I will never understand the gullibility of people that I consider intelligent getting involved in multi-level marketing - network marketing schemes (i.e. pyramid schemes).
At the risk of 'stepping on toes' of friends, colleagues and relatives people seldom 'tell the truth' to victims and perpetrators of these bogus plans. Most of the victims and the perpetrators are one and the same persons. This subject is seldom discussed publicly.
This editorial comes on the heels of the king of MLM, Amway, being brought to trial for its lies, frauds, and scams. Amway is merely a well known MLM company being exposed for what it really is. However, countless MLM companies have faded away without fanfare and many of these were guilty of far more crimes than Amway.
Most people have been involved in an MLM scam at one time or another. I have been involved in a couple in the past too. Common sense, for most of us that have been led down this primrose path of lies, tells us from experience this 'crap' simply doesn't work, or pay off.
Some of the best products in the world have been developed or promoted by MLM companies. The sheer success of a good product in an MLM company is one reason for the company's failure. The 'marketing plan' is based on a mathematical algorithm doomed to failure. As such, the excellent products have disappeared into oblivion.
The first 'hook' to get a person to listen to the MLM lie is the speech of how you are going into business for yourself, how you are going to empower your life and your income, how you are going to create a 'residual' income for life for you and your family, and how much money you are going to make. These masters of mind control actually convince people that they are taking control of their future and their income. It's all a lie.
Empowerment is the word or the concept they use to manipulate people into believing in this pyramid scheme. Many believe in these schemes like a cultish religion, chasing one failed scheme after another, never learning their lesson. These people are NOT stupid, in fact they are usually intelligent people, but have been brainwashed through the sales hype and through greed.
Even having experienced failure after failure of MLM pyramids, wasting countless hours for a failed company, wasting their lives on failed schemes, they are so deluded, like 'dogs returning to their own vomit,' they seek out another MLM scam to be involved in.
MLM pyramids are simply an illusion of success and empowerment. You will hear of the 'matrix' and how this matrix will force people under your level in the pyramid to finance you for life. MLM (network marketing, pyramids) advocates promote an illogical illusion based on their own delusions. Mathematically the entire marketing scheme and scam is destined to fail.
The patriot community is one targeted group of people hoodwinked into falling for these pyramids. Patriots are usually very smart people trying to get America back to its constitutional foundations. They are trying to 'get out of the system' as much as possible so that government has little control over them. Patriots are 'freedom' minded people and this make them an easy target for MLM scams and lies.
The patriot community teaches about the government's unilateral and hidden contracts. They have researched this subject endlessly and fight in the courts to have these unilateral, hidden contracts removed and voided. Hidden contracts give control to the government or the holder of the contract.
Ignorantly and hypocritically these patriots fall for the same type of unilateral, hidden contracts when they fall for these MLM pyramid schemes. They give up power over their own lives and income to the MLM company. They hand over 'full' control to the company through a unilateral contract that can be changed or voided at any time.
The marketing plan changes all the time! Why? The changes are always presented to the marketers as in their best interests and so they will make more commission. None stop to think that changing of the plan is due to failure of the existing plan. If they increase the commission rate, it usually means the company is not growing and the increased rate is to encourage marketers to bring in more people at the bottom level to feed the top level. When the company decreases the rate of commission or earnings, the company is at 'critical mass' internally and financially. They are discouraging growth -- they can no longer meet their obligations. Commission checks start arriving late.
New agers, alternative health seekers, and other people and groups that show an independent attitude are prime targets for these MLM scams, promising the 'independence' while delivering 'company control.'
MLM products are overpriced. They have to be overpriced to carry commission to all those down line levels. For this reason the product itself is doomed to failure. There is a market value for any product produced and manufactured. If the final selling price is 300 to 400 percent greater than that market value, eventually even the closed family of MLM buyers will quit purchasing. The average family cannot afford to buy overpriced products month after month for the privilege of selling the MLM plan that will not pay a living wage to the majority of the pyramid victims.
I was involved in an MLM company years ago that carried a unique automotive line of products. The products were very successful and not too overpriced. I was selling thousands of dollars per month of this product and had virtually no down line. Other MLM victims were experiencing the same thing-- the product was moving as direct sales very fast, but no down lines to speak of. The product was outselling the MLM marketing scheme. The product demand was so great the company could not furnish it fast enough to supply the demand. Being stuck in an MLM scheme setup - normal business financing was not available to this company. Manufacturing facilities were too small to supply the demand.
It had to sell the company and product line, end the MLM scheme and return to a normal distributive marketing setup to continue. This left all the MLM marketers out in the cold without a product and all the work and investment was lost. No residuals were coming. It was finished. The success of the product doomed the MLM scheme. Under the new company the product was on store shelves at one half the MLM price. Thousands of MLM distributors paid the price, made the product known and successful, and they were left out in the cold.
MLM companies, successful products or not, are doomed to fail. Most of these MLM companies are created, set up, and run by the same people, over and over again. They are professional con-artists, in that they know that all the profits really go to the top of the pyramid, where they hold the top spots. The top of the pyramid is usually a close knitted clique that is making huge amounts from all the work of the middle of the pyramid workers. They throw out a bone to upper middle pyramid workers every month or so. This is their 'token' winners to prove to the lower slaves in the pyramid that the scheme works.
When they 'finish' off one MLM company, they go and create a new one to scam the slaves with. They are good speakers - good at mind control, mass persuasion, and manipulation.
Ethics is not a concept used in MLM companies. For however they present their plan, how honest they think they are, the MLM scheme cannot succeed. It is unethical to sell dreams to a needy and poor public. Dreams of success in income, residuals, retirement, and so on are unethical methods to move overpriced products into the garages around the country. People that barely have a pot to piss in are convincing others that the scheme is so very grand to make everyone rich, and the promoter is not even making minimum wage selling the scheme!
Con-artists appeal to the base needs of people, utilizing Maslo's hierarchy of needs. So do MLM companies. Using Maslo's chart to fulfill a need is not unethical, but to appeal to those needs to provide nothing but a lie is unethical and should be illegal. It is certainly immoral.
Take the MLM presenter showing the chart the company has provided for instance. They show you the pyramid and elaborate for hours on how theirs is not truly a pyramid. It's another lie. Regardless of how wide the base of the pyramid is, it is still a pyramid. Once the pyramid, the bottom level is larger than the resources of the company, the chart is a fraud. They are presenting a marketing scheme that is never going to be achievable.
Instead of empowering a person the MLM company is enslaving the person. The company is using the 'MLM' distributors' investment, resources, marketing abilities, and other talents FOR FREE. All they pay is a pittance amount of commission based on sales of products. The commission rates are ridiculously small in comparison to the overpricing of the products.
There is a growing danger of people getting involved in MLM scams selling products in the health industry. Not all these companies are health conscious; selling their overpriced health products in less than safe packaging. Some are not qualified in the health field, much less the medical field. Many are making promises for cures that no reputable alternative health care provider would ever endorse. In these companies you will have thousands of unqualified distributors making claims of 'false' health benefits - just to sell you their overpriced nonsense.
In normal and direct marketing the seller gets the lion's share of profit. This is what the business minded person is aware of. Jewelers make 50 to 100 % profit from their sales. MLM sellers are lucky to get 10%, most getting less than this. The MLM company tells its victims that they are buying the product wholesale at distributor prices for resale. The problem is that the 'MLM wholesale' price is greater than the market value of the product. So they really are not able to 'sell the product'. Therefore they have to rely on selling the scheme, the false hopes and dreams.
Intelligent, but gullible people fall for these scams all the time. They don't stop and put a pencil to the math used to create the so-called MLM marketing setup. The algorithm reaches out to infinity.
To overcome this, MLM con-artists paint a false picture of reality, a false picture of success. They create a 'family' which becomes very cultish. If everyone in the cult 'believes' then everyone gives the appearance of success, when in fact they have been cheated out of their talents and their labors.
I am all for people taking back control of their lives and their way of making a living. I am all for a person's self empowerment. It will not be found in MLM scams. The tenant of the wise consumer remains: "if it sounds too good to be true, it probably is."
Don't sell your independence, your control, your power to any MLM type scheme. Don't give up control of your own destiny. Don't give up control of your own income to a promise that can be nothing but a lie. The answer for self empowerment does not lie in false promises and lies.
I found this empowerment years ago when I got tired of climbing the corporate ladders and playing the games to get ahead. Make an objective list of your talents. Find out what you do that is equal or better than most people can do. Everyone has a saleable talent or skill. Locate your niche in the marketplace and go after your share. Expect to fail and fail again at first, but keep your eye on YOUR OWN GOAL and keep going after it until you succeed. This is not only the answer and cure for you and your family; this is the cure for what is wrong in America.
I know many people will be mad or shocked that an editorial of this nature has been written, but I challenge them to take a good hard look at the experience rate of success of MLM schemes. It's not a pretty picture, but one of failure after failure.
This article is an opinion, an editorial. If you need proof then I recommend you read these three reports.
Five Causal and Defining Characteristics of
PRODUCT-BASED PYRAMID SCHEMES or
REPORT OF VIOLATIONS of NuSkin
FDA Letter to SeaSilver