Category: Failure in MLM

Common Misrepresentations by Recruiting MLMs

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. Dr. Jon Taylor, a noted expert on MLMs, put together a list of common misrepresentations (found in Chapter 8), and here are some of my favorites.

I bet all of us have heard most of these 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. Continue reading “Common Misrepresentations by Recruiting MLMs”

Mary Kay: Not Just One Bad Apple In the Bunch

Probably the most frequent challenge I hear to our real-life experiences with Mary Kay Cosmetics is, “Oh, there’s always one bad apple in the bunch. Don’t judge the entire company by that one person!”"Image"

Yet in maintaining this site, I hear similar stories daily. Stories of lying and deception in an effort to get to the top of Mary Kay Inc. I don’t care what anyone says. These incidents are not isolated. I have heard literally thousands of similar stories. Women in MK compromise their morals to move to the next level, get a few extra recruits, or win a prize. Continue reading “Mary Kay: Not Just One Bad Apple In the Bunch”

Why MLM Doesn’t Work

Written by Rachel

I recently read a quote from a site promoting an MLM:

To recoup your initial $570 costs, focus on enrolling two distributors into your downline and then help them also enroll two people each.

This is the problem. Right here. It’s the exponential growth caused by unlimited recruiting (what MLMs like to bill as “unlimited earning potential.”) In the midst of a lot of talk about selling the product, the real focus for leadership in any MLM is recruitment. Some MLMs push recruiting harder than others, but they all have two things in common.

Continue reading “Why MLM Doesn’t Work”

Proof That 99% Lose Money in MLMs

Robert FitzPatrick of Pyramid Scheme Alert has conducted extensive research on multi-level marketing companies (MLMs). The research can be difficult with companies like Mary Kay, which are privately owned and therefore don’t release hardly any information about the dismal earnings of the sales force. (Who would want to admit the financial truth unless forced to? And don’tcha think that if consultants were doing so well in Mary Kay across the board, that the company would be out there touting these statistics left and right?)

On the other hand, certain companies using MLM models that are similar to Mary Kay’s way of doing business, do release public information about their representatives. Robert studied figures for Amway (Quixtar), Nuskin, Nikken, Melaleuca, Reliv, Arbonne, Free Life International and Cyberwize.com. Continue reading “Proof That 99% Lose Money in MLMs”

ESPN the Magazine on Advocare

Yesterday ESPN published an article about AdvoCare, Drew Brees Has A Dream He’d Like To Sell You. AdvoCare is a typical multi-level marketing (MLM) company. It focuses on selling a “business opportunity” and uses nutritional products to make it appear as thought they’re not promoting a pyramid scheme. Unfortunately, more than 99% of participants in MLM lose money, making it a “business opportunity” that is even worse than gambling at a casino.

Mina Kimes did an outstanding job of digging into AdvoCare’s empty promises to distributors. It’s a long article, so I’m going to pull out some of the most interesting excerpts for you. Here is one of the most important things to remember: ESPN has nothing to gain from misleading you. They don’t care one way or another if AdvoCare or any other MLM is a legitimate opportunity.  AdvoCare, on the other hand, lives or dies by the public perception… they are fully invested in consumers believing that they push a good and beneficial opportunity.

On selling hope:

AdvoCare, which has used athlete endorsers and event sponsorships to cultivate deep ties to the sports world, portrays itself as a company that “offers the average American the chance to make an above-average income,” but, in truth, only a tiny percentage of salespeople ever make significant money.

Slight correction: Only a tiny percentage of MLM salespeople ever make any profits.

Read the rest of my article here.

25 Years of Failure in Mary Kay

time-is-moneyThis story comes from a reader of Pink Truth whose mother has been in Mary Kay for 25 years. For all those former Mary Kay consultants who lost money and were told they didn’t try hard enough or weren’t in long enough….

I just need a place to rant. I am 25 and my mom has been doing Mary Kay for 25 years. She just got back from seminar today. She hasn’t even been selling much of her products lately, but seminar convinced her she needed to take action by placing a big order.

So she borrowed $2,000 from my dad to make a Mary Kay order.

I just don’t understand why she can’t see or won’t accept that after 25 years, she’s not and will never make a profit from Mary Kay. Continue reading “25 Years of Failure in Mary Kay”

Multi-Level Marketing Victims Speak

Almost everyone loses money in multi-level marketing. Sure, you hear people say “I know several people who have made a lot of money in MLM.” This is nonsense for three reasons: 1. People rarely see proof for this “making a lot of money.” 2. These claims are almost always false based on the figures that MLM companies themselves release about their distributors. 3. Even if someone you know is “making a lot of money,” that money comes from an unethical business model that victimizes hundreds or thousands of consumers in order for that one person to profit.

Check out this new video featuring victims of the Herbalife “business opportunity.” They put lots of money, time, and effort into their “businesses” and ended up losing money. Continue reading “Multi-Level Marketing Victims Speak”

No Executive Income in This Mary Kay Area

Today I’m ranting again about the lack of the “executive income” in Mary Kay. Oh, I know the arguments by the Kaybots…. but what if women really don’t WANT to make an executive income.

I dunno. I heard so many women recruited with the promise of executive income and I heard so many women in Mary Kay talking about wanting to make an executive income… that I believe there are many, many women in Mary Kay who would like to be able to do it!

The fact is, almost no one is making that executive income. If they say they are, they’re probably lying. Continue reading “No Executive Income in This Mary Kay Area”

What Does Dave Ramsey Say About Multilevel Marketing

pink-pyramid-selling-scamBack in 2013, I criticized Dave Ramsey sharply for promoting the idea that multi-level marketing is a way for consumers to make a lot of money.  This article was published on his site, and it said:

Truthfully, if you have a go-getter personality, and you can follow some basic business and personal etiquette, you can make a lot of money in an MLM. The trick is to avoid all the potential pitfalls along the way.

That statement upset me because it has been proven that 99% of people involved in MLMs lose money. Dave cautioned:

MLMs can be awesome if you understand how they work, but they can also be a financial and personal disaster if you jump right in without thinking.

The sad truth is that no matter how careful you are, you are almost guaranteed to lose money in MLM. You can follow all the rules, invest lots of time and money into your “business”, and you will still lose money. Continue reading “What Does Dave Ramsey Say About Multilevel Marketing”