MLM Scam Discussions (cont from DD Main site)

[aygart]

Some of these have stood the test of time and there are people who make a living off it. You just need to be ready to do real work and be good at sales.

[Dan]

Some of these have stood the test of time and there are people who make a living off it. You just need to be ready to do real work and be good at sales.

And be sleazy. And not mind having no real friends left.
See also: Ambit salesmen. My Harvest America salesmen. Sungames.

[aygart]

Or Shaklee or Mary Kay?

I do not condone MLM and mybusiness involves helping those messed up by Ambit, but done have worked and are viable for the right person if they are not starry eyed. The ones you mention have not yet stood the test of time.

[Tankchucker]

some have worked and are viable for the right person if they are not starry eyed. The ones you mention have not yet stood the test of time.

No mlm is viable for anybody besides the leaders, anybody would be better off cleaning gas station bathrooms over joining a mlm.

Saying that because a mlm wasn't completely proven to be a scam yet so it's viable for the right person is like saying that laying with a harlot that wasn't yet tested positive for aids isn't a bad idea for the right person (a halachik mamzer). (Sorry can't think of a better example at the moment)

[yesitsme]

He got me in ambit I wasn't A DDF'er by then, this is his current profile

[Dan]

Madoff's pyramid lasted for decades.  That's the thing about pyramids, they always cave in, though it can take a very long time.

[aygart]

MLM is not the same as a ponzi scheme. MLM is a marketing system and nothing else. The people I know who are happy after many years involved in MLMs all have a common denominator. The main money is selling products and the downline is a bonus. Such a structure is not so different than people who have a line of products which they sell from their house. They also understood exactly what they were getting into and did not think they would have a million people in their downline. The problems start when the main item is the downline because then it is a bunch of hot air.

[elit]

MLM is not the same as a ponzi scheme. MLM is a marketing system and nothing else. The people I know who are happy after many years involved in MLMs all have a common denominator. The main money is selling products and the downline is a bonus. Such a structure is not so different than people who have a line of products which they sell from their house. They also understood exactly what they were getting into and did not think they would have a million people in their downline. The problems start when the main item is the downline because then it is a bunch of hot air.

The problem is the product is never worth the value it's sold as and is only done through mlm as opposed to being sold as every other product in the world is because it only survives on the money from the downline

[aygart]

The problem is the product is never worth the value it's sold as and is only done through mlm as opposed to being sold as every other product in the world is because it only survives on the money from the downline

That is simply not the case. One of the first things stock analysts look for in these companies is exactly that. How much of earnings is from product and how much is from the network. This is essentially Bill Ackman's claim regarding Herbalife. Other MLMs such as Tupperware and Mary Kay are not like that. Just look at how many people have Tupperware containers in their home.

[Dan]

http://www.mlmmyth.org/tupperware-direct-selling-left-us-industry-dominated-by-apparent-pyramid-schemes/

[elit]

That is simply not the case. One of the first things stock analysts look for in these companies is exactly that. How much of earnings is from product and how much is from the network. This is essentially Bill Ackman's claim regarding Herbalife. Other MLMs such as Tupperware and Mary Kay are not like that. Just look at how many people have Tupperware containers in their home.

I don't know a single person who bought tupperware through a direct sale i know many who have bought from the store. I ask every time some one tells me about a mlm if the product is so great why dont they sell it in the stores and i have yet to hear a remotely good answer

[Dan]

I bought mine on a direct sale.
Directly from amazon.com.

[Luvtotravel]

Tupperware, Mary Kay and shaklee, not from party sale but from one of the levels in the mlm. Y not?

[aygart]

Tupperware, Mary Kay and shaklee, not from party sale but from one of the levels in the mlm. Y not?

What?

[Luvtotravel]

What?

I patronize my local agents for these companies.

[aygart]

I don't know a single person who bought tupperware through a direct sale i know many who have bought from the store. I ask every time some one tells me about a mlm if the product is so great why dont they sell it in the stores and i have yet to hear a remotely good answer

I bought mine on a direct sale.
Directly from amazon.com.

Tupperware's move to retail is relatively recent.
http://www.nytimes.com/2001/07/18/business/tupperware-to-sell-products-in-supertarget-stores.html

It was not a great move, at least in the beginning. Availability in retail can undermine the network.
http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&cad=rja&uact=8&ved=0CDgQFjAE&url=http%3A%2F%2Fwww.wsj.com%2Farticles%2FSB107706271446632041&ei=eapxVdiIOYnEgwSG7oDIBw&usg=AFQjCNHbZxKoMWpO-56DzpSmG_xoZ8InhA&sig2=HHJ3ebCXv9VaRoYXkNQy8g&bvm=bv.95039771,d.eXY

[aygart]

http://www.mlmmyth.org/tupperware-direct-selling-left-us-industry-dominated-by-apparent-pyramid-schemes/

I fully agree with that post. MANY MLMs are ways to separate members from their money. MHA is a prime example of it since there was no business model to it at al other than the downline. Others, like Tupperware, Mary Kay, Avon, and I think Shaklee have a legitimate business which is marketed using MLM which is a system which works and has stood the test of time. When new ones pop up they need to pass a test of having a legitimate sellable product which can be the core business of it members.

Again, I do not condone and have never done MLM and think it is not for most people, but it can work for the right person with the right attitude towards it.

[Ergel]

Except that for many/most of these, no one really wants the product (take Shaklee for example) and your friends just feel like you are trying to force it upon them at every turn and as such avoid having contact with you

[churnbabychurn]

I fully agree with that post. MANY MLMs are ways to separate members from their money. MHA is a prime example of it since there was no business model to it at al other than the downline. Others, like Tupperware, Mary Kay, Avon, and I think Shaklee have a legitimate business which is marketed using MLM which is a system which works and has stood the test of time. When new ones pop up they need to pass a test of having a legitimate sellable product which can be the core business of it members.

Again, I do not condone and have never done MLM and think it is not for most people, but it can work for the right person with the right attitude towards it.

Selling a semi legitimate product at insane markups, using predatory multi level marketing technics is still despicable.


Regardless, the definition of a MLM company is made by analyzing how they make their money. A normal legitimate business makes money by selling a product or service at a premium.
A MLM makes their money by selling the right to "buy in" to be "allowed" to market their "products" . - It makes absolutely no difference whether the product is legitimate or not. It generally is not, and/ or is massively overpriced. This is because the product is not subject to normal market forces.
The MLM push of harrasing desperate people to "buy in", " subscribe" or wtvr is the scam. It is wrong.

[aygart]

Selling a semi legitimate product at insane markups, using predatory multi level marketing technics is still despicable.


Regardless, the definition of a MLM company is made by analyzing how they make their money. A normal legitimate business makes money by selling a product or service at a premium.
A MLM makes their money by selling the right to "buy in" to be "allowed" to market their "products" . - It makes absolutely no difference whether the product is legitimate or not. It generally is not, and/ or is massively overpriced. This is because the product is not subject to normal market forces.
The MLM push of harrasing desperate people to "buy in", " subscribe" or wtvr is the scam. It is wrong.

I don't think we are disagreeing except maybe on a technicality.

MLM is not the same as a ponzi scheme. MLM is a marketing system and nothing else. The people I know who are happy after many years involved in MLMs all have a common denominator. The main money is selling products and the downline is a bonus. Such a structure is not so different than people who have a line of products which they sell from their house. They also understood exactly what they were getting into and did not think they would have a million people in their downline. The problems start when the main item is the downline because then it is a bunch of hot air.

That is simply not the case. One of the first things stock analysts look for in these companies is exactly that. How much of earnings is from product and how much is from the network. This is essentially Bill Ackman's claim regarding Herbalife. Other MLMs such as Tupperware and Mary Kay are not like that. Just look at how many people have Tupperware containers in their home.