Skepticism about MLM

[therealbt]

This is simply my opinion, and I admit my bias is taken from real life “experience” when I watched how one of my daughters ruined her life in MLM. It takes real grit to “run your own business”. Suggesting to people – most are just ordinary people -they can run their own business in an MLM scheme and make money is not the reality of it.

In reality, to be successful, they have to work extraordinarily HARD and claw their way up by getting good downline. They are encouraged to do this with diligence is a term I see a lot. A lot of people (just ordinary people remember) do not have the kind of grit needed to run their own business – otherwise they would already be doing so - and end up buying the “product” for themselves – but they would save more than the commission they earn and the exorbitant cost of the product simply by shopping at a supermarket or store. And furthermore, they often lose friends or get shunned by people wanting to avoid their “diligence”.

To recruit people with an idea they are running their own business and tell them the cost of the product they are selling is justified through its unique and exclusive nature, makes it not ethical for me.

I cannot do academic arguments about business models, but from a simple “human” aspect I see MLM as a “sting” on ordinary people.

I wish you luck with your MLM adventure – but I hope you see that ideas expressed here in this whole discussion, really HAVE come from an attitude of caring.

M

It is nice to meet someone on the forum that has some grace.

sounds like the expeerience you are talking about was with a company that doesnt have a brilliant mlm reputation..
However i have to say that would not appear to be the case for all MLM companies.
During my due diligence exercise it would appear that there are some very good top MLM companies out there.

and it would appear that MLM as a marketing method is here to stay.

So I would say to your daughter, who I'm sorry to hear had a bad experience that she might want to get back into the MLM marketplace. her judgement was right the first time around about the method. She just didnt get the company right by the looks of it. So she could trust her gut. do some heavy duty due diligence and then select an MLM company thats in the top rankings, make sure the companys' philosophy and products align with her values, Learn the business, work hard with a laser focus, learn learn and learn some more then teach teach and teach some more. Stick with it and who knows what the possibilities are.

The other possibility is to stay in the 95% who by the time they are 65 are either dead or dead broke, and have to keep working to make ends meet.
that is a statistical fact.

Or you can join the 5% who have all the wealth and see if you can emulate what they do.

I trust you've got a good pension plan but will it keep you in the lifestyle you really want?
thats a question you'll have to answer for yourself

Dont let the skeptics here (although I understand some of their fears) immobilise you.

It wont serve you in the long haul.

Life is all about risk, but also about making sure the odds lie in your favour.

Dont expect to trailblaze a new venture without tripping up a few times. The winners are the ones who get up dust themselves down and carry on.

The losers are the ones who trip up and stay laid down bacause theyve given up hope or arent strong enough of character or dont have a big enough dream and vision to make it to the top.

If you had a choice to stay in the 95% or join the 5% what would it be?

I know where I'm going.

I'm sure you and your daughter have the courage to blaze the trail and to honour who you really are , and so do all the other poor folks on this forum even though they dont have an inkling of their greatness, and probably far less the tools to change things.

it would seem the premise of this forum is to dampen someones dreams and settle for the status quo.

thank god da vinci, louis pasteur, einstein and Mr Bell didnt feel that way or we wouldn't be able to converse this way.

hope you can find a way to being a warrior

Again it was a pleasure to sense your grace

Bryan

[Admin]

Dont let the skeptics here (although I understand some of their fears) immobilise you.

Bryan, you still here?

I always enjoy this quip. Skeptics are too afraid to face reality.

Bryan, you're simply seeing things how you want to see them. It's blatantly obvious to anyone else reading.

You haven't answered the real core question here: how can an exponentially expanding sales force sell at a profit to a static, low-demand market?

The answer: it can't.

And I love the way you just reinterpret 770,000 sales people and turn them into customers.

If we look at the total sales force the figures look really bad (just as I predicted) but if you ignore 96% of the sales force and apply the commission payments to the other 4% then the figures look a little more like you want them to look like.

Bryan - it's called: self-delusion.

[Allo Allo]

It is nice to meet someone on the forum that has some grace.......

it would seem the premise of this forum is to dampen someones dreams and settle for the status quo........

hope you can find a way to being a warrior......

Again it was a pleasure to sense your grace

Bryan

Thank you for this post.

I have to say that I am here a second time around – my first time was most stressfull! I had freelanced as a journalist and written several (unimportant) books which I began to see was a grave responsibility if they were, in fact, a load of crap! I came here to challenge my own thinking – and I got spun out into REALLY investigating everything I have written and to thinking about how I could have affected other people’s lives. This has been painful to say the least! I left this forum and spent an intense time learning stimulating “new” stuff.

None of this is important in any way – but I have my tiny band of “admirers”. This last point is most important. Because moving in circles where your own thoughts are never challenged is dangerous. It leads to self-confirmation – and it really is a shock when you find not everyone agrees with you. You can take it personally and get hurt or aggressive, or you can go away (like I did) and investigate the ideas of those who DON’T agree with you.

I used to come back over and over again to this forum and just “lurk”. One day I found it had been removed from the Internet and I felt I had lost a friend! The Forum has been the catalyst to a “new” way of thinking for me that has been exhilarating. When John put it up again, I came “back” for a second time. Now I don’t know the people here, never met one of them – but in a way, they are my “thinking” acquaintances. My own thought processes are still “under construction” – so I’m insecure myself. I don’t agree with everything said here, and I still get pounded – but the basic motive for UK Skeptics being on the Internet is worthy.

I have had my career both in working for others and in working for myself. I am supposed to be retired. I’m not wealthy in money but I’m rich in other ways – and those other ways can’t be bought with money. And neither can happiness.

M

[Legaleagle]

OK, here's a question.

If you really passionately want to sell dietary supplements, or whatever, to members of the public and you think there is good money to be made from it and a satisfying and rewarding career, why go down the MLM route?

Why not become a rep for one or more of the pharamceutical companies. Or you could set up your own agency to supply such products. That way you would really be in control of your own business, you would get to keep all the commissions and you wouldn't have to offer the goods at such high prices because there were 10 other people up the chain from you creaming off their percentage before the money got to you. You wouldn't be restricted to selling only a few products from the same source Company. You wouldn't have thrown your lot in with a Company which has in the past suffered many blows to it's reputation with consequent implications for potenatial sales.

If you really use your imagination surely you can come up with a much better business model than simply signing up to an MLM with Pharmanex.

[therealbt]

and how much do you think it would cost you to set that up????

£12.50 I dont think so

risk of failure about 85% if you take the standard risk of starting a business in the UK in the first 5 years.

not such a brilliant model i'd say.

and John you said:
how can an exponentially expanding sales force sell at a profit to a static, low-demand market?

put it into the context of a high demand consumable and you have your answer.

MLM doesnt operate in static low demand markets as a general rule.
can you point me to one that does?

[therealbt]

I'm still here because I find your lack of proof and baseless assertions curiously interesting and intriguing.

you didnt say what a horizontal psychologist is John

[therealbt]

John you said

And I love the way you just reinterpret 770,000 sales people and turn them into customers.
-----

Your showing yourself up again and ruining any credence you had.

the 770,000 are distributors.
These are people who are primarily product users who have become distributors at a cost of "I think" 12.50 in order to be able to purchase the products at wholesale. Smart move I reckon.

the Sales people are the 30,000 execs.

Did you understand that ?

I think that debunks your assertions again

[Matt]

Hi Bryan,

Reading this I see that you're here as part a a due dilligence exercise considering a business opportunity involving Multi Level Marketing.

Are you considering starting an MLM company or joining an existing one?

Or to put it in what we might presume to be John's words are you intending to be a scammer or a scammee?

It is clear from John's description of some MLM schemes that I hope we would all agree are scams, that someone is making money. Take for example those e-mails "make $$$ working from home" look into them and you'll find that they're only one step removed from illegal chainletters. The idea being that you recruit ten people who each recruit ten people and each buy a pamphlet from someone "up stream" telling them how to do so. They claim that because these people are buying a product that it's not an illegal pyramid, chain letter get rich quick scheme. Such claims are contestable.

I'm sure we don't need anyone to explain why there are laws against such schemes or why the vast profits imagined are typically only realised by the founders of the scheme.

Clearly there will have to be subtle variations between each possible scheme. Such variations will include how the founders intend the scheme to be marketed to new players and also how the players actually market the scheme to potential recruits. Some will clearly violate the law, others will appear to be sold using he same faulty logic as the almost ponzi like chain letter schemes of old and yet still manage to observe the letter of the law. Some may even be fully reputable companies with reputable products whose business methods bear a passing resemblance to a pyramid scheme.

Some will be fully moral and legal, others may be as immoral as any ponzi scheme but manage to squeeze through loopholes in the law. There's plenty of grey area. Some may be more moral but also more vulnerable to prosecution. Some may be blantantly immorral and blatantly illegal but operated from behind aliases and front companies. Even large schemes can try to keep one step in front of often complex fraud cases by issung false accounts, reopening using different names and identities or switching their registered offices from one jurisdiction to another. Some may be fully reputable at head office but inadvertantly allow the immoral actions and claims of recruiters to be profitable to them.

If you are planning to start such a scheme then there's no argument that you have a very good chance of making money, even getting in early and working hard is a reasonable option. It is the get rich quick claims of some recruiters that many of use here find dishonest and immoral.

As John has said he has examined a number of schemes and found Avon to be "the most reputable" There is clearly nothing in John's mind that makes using the of theory Multi Level Marketing, lead automatically to a scam as he is willing to describe this one company, Avon, that uses a such model as relatively reputable.

However it cannot be denied that the MLM model offers a great potential advantage to those who would wish to disguise a pyramid scam from the consumer or from the law. Such scams have been revealed and prosecuted e.g. Fund America where it was revealed that 90% of the founder's revenues was generated from "distributorships" rather than product. Thus it was argued that this MLM was a pyramid scheme. It may not even have been the founders intention to operate a pyramid scam it's just adoption of the MLM model allowed what to the company is a highly profitable revenue scheme to evolve within the company.

So the undeniable fact is that MLM can act as a cover for a pyramid scheme. Observations show that MLM often does act as a cover for a pyramid scheme. Therefore when encountering a company using MLM it is reasonable to suspect that the MLM is covering for a business model where the profits are generated from an exponentially growing membership or from the margins added to product sales.

A number of sensible ways exist of doing this.

The first is to examine the company's own disclosed figures. What percentage of it's takings came from new memberships? how much does each distributer make from the model? As you have shown, Bryan, the latter may not be entirely fair. If the majority of members are not trying to build a business out of their membership but merely access "member rates" for their product then this may skew the figures. However it is still and exercise worth doing to put often exaggerated or misrepresented claims into perspective.

Another is to view the other reasons that MLM might be being employed if not to disguise a pyramid scheme. Bryan, you have suggested one such reason. You have suggested that multi level distribution schemes cut costs. Also advertising and other costs might be reduced. Thus resutling in savings for the end consumer. This can be simply tested if the equivalent products are available through other channels. If the product is cheaper though MLM channels then MLM channels work. This rarely appears to be the case. As mentioned before, AVON appear to be the reputable end of the spectrum and in shopping around for Sun Cream before last year's holiday AVON have a special offer that made our local Avon lady the best supplier around. I'm quite willing to accept that this may be partially down to their business methods and the MLM component in particular. I'm therefore not left with the default conclusion that AVON is using MLM to disguise a pyramid scheme. In the case of Kleeneze I see products in their catalog, for sale at stupid money, sometimes five times what exactly the same products can be bought for in town. However there's one or two loss leaders which my beloved takes advantage of and occasionally products that just don't seem to be available elsewhere.

In the case of nutritional supplements the argument then becomes are those available from pharmanex exactly equivalent to those available at Holland and Barret. The question of whether the claims of certain health food retailers are justified is another issue. Suffice to say that may people of a critical bent are aware of many instances where such claims have prove to be inflated exaggerations or downright lies. For similar reasons won't find many sceptics buying "pro-youthinol age reducing nutricreame with pseudo-bedazzle-aze 42" when a quality moisturizing cream is on the next shelf for a fraction of the price.

However if, to you, the pharmanex products are unique and only available from pharmanex then you will not be able to answer the question of whether there is a purpose to pharmanex employing MLM through this method.

I'm dubious I watch some TV adverts and see the phrase "not-available-in-any-shops" rarely seems to be associated with high quality demand items. Does it give you a warm fuzzy "I want one of those" feeling when you hear it? Not me. I'd be pleased and surprised if the pharmanex product line lived up to all the claims made about it. Just a thought - not an intrinsic part of the argument - if that's where you want to take the argument I suggest we set up a new thread.

Back to the economic comparison of agreed like with like..

As always there examples where the product would be cheaper in the shops and allegedly fewer examples where the product is cheaper through MLM.

I'm not convinced that adding middle men into the chain can ever make a product cheaper. The growth model of recent years appears to be direct selling via the Internet on the basis that it cuts out middle men.

Therefore whilst I'm absolutely convinced that MLM is sometimes a pyramid scheme I'm not convinced that it is often operated to reduce costs. In the instances where costs for a particular product are lower through a particular MLM scheme other reasons are possible. E.g. it is a loss leader, it is of lower quality, end of line discounts etc.

Can you point to any hard figures that demonstrate a comparison between a more orthodox distribution system and MLM?

Failing that can you suggest a reasonable purpose for MLM other than disguising a pyramid scheme?

I can suggest a few.

For use within the initial growth phase of a respectable business?
Where passing the product through multiple hands adds value?
Where orthodox methods of distribution are denied e.g. Marijuana dealing.

[Admin]

Or to put it in what we might presume to be John's words are you intending to be a scammer or a scammee?

Actually, people who join MLMs (unwittingly) become both perpetrator and victim of the scam at the same time.

That's because they've become involved in something they don't really understand.

As John has said he has examined a number of schemes and found Avon to be "the most reputable"

I didn't say that!!

With something like Avon I would think that moving products would be a little easier than with some others; but if they're using the MLM model to sell their products then no-one's going to get rich as an Avon rep.

Let’s use the ‘Avon Lady’ as an example, however:

If someone sets up as an Avon rep in an area then she will have a certain amount of customers to target and she will get sales from those customers. That’s how it’s possible to make pin-money through MLM.

But, if she sticks to the ‘MLM proven plan’ and starts developing her downline, lets say 6 people per level, then by signing those six extra reps she now has six other people competing for the same number of potential customers. The demand remains static but the number of sellers increases. Then if those six also do the same, before long there could be 43 reps aiming to sell to the same customers, and if they start signing others…. And so on.

The amount of reps who can sell to these potential customers will depend on how much demand there is and the size of the target audience but the key point is that demand will be static. It could be argued that these new reps could simply target a bigger area but there may well be existing reps in those other areas and they could also be expanding into your area.

This is why MLM is fatally flawed as a business model from the reps’ point of view. It is simply not possible to keep adding more and more sales reps to sell to a static market. The more people there are selling to the same audience the less profit each one can make (!) and as new reps are always being added to the sales force it ensures that each rep’s potential for earning income is going to be severely limited.

This is the reason that the failure rate in MLM is astronomically high. People join after falling for the propaganda but quickly realise that they can’t make money selling the products and so quit after learning a harsh, and sometimes costly, lesson.

If a conventional company (i.e. one that pays wages rather than commission) added to its sales force in this manner it would go bust very quickly. So why do MLM companies use it?

Well, they don’t pay wages, only commission on sales; and the reps pay to join the MLM scheme. This means that the company is always making money whether the reps sell products or not. It’s a win-win situation for the company. They don’t care if a rep pays to join and then never sells a thing, the company is still quids in.

This problem of saturating the market with sales people is actually inherent in the MLM model. That’s why it doesn’t matter who the company is or what the product is, MLM is always going to be nothing more then a pipe dream. No-one’s getting rich in MLM other than those running it.

That’s why I call it a scam. It’s not just the fact that it appeals to people’s desires but fails to deliver – it’s because the business model cannot deliver by design.

[Matt]

Actually, people who join MLMs (unwittingly) become both perpetrator and victim of the scam at the same time.

That's because they've become involved in something they don't really understand.

Well yes I can see what you're saying. Technically I suppose perpetrator is an adequate description and acknowledge that you add "unwittingly" however since they're typically not proffiting from their facilitation of the scheme I think scammee is equally accurate and perhaps more appropriate in such cases.

I didn't say that!!

Whoops Mea Culpa

http://forums.moneysavingexpert.com/...von#post659111

'Twas this post I was thinking of, and working from memory I'd thought that it was you that posted it. Please accept my appologies. I assure you that this missattribution wasn't deliberate.

With something like Avon I would think that moving products would be a little easier than with some others; but if they're using the MLM model to sell their products then no-one's going to get rich as an Avon rep.

<... snip ...>

That’s why I call it a scam. It’s not just the fact that it appeals to people’s desires but fails to deliver – it’s because the business model cannot deliver by design.

I was assuming that the reason that Avon was considered (by some) as more reputable, would be that whilst their marketting and distribution might follow the MLM model, they didn't push the recruitment of new distributors either in their promotional literature, genrally observed practive or their compensation scheme. If they operate as an MLM but tell potential distibutors "Well you can if you like, there's no startup cost but you'll never make a lot of money as we saturated the marketplace decades ago" then they're being honest and above board. If the financial incetives encourage this hoest approach then the company is being moral.

Looking closer at what the reference actually says it seems that the recent feedback is not quite so rosy.

However for the purposes of my argument the theoretical possibility of such a company serves as sufficient illustration to contrast against the typical manifestation of MLM.

[Legaleagle]

and how much do you think it would cost you to set that up????

I don't know, why don't you tell me hotshot, you're the one doing the due diligence, or hadn't you explored that possibility?

£12.50 I dont think so

What exactly do you get for your £12.50?

risk of failure about 85% if you take the standard risk of starting a business in the UK in the first 5 years.

If I take that figure as accurate (and I am not sure that it is) it's still 14.99% less risky than a Pharamanex MLM.

not such a brilliant model i'd say.

Well you would say that wouldn't you, Mr Due Diligence

[therealbt]

I don't know, why don't you tell me hotshot, you're the one doing the due diligence, or hadn't you explored that possibility?



What exactly do you get for your £12.50?



If I take that figure as accurate (and I am not sure that it is) it's still 14.99% less risky than a Pharamanex MLM.



Well you would say that wouldn't you, Mr Due Diligence

well mr damp squib legal eagle.

dont know what you get for the 12.50 but it will be an intro kit of some sort. I'm sure. I havent bought one so havent the experience to share with you.

and where do you get you 14.99 %?

I assume your saying that 99.9% of people who join an MLM company to do business fail. OK I can accept that assumption as a possibility.
Now give me some HARD evidence real proof that that is the case in all MLM companies.

[therealbt]

Matt,
at least your respons was, to a degree,considered. but when you throw words around like scammer and scammee you lose some credibility.

A Scam is a fraud as I understand it.
and there may be some MLM companies out there perpetrating a fraud, I havent found any yet, but nevertheless its possible.

but to say that MLM is a scam would suggest that all MLM companies are perpetrating a fraud. I doubt that that is true. However, unless all MLM companies are perpetrating a fraud, you cannot attach the word scam to MLM. If you do you are being fraudulent yourself and taking part in some scamming.

In all of the comments that have been made about MLM I havent yet heard one that stands up to examination and covers the complete spectrum of MLM.
So I would suggest that MLM is no a Scam and if it is then prove it.

And tell me how a company that falls under your heading of a scam:
turns over +/- $1.2 billion in sales.
pays commissions to independent distributors / execs (30,00) of $550 million.
been existence for 20 odd years.
have a 5A1 dun and bradstreet rating (better than any bank I believe)
are listed on the NYSE so is accountable to investors and shareholders.
Won the American Business award for the most innovative product ( Biophotonic Scanner)in 2005. this is the same as the Oscars in the business world apparently.

I have no problem with you saying that a specific company is a scam if that is the case. but I do have a challenge with you labelling a marketing methodology as a scam, which it clearly is not.

Its even been taught at business school. and Harvard professors dont teach fraud. they would be most unhappy to hear that you said they did.

Matt I trust you will examine what I have said in a considered manner.

hope your not a scammer too



.

[Matt]

Matt,
at least your respons was, to a degree,considered. but when you throw words around like scammer and scammee you lose some credibility.

Please reconsider what I wrote. Where I initially wrote "scammer" and "scammee" its was acknowledging someone else's point of view. Where I further used the word scam it was in relation to scenarios real or hypothesized that were immoral, illegal or both.

A Scam is a fraud as I understand it.

Oh, well I didn't mean to explicitly limit my description to fraud but to any immoral or illegal money making activity. I think scam is an adequate word but if you have another suggestion I'm open. What they call a pyramid scam is clearly to me a scam. What word would you prefer I use? I can't think of another so for the time being I continue to describe schemes that primarily generate money from exponential recruitment as scams.

and there may be some MLM companies out there perpetrating a fraud, I havent found any yet, but nevertheless its possible.

You haven't found any? When I stated that there are some companies operating illegal pyramid scams and attempting to use MLM as a legal defense against accusations of operating a pyramid scam I thought to myself. "This is a sceptical website. I can't jsut make assertions and not expect them to be challenged." It took about two minutes to find the example of Fund America. Once agains I should ask you to reconsider what I wrote as you must have missed this example. There is no doubt that there have been MLM companies perpetrating fraud. The single example I have already given is sufficient proof of this statement. However fraud is not the object of my post but scams. Once more, under my intended usage of the word scam, a scam is a scam if it is immoral or deceptive - this carries a lower burden of proof than the legal issues.

but to say that MLM is a scam would suggest that all MLM companies are perpetrating a fraud.

I didn't say MLM was a scam I said that there are a type of scam that MLM is well suited to disguising.

I doubt that that is true. However, unless all MLM companies are perpetrating a fraud, you cannot attach the word scam to MLM.

Sorry not with you. Can you explain what you mean and how it is relevant to what I wrote.

If you do you are being fraudulent yourself and taking part in some scamming.

Well I don't think I've misrepresented any facts, (fraudulent) and I don't think I've intentionally profited from illegal or immoral actions (scam)

In all of the comments that have been made about MLM I havent yet heard one that stands up to examination and covers the complete spectrum of MLM.

Well to be fair you haven't explained what objection you have to the points I've made about MLM expect for taking umbrage at the fact that I've noted that some pyramid scams use MLM as a cover. Obviously you don't think my treatment stands up to examination. I'd be grateful if you explained why.

So I would suggest that MLM is no a Scam and if it is then prove it.

No MLM is not intrinsically a scam, I have pointed out that it is possible for a company to run MLM and not be a scam, MLM can however be a cover for a scam.

And tell me how a company that falls under your heading of a scam: turns over +/- $1.2 billion in sales. pays commissions to independent distributors / execs (30,00) of $550 million.

Scams make money too. There's no logical reason why an enterprise that nets a vast amount of money shouldn't be one fairly described as a scam.

Nigerian 419 Advance fee fraud netted $3.8 billion in 2006 source

If you want me to accept this as relevant you'll have to explain why a scam should stop after netting a specific amount of money - especially when the scam might comply with the letter of the law.

been existence for 20 odd years.

Again there's no logical reason why a scam shouldn't be long lived. Again Nigerian 419 advance fee fraud has outlived pharmanex. same source Enron was nearly as old when its fraudulent activities came to light.

If you want me to accept this as relevant you'll have to explain why a scam should stop after lasting a specific amount of time - especially when the scam might comply with the letter of the law.

a 5A1 dun and bradstreet rating (better than any bank I believe)

Again I don't see what relevance a Dunn & Bradstreet rating has to do with this issue. Dunn & Bradsteet tell me that if Pharmanex wish to open an account with my business then there's no business reason to refuse them goods on credit they have assets in excess of &#163;35 million (the 5A part of the rating) and that they are not considered likely to fail any time soon (the risk part of the rating:1) The morality of their business practices may be an issue to me but it is certainly not to Dun & Bradstreet.
If you want me to accept this as relevant you'll have to explain why a scam should stop after achieving a specific credit rating - especially when the scam might comply with the letter of the law.

are listed on the NYSE so is accountable to investors and shareholders.

Enron and Worldcom were both publicly traded. Microsoft was found guilty of antitrust violations, it found it profitable to pay the fine and continue trading illegally. All accountable to shareholders. The morality of their business practices may be of interest to me but not to the fund managers who invest in the companies. They're only interested in return on investment.

If you want me to accept this as relevant you'll have to explain why a scam should stop after floating on the stock market - especially when the scam might comply with the letter of the law.

Won the American Business award for the most innovative product ( Biophotonic Scanner)in 2005. this is the same as the Oscars in the business world apparently.

Well clearly you and I have differing opinions over the value of firstly a Stevie award (awards in over 100 categories to self nominated companies since 2002) and secondly of an Oscar (used to mean something now it appears the members of the academy based their votes on box office returns rather then actually viewing all the films nominated)

However that's all bye the bye. I can see no logical link between being a scam and not winning an award. There were three nominees in that category and I suspect that the panel of judges spoent very little time examining all the nominees in all 100 categories. I'd say they had a one in three chance of winning whether they're operating a pyramid scam disguised as MLM or a reputable business that happens to utilize MLM

If you want me to accept this as relevant you'll have to explain why a scam should stop after winning an award however prestigious - especially when the scam might comply with the letter of the law.

I have no problem with you saying that a specific company is a scam if that is the case.

well that's good.

but I do have a challenge with you labelling a marketing methodology as a scam, which it clearly is not.

I painstakingly didn't do this. I said that it may be used to serve the purpose of legalizing or disguising pyramid scams and has been observed to be used in this manner. I also acknowledged that it was theoretically possible that it served other purposes.

Its even been taught at business school. and Harvard professors dont teach fraud. they would be most unhappy to hear that you said they did.

Well there's three points here.

One that I'm saying that MLM is intrinsically fraudulent. If I may reiterate - I'm not saying that.

Second that MLM is taught at business school including Harvard. I can see no mention of it on the Harvard curriculum online.

Third that where MLM might be discussed in business schools it is necessarily being promoted. Clearly that doesn't follow.

I can confirm that Harvard Business Professor Carolyn Hotchkiss does indeed teach fraud as part of her "Legal Aspects of Management" course. In fact any business school that didn't mention fraud would be rather negligent. Of course promoting fraud would be another matter.

Incidental though the matter is (as I never suggested that all MLM is de facto fraud, or even a scam) it raised my curiosity. Having examined the Harvard Business School curriculum I can find no supporting evidence to your claim so if you will excuse my curiosity, may I ask for your source?

Matt I trust you will examine what I have said in a considered manner.

hope your not a scammer too



.

I believe I have addressed what you've said in a considered manner.

I'm disappointed though. I asked you a couple of specific questions:

1) What is the opportunity you're doing due diligence on - starting a brand new enterprise or joining and existing scheme?

2) What purposes do you think MLM may serve if not as a cover for a pyramid scheme?

You answered neither.

I made a number of point which you should feel free to discuss. Instead you focus on alleging that Multi Level Marketing is not intrinsically a scam and suggesting that I disagree with this point. I clearly don't.

The only thing that I have called a scam (in my own words rather than what I jokingly, and with a smiley, implied John might say) is the pyramid scam. This is not intrinsically deceptive but it is a scam and in it's raw form is illegal.

To me multilevel marketing is a tool which can serve a number of possible purposes. The purpose for which it is most apt, i.e. which generates the most money for the initiator, I have suggested may be that of disguising a pyramid scam from the victims and from the law.

I have further suggested that this being the case that the presence of MLM might be a good indicator of the presence of a Pyramid Scam.

This would not be the case if MLM offered some other common purpose to which it was more apt. It is towards this area I would like to direct the discussion.

Lets take an analogy. Lock picks serve the purpose of opening locks without a key. There are three (at least) classification of people who use lock picks depending on the purpose from which they wish to open locks.

1) Thieves
2) Locksmiths
3) Hobbyists

I am no thief or locksmith but I have made and used a set of lock picks. I am a hobbyist. However I understand that being found in possession of lock picks would be incriminating.

The frequency with which possession of lock picks might be associated with thievery is great enough for certain presumptions to be somewhat justifiable.

In such a situation the onus would be upon me to offer an explanation for my possession of lock picks other than thievery. Otherwise I might be charged with "going equipped"

You have suggested in previous posts that it is possible that a company uses MLM not as a disguise for a pyramid scam but instead to cut costs. I have suggested that when examining many MLM companies their costs are higher.

You have left this challenge un-adressed. I invite you to rectify that.

[Cuddles]

wasn't going to respond any more but your so far out with your math caluclation its not true.

biggest mistake is that there are only 30,000 active reps. that changes you sums somewhat and you are forgetting that that one product is only one of more than 30 products.

so your maths dont stand up
plus your missing the point
I mentioned the 2.5 billion in response to a remark that was made by John I believe that it was a market of little demand

in fact the trend forecasters are predicting a 1 trillion dollar market by 2010

wrong figures its not 450,000 sales reps
A rep is called an executive and there are only 30,000 of them

by law they have to put in a disclaimer as they dont sell medication.


Next

The trouble you have here is that you are just plain wrong. These are the figures from their own website. No matter how much you deny this, they state themselves that there are 450,000 salesmen. The fact that there are many products is irrelevant, the 2.5 billion specifically states that this is the sales of LifePak packets. In any case, the more products there are, the worse that makes it since it means that the market for any one product is much smaller.

Please, before making any more ridiculous claims about this, at least try actually reading the company's own website.