted by case

Now she "sells" Pampered Chef. Not to knock the products, because they are good, usually, but I hate getting invited to a friend's house only to get trapped into an hour's worth of guilt tactics designed to sell kitchen products.

The bonus of the Pampered Chef concept is the "Chef" part. If there are a small enough number of women (and the occasional gay man, which makes it a much better party) you can do some serious eating at one of those ...

The products do indeed rock, I have two of the knives in the auto-sharpener cases, a small prep knife, and one that Tony Perkins could have wielded with pride. I also have a bunch of the $1 paring/utility knives. Those babies will cut anything, but I would like them better if the would have provided a better blade cover than the cardboard one it comes with. Heck, I'd pay an extra fifty cents, even.

Their unglazed clay bakeware is the coolest thing since sliced bread, and in fact, you can make some happenin' unsliced bread by using their pizza stone as a baking stone ...

I did annoy one Pampered Chef lady by letting other "guests" know that an identical ice cream scoop to their $15 one with the antifreeze in the handle was available at Ikea for a buck.

In case you were wondering, I only own two Longaberger Baskets. Three if you count the one I gave to my mom ...

[kerosene]

Yes, the baking stones are quite groovy. Maybe my problem is my lack of skills in the kitchen.

[wolf]

Easily overcome by a good cookbook, patience, and many dozens of eggs.

[tw]

Originally Posted by BigV

Now, without the flowery language, are you interested in explaining your thoughts on services with respect to your earlier post?

Bee it as it may (the month that dandelions arrive), mrnoodle explained the same concept.

Yes, people make money. but they make it by selling the kit and training materials. in the long term, the amount of money you get from all the fabulously overpriced merch will start to add up, but only after you have a sufficient downline of misled people looking for a pot of gold. for anyone in amway to make money, there must be a substantial base of people who are not making money. those people on the lowest tier supply the funding for everything else.

The money comes not (so much) from the product as from the so many lower tiered who buy into the pyramid scheme. Only enough product is sold to give the scheme legitimacy. The investments clearly don't justify the profits generated by moving product. In short, these Amway schemes have no product (a product or service). One gets rich by promoting 'get rich quick' kits to many 'investors' who must take a loss on their investment.

Never enough money earned by the product line to justify that investment. Classic pyramid scheme. Sold only on what it can do for you and not what it provides to society. If society gets no benefit, then there is no product.

The investors don't even get franchise benefits other than to sell franchises to other 'investors'. Nobody concentrates on selling the products. There is no money in selling products. Selling the franchise - not the product - is where almost all money is made. Even with lots of franchises sold, the product from those franchises amounts to near zero profits.

Buy a Fiat. You will own product from the fastest growing car company in the world. Right. Where does he even promote the product? He does not. He promotes a scam that is really irrelevant to the product.

Carly Fiorina did same to promote the purchase of Compaq. She justified everything in terms of "HP and Compaq will be the biggest market in this business and second largest in that business". Does size (and the lie about 'economies of scale') mean stockholder value? Of course not. There was no product advantage to the HP merger with Compaq. All but the institutional investors (MBAs) understood that. Obvious because the deal provided no 'product'. Fiorina promoted a scam by selling something that provided no advantage to the HP product line nor provided HP customers with new or better products. Fiorina promoted the classic MBA scam using spread sheet spin. And that is also what the Amway, et al scheme is all about. Finance spin because there is no money to be earned on the product line.