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View Full Version : Do you consider an MLM a business?


Steve
11-20-2006, 09:59 PM
Do you consider MLM (multi-level marketing) a business? When I say that, the most famous that comes to mind is amway.

ritchiem
11-23-2006, 06:46 AM
I am going to have a hard time not flaming in this post...but I'll try not to.

MLM are businesses that distribute false hopes to make the rich richer. If you don't understand what a MLM tier looks like here is an example.

I'll start a business lets call it Richards Scam Tier. I'll start out by collecting $100 from 10 people. And I'll give them nothing but information on how to enroll other people for $100. Now every time they enroll someone they'll get to keep 10% or $10 from every $100 and the other $90 will go to me. I am sure how you can see this being very beneficial to me http://www.gophergraphics.com/forum/iB_html/non-cgi/emoticons/rock.gif

So say that the 10 suckers...I mean people under me enroll 3 people each. How much money is in my pocket? Right $3700, not too bay for doing nothing eh? Say this tier went down 10 steps and by hundreds of people. The top tier would be making tens of hundreds of thousands of dollars for doing nothing. Itís the funnel effect. Turn the tier upside down and all monies funnel to the bottom...to me http://www.gophergraphics.com/forum/iB_html/non-cgi/emoticons/tounge.gif

But wait, in North American this is not legal. You need to sell a product or service in order for this to be legit. So lets start selling long distance plans...well not long distant plans but information on getting better rates, ya that sounds good. Heck we could even sell real products, ummmm like Avon.

This tactic affects me on so many levels (did you catch the pun?), and it is sad to see some of my friends fall for the "Get Rich Now" schemes. So you ask me

Quote[/b] ]Do you consider MLM (multi-level marketing) a business?

No.

Steve
11-23-2006, 10:53 PM
How many times have you been proposed to get involved in one of these MLMs in the past?

Looking back, I can't remember now how many times I have heard the pitches.

ritchiem
11-24-2006, 08:12 AM
a few times, it is a good thing that I am a hard sell. Sometimes a good talker can make you believe anything.

Steve
11-24-2006, 08:30 AM
Ever since I saw these statistics it made me think they are not good even for a beginner in business to get involved with.

New Laws Effecting Multi Level Marketing (http://www.nytimes.com/2006/11/13/business/13short.html) - In April, citing hundreds of fraud investigations, the F.T.C. proposed new rules for multilevel marketing companies and related businesses. They would require companies to tell potential recruits how many sales representatives have failed to earn more than their start-up costs and how many customers have filed lawsuits for deceptive practices.

The proposal, which may be modified and could take as long as two years before approval, also requires a weeklong waiting period between approaching new sales representatives and sealing the deal.

Steve
11-24-2006, 08:32 AM
But like many multilevel marketing companies, Pre-Paid Legal suffers from high turnover. In 2005, the company replaced at least 50 percent of its active sales force, according to filings with the Securities and Exchange Commission. Industrywide, multilevel marketing companies typically replace almost all of their sales representatives every year.