Common Misrepresentations in MLM Recruiting

mlm-scheme-pyramidThe lies that multi-level marketing recruiters use to con people into signing up for their scams change little from company to company. I bet all of us have heard most of these lies at one time or another in our Mary Kay experiences, either when we were being recruited or when others were being sucked into the pink vortex…

Presented as a great “income opportunity,” with huge incomes reported for many.

Recruiting MLM’s nearly always lead to certain loss for new recruits. A few are at the top of a pyramid of participants are enriched at the expense of a multitude of downline participants, about 99% of whom lose money.

“Everyone can do this” – and earn a good income.

Holding up top earners as examples of what others can do is deceptive. Almost no one earns a “good income” from MLM. And if they do, it’s only those already at the top of the pyramid.

Average earnings statements on official reports make MLMs appear highly profitable.

Reports of average incomes are full of deceptions. They leave out certain information, use funky math to calculate averages, and focus on the high incomes rather than the low ones. Many even leave out all the distributors who earn no commissions.

Products can be resold at retail prices for a handsome profit.

Products are high priced and are sold primarily to recruits to “do the business,” rather than to persons outside the network of participants. Even if third party consumers buy the products, it is rarely at full price and repeat purchases are not the norm.

Presented as a legitimate business – “not a pyramid scheme.”

Product-based pyramid schemes have been found to be the most extreme of all the types of pyramid schemes, with the highest loss rates (approximately 99 %) – far worse than for most games of chance in casinos.

Work for only an hour or two a day, and build up a “residual income” that will allow you the “time freedom” to quit your job and spend more time with your family or do whatever you want.

To profit at a recruiting MLM, one must work long hours and be willing to continue to recruit to replace dropouts. One must also be willing to deceive large numbers of recruits into believing it is a legitimate income opportunity. Recruits are only fattening their upline’s commissions. There is nothing immoral about hard work for honest rewards, but the rewards in MLM are far from honest.

The job market is not secure. The stock market is even shakier. MLM offers a much more secure and permanent (residual) income.”

MLM is far more risky than either the stock market or the job market. It even makes gambling look like a safe investment by comparison. Residual income for almost all MLM recruits is a myth.

Standard jobs are not rewarded fairly. In MLM, you can set your own standard for earnings.

Fair? Most MLM compensation plans are weighted heavily towards those who got in early or scrambled to get to the top of a pyramid of participants. And MLM is largely pay to play, meaning rather than receiving a paycheck, participants are busy putting money into the scheme.

If not legal, the program would have been shut down long ago.”MLM’s have survived legal challenges. The fact that they are still around tells you they are legitimate.

Consumer protection officials are reactive, not proactive. Since victims rarely file complaints, law enforcement seldom acts against even the worst schemes. Victims don’t complain because they blame themselves, and they fear self-incrimination or consequences from or to their upline or downline. Even when there is legal action, the consequences are rarely severe.

If you fail at this program, it is because you failed to properly “work the system.”

The system itself is inherently flawed – an endless chain recruitment of participants as primary customers. The vast majority will always lose money.

“In any business, one must invest time and money to be successful.” Like anything else, you can expect to get out of it what you put into it.

Independent research, supported by worldwide feedback, suggests that the more a person invests in an MLM in time, effort, and money, the more he/she loses – which is true of any scam. Committed MLM participants may continue investing thousands, and even tens of thousands of dollars, over many years before running out of money or giving up.
Conversely, in legitimate companies, sales persons are not expected to stock up on inventory or subscribe to monthly purchases. But in MLM, incentivized purchases (required to participate in commissions and/or advancement) are merely disguised or laundered investments in a pyramid scheme.

One Comment

  1. Char

    This article really sums it all up!

    Maybe the Mary Kay MLMer reading this believes in herself and thinks she will be one of the successful ones in that top 1%?

    The problem with that is this:

    “A few are at the top of a pyramid of participants are enriched at the expense of a multitude of downline participants, about 99% of whom lose money.”

    Are you working hard at recruiting people to lose money and selling the dream? Not nice. Recruiting your own customers and creating your own competition in an endless-chain is inherently flawed. Any company that uses this method is scum.

    “Legal MLM” is like saying, “Stealing is legal, if you don’t take anything.” An MLM company that abides by the anti-pyramid scheme rules would fail due to the MLM system itself. Result: MLM companies are pyramid schemes.

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