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FIB - Scams 101 - Ye Olde Archives

No *BING*, You've Got It Wrong.

Posted By: Nathan Haines <NathanHaines@xrs.net>
Monday, 7 August 2006, at 3:23 p.m.

In Response To: Re: Yeah, but they're still *LEGALLY* MLM (Chris Bailey)

> Actually, that's the definition of an illegal pyramid. BTW, repeating it
> multiple times won't make your statement accurate. ;)

An illegal pyramid scheme derives revenue entirely or chiefly from new investors. There are no product sales going on.

You can find legal definitions of both, here:

http://www.mlmlaw.com/library/guides/Primer.htm

I stand by the definition that any program that compensates resellers (meaning they're selling a product) to recruit more resellers, is an MLM program.

ie. These 2-up programs are legally mlm

http://www.mlmwatchdog.com/RC_Aussie2Up.html

"8. Unfortunately the Law doesn't move fast enough. The good part is most of them say 2 ups are not MLM (although legally they are) so the MLM Industry does not take a lot of heat!"

> As for K&B, I'd have to say they are about as much an MLM as my local
> AFLAC insurance office where the manager gets an override on the sales of
> his agents.

Because of the low level of leverage and emphasis on direct sales, 2-tier plans like K&B usually do not turn into a big pyramid game, and are LARGELY free of most of the nastier aspects of multi-tier programs. So yes, K&B is different from most typical MLM in most practical aspects. But it's still, technically MLM.

Generally speaking, in most marketing circles 2-tier programs are not considered to "really be MLM" because the focus on sales remains strong, and recruiting is usually minimal. Get past 2 tiers and the focus of the program switches over to getting more and more people to join. That's the general consensus, but it's techically, and legally incorrect.

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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.
Scams outnumber legitimate biz ops about a bzillion to one, so it's well worth your time.



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(you know who you are... you scream "Foul!" when the truth comes out)
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