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Re: Please beware of MULTI-LEVEL NETWORKING / PYRAMIDING COM
Hi MLM networkers,
I recommend you give quantitative facts. How can you claim the "Amazing Compensation" of MLM if we don't have "numbers" to measure and conclude your claims? Most of you compare your success but not as a WHOLE.
Here the list of questions and I WANT QUANTITATIVE FACTS to measure the claims. If not, these are "RED Flags":
1.) You claim that many people are profiting from your (MLM) program. What proof can you give to show that MOST people who put effort in your program actually FILE a PROFIT on their INCOME TAXES?
2.) Would you please provide AVERAGE NET PAYOUT by the company (after SUBTRACTING PRODUCT PURCHASES) to ALL participants who ever signed up (or in the past 5 years, etc.) INCLUDING THOSE NOT NOW ACTIVE?
3.) CARRIED TO ITS LOGICAL EXTREME, how many PLANETS would be required for 5000 prospects were to work hard enough to achieve the promised income rewards for their recruitment efforts and achieve the highest RANK in the MLM program?
4.) Are your MLM company's wholesale prices low enough to allow a respectable profit when marking up for resale - at a retail price that is still competitive with comparable products through other sources? (or are retails prices so high that they must be sold at wholesale to achieve any volume - IN ORDER TO MAINTAIN/ADVANCE in RANK in the scheme?) What evidence do you have to show a HIGH PERCENTAGE of participants PROFITING from actual retail sales?
5.) You claim that MLM can promised high income enough to be obtain luxury. However, why are FORTUNE 500 COMPANIES are not blushed or even praised MLM and its "unethical" business practices? Can you provide evidences enough to persuade them to adapt MLM business practice?
6.) You talk of time freedom. If your top people are making so much money, why are they out recruiting, rather than enjoying the promised life of leisure? What percent of your top “distributors” are no longer actively involved with the company – and never attend opportunity meetings? Can you give me their names?
For the MLM summary, here is what really happening:
Information is from: By Jon M. Taylor, MBA, Ph.D., Consumer Awareness Institute. I thank him for revealing the TRUTH
What is the appeal of recruitment-driven MLMs?
1.) The “easy money” appeal of MLM is often couched in terms such as “time freedom” (to do what you want), perpetual or “residual income” (like author’s royalties or annuities), and “unlimited income possibilities,” with the success of recruits limited only by their efforts.
2.) MLMs are often sold as a viable alternative to an unfavorable job market and as a better route to retirement than traditional plans.
3.) MLM programs typically sell “pills, potions, and lotions” or other products that are consumable, that have unique appeal, and that can be claimed to deliver benefits not available elsewhere.
4.) One sees a strong sense of belonging, or an “us versus them” cultish mentality.
As a business model, is MLM legal and ethical?
1.) MLMs depend on unlimited recruitment of a network of endless chains of participants.
2.) Participants secure and advance to ranks or positions in a pyramid (“downline”) of participants based on timing and recruitment, rather than on merit or appointment.
3.) As endless entrepreneurial chains, or “opportunity” recruitment schemes, MLMs assume an infinite market, which does not exist in the real world. They also assume virgin markets, which don’t exist for long. They would be doomed to eventual market saturation and collapse, except that some avoid this by expanding – or “re-pyramiding” – to other countries and/or through the same markets with new product offerings and divisions.
4.) Therefore, as endless chains, MLMs are ihherently flawed, unfair, and deceptive – profitable primarily for those at or near the top, or TOPPs (top-of-the-pyramid promoters) – who are often the first ones to join.
5.) Worldwide feedback suggests that MLMs can be extremely viral and predatory. As endless chains, MLMs quickly spread from state to state and often to vulnerable foreign markets.
6.) MLMs typically finance their operations from purchases by participants who are incentive to buy overpriced products to qualify for commissions and for “rank advancement” (to advance to higher levels in the pyramid of participants). With the exception of some party plans, the majority of sales are typically to participants.
7.) Typically, MLM products are unique (making it difficult to compare with alternative products), consumable (to encourage repeat purchases), and priced higher than products sold elsewhere – to pay commissions on many levels of participants.
8.) In MLMs, most of the commissions are paid to those at or near the top levels in the hierarchy of participants (TOPPs). It is this extreme concentration of commissions paid to TOPPs that motivates them to work tirelessly to expand downlines, thereby assuring the MLM’s survival and growth. They also must continually recruit to replace dropouts due to high failure rates.
9.) Most MLMs become even more top-weighted with five or more layers in their compensation plans – more than are functionally justified.
10.) The villain in MLM abuse is not so much the leaders as a flawed system built on unlimited recruitment of endless chains of participants as primary customers. MLMs enable the transfer of money from a rapidly churning supply of new recruits to TOPPs (top of the pyramid promoters), founders, and the company itself.
11.) MLM promises what it cannot deliver. To be successful, MLM promoters depend on a litany of deceptions, including much self-deception. Misrepresentations regarding products, income potential, and legitimacy are commonplace in MLM.
If I am asked if MLM is a moral or ethical business model, I would have to answer “NO!”
Also, as explained above, MLM is clearly an unfair and deceptive business model.
What are the effects of MLM on participants and on society?
1.) Based on available company data, approximately 99.7% of all MLM participants lose money – spending more on company purchases and minimal operating expenses than they receive in commissions from the company. Attrition rates are high. And if one removes TOPPs from the calculations of average income, the loss rate is closer to 99.99%, which means that the chance of new recruits profiting is virtually ZERO.
2.) As is true with any scam, those who invest the most are those who lose the most, having accepted deceptive claims that the MLM is a legitimate income or business opportunity, and having continued to invest in the vain hope of eventually profiting handsomely.
3.) Sales reported by MLM companies represent losses to participants. So – based on statistics from the Direct Selling Association, the chief MLM lobbying organization – aggregate losses suffered by tens of millions of victims exceeds ten billion dollars a year in the U.S., with far greater losses worldwide. (MLMs often plunder vulnerable populations overseas.) This means that total aggregate losses from hundreds of millions of MLM victims worldwide since the 1979 Amway decision. These would amount to hundreds of billions of dollars.
4.) Abuses from participation are widespread in the MLM industry. In some cases, monetary losses from MLM participation lead to heavy indebtedness, bankruptcy, foreclosed mortgages, and failed educational and career pursuits.
5.) Some MLM participants lose more than money. Divorces and rifts among extended families are commonplace. Even suicides and murders related to participation in MLM, have been reported.
6.) Addiction to MLM can result from excessive commitment to MLM – which can become a lifestyle. “MLM junkies” – who have internalized its “easy money” appeal – may find it difficult to work again in a normal work setting.
For the parting
In MLM, market collapse is manifested in CONTINUOUS COLLAPSE, meaning that the market is constantly collapsing, requiring constant recruitment to replace those continually dropping out - with recruits willing to make “pay to play” purchases in hopes of cashing in. MLM leaders have learned other strategies for circumventing market collapse. They find new markets in which to recruit, or recycle through old markets with new generations of prospects, or with new products. Without these efforts, an MLM could collapse fairly quickly.
How in the world would this be a business opportunity? If you MLM recruiters would not give us quantitative results and facts at your business. I don't know if you really understand the word opportunity. You state many issues at MLM business but NOBODY acts to correct and prevent these issues.
Hi MLM networkers,
I recommend you give quantitative facts. How can you claim the "Amazing Compensation" of MLM if we don't have "numbers" to measure and conclude your claims? Most of you compare your success but not as a WHOLE.
Here the list of questions and I WANT QUANTITATIVE FACTS to measure the claims. If not, these are "RED Flags":
1.) You claim that many people are profiting from your (MLM) program. What proof can you give to show that MOST people who put effort in your program actually FILE a PROFIT on their INCOME TAXES?
2.) Would you please provide AVERAGE NET PAYOUT by the company (after SUBTRACTING PRODUCT PURCHASES) to ALL participants who ever signed up (or in the past 5 years, etc.) INCLUDING THOSE NOT NOW ACTIVE?
3.) CARRIED TO ITS LOGICAL EXTREME, how many PLANETS would be required for 5000 prospects were to work hard enough to achieve the promised income rewards for their recruitment efforts and achieve the highest RANK in the MLM program?
4.) Are your MLM company's wholesale prices low enough to allow a respectable profit when marking up for resale - at a retail price that is still competitive with comparable products through other sources? (or are retails prices so high that they must be sold at wholesale to achieve any volume - IN ORDER TO MAINTAIN/ADVANCE in RANK in the scheme?) What evidence do you have to show a HIGH PERCENTAGE of participants PROFITING from actual retail sales?
5.) You claim that MLM can promised high income enough to be obtain luxury. However, why are FORTUNE 500 COMPANIES are not blushed or even praised MLM and its "unethical" business practices? Can you provide evidences enough to persuade them to adapt MLM business practice?
6.) You talk of time freedom. If your top people are making so much money, why are they out recruiting, rather than enjoying the promised life of leisure? What percent of your top “distributors” are no longer actively involved with the company – and never attend opportunity meetings? Can you give me their names?
For the MLM summary, here is what really happening:
Information is from: By Jon M. Taylor, MBA, Ph.D., Consumer Awareness Institute. I thank him for revealing the TRUTH
What is the appeal of recruitment-driven MLMs?
1.) The “easy money” appeal of MLM is often couched in terms such as “time freedom” (to do what you want), perpetual or “residual income” (like author’s royalties or annuities), and “unlimited income possibilities,” with the success of recruits limited only by their efforts.
2.) MLMs are often sold as a viable alternative to an unfavorable job market and as a better route to retirement than traditional plans.
3.) MLM programs typically sell “pills, potions, and lotions” or other products that are consumable, that have unique appeal, and that can be claimed to deliver benefits not available elsewhere.
4.) One sees a strong sense of belonging, or an “us versus them” cultish mentality.
As a business model, is MLM legal and ethical?
1.) MLMs depend on unlimited recruitment of a network of endless chains of participants.
2.) Participants secure and advance to ranks or positions in a pyramid (“downline”) of participants based on timing and recruitment, rather than on merit or appointment.
3.) As endless entrepreneurial chains, or “opportunity” recruitment schemes, MLMs assume an infinite market, which does not exist in the real world. They also assume virgin markets, which don’t exist for long. They would be doomed to eventual market saturation and collapse, except that some avoid this by expanding – or “re-pyramiding” – to other countries and/or through the same markets with new product offerings and divisions.
4.) Therefore, as endless chains, MLMs are ihherently flawed, unfair, and deceptive – profitable primarily for those at or near the top, or TOPPs (top-of-the-pyramid promoters) – who are often the first ones to join.
5.) Worldwide feedback suggests that MLMs can be extremely viral and predatory. As endless chains, MLMs quickly spread from state to state and often to vulnerable foreign markets.
6.) MLMs typically finance their operations from purchases by participants who are incentive to buy overpriced products to qualify for commissions and for “rank advancement” (to advance to higher levels in the pyramid of participants). With the exception of some party plans, the majority of sales are typically to participants.
7.) Typically, MLM products are unique (making it difficult to compare with alternative products), consumable (to encourage repeat purchases), and priced higher than products sold elsewhere – to pay commissions on many levels of participants.
8.) In MLMs, most of the commissions are paid to those at or near the top levels in the hierarchy of participants (TOPPs). It is this extreme concentration of commissions paid to TOPPs that motivates them to work tirelessly to expand downlines, thereby assuring the MLM’s survival and growth. They also must continually recruit to replace dropouts due to high failure rates.
9.) Most MLMs become even more top-weighted with five or more layers in their compensation plans – more than are functionally justified.
10.) The villain in MLM abuse is not so much the leaders as a flawed system built on unlimited recruitment of endless chains of participants as primary customers. MLMs enable the transfer of money from a rapidly churning supply of new recruits to TOPPs (top of the pyramid promoters), founders, and the company itself.
11.) MLM promises what it cannot deliver. To be successful, MLM promoters depend on a litany of deceptions, including much self-deception. Misrepresentations regarding products, income potential, and legitimacy are commonplace in MLM.
If I am asked if MLM is a moral or ethical business model, I would have to answer “NO!”
Also, as explained above, MLM is clearly an unfair and deceptive business model.
What are the effects of MLM on participants and on society?
1.) Based on available company data, approximately 99.7% of all MLM participants lose money – spending more on company purchases and minimal operating expenses than they receive in commissions from the company. Attrition rates are high. And if one removes TOPPs from the calculations of average income, the loss rate is closer to 99.99%, which means that the chance of new recruits profiting is virtually ZERO.
2.) As is true with any scam, those who invest the most are those who lose the most, having accepted deceptive claims that the MLM is a legitimate income or business opportunity, and having continued to invest in the vain hope of eventually profiting handsomely.
3.) Sales reported by MLM companies represent losses to participants. So – based on statistics from the Direct Selling Association, the chief MLM lobbying organization – aggregate losses suffered by tens of millions of victims exceeds ten billion dollars a year in the U.S., with far greater losses worldwide. (MLMs often plunder vulnerable populations overseas.) This means that total aggregate losses from hundreds of millions of MLM victims worldwide since the 1979 Amway decision. These would amount to hundreds of billions of dollars.
4.) Abuses from participation are widespread in the MLM industry. In some cases, monetary losses from MLM participation lead to heavy indebtedness, bankruptcy, foreclosed mortgages, and failed educational and career pursuits.
5.) Some MLM participants lose more than money. Divorces and rifts among extended families are commonplace. Even suicides and murders related to participation in MLM, have been reported.
6.) Addiction to MLM can result from excessive commitment to MLM – which can become a lifestyle. “MLM junkies” – who have internalized its “easy money” appeal – may find it difficult to work again in a normal work setting.
For the parting
In MLM, market collapse is manifested in CONTINUOUS COLLAPSE, meaning that the market is constantly collapsing, requiring constant recruitment to replace those continually dropping out - with recruits willing to make “pay to play” purchases in hopes of cashing in. MLM leaders have learned other strategies for circumventing market collapse. They find new markets in which to recruit, or recycle through old markets with new generations of prospects, or with new products. Without these efforts, an MLM could collapse fairly quickly.
How in the world would this be a business opportunity? If you MLM recruiters would not give us quantitative results and facts at your business. I don't know if you really understand the word opportunity. You state many issues at MLM business but NOBODY acts to correct and prevent these issues.
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