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FIB - Scams 101 - Ye Olde Archives

Re: MLM Lies

Posted By: William
Monday, 16 January 2006, at 3:37 p.m.

In Response To: MLM Lies (Older but Wiser)

MLM works for 100% of the people who work it the right way !

> I found this andthought you might like it.
> Lie #1: MLM offers better opportunities than all other conventional
> business and professional models for making large amounts of money.
> Truth: For almost everyone who invests, MLM turns out to be a losing
> financial proposition. Fewer than 1% of all MLM distributors ever earn a
> profit and those earning a sustainable living at this business are a much
> smaller percentage still.

> Extraordinary sales and marketing obstacles account for much of this
> failure, but even if the business were more feasible, sheer mathematics
> would severely limit the opportunity. The MLM business structure can
> support only a small number of financial winners. If a 1,000-person
> downline is needed to earn a sustainable income, those 1,000 will need one
> million more to duplicate the success. How many people can realistically
> be enrolled? Much of what appears as growth is in fact only the continuous
> churning of new enrollees. The money for the rare winners comes from the
> constant enrollment of armies of losers. With no limits on numbers of
> distributors in an area and no evaluation of market potential, the system
> is also inherently unstable.

> Lie #2: Network marketing is the most popular and effective new way to
> bring products
> to market. Consumers like to buy products on a one-to-one basis in the MLM
> model.

> Truth: Personal retailing -- including nearly all forms of door-to-door
> selling -- is a thing of the past, not the wave of the future. Retailing
> directly to friends on a one-to-one basis requires people to drastically
> change their buying habits. They must restrict their choices, often pay
> more for goods, buy inconveniently, and engage in potentially awkward
> business relationships with close friends and relatives. In reality, MLM
> depends on reselling the opportunity to sign up more distributors.

> Lie #3: Eventually all products will be sold by MLM. Retail stores,
> shopping malls,
> catalogs and most forms of advertising will soon be rendered obsolete by
> MLM.

> Truth: Fewer than 1% of all retail sales are made through MLM, and much of
> this is consists of purchases by hopeful new distributors who are actually
> paying the price of admission to a business they will soon abandon. MLM is
> not replacing existing forms of marketing. It does not legitimately
> compete with other marketing approaches at all. Rather, MLM represents a
> new investment scheme couched in the language of marketing. Its real
> products are distributorships that are sold through misrepresentation and
> exaggerated promises of income. People are buying products in order to
> secure positions on the sales pyramid. The possibility is always held out
> that you may become rich if not from your own efforts then from some
> unknown person ("the big fish") who might join your
> "downline."

> MLM's growth does not reflect its value to the economy, customers, or
> distributors, but the high levels of economic fear, insecurity, wishes for
> quick and easy wealth. The market dynamics are similar to those of
> legalized gambling, but the percentage of winners is much smaller.

> Lie #4: MLM is a new way of life that offers happiness and fulfillment.
> It provides a way to attain all the good things in life.

> Truth: The most prominent motivational themes of the MLM industry, as
> shown in industry literature and presented at recruitment meetings,
> constitute the crassest form of materialism. Fortune 100 companies would
> blush at the excess of promises of wealth, luxury, and personal
> fulfillment put forth by MLM solicitors. These appeals actually conflicts
> with most people's true desire for meaningful and fulfilling work at
> something in which they have special talent or interest.

> Lie #5: MLM is a spiritual movement.

> Truth: The use of spiritual concepts like prosperity consciousness and
> creative visualization to promote MLM enrollment, the use of words like
> "communion" to describe a sales organization, and claims that
> MLM fulfills Christian principles or Scriptural prophecies are great
> distortions of these spiritual practices. Those who focus their hopes and
> dreams upon wealth as the answer to their prayers lose sight of genuine
> spirituality as taught by religions. The misuse of these spiritual
> principles should be a signal that the investment opportunity is
> deceptive. When a product is wrapped in the flag or in religion, buyer
> beware! The "community" and "support" offered by MLM
> organizations to new recruits is based entirely upon their purchases. If
> the purchases and enrollment decline, so does the "communion.'"

> Lie #6: Success in MLM is easy. Friends and relatives are the natural
> prospects.
> Those who love and support you will become your life-time customers.

> Truth: The commercialization of family and friendship and the use
> of"'warm leads" advocated in MLM marketing programs are a
> destructive element in the community and very unhealthy for individuals
> involved. People do not appreciate being pressured by friends and
> relatives to buy products. Trying to capitalizing upon personal
> relationships to build a business can destroy one's social foundation.

> Lie #7: You can do MLM in your spare time. As a business, it offers the
> greatest flexibility
> and personal freedom of time. A few hours a week can earn a significant
> supplemental income
> and may grow to a very large income, making other work unnecessary.

> Truth: Making money in MLM requires extraordinary time commitment as well
> as considerable personal skill and persistence. Beyond the sheer hard work
> and talent required, the business model inherently consumes more areas of
> one's life and greater segments of time than most occupations. In MLM,
> everyone is a prospect. Every waking moment is a potential time for
> marketing. There are no off-limit places, people, or times for selling.
> Consequently, there is no free space or free time once a person enrolls in
> MLM system. While claiming to offer independence, the system comes to
> dominate people's entire life and requires rigid conformity to the
> program. This is why so many people who become deeply involved end up
> needing and relying upon MLM desperately. They alienate or abandon other
> sustaining relationships.

> Lie #8. MLM is a positive, supportive new business that
> affirms the human spirit and personal freedom.

> Truth: MLM is largely fear-driven. Solicitations inevitably include dire
> predictions about the impending collapse of other forms of distribution,
> the disintegration or insensitivity of corporate America, and the lack of
> opportunity in other occupations. Many occupations are routinely demeaned
> for not offering"unlimited income." Working for others is cast
> as enslavement for "losers." MLM is presented as the last best
> hope for many people. This approach, in addition to being deceptive,
> frequently discourages people who otherwise would pursue their own unique
> visions of success and happiness. A sound business opportunity does not
> have to base its worth on negative predictions and warnings.

> Lie #9. MLM is the best option for owning your own
> business and attaining real economic independence.

> Truth: MLM is not true self-employment. "Owning" an MLM
> distributorship is an illusion. Some MLM companies forbid distributors to
> carry other companies' products. Most MLM contracts make termination of
> the distributorship easy and immediate for the company. Short of
> termination, downlines can be taken away arbitrarily. Participation
> requires rigid adherence to a "duplication" model, not
> independence and individuality. MLM distributors are not entrepreneurs but
> joiners in a complex hierarchical system over which they have little
> control.

> Lie #10: MLM is not a pyramid scheme because products are sold.

> Truth: The sale of products does not protect against anti-pyramid-scheme
> laws or unfair trade practices set forth in federal and state law. MLM is
> a legal form of business only under rigid conditions set forth by the FTC
> and state attorneys general. Many MLMs are violate these guidelines and
> operate only because they have not been prosecuted. Recent court rulings
> are using a 70% rule to determine an MLM's legality: At least 70% of all
> goods sold by the MLM company must be purchased by nondistributors. This
> standard would place most MLM companies outside the law. The largest MLM
> acknowledges that only 18% of its sales are made to nondistributors.

No Selling in MLM

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You'll find great information in this "Read Only" Archive, but remember..... things change.
Be sure to visit the Current Message Board when you're finished here.

We're very friendly, so don't be shy... just jump right in and post your question.
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