Re: For Those Who Believe In MLM Please Read This

> For all of you MLM supporters please read the following article link:

> http://www.vandruff.com/mlm.html

> As always your comments are welcome.

Len Clements wrote a fine rebuttal to Van Druff and other mlm critics. Here is an excerpt with the material dealing with Van Druff. You can read the full article at www.marketwaveinc.com. in the articles section.
Cheers,
Russ

Anti-MLM Zealots
Do They Have a Point?

By Leonard W. Clements 2001, 2003

I like Multilevel Marketing. I've been involved, full time, for over ten years, and I've managed to make a very good living at it and I've never front loaded anyone with product, I've never flashed my check, I've never mislead anyone into attending an opportunity meeting, I've never made an outrageous claim about the benefits of my products, and I've never lost a single friend in the process. I have, with hard work, commitment, and patience managed to ethically and honestly build a downline sales organization that has afforded me enough residual income to "exit the rat race."

However, according to some, I don't exist.

There are certainly some networkers among us who might be considered "zealous" as well. Perhaps overly so. And, as physics dictates, for every action there is an equal and opposite reaction. Indeed, the MLM yin has it's yang. For every person attempting to convince a jaded, wary world that MLM is true, and good, there are an equal number who immediately dismiss it with prejudice. I mean this literally. There are about seven million network marketers in the U.S., and based on my best guess (since one's opinion of MLM was not a question on the last National Census form), about as many who would reject it out of hand with nary a moments consideration. And, yes, some of them can get a little overzealous as well.

Anti-MLM Zealots tend to come in two flavors: Ignorant or vindictive. In other words, they've either never actually participated in MLM themselves (thus have adopted someone else's opinion as their own, or simply guessed at their conclusions), or they have participated and failed at it. Would you take marriage advice from a guy who was recently divorced? Or, worse, has never even had a girlfriend?

In fact, there are four individuals who have made it a point (and in some cases, it seems, their life's mission) to be a thorn in the side of every MLMer in an effort to save the other 283 million Americans from a fate such as mine. Although these Four Horsemen of the Apocryphal are small in number, thanks to the internet their words are available to millions, and to many they seem to make sense.

What's Wrong With Multilevel Marketing?

Dean Van Druff, the author of the well traveled essay "What's Wrong With Multilevel Marketing?", is perhaps the most prevalent of the four in spite of making the weakest argument. Mr. Van Druff goes so far as to state that "MLM will never work, even in theory" in the face of the blatant fact that MLM is a 65 year old industry with numerous profitable companies and thousands of successful distributors.

The ignorance of most Anti-MLM Zealots is clearly evident in their reporting of basic MLM related facts and figures, and Van Druff provides a litany of them. I should point out that I am not at all implying he, nor anyone opposed to MLM, is dumb. Ignorant means to ignore readily available information, thus resulting in a lack of knowledge, not intelligence. For example, throughout Van Druff's 12 page essay he makes several observations about MLM that are simply inaccurate, such as, that we are a 25 year old industry (which would have been off by 30 years even in 1990 when his essay was originally written). This could be explained by Van Druff's own reluctant but eventual admission that he has had no personal experience with MLM and did little, if any, research into the subject previous to putting his "theoretical analysis" on paper.

Besides the historical inaccuracies mentioned previously, Van Druff also claims "many high level MLM promoters have been shut down, the 'executives' incarcerated." He later claims that the founder of FundAmerica was "arrested for having generated some 90% of revenues selling 'distributorships' versus product." Although FundAmerica was declared a pyramid scheme, the founder was arrested on fraud charges. In fact, it is extremely rare for anyone promoting even a blatant pyramid scheme to actually serve jail time as this is usually a civil offense, not a criminal one. The few criminal cases involving incarceration (three that I know of over the last 25 years) did not involve legal multilevel companies.

Van Druff again shows his ignorance by asking the question "If (an MLM product) is so great, then why isn't it being sold through the customary marketing system that has served human society for thousands of years?" Yes, he actually said that in his article, and it's wrong on so many levels. First, I can think of only one "marketing system" that has served human society for "thousands of years" word of mouth. Let's forgive his hyperbole and assume he meant store shelves. Has Mr. Van Druff ever researched what is involved with getting a product on a store shelf? Obviously not, for it's a daunting, expensive, extremely competitive challenge. It also involves millions of dollars in advertising to get those products off the shelf. Where as word-of-mouth is not only the most powerful form of marketing, it's the least expensive (that's a pretty good combination). But then, this is one of the most fundamental, basic, and most touted benefits in regard to marketing a product via MLM. Yet, Van Druff appears oblivious to it. This is the epitome of ignore-ance.

It get's worse. Van Druff also claims that some MLM companies attempt to address the saturation issue "by limiting the number of people you can sponsor, say, to four." Really? Actually, no. No such limitation has ever existed in any of the several hundred MLM programs I've reviewed over the last 20 years, nor do I suspect it has ever existed. He's probably talking about matrix plans where you are limited to the number of people you can place on your first level, but not the total recruited, and he just doesn't understand what he's talking about. He also claims MLM distributors "usually sell through prefab parties or home demos." Of course, anyone with any actual experience in MLM would know that such activity is rare today in all but a few old-school MLM groups. He goes on to describe a "shadow pyramid" where people are induced into buying "motivational tapes, seminars, and videos" Of course, we all know he's talking about only one, albeit very large, MLM company. And even then it's upline distributors (not the company) who are making the profit, and on a direct sales basis, not MLM. He also claims the MLM company itself profits by "conning" recruits with a"distributor fee." What he is ignorant of is the easily obtainable and verifiable fact that, by law, MLM companies must sell their sales aids, promotional tools, training, and distributor kits/fees at cost! No significant profit can be made from these items, and they can not be commissioned as part of the MLM compensation plan. Sure, some MLM companies push the envelope a little on this, and yes, some push it a lot. But the vast majority do not. Furthermore, that $25-$50 annual "distributor fee" we all are "conned" out of typically covers such things as maintaining our sales organization, the paying of commissions to our downline sales reps, the paying of sales taxes to all 50 states, data entry services, customer support, warehousing, and various other administrative functions that would likely cost hundreds, if not thousands of dollars per month if we were to hire someone to do them for us.

Van Druff then takes on "loony product claims." While I concur with his overall criticism (some are pretty loony), his theory as to how MLMers "effectively skirt the Federal Trade Commission" is by using "word of mouth testimonials, supposed 'studies' done by scientists, fabricated endorsements (etc)...". If Van Druff would have invested about ten minutes of research into this topic, he could have easily discovered that, indeed, the FTC already prohibits curative or treatment claims by all of the means he lists, including personal testimonials. In fact, the FTC has made available (for years) guidelines for product claims in their document "Dietary Supplements: An Advertising Guide for Industry (see http://www.ftc.gov/bcp/conline/pubs/buspubs/dietsupp.htm for entire text). We are just as forbidden from promoting our products in all the ways Van Druff describes as any other marketer of products.

Van Druff arrogantly professes that "the law generally condemns MLM" and even goes so far as to claim that all MLMs are illegal! Of course, Mr. Van Druff doesn't get to make that call. Our state and federal government makes those laws, and our courts decide who breaks them. And our government and our courts have ruled that MLM is legal. Van Druff's opinion, much to his chagrin I'm sure, doesn't count.

Van Druff then borders on the absurd by implying there is some grand conspiracy by MLM "experts" to "propagandize, lobby and defend" MLM. (Defend ourselves? How dare we?!!!). He theorizes (but states as a matter of fact) that the MLM industry has used "so much money from it's victims" to hire these nameless lobbyist experts who have managed to pull the wool over the eyes of state and federal regulators. Considering, once again, there are over 1,500 MLM companies in the United States, over 7 million distributors, and MLM has existed for over half-a-century, those must be darn good lobbyists! Of course, the truth is, few MLM companies or distributors are involved in defending the industry on a regulatory level. That job is left to the Direct Selling Association, which is a national trade organization representing all direct sales companies (MLM or otherwise).

When I inquired as to whether or not Van Druff has had any experience with MLM, he responded by directing me to a section of his web site (which I had read) where he states his analysis is "theoretical." He then mockingly attacked my intelligence and investigative skills for not understanding that this meant he had no experience (of course, he could have just said "no"). I guess, in Mr. Van Druff's world, you can only develop theories about things you have no personal experience with.

Near the end of Van Druff's diatribe, he states "Anyone who has any experience with an MLM has strong feelings, either for or against, and this is the problem." In this case, I wholeheartedly agree. It's even worse when people develop strong feelings about it who have no experience at all.