Is EVERY multi-level marketing (MLM) system a scam?

[gmoney]

A friend is trying to enlist me, and it looks like your basic "you sign up your friends, they sign up their friends, and so on and everyone gets rich" Ponzi scheme.

Is there any way that anyone makes money on these deals, except those at the very top?

I'm not really tempted, but I feel I should warn her not to get involved. Or will she have the last laugh earning $18,000 a month from her network?

[Swede]

1. Check her company with the BBB.

If you have to buy a bunch of candles lotions or potions,I'd stay away from it.

[TreasonousBastard]

2. Not exactly scam or Ponzi, but...

they all have you spending more time selling sales jobs than product. If you must have a sales job, spend your time selling the product.

I was hoodwinked into one of these presentations a while back and was shown how I would make so much money by making 15% commission on everything I sold, plus 10% on everything my next sales level sold, plus a few points on everyone else in the downline. Then the numbers get bigger when I became a "Regional Vice President".

They threw me out when I asked why go through all this when they could just pay me the 35% or so total commissions they paid for each sale and eliminate the hassle and expense of carrying all those other people on the payroll.

(The trick is that they know only a small percentage of the "sales" staff will ever sell more than a few things a month, so they they go through this to have a huge staff to make the few things a month from each staffer add up to a lot of things-- and yes, only a few who get in early and can really sell make any money at it.)

[TreasonousBastard]

3. dupe

[Sebastian Doyle]

4. Some are even worse than that.

Amway is probably the most successful MLM pyramid scam of all time. And their money now funds various right wing causes, not the least of which is the fascist mercenary corporation known as Blackwater/Xe/whatever it's called this week.

And they're supposed to be the "honest" MLM company.

The only way to make any money in these things is if you're in one of the top layers of the pyramid.

[baldguy]

5. Yes

[hobbit709]

6. It's a LEGAL Ponzi

[datasuspect]

7. yes, and most legitimate business people will chuckle in your face

and behind your back if you go to networking functions trying to peddle your "wares."

i've seen tons of nutritional supplement people, etc etc come and go through the various chambers of commerce i am involved with.

[HopeHoops]

8. By definition.

Turn around, and run the other way.