Former MLM'ers?

by the way, sorry if that sounded like a personal attack. it wasn't and i'm not questioning your sincerity its just that a lot of people around here look up to you and i'm sure for good reasons and you could be doing them harm. i work in a very high risk field that also has a terrible track record and i always make sure to highlight the risks before any possible rewards when asked. i steer most away if i don't feel that they are willing to face the realities of what i do.

agreed gordon. you sound like a very reasonable intelligent guy and i'm sure your intentions are pure.
i also know that you do know more and have more experience with mlm's than i so i will consider your views.

For me, I would be much more interested in MLM's if the ones that were presented to me were just straight up with me. I cannot tell you how many times I have been approached with, "How would you like to go with me to a motivational seminar?"

I fell for that once with a girl I was going out with. It ended up being an Amway meeting. Why not just come out and say, "Hey, I want to tell you about a company I am involved with called Amway. You can buy some great products; never have to leave your home, etc."

There was one couple friend of ours who were really struggling and they invited us, over and over, to hear a "motivational" speaker. I knew what was coming but we went anyway. Yes, it was Amway and I have never been so insulted in my life. The "star" couple got up and I kid you not...for 15 minutes this guy went on and on and on and on and on with such challenging questions as:

"Would you rather drive a Yugo....or a Mercedes?"

"Would you rather vacation in your backyard...or in Hawaii?"

The questions were so ridiculously inane. I told our couple friend what I have told others..."Give it a shot for six months and if you are still involved, come back and let's talk." That works every time.

The ONLY time I have been approached by someone with an MLM opportunity and they were straight up...I joined.

I know quite a few MLM junkies and none of them have made any real money. These people run from one company to the next either when they can't make money in the company they are presently in or the company goes out of business. Most MLM companies are considered lucky if they are able to make it in business past the first year. In my opinion MLM stands for many lose money.

The MLM I am involded in now you can learn about at

My Main source of income are my martial arts schools and my billing service. It doesn't hurt to diversify and the MLM company that I am with right now is real easy, doesn't take a lot of time and I have been making some money each month.

This is a cool thread by the way :)

Justin Morris

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This is ground floor and no money to get in and huge potential. I am only hiring a few people for this position and one slot was already taken.

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the mlm structure guarantees that 96% of participants will not be making money - why the motivational aspect of it is not just a side business, but the real business. all sounds very positive, self-empowering, etc., but absolutely designed to make money while encouraging a dream that is impossible to attain.

taba is correct - which is why they don't focus on retention (they know a person will only lose so much time and money before he quits), but on an influx of new suckers - hence, the motivational meeting with pie in the sky expectations and "ask me!" buttons on their shirts.

what percentage do those you know who actually make money make up of the total number? you said yourself that over 15 million people are involved in mlm's in the us. that's a bit misleading. that number is not stagnant - it is made up of a revolving door of those who signed up , lost (while contributing to the success of the few), and moved on. its like saying that there are 10 people on an escalator - that might be true but for that exact time only(thoughout the day there will be 1000's). a look at the structure dictates that the vast majority will fail while a select few will hit big - like the lottery - for every winner there are millions of losers who contributed to the winner's success. to hold the winner up as evidence that playing the lottery is wise would be misleading.

see the sites i posted above for a more complete discussion.


"Lie #10: MLM is not a pyramid scheme because products are sold.

Truth: The sale of products does not protect against anti-pyramid-scheme laws or unfair trade practices set forth in federal and state law. MLM is a legal form of business only under rigid conditions set forth by the FTC and state attorneys general. Many MLMs are violate these guidelines and operate only because they have not been prosecuted. Recent court rulings are using a 70% rule to determine an MLM's legality: At least 70% of all goods sold by the MLM company must be purchased by nondistributors. This standard would place most MLM companies outside the law. The largest MLM acknowledges that only 18% of its sales are made to nondistributors.

Accountability Needed

An FTC trade regulation rule that forces honest disclosure of potential MLM distributor income is desperately needed. Toward this end, Pyramid Scheme Alert has launched a petition drive urging the FTC to force multilevel companies to disclose the true income of their distributors. The requested data would include: (a) the total number of distributors involved in the company for at least three years (or since the company's founding if less than three years); (b) the average incomes of all distributors who have signed up for a distributorship by percentiles, not just the ones deemed "active"; and (c) a "weighted" overall average income of all distributors so that the extraordinary high incomes of the small number at the top are not calculated in with vast majority so as to give a more statistically valid figure."

also from

".......People who don't join during the first few months of operation or become one of the early distributors in their community are unlikely to build enough of a sales pyramid to do well. Fewer than 1% of new distributors earn significant income; and many who stock up on products to meet sales goals get stuck with unsold products that cost thousands of dollars. This strategy -- referred to as "front-end loading" -- is promoted with claims that it will push the new distributor to higher bonus and/or leadership levels quickly. In July 1999, the National Association of Attorneys General announced that complaints about multilevel marketing and pyramid schemes were tenth on their list of consumer complaints...."

"Do you have statistics that back up your claims that 96% of all participants will not be making money or that succes is impossible to attain?"

sorry, Gordon, do not.

remember the number from when researched mlm some time ago when a friend was enamored with.

from an economists study - argued that the model itself does not allow for a number greater than ~4% to make money.

"As a result of this effort, they improved retention by almost 25%."

need raw numbers to make this meaningful. if avon retained just 4 of 1M last year, means little that bumped retention up to 5 this year.

I appreciate you are sucessful at what you do, but do you have a formal education in economics? accounting? finance?

why do you think mlm not a subject of study in business schools?

"the mlm structure guarantees that 96% of participants will not be making money"This could not be more incorrect. I'm sure that number may be accurate when talking about who DOES make money, but not who CAN. Take the big boys, Amway, for example. Let's say you buy your 100 points worth of stuff for the month. There is no "structure" that tells you that you can't sell it for the suggested retail price. In fact, they strongly encourage you to do so. Doing this alone may not make you rich, but it certainly blows the "guarantee" out of the water.Aside from what is possible, I can also guarantee you that every single person in your upline prays to God every night that you do make money. Not only you, but everyone they sponsor."why the motivational aspect of it is not just a side business, but the real business."Agreed. Especially with Amway. When I was involved the Yeager line was selling tapes for $5.50 each. They encouraged you to get on two automatic tape-per-week lists. One of the biggest turnoffs for me was hearing them tell me that the $5.50 was the price of making the tapes. Total bullshit.

am a little curious how you reconcile your mlm stance with understanding of economics... maybe you can explain it in such a way that I could understand how more than a fraction of practitioners can expect to make money?

I maintain mlm is structurally flawed - it's failing are *not* due to over promising and under delivering and/or personal failings.

any positives mlm offers (and does) outweighed by that flaw.

would you encourage someone to believe in magic because gave them a sense of heightened efficacy? is ultimately fucked.

personal experience not very meaningful to me. really need a theory to support mlm to take seriously.

would you ask for my stock picking advice if I demonstrated a strong record? would you follow it if I shared that based picks on dart throws?

I do not believe you could source for me a single peer reviewed work authored by a respected academic that supports mlm.

if mlm offered *anything* that traditional distribution channels do not it would be respected as a alternative distribution channel. it does not.

I do appreciate that you have mlm reservations and are not uncritical.

however, I fail to understand how you do not recognize the opportunity costs involved with.

even if mlm (or kiyosaki) not irredeemably bad, it still short of the more attractive models.

is not a question of how the mlm/kiyosaki positives weigh against the negatives – but how mlm/kiyosaki sum weighs against alternative sums.

so someone is motivated off couch by mlm/kiyosaki? how positive is that? they ultimately fucked.

if had been introduced by someone respected (yourself) to superior models they would be no less enthused and likely to succeed in the end. even if failed would know why.

wouldn't argue with you if didn't think you were well-intentioned, but think your willingness to give some sketchy ideas the benefit of the doubt give those who respect your opinion here a nudge in the wrong direction.

good luck with the cfa. I understand the 2nd and 3rd exams are pretty painful.

i would agree with taba in that gordon seems to talk out of both sides of his mouth on certain issues.

-claiming to be "one of the biggest critics" of mlm's when facing other critics, but then going on to defend them with personal testimonials while ignoring the specific problems raised.

-finally acknowledging the faulty advise and outright fraudulent claims from kiyosaki when pressed, but refusing to "judge" him and continuing to maintain that he provides "value".

this is an interesting debate/damage control technique.

-don't argue,concede.

-stake the claim to being the "biggest critic".

-agree, but don't address the problematic issues directly.

-move on to support that which you just claimed to be the "biggest critic" of using personal testimonials and isolated statisitics...

i don't know, maybe i'm being overly harsh. if so i appologise. its just that it seems that this is standard fair among the self-help/motivational guru/mlm crowd (which unquestionably are closely intertwined). i've heard this strategy so much from them that it almost seems like they have been taught these techniqes to deal with critics. they disarm them with agreement, compliment their motives, ignore the pertinent issues, and keep on message - supporting mlm's/gurus.

am i just being paranoid?

"i would agree with taba in that gordon seems to talk out of both sides of his mouth on certain issues."I'm not taking Gordon's comments that way at all. In my opinion he's looking at it less subjectively than the rest of us. He's simply pointing out the goods and the bads.

my point, scott, is that the very consideration of grants too much credit.

if I were (as mma mod) to spend time entertaining the merits of judo kai, you would rightly consider to be a waste of time.

you would not consider me fair-minded, but irresponsible for not working to steer people away from judo kai to a style more appropriate.

again, is not a question of weighing judo kai positives (weight loss, confidence building, etc.) against negatives (insanity).

why? because the same positives can be found among alternatives that do not share jodo kai negatives.

and, gordon? let me know if you come across mlm in your cfa prep. not listed under 'analysis of alternative investments' in the bok...

i agree with you. i think he is not being objective. i feel that he is passively supporting mlm's while claiming to be "the biggest critic". his opening statement on this thread could hardly be characterized as "critical":

"What MLM company did you join? I have been around it for many years and taught distributors at different companies on how to build a successful small business.
One of my partners has been in the industry for 16 years with the same company and has earned over $45 million. He was a waiter prior to becoming an MLM distributor. I have done financial consulting for various distributors who are million dollar per year earners in the US."

his next post contains this:

"I was at the DSA (Direct Selling Association) annual conference last weekend. Most of the big MLM companies were there. The industry is the US was at 28.7 billion in annual sales in 2002 and up 7.5% from the prior year. It was the 18th straight year of records sales in the United States. Can any other industry make such a claim? "

it is only when challenged on mlm's probelmatic nature that he then claims to be a critic. only then does he then makes his claim to be a critic, concedes small points, and continues to support mlm's. there is nothing wrong with this - it is a subtle form of sophistry taught in many seminars on the art of successful persuasion. it is also very affective and disarming. but is it really honest or objective? it is basically a more advanced form of "i agree with you but.....", without actually agreeing with you.

i don't doubt gordon's sincerity and he is obviously a master communicator but i feel that his methods could be characterized as "doublespeak" and are misleading.

i make no bones about my opinions of mlm's. while a began my investigation of mlm's objectivley and with an open mind, i have come to beleive that dispite what ever good you can find to say about them, on net, they are not good.

i have heard people claim that hitler did some good for german moral, that he loved animals.....this may be true, but i would never claim hitler was good. his net effect was horrible. supporters of hamas claim that they provide "humanitarian support", but does this outweigh their murderious activities? you can always find something good to say about anything if you try hard enough, and this might be a good way to live your life and to look at things, but i prefer to look at the "net" or the "bottom line" when evaluating things.

"He was a waiter prior to becoming an MLM distributor."

and kiyosaki, bankrupt, lived in his car.

why the fuck is this meaningful?

only tips off that targeting an audience that can identify with.

who else markets this way?

mlm encouragement of belief that "anyone can succeed" fails to identify any determinant other than motivation.

reality says the model and skill set more important.

would you rather a blase doctor operated on your loved one than yourself? you may be more motivated, but that really not very meaningful.

apply to H/S/W as a waiter. try convincing admissions that can succeed because are especially motivated.