Is MLM a Scam?
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Some people confuse an MLM marketing plan with the illegal pyramids that were prevalent in the 1970's. Because they harmed people, financially, pyramid schemes have been outlawed by both lawmakers and the public. The assumption that all MLM companies are scams shows a very cynical and dim view of all people because MLM's are about people. Millions of people. When you call an MLM a bad thing, you are calling all those people stupid or crooked, or however that negative thinking goes. One person on this website summed up the whole point of the MLM concept (and showed where his knowledge of an MLM came from) by saying his parents are Amway Distributors, but, he said thats alright because they just sell soap to their friends. Amway has the most intrusive marketing plan of any MLM that I know, but his parents are able to participate in whatever way they wish. That is the whole spirit of the MLM concept. Its not about evil companies. Its not about evil company founders. Its about the people. Its called an "opportunity" because it allows people who don't have the capabilities to found a corporation, to have a business of their own, with no appreciable investment, part time or fulltime. They have the choice to offer for sale products to their friends, relatives or strangers. It is their own choice. They can sponsor and train others if they wish. Or not. So to make a sweeping statement that MLM's are a scam, would be ignorant. > Some people confuse an MLM marketing plan with the illegal pyramids that > were prevalent in the 1970's. I have told you that I am not in the slightest way confused about this issue. The legality of MLM schems is, at best, tenuous. > Because they harmed people, financially, > pyramid schemes have been outlawed by both lawmakers and the public. Only lawmakers can outlaw anything. Rational people can scorn them. > The assumption that all MLM companies are scams shows a very cynical and dim > view of all people > because MLM's are about people. Can you point to where I claimed that *all* MLM companies are scams? Care for another helping of red herring? > Millions of people. When you call an MLM a > bad thing, you are calling all those people stupid or crooked, or however > that negative thinking goes. As I have pointed out to you, I do not call all of the people who partake in MLMing stupid, crooked, etc. I call those who start them up and push them as a road to riches as being crooked. The others are often dupes, i.e., victims of the scam. > One person on this website summed up the whole point of the MLM concept > (and showed where his knowledge of an MLM came from) by saying his parents > are Amway Distributors, but, he said thats alright because they just sell > soap to their friends. That person would be me. First off, I said it was my aunt and uncle. Second, Amway made numerous products when my aunt and uncle were involved with it. Thus, referring to soap is just dumb. > Amway has the most intrusive marketing plan of any > MLM that I know, You have no idea what period my *aunt & uncle* were involved with it. > but his parents are able to participate in whatever way > they wish. Aunt and uncle. Try reading, remembering and comprehending. > That is the whole spirit of the MLM concept. Its not about evil > companies. Its not about evil company founders. Utter bull shit. It is the companies and the founder who rake it in for the hard work of many people. > Its about the people. Its > called an "opportunity" because it allows people who don't have the > capabilities to found a corporation, to have a business of their own, with > no appreciable investment, part time or fulltime. They have the choice to > offer for sale products to their friends, relatives or > strangers. It is their own choice. They can sponsor and train others if they > wish. Or not. It still is a questionable scheme. > So to make a sweeping statement that MLM's are a scam, would be ignorant. The way MLM is done is akin to a pyramid scheme and AFAIAC, a scam on those people who buy into it.They do have to buy product to sell it. I'm already too familiar with the perverse influences of MLM. It's an unhealthy, all-consuming lifestyle. For starters, the goods sold via multi-level marketing will, by the fundamental nature of MLM, exhibit artificially inflated end-user prices. This borders on unethical because there are any number of "down-line" payoffs which had nothing to do with the sale, other than "signing up new recruits" in a ideal endless pyramid. Take any MLM product and sell it via a traditional chain (mfr ==> wholesale/distribution ==> retailer) and that same product will generally sell for a fraction of its MLM pyramidal mark ups. MLM has the added dimension of recruitment, which is contrary to both efficiency and fairness. Building one's down-line is the only viable method for serious MLM prosperity, and such a scheme is largely dependent upon "who arrived first" to the party, not necessarily the skill or perseverance of the individual. Take any MLM model to its extreme and we run out of people to recruit. Such MLM schemes are almost always accompanied by a strong "motivational" agenda, sometimes bordering on cult-like ritual. For proof, simply take a look at MLM's biggest success story. Amway's most recent SA-4400 report (as required by FTC) shows an extreme degree of down-line turnover and the need for top-level distributors (of which there are in reality very few) to continually harvest new down-line. At the top, it's not about "product" but almost entirely focused on motivation and cheer leading -- feeding people their daily dose of dreams. It's well established that less than 1% of people who become multi-level distributors ever turn a true profit, and that those who achieve a sustainable living are a much smaller percentage still. Distributors are fond of calling MLM the "wave of the future." But after 50+ years of MLM, far less than 1% of all retail sales are made via MLM models. And most of those new sales are from hopeful new distributors who are "paying the price of admission to a business they will soon abandon." Xxxxxx, you seem to have convinced yourself that all is well in pyramid land. But for every MLM "success story" there are untold masses of burnt out wannabes who worked hard to grow a business, enriching their up-line in the process, but ultimately becoming just another sad MLM statistic. I would not want this on my conscious. Indeed, MLM is growing -- in the same way legalized gambling and lotteries are growing. The compulsive desire to "get rich quick" and "live the life" is more powerful now than at any time in American, and perhaps world, history. And just as obsessive gambling can destroy families, MLM marketing tends to commercialize and cheapen family and friendship relationships. It's an MLM lesson I learned long ago -- friends and family are not business prospects. Such a mind-set (pervasive in MLM) can pervert natural affection and the very foundations of filial love and trust, ultimately alienating us from authentic relationships. When everyone is a "prospect" -- we lose sense of authentic human and spiritual value. The FTC's MLM warning page http://www.ftc.gov/bcp/conline/pubs/alerts/pyrdalrt.htm What you omitted was the fact that recruiting friends often >turns them into former friends. Exactly. MLM ultimately turns 100% of our waking life into a "recruiting" mindset. As we increasingly see every person as a "prospect" we eventually undermine the sacred foundations of true family and friendship. At best, it is a very unhealthy lifestyle. In fact, the Neways pitch is a classic example of appealing to parents' fears about their children's safety in order get them to behave emotionally rather than rationally. Its message basically boils down to "Mothers: you don't know it, but what you're doing might give your kids *cancer*! You must be wracked with guilt now, but redemption is in sight! Just join our program!" It's not all that different from the "blood libel" against the Jews: the accusation that they killed children to use their blood in rituals (an accusation, BTW, that's been applied to groups other than the Jews, which just goes to show that it's the form, rather than actual content, of the technique that matters). The point is that parents tend to deal with possible threats to their children emotionally rather than rationally (probably something pretty close to an instinct, coming from the fact that parents had to protect their children long before humans evolved much higher brain function) and therefore can be persuaded to suspend their better judgment by the allegation of such threats. It's not a matter of lack of IQ-type intelligence; the smartest person in the world can do some pretty dumb things in an emergency, and this type of appeal puts people into "emergency response mode."
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