Network Marketing

Wow. Fantastic episode, Brian. Thanks a lot.

Peter, Toronto, Ontario
October 20, 2009 9:57am

MonaVie has a document called the Income Disclosure Statement that is essentially our W-2. It show's the High, Low and average earnings of it's Distributors. The document states that 99% of Distributors earned an average of somewhere in between $23 and $65,548 per week for the weeks of July 4, 2008 to June 26, 2009.

Link to Income Disclosure Statement is: monavie.com/ids

Wishing you the best, TAC

Team Acai Chico, Chico, CA
October 20, 2009 9:59am

these "products" must be well expensive to support all that margin at each of the levels.

pete, London
October 20, 2009 10:06am

My ex-wife did these for a while as as alternative to actually working. All we wound up with was increased debt plus 4 big boxes in the basement filled with plastic containers, crappy makeup samples and hideous lingerie.

H. Tiberius Miser, Secret Underground Lair, Earth
October 20, 2009 10:11am

While I don't like to admit it I was sucked into one of these schemes (amway), but due to not being able to sell anything and incompetance of the people above me I bailed. Only lost a couple of hundred dollars.

Robert Mcbride, Columbia, MD
October 20, 2009 10:18am

"Team Acai Chico", I can hardly believe you posted that to support Mona Vie. It shows that 85% LOST MONEY!!!! and 97% made less than $7K a year!!!! (Keep in mind it does not subtract the minimum required purchases, which are $1920 per year, and most buy more!!)

And that's Mona Vie's own marketing materials, which there's no reason to suspect might be truthful.

Eric Schulman, Chico, CA
October 20, 2009 11:26am

Also in regards to "Team Acai Chico":

To even be included on that statement, you have to have recruited at least one person and received at least one bonus. Does it strike anyone else as dishonest that this marketing statement only reports the income of people who make money?

Of course, Mona Vie probably hopes no one will read the fine print.

Rob Wells, Salt Lake City, UT
October 20, 2009 11:56am

The "fine print" takes up half of the first page of that document. The only way people can't read it is on purpose.

Kris, Portland, OR
October 20, 2009 2:21pm

What really is the difference between these companies and multinational companies in general?

Robert Mcbride, Columbia, MD
October 21, 2009 7:08am

Nice work Brian,

I've been approached by one MLM distributer after another over the last year. It's mostly been Juice and vitamins, and each time it was a friendly conversation that turned into miraculous conversations about their solved health problems then - BAM - sales pitch. One guy told me that it was ok because Donald Trump was involved. (oh well if HE'S involved...) It's good to know that there's good information available if you're willing to look...

Also, to Robert above...

I don't know if you asked that question in earnest or not, so I'll assume it wasn't poisoning the will with some anti-corporate rhetoric. MLMs don't allow for dealers or stores and make you pay to be part of the chain. They're apples and oranges. Brian's discussed this at length in previous MLM themed podcasts.

Mike, new york
October 21, 2009 7:46am

I will admit to having an anti- (large)corporation bias. Many of the parts of the MLM ripoff schemes are a part of accepted business. Part of what Brian has said about Noni juice was that it's price was inflated and tasted horribly. I'd ask you to compare that with how many people feel about the telecom compnanies. Then there are big box stores (of which wal-mart is only one) who have taken or caused their suppliers to take their production overseas to countries that allow sweat shops to exist. Big business is all about taking public money for private profits.

Robert Mcbride, Columbia, MD
October 21, 2009 10:09am

I've never understood anti-corporate sentiment. Anti-corruption? Sure. Anti-fraud? Sure. Anti-big business? Why?

Big business or small, the goal of the owner is profit. That in and of itself is not a negative. If companies of any size are doing something illegal or immoral toward that end, then criticize the individuals and their practices, not the system.

That's like saying that because a few cops are corrupt and abuse their powers we should ban them and hire unarmed mall cops instead.

H. Tiberius Miser, Secret Underground Lair, Earth
October 22, 2009 8:36am

H. T. Miser, why not share your real identity and location. You are not helping your supposed views by hiding behind a pseudonym. The problem lies in your own description "big bussiness or small, the goal of the owner is profit". I don't have a beef with small businesses which are rooted within their communities and tend to return as much as they take. The ONLY value behind multinational companies is profit often at the expense of considerations like customer service and social standards. For example most (if not all) big box stores have engaged in a "cost war" that drives out smaller business and forced manufacturing abroad often to places like china with slave labor.

Robert Mcbride, Columbia, MD
October 22, 2009 10:32am

Just a little suggestion. You should put the blurb for each show (from the hompage) also on the shows' script page. For example, the bit about 99.98% and 1 in 2000 should be on this page as well. Thanks for the excellent work!

John K. Fitzpatrick, Grand Rapids, MI
October 22, 2009 12:52pm

Where on earth do people get this idea that small businesses "give back to the community"? Aside from employment - which is also offered by the larger big boxes - what else do they do? They sell things and make money, like every other business.

Large corporations sponsor community events and make donations to charity as well.

If you want to talk about transporting jobs to China and whatnot that is a whole different conversation. I would note, however, that most small businesses use products and services every day with roots in other countries. If it were an option, I'm sure many would use cheap labour to boost their profits as well. They are not intrinsically more moral simply because they are smaller.

As to my name and location, what difference does it make?

Anyhow, this whole thing is off topic.

H. Tiberius Miser, Secret Underground Lair, Earth
October 22, 2009 2:05pm

You forgot one thing. Distributors do not only lose their $/£/€. They also lose their friends.

Brigitte, Paris
October 22, 2009 3:16pm

I think that your gold rush analogy is somewhat fallacious. Though it's true that Levi and other suppliers became millionaires, it overlooks two pretty relevant points. First of all, not every supplier became rich. Plenty of suppliers probably went broke, too. Second of all, some gold diggers became rich. The question is whether one has greater odds of being rich by selling shovels or digging for gold.

... The answer is probably still selling shovels, but the way you put it was a bit misleading.

Marshall, Atlanta, GA
October 22, 2009 4:46pm

My wife sells candles with "PartyLite" (although her goal is only to be successful enough get free candles, not make money, so she succeeds in that humble regard).

Although there is no minimum that she needs to buy, she recieves zero commission unless she sells $300 per "show" and books at least two "shows" effectilvly making her unpaid labor even when she sells $290 worth of candles a day.

Morgan, Tracy, CA
October 23, 2009 10:03am

This was exactly the sort of information I needed and looked for but couldn't find 7 years ago. I did herbal life. Thought the recruiting part was a bit stupid so I tried retailing the product. I managed to break even so I beat the odds it seems. Thanks Brian for for putting the word out there. MLM is damaging in so many ways.

Aaron, Melbourne
October 23, 2009 6:48pm

Robert,

Asking what makes an MLM different from a multi-national corp is comparing apples to oranges. Offering it here as part of the debate is throwing in something from left field, like - what's the difference between an MLM and a government. Let's leave the "thing that makes you go hmm," to C&C Music Factory.

Wal-Mart pays you to work in their electronics department, to sell their underwear, or fill shipping containers with their grills. That's the difference.

Mike, new york
October 23, 2009 7:44pm

I shocked but ultimately not surprised when Brian said that 6% of people in Idaho and Utah have been a part of MLM schemes. I grew up in Boise, and remember my mom constantly grumbling about getting invitations for Tupperware parties and Mary Kay demonstrations.

I wonder how much religiosity has to do with this statistic, or maybe not so much the religion as much as the culture surrounding it. Everybody I knew in Idaho that was involved in MLM were Mormon housewives, who typically didn't work, were probably bored, and wanted to feel like they were contributing financially to the household. Anybody have any thoughts on this?

Ryan, Pullman, WA
October 24, 2009 3:53pm

I ain't no big-city lawyer, but it seems to me that there are actually professionals in this world who make a living selling things. They are called "salesmen". And from what I hear, most of them angle to have an "exclusive territory".

Oh--I did know one really crafty businessman in Japan. He wanted to buy a roomful of Data General computers back in the day. So he set up a company as a distributor of Data General products, then had it sell the computers to his other company, thereby pocketing the commission for himself. Niiiiiiice!

Not Brad, Not Tokyo
October 25, 2009 2:05am

14 level MLM deep . The number of the joined person is
5^0+5^1+5^2+.......+5^14=7629394531 about 7.6 billion.The total person in the erath is 6.6 billion. I think the MLM may want to sell products to Mars men.

ZMJ, NanChang/China
October 25, 2009 7:14pm

To respond to Ryan's sentiment on religiosity and MLM schemes: Mormon's have a habit of accepting things based on appeal to authority, and it is very common in LDS communities for MLM (or snake-oil) to be sold based on the seller's shared religious preference with the audience. I've read a fair number of accounts where a MLM recruiter will pull out a temple recommend in order to convince his audience that he is honest and that they should trust him (which is why Utah seems to get continually hit with Ponzi schemes as well...they're far too trusting of people who "look nice.")

Brian, Cleveland
October 25, 2009 9:44pm

I've never been sucked into one of these MLM "schemes" but I can say that I buy mona vie.. not because I want to suck everyone else in it but because I like the way it tastes and some of the proceeds go toward a really good charity.

If no one else I know wants to buy it then that is fine by me! Everyone has their own thing that they like.. or don't like LOL

Julie, CA
October 25, 2009 11:16pm

These things seem to be popping up and more of late. I've had 3 different people I know among friends and family tell me they were approached in some way to take part in a pyramid or pseudo pyramid scheme, including my girlfriend who interviewed for a "sales position" with Aflac, the insurance company, for a 100% comission position with insane promises of 10,000 dollar comissions for a single sale.

These things are like cockroaches

Ben, Baltimore/MD
October 26, 2009 9:10am

What always strikes me about MLMs is how incredibly inefficient the business model is. We all know that more middle men in a transaction is not efficient. And 8 levels of middle men, who aren't performing a function in the transaction but who are all getting a cut, simply cannot be a good way to do business. It raises the cost of the product so much that the end customer cannot possibly be getting a good deal.

I was a direct customer of a MLM that sells health and nutrition products, and I still use their vitamin product because I can't find a replacement for it in stores that I trust. This product costs over $100 for a monthly supply. However, I quickly discovered that I can buy the product from distributors on ebay for less than half of that price, which is a competitive price. This particular MLM doesn't require distributors to buy large amount of stock, so I can only guess that it's distributors who buy large amounts anyway to quickly boost themselves up to higher levels. I'm glad I can get the product at a reasonable price, but I can't help but wish they would just sell it through traditional channels and save me the hassle.

Norman Richards, Austin
October 26, 2009 11:57am

Norman,

Good for you! You took the first step. Now take the next and take a good hard critical look at that vitamin supplement you're now getting at the "low, low" price of $600/yr.

It'll sting a bit at first when you discover that the same nutrients can probably be gotten from...GASP...food!

Frank, TX
October 27, 2009 10:55am

That is a great point Frank!

Although I like mona vie which is a fruit blend drink.. I'm a avid believer that if you eat fresh whole foods, you can get all the vitamins and minerals you need!!

Julie, CA
October 27, 2009 10:59pm

Norman,

I must agree with Frank,

Although I am glad you are saving money by refusing to purchase from a MLM, you should probably reconsider spending hundreds of dollars a year on a vitamin in the first place.

Jason, Toronto
October 28, 2009 8:50am

"A fundamental reason that such networks fail is that they depend upon recruiting people to compete with you. If you own a shoe store, and you pitch every customer on opening their own shoe store instead of being your customer, very soon you're going to have a neighborhood full of shoe stores, with everybody trying to sell and nobody left to buy."

Known as "The Shoe Event Horizon" and foretold in the great and glorious Hitchhiker's Guide To The Galaxy (BBC radio version).

Lewayne, Near Des Moines
October 28, 2009 4:42pm

Thank you for episode, I always knew there was smth wrong with MLM (all people becoming a millionaire), but never had numbers to show me whether I was wrong or right.
But I still have a question - it's about Financial Advisors. I don't know whether these kind of companies exist in USA. Those guys have contracts with different banks and propose commercial products (insurance, credits etc) to people (charge free). Then they recieve money from bank for distributing the product (I as a customer sign papers myself and do it in the bank, so it's not more expensive for me to do it with a help of advisor). Maybe everything is fine, but they also have some kind of a cult (becoming offended on friends, which don't want to use their Perfect Services) and moreover - they want everyone to make their own net of Financial Advisors and recieve percents, what already does look like a bit MLM. I really didn't pay a lot for trainings (cca 20$, not a lot even here) - that's additional information. For whatever reasons I couldn't work there, so I don't know what is behind.
The question is - are they also a kind of MLM or aren't they?

Dmitriy Polovinkin, Lviv, Ukraine
October 29, 2009 3:17pm

Brian,

Your podcast is unfortunately full of the usual misconceptions and overgeneralizations that many people attribute to Network Marketing.

I think it may have been James Randi who once said something along the lines that smart people can sometimes be the easiest to be fooled because they think their smart enough to not miss anything. In the world of skepticism this seems to be all to often true with regards to network marketing - otherwise smart, intelligent people see some brief overview and a few bogus statistics from important sounding websites and think they understand what they're talking about. The Internet Echo Chamber and confirmation bias takes care of the rest.

There's not the space to point out all of what's incorrect or over-generalized in your article, however the primary concern is that your entire article seems to be based on the operations of a relatively small part of the MLM market (mostly actual scams, not legitimate MLMs) and the bogus analysis of a few self-declared "industry watchdogs", such as claims of "overpriced products" and "required purchases", the ridiculous idea that focusing on wholesale sales is "recruiting competitors", the absurd accusation of "paid shills", entirely misconceived ideas of "saturation", misuse of real statistics (eg incomes) and promotion of utterly bogus ones from the likes of "mlm-thetruth" and mlmwatch. Indeed, linking to sites like that is akin to linking to Sylvia Browne as proof that psychic powers are real

David, Stockholm Sweden
October 31, 2009 4:28pm

This was a very enlightening episode for me; my mom is a Mary Kay Independent Beauty Consultant and I have always had my misgivings. This episode put them to rest! The success stories and inspirational CDs in particular were always very hard for me to swallow.
However; Mary Kay is set apart from a lot of other MLMs. While it may be true for most, Mary Kay products are not identical to the more affordable skincare and makeup items on the supermarket shelves. Mary Kay has a huge research and development team made up of approximately forty advanced degree scientists - chemists, biochemists, biologists, microbiologists, pharmacologists, toxicologists, and dermatologists - and holds many, many patents. Not to mention the forty also advanced degree scientists in quality control and product safety, and the forty technicians who facilitate the work of those two groups.
Why this makes a difference is that all mass market brands utilize trickle-down technology, using yesterday's patents at best. Avon is included in this group.
Also, Mary Kay Consultants do make sales and are capable of making a living off of them, and a great many women stay in Mary Kay for a very long time.
The Mary Kay marketing plan has, in fact, been taught as part of a course at Harvard business school.
As with all your podcasts, you can't address every single aspect or facet of the topic, and I understand that and am not intending to be antagonistic. This comment is more of an aside than anything else. Thanks!

Holly Austell, Chase City, VA
November 01, 2009 10:04am

David, do you have any links that refute the math or the claims about MLM?

Do you have any argument that actually addresses what has been said in the article?

Just throwing around the terms 'confirmation bias' and accusing the sources of being wrong doesn't help much. How are they wrong? Is there any claim specifically that you can address? How are the accusations of paid shills (well documented by the way) absurd?

Brandon, Falconer NY
November 01, 2009 10:07am

Holly - You are right, there are substantial differences between Mary Kay & Avon and MLM programs. That's why I did not discuss them in the podcast. In short, they are based upon product sales commissions, and not dependent upon recruiting networks.

Brian Dunning, Laguna Niguel, CA
November 01, 2009 5:06pm

So let me get this straight. Your saying that a network marketing business is not only fake but a complete scam? Well Sense you never adressed who told you this and never stated any personal experience your statements are completely not relvant. The people who start these mlm "truth" websites where they bash online marketing systems are the people who tried it and had no idea what to do. All they did was sit there and expect money to roll in. Im sry but network marketing is not a get rich quik scam. So if you dont work it then it wont work for you. Its a business not a pyramid scheme.

Dillon, Jacksonville, Fl
November 02, 2009 8:36am

Dilon,

That's something like asking how we know an asteroid hit the Earth 65.4 million years ago. No one told Alvarez, and no one had any real experience in that subject (fossil impact craters). Thus, he can't know, and anything he said is irrelevant!

In fact, simple math demonstrates the flaws in mlm. Anyone with basic math skills can run the numbers and establish that no, you won't make money, even if you try really hard. It's simply not possible. If you don't want to run the numbers there are ample resources that have done so, including the government, which in many states (all?) flat-out outlaws these practices.

Finally, I suggest clicking on a few of the links Mr. Dunning has provided. They answer any issues of source citation that may arise (which I hope is what you're getting at in your post).

Gregory, Alabama
November 02, 2009 3:11pm

Brian,
Both Avon and Mary Kay operate Multilevel Marketing plans and network marketing. To say "there are substantial differences between Mary Kay & Avon and MLM programs" is nonsensical.

You then go on to say -

<i>In short, they are based upon product sales commissions, and not dependent upon recruiting networks.</i>

One of the defining characteristics of an MLM is that they are based upon product sales commissions! If they are not, then they are not an MLM, they are an illegal pyramid scheme.

Brandon - re references too many to write here. I recommend reading "The Direct Selling Revolution" by Professor Dominique Xardel of ESSEC, which covers Amway, and "The New Professionals" by Professor Charles King of the University of Chicago, which is a generic book about the network marketing industry. If you have a specific point you'd like addressed, let me know.

As evident from the above, Brian appears to think illegal pyramid schemes are MLM. This is one of the major issues in the industry, many pyramid scams pop up and <i>claim</i> they are MLMs or Network Marketing companies in order to have a cover of propriety. In reality they're not at all - unfortunately with a leap of poor logic I'm disappointed to see on skeptoid, it's then assumed that other companies that call themselves MLM suffer from the same failings as the pyramid scams.

David, Stockholm Sweden
November 02, 2009 4:44pm

Mr Stockholm, a few things.

First of all, Direct Selling is not MLM. MLM depends on recruiting more and more sells at several levels. That's why it's called 'multi-level'. It's based on the sales of the product to the lower level distributors, not to end users. Direct selling is the 'door to door' salesman type marketing based on the sale of the product, and not recruiting people under you.

Secondly, "The New Professionals" was not written by Professor Charles King, but by someone named James W. Robinson. A quick look at the reviews of that book, plus the other books he has written, provides one with plenty of reason to be skeptical. Almost all the reviews read as recruitment advertisements, and the sole two star review points out that the book is poorly researched and, "Quite a few of the companies edified in the book are now shut down, out of business and some of the company founders are now in jail."

The Federal Trade Commission, Consumer Reports, Wisconsin government, Newsweek, and the government of the United Kingdoms cannot be characterized as self-declared industry watch dogs and their analysis is in no way 'bogus'.

Less than 1% of sellers make money. That's what I would love to see addressed. Do you have anything to address the fact that MLM do not make their sellers money as promised? Cold hard math can be very illuminating.

Brandon, Falconer NY
November 03, 2009 6:51am

"One of the defining characteristics of an MLM is that they are based upon product sales commissions!" This is also a defining characterstic of a waitress's job (tips). And makeup sales. And real estate. And lawyers.

Commissions may be AN important factor when definint MLM, but it most certainly is not THE defining factor.

Gregory, Alabama
November 03, 2009 8:54am

Well to people against MLM industries. MLM is a business and like all business (legal) its sucess dependt on sales of product.Like any other business (real state, sales retail,encyclopedia sales and so on)if you don´t sale your product you are not make any profit. How many people in real state, sales retail or whatever, you know that are making big profit? And this business are illegal? Are a fraud?. If all people in them were making big profit, there was not a countless books and seminar on that topic, to make big money on those business.
MLM is like any other business system, you have to work hard to make money.
How many building, like a real state, have to sell to make a decent life? How many cars a sales car man have to sell to make a decent money? Make that math too to be equal. How many people in those activities reached the top 10%?

Angel, Caracas
November 03, 2009 3:28pm

Angel, the people in those industries actually do tend to make money. The people who RUN MLM do make money as well, off of scamming people to buy lots of their over priced product on the belief that they can make money getting more distributors under them. The MLM companies make money even when they DON'T make end user sales, unlike all other industries.

99.95% of MLM victims loss money. Half of all new restaurants go under in the first year. That is still a success rate more than 500 times MLM sales people. It is disingenuous to talk about 'making big money' when the conversation is about making ANY money.

I hate to keep making post after post here, and I'll try to stop. If anyone is really interested, click on the link to the JREF forum and people can explore it there.

Brandon, Falconer NY
November 04, 2009 6:26am

There's also the fact that in real estate, the agent doesn't expect you to become a real estate agent under them when you buy the house. They simply sell you the house. Not so with MLM. That's the real difference--MLMs rest on the premise of selling stuff to your own competitors. A regular business sells stuff to consumers.

Gregory, Alabama
November 04, 2009 8:38am

Why was my comment, which supplied supporting links to the issues raised, not posted?

David, Stockholm Sweden
November 05, 2009 12:52pm

I have been listening to Skeptoid for over 2 years now since learning about it from "Skeptics Guide to the Universe" podcast when they had Brian Dunning on. I am proud to have donated to skeptoid in the past because I believe in critical thinking.

The problem with this episode though is Brain tries a "One Size Fits All" approach to MLM. Yes there are a lot of bad MLMs out there and there are a lot of good ones like others have already listed. I have people that buy our product every month and have no interest in doing the business because they like the product.

I have made my living as a distributor in a MLM company for over 10 years. It has not been easy but the rewards have been worth it.

The quote from the podcast "99.95% of MLM victims loss money." is very misleading because it makes it sound like these people put their entire efforts and savings into the business when in reality 90% of the people that have joined my organization over the years do not do any work at all. Some may do some work but treat it as a casual business. Of course they are going to fail. Most of them don't take it serious and like to magically think that it will just work on its own and don't have to do the work.

Brandon - People that try and start a restaurant are very dedicated. Working 60+ hours, dumping a ton of money into their establishment, and still half of them fail. 90%+ of the people that join MLM, don't even spend 1 hour a week working the business. That is why most don't succeed.

Richard, Utah
November 11, 2009 10:38am

Richard, this is called a special pleading, or rationalization. You believe that all or most people who start restaurants work very hard, try very hard, and still mostly fail. You then attribute the failure of people on MLM to their laziness.

Even if 90% of people who join an MLM don't work hard at it, as you claim, that's still 99% of that remaining ten percent who don't make any money, let alone enough to justify doing it full time.

Even the people that do make money at MLM make less than if they had just worked a traditional job.

Brandon, Falconer NY
November 15, 2009 4:45pm

Hi All,

I've been reading loads of articles which are Anti-Network Marketing since the day i myself got into the Industry 2 Yrs back. It is so much evident in every post that either the person who wrote the article, his family or friends have lost money or have been cheated and hence the aggression.

It is also very evident that they did not understand the industry before they got into it. Here are some tips that I found during my so far successful journey in NM.

1. Understand the Industry. As on today its a $115+ Billion Industry World Wide with over 8% of world population into it.

2. Understand why the co. is into NM ? To sell product and make money or to make people wealthy. If you Choose a Co. who wants to sell products you'll be a sales man all your life.

3. What is the co. giving you apart from a product or a service. Hint - Education ?

4. Compensation plan. Is the co. a multi level commission ? Today there are Co. with pay $41 for direct or indirect ref's.

5. Why is your friend asking you to join ? Is it b'coz he get some money ? or is it b'coz he wants your help to build the biz ?

Last but not least....... Why do you want to do NM ? If you don't have an answer to this question PLEASE DO NOT GET INTO THIS INDUSTRY. I WILL ASSURE YOU FAILURE.

I've also written a small blog on my experience in this industry. Feel free to read and comment.

Guys, no industry is bad. Its a Co. which can be bad or an Individual. Its never an INDUSTRY

Cheers,
C.Rowe

Chakradhari. Rowe, Bangalore, India
November 16, 2009 8:41pm

Huh, in retrospect, I realize I was taken in by an MLM, specifically, American Income Life. While it didn't draw money directly from the recruits, it did follow the basic model of heavy focus on recruiting 'agents', who were then encouraged to recruit more agents to make real money. All commission based, naturally.

Where AIL got its benefit was twofold. One, the agents paid all their own expenses ( including *gas* ). Two, agent payment was supposed to include residuals, since insurance policies involve continued payments by the purchaser. However, if you left the company sooner than five years, you got bubkiss. . . but the company still got those payments.

More ethical than Amway, I suppose, as you could be successful if you were good at high pressure sales. However, they definitely leveraged the MLM model to reduce the expense ( to them ) of finding salesmen.

Brian Kilkowski, Maryland
November 30, 2009 7:09am

I think this one is simple. A common-sense litmus test, if you will.

a) How many people do you personally know that have made money by participating in MLMs, and b) How many people do you know that know someone else personally that has done the same.

Sorry, stories you heard at an MLM recruitment meeting don't count. I'm talking real life here.

I know of none. And chances are, your friends don't either. If it so great I have to think I would at least know of a friend-of-a-friend that has made it work. I almost got suckered in my younger days, but I figured it out shortly after the full-court press began to get me to buy a $200 distributor kit (or I could shell out $1200 and instantly become a "manager" instead of waiting to recruit 5 other people--what a deal!)

Do yourselves a favor, stay away from this garbage and go make an honest living.

Roger, Oregon
December 04, 2009 1:34pm

Thank you so much for so much good sense about MLMs. It may be so that some of the criticisms are not always correct for every MLM but it went right to the heart of the false claims of many of them, even many that claim not to have these problems -- well, who are we kidding; they all claim not to have such problems. Great episode and a great show.

Patrick Murphy, Osaka
December 16, 2009 3:11am

What about Max International

Richard, Skaneateles
January 22, 2010 6:25am

Success in MLMs is never heard first hand unless it is at a seminar from the guy who started the scam in the first place. Darwinism at its finest. You will fail, I would laugh at you guys defending it but you always disappear when you figure out the scam. Selfish really, you should be helping others who are falling for the scam you like you did.

Kevin, Vancouver B.C
February 14, 2010 9:49pm

As I always appreciate hearing both sides NM, it pains me to have the examples given only relate to MLM'ers whom have been scammed or were misunderstood in their efforts.

NM, as is any business model, is a communication industry. After working in the private sector for many years and finding out that those positioned above me were more unethical in their pursuit of success, and negative in attitude for the most part, it became more apparent that these corporations are more of a 'pyramid scheme' then the better NM companies I have been made aware of.

Additionally, those I have come to know working in NM vs those I no longer know working in corporate America are much more positive and enjoyable to interact with.
The negativity associated with people working for someone who dictates their every move and then pays them in peanuts is destroying more dreams on a daily basis than the NM options that I personally have come in contact with.

My experiences may be in the minority based on your article and thus considered bias, but I enjoy the people element of networking more than the negative grind of dictatorship corporate pressures.
I believe we all make our luck through determination and association. The corporation structure disallows most creative processes that most humans have thereby destroying more hope than any other model currently available.

If you chose that lifestyle, I wish you all the best. If you chose NM, I trust you are there for the right reasons. Choices?!?

Tim, Lakewood, Colo.
March 07, 2010 10:07am

My wife joined a MLM about three years ago; she makes between $3000 to $9000 a month and has been able to quit her full time job. Do you think its a good idea to get out of this scam and to start an honest living?

Fred, Kelowna
March 08, 2010 1:00pm

Fred, your wife is doing pretty well taking the money from all those folks below her. She must be at the top of the pyramid... Care to mention what MLM she is a part of or does that open this discussion to honest criticism too much?

Chris, Fort Worth, TX
March 11, 2010 10:51am

I have found that at the top of most MLM groups is someone who is making thier money not off the products they sell but by making thier "distributors" purchase other things not sold by the MLM company. In particluar, Amway has had trouble for years with top sellers forcing thier people purchase motivational materials to augment thier income, like 6 motivational tapes per month or going to conventions in far away cities and paying for expensive tickets to participate. Oddly, Amway has specific rules against this since they have been sued and fined several time for this practice. Sadly, Amway does not police thier distributors for this activity and it continues to this day.

Elgog Partynipple, Allentown PA
March 18, 2010 6:52am

While I enjoyed your article, your comment about Avon and Mary Kay proves you did not do your homework. If you read the works of Jon Taylor, Robert FizPatrick, and Tracy Coenen (Fraud Files Blog and Pink Truth), you would learn that there is no such thing as a good MLM.

The sad thing about ALL MLMs is that the so called "business model" guarantees two things:
1. Only the owners and TOPPs (top of the pyramid people) make money --specifically by causing the rest to lose money.
2. They cause severe economic losses to folks that can least afford it, and often damage relationships of the participants in the process.

The DSA represents the MLM industry and has a lot of money and political influence. They, along with Mary Kay in particular, effectively killed the so called biz-op rule as proposed by the FTC.

All MLMs are simply legal pyramid schemes. The products make them legal, but they are all, without exception, unethical and harmful.

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Doo Dilly, USA
May 05, 2010 4:23pm