Confession: I'm amazed at (and terrified of) Multi Level Marketing businesses

[Tommy_Carcetti]

On Facebook--and occasionally in real life--I'll sometimes come across a person who starts raving about some product or company that I've only heard about in passing. It immediately comes off as sounding rather scripted, and yet there is inevitably one or two people who will "like" the post or even add their own testimonial on the product.

Some of the products and companies have familiar names--Avon, Mary Kay, Herbalife. Others were a little new to me--Plexus? Xseed? The Pampered Chef?

So naturally curious, I'll google the product or company. And it will inevitably reveal itself to be some sort of personal sales program. Which just leaves me with more questions, and I'll usually google the company's name along with "scam" or "pyramid scheme".

Now here's the really fascinating part about it. When googling whether these products are scams, almost all of these products/companies, without fail, will link to various Youtube videos. And these videos will almost always appear to be private Vlog type presentations. Frequently it will feature the person standing in front of a dry erase board. And usually they will all be titled something to the effect of, "Is (Product Name) a scam?" or "Is (Product Name) a pyramid scheme?", as if the poster of the video is providing some sort of expose on whatever the MLM product is.

Except, without fail, the people who post these videos actually spend their time talking about how their product is not part of a scam or a pyramid scheme. And almost all of these videos follow a certain script: "Chances are, you are watching this video for one of two reasons. You might want to know more about (Product Name). Or you may have heard about (Product Name) and you may think it is some sort of scam."

From that point on, they'll usually compare what they do to a well-known company. And then they go on to "prove" that their company isn't a pyramid scheme or a scam, or that their type of multi-level-marketing is the legit kind.

Frankly, I'm amazed that there could be so many different MLM companies out there, and yet almost all of them have their representatives parade themselves on the internet with messages that are nearly all identical with one another. And the even bigger question is, how marketable can a product be if right off the bat those involved in selling the product assume you think it to be a scam?

I find the whole MLM business to be fascinating, depressing and utterly terrifying all simultaneously. It really is cult-like behavior, and I'm sad that there are people who are gullible enough to ruin their own reputations online in pushing these products.

[Cal Carpenter]

1. There's a cult education website with a section on these:

http://forum.culteducation.com/list.php?3

Just an FYI to anyone interested in the topic.

[NRaleighLiberal]

2. It's pretty easy for me - if it sounds too easy, too good to be true - it is.

I also don't click, don't watch ads - I assume if something is being pushed, it is about marketing more than quality or effectiveness.

Served us well so far!

[sharp_stick]

3. I had a friend that was doing the whole Amway

MLM thing and no matter what they tell you it's a pyramid scheme and it is cult like. I always get a weird blank vibe from the people trying to sell it.

He was desperate once, his one over was coming by and he didn't have any new marks...oops I mean prospects, to try and sell the scam to so he pretty much begged me to help him out.

I showed up and endured over an hour and a half of high pressure bullshit of this one over asshole trying to con me into getting into the Amway business. I told him I didn't like selling stuff and he said that you don't need to sell anything just bring in other people to do the selling. I pretty much had to physically push myself past this dude and his wife to escape the damned house, they would not give up and take fuck off for an answer.

This was worse than one of those "free vacation" time share deals. Fortunately my friend figured it out soon after and got out because the pressure to recruit new saps was too much.

[Tommy_Carcetti]

7. Part of me feels bad for them.

The other part of me just wonders how they could be so gullible.

[CreekDog]

10. yeah, that's a good answer, "i don't like selling stuff"

and for the obvious, MLM followup the answer is:

"i don't like selling stuff and i like selling bullshit that doesn't even rise to the level of 'stuff' even less"

but if they're friends, might want to soften that a bit.

[MrNJ]

4. There's an easy mental trick I found to resist and avoid scams.

When I hear somebody trying to recruit me.
When I see an ad for an easy money-making opportunity
When I accidentally tune to an infomercial with some quick talking guy promising your riches

I ask:
If this is such a gold mine, why doesn't he use it himself? Why does he need me?
Why is he spending time and money to advertise?

The answer is obvious.

[Populist_Prole]

6. Bingo. Excellent analogy. n/t

[Populist_Prole]

5. To me MLM seems inherently dishonest

Over the years I knew a few people who were big into Amway and a few other MLM schemes. One common thread is they were all big-time fundie christians. The other thing that irked me was the phony way they tried to work around the well-deserved stigma of MLM/Pyramid thing and being as vague as possible in describing it as they attempt to reel in yet another sucker; Referring to "My business" or "business opportunity" and the like.

Try as I might, I just can't wrap my mind around the whole MLM business model. I mean, if one wants to be a salesman, and be successful doing so, then the best means are to emphasize the product, how good it is etc, right? Why the utter fixation on trying to get others to sell? If one needs a cadre of underlings to support themselves, then each of those underlings in turn need to increase the number of underlings exponentially. It's just not mathematically possible; Hell, we'd be a nation of proselytizing salesman with nobody to actually make stuff, fix stuff etc. Then again, I guess that's why so many of these people are fundies, since that business model fits their proselytizing nature.

[Heidi]

11. The so-called "prosperity gospel."

I honestly feel sorry for people who buy into it.

[Jenoch]

8. While Avon and Mary Kay are both MLM

companies, they are selling products that are in demand. Those MLM that sell water filters are just a scam.

[Tommy_Carcetti]

12. Honest question:

Are Avon and Mary Kay products considered superior or at least on par with products you might find at the store, in terms of either quality and/or value?

It's true that unlike some MLM schemes, they actually provide a useful product. But is the customer actually getting an actual deal compared to what they could get on their own.

For example--and what raised the issue of MLM sales for me today--yesterday my mother-in-law was talking about how she bought a strainer at a Pampered Chef party hosted by a friend. And while she said she could use the strainer, she said it cost more than it would at, say, Bed Bath and Beyond, and that the only reason she bought it was to appease her friend.

[Jenoch]

13. I think the Pampered Chef parties place

a little guilt on the friends to buy something. I made my comment about Avon and Mary Kay only from personal experience. My mother had an Avon lady coming to our house for many years. This was the 60s and 70s when she was a housewife at home and she liked the products and the conversation. My mother later switched to Mary Kay and really liked the products. She actually became a Mary Kay lady but she was not any good at it because she hated to ask for the sale, heck she gave product away than she sold. I think most of the make up and cleansing products my mother used over the years were either of those brands. Yes, the are products avaiable at retail that are similar, but these are two MLM compqnies where selling product is important. Some might say the same about Amway, my mother always had Basic H and Basic I cleaners on hand, but I juat don't see it the same way. I know the water filters were useless and were not the focus of that MLM situation.

[jmowreader]

15. My hairstylist WAS a Mary Kay rep.

Emphasis on Was. Here's what she says:

1. The product is good-quality drugstore makeup at department store prices. They want $15 for a lipstick that's no better than what you can get at Walgreens for $8.

2. If you own a "beauty business" you're required to keep your Mary Kay business separate, because it would be unfair to the other Mary Kay reps if you could walk into a hair salon and buy Mary Kay makeup.

3. There is significant pressure to maintain minimum orders that leads plenty of women to buy whole rooms full of product for their "inventory." Very little of this actually sells because...

4. Cosmetics are in demand but there is a corresponding supply: very few stores don't sell makeup. They sell it in auto parts stores, for chrissake (the little display of candy bars most of those places have now have lip gloss as part of their standard set, because the display is managed by an outside vendor).

5. Unless you deal with one of the reps who keep inventory, you order and wait. A lot of makeup is bought on impulse; if you need something for the outfit you bought today to wear to the party tonight, a week's lead time won't work.

6. Mary Kay changes their packaging frequently, and customers expect to go home with the same packages they saw in the catalog...

7. ...and the catalogs cost the rep money. The samples do. Many of them advertise in newspapers and that costs money. It's a really expensive business to be in.

The only person I ever knew who made money at MLM decided Amway had exactly one product: their water filtration system. And he was right: in the 1980s when I knew him, the Amway Whole House Water Filter was the best on the market. So he decided to blow off the entire rest of the line, blow off sponsoring people, got a plumbing license and started a business selling, installing and servicing Amway water filters.

Essentially, any MLM is a scam.

[Jenoch]

16. My mother like the Mary Kay products and the Mary Kay lady.

My mother was talked into selling it and she was no good at it. When my parents moved, my mother found another Mary Kay lady to buy product from because she had quit selling it herself, so I guess there are women who do like the product and service.

My mother died 6 years ago at age 78. Her Avon lady died last October at age 97. I wonder when she retired from Avon?

Several years ago I was an advertising salesman. One of my clients insisted on coming to my house to discuss a business opportuity. It was Amway. Boy was he pissed when all I did was to buy some cleaning chemicals.

[JI7]

19. some department store stuff is like drugstore also but they have a designer label

and that designer name is the one that is worth the money.

[CreekDog]

9. they're all answering the "Pyramid Scheme" question the same way because they need to

Amway had a canned response to the MLM question...are we a Pyramid Scheme? No, because we aren't!



they're all Pyramid Schemes because most of the money made from them is not from selling the products but from getting other people to sign up and sell the products.

[jmowreader]

17. Amway's answer to that question is a bit more complex than that

According to them, if your business has no products involved in it, it's a pyramid. If it has products, it's not - it's "network marketing." Since Amway has products (albeit ones that no one without an Amway connection buys) it doesn't fall under their definition of a pyramid. And in the very old days, Amway required its "independent business owners" to sell products to ten people every month. They don't do that anymore.

"The Plan" itself falls apart by even the simplest analysis: according to them, you can attain a six-figure income simply by "showing the plan" to everyone you meet and through self-use of Amway products. Now hang on a second: if there is no money coming in from outside, how in hell are you going to pay for all the Amway products you use?

[Tommy_Carcetti]

14. Interesting find on Youtube:

Entire Youtube accounts where a single person does the whole "Is X Product a Scam? (No)" schtick....for multiple MLM companies.

http://www.youtube.com/user/JusticesMLMreviews
http://www.youtube.com/user/katesnetworkreviews
http://www.youtube.com/channel/UCEkDFkXq8qvooZUs5Tx9JTQ

After seeing this--essentially you have mercenaries hired by different MLM companies to pitch propaganda as to why their product isn't a scam by trapping in people who might think it is a scam--how on earth could you think that these type of companies aren't scams?

[Art_from_Ark]

18. I was once unwittingly invited to an MLM sales pitch

The guys were selling 1/10 ounce gold bullion coins for like twice an average dealer's selling price ($70 versus $35 at that time). When I mentioned that, one of the guys showed me a catalogue from America's Most Expensive Coin Dealer showing a price of $105 for (supposedly) the coin in question. But I told him that the coin in the catalogue was a specially-made "Proof" coin, and was not the same as the cheaper "business strikes" that he was trying to sell. I was glad to finally wiggle out of that one.

Ironically, though, in that case even if someone had paid $70 each for those coins, they would be worth around $140 today.

[joshcryer]

20. Poverty or desperation plays into it a lot.

And not necessarily poor desperation, the wealthy stay at home mom hawking Avon may just want to get out there and have a job but her circumstances at the time don't allow it (apologies for the stereotype there, it's just an example).

[sendero]

21. These companies....

.. prey on a dream that many of us have - how to make a living without going to the site or office every damned day.

I think some of these companies are better than others, but making a living selling any of this stuff is very unlikely and I doubt if even 1%of the folks who set out to do so actually succeed.

Many years ago I was contacted by an old coworker. He wanted to have lunch. He was a nice guy and I was looking forward to catching up, we hadn't talked in a couple of years. Imagine my surprise when he started pitching Amway. I could hardly believe it. He always seemed like a really smart guy and he was well respected in the office.

Problem was he was not much of a salesman, I had already achieved the dream of not going to someone's office every day, nor would I have been interested either way.