Lie #10: MLM is not a pyramid scheme because products are sold.I'll try to reply one by one, dont like super long topic that has to be put into [Post is too long. Click here to view this post.] thingie.
Truth: The sale of products is in no way a protection from anti-pyramid scheme statutes or unfair trade practices set forth in federal and state law. MLMs that sell useful, quality products have been successfully prosecuted under anti-pyramid scheme laws by state and federal officials. MLM is a legal form of business only under certain rigid conditions set forth by the FTC and state Attorneys General. Many MLMs are currently in gross violation of 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 non-distributors. This standard would place most MLM companies outside the law. The largest of all MLMs acknowledges that only 18% of its sales are made to non-distributors
Lie #9. MLM is the best option for owning your own business and attaining real economic independence.You can see very clearly in this para the article writer has no clue what he is writing. The word 'service' in the prostitution industry has a totally different meaning from the word 'service' in religious movement.
Truth: MLM is not true self-employment. 'Owning' an MLM distributorship is an illusion. Some MLM companies forbid distributors from carrying additional lines. Most MLM contracts make termination of the distributorship easy and immediate for the company. Short of termination, downlines can be taken away with a variety of means. Participation requires rigid adherence to the '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 #8. MLM is a positive, supportive new business that affirms the human spirit and personal freedom.Yes. This is damn right. I am pissed off whenever other things are demeaned or put down in order to promote the scheme.
Truth: MLM marketing materials reveal that much of the message is fear-driven and based upon deception about income potential. Solicitations frequently 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 professions or services. Conventional professions, trades and business are routinely demeaned and ridiculed for not offering 'unlimited income.' Employment is cast as wage enslavement for 'losers.' MLM is presented as the last best hope for many people. This approach, in addition to being deceptive, frequently has a discouraging effect on 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 #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 unnecessaryAnd these statements are based on? Cant help but to notice most writers are lousy nowadays. They neither prove nor argue. Its basically making statements as if they are facts.
Truth: decades of experience involving millions of people have proven that making money in MLM requires extraordinary time commitment as well as considerable personal wiliness, persistence and deception. Beyond the sheer hard work and special aptitude required, the business model inherently consumes more areas of ones life and greater segments of time. 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.
Under the guise of creating money independently and in your free time, the system gains control and dominance over people's entire lives and requires rigid conformity to the program. This accounts for why so many people who become deeply involved end up needing and relying upon MLM desperately. They alienate or abandon other sustaining relationships.
I agree wat numby say . all r the lie in MLMOriginally posted by numby:Lie #1: MLM is a business offering better opportunities for making large sums of money than all other conventional business and professional models.
Truth: For almost everyone who invests MLM turns out to be a losing financial proposition. This is not an opinion, but a historical fact. Consider some notable examples from among the largest MLMs.
In the largest of all MLMs, Amway, only 1/2 of one percent of all distributors make it to the basic level of "direct" distributor, and the average income of all Amway distributors is about $40 a month. That is gross income before taxes and expenses. When costs are factored, it is obvious that nearly all suffer a loss. Making it to "direct", however, is not a ticket to profitability, but to greater losses. When the Wisconsin Attorney General filed charges against Amway, tax returns from all distributors in the state revealed an average net loss of $918 for that state's "direct" distributors.
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 type of 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.
The vast majority of the losers in MLM drop out within a year. In a 1999 court case brought against Melaleuca, one of the country's largest MLMs, the company claimed it has the highest "retention" rate among distributors in the entire MLM industry. Melaleuca boasted a drop-out rate is 5.5% per month. This equates to about 60% per year, if the dropouts are replaced each month.
In its annual report to the SEC, Pre-Paid Legal, another large MLM, revealed that more than 1/2 of all its customers and distributors quit each year and are replaced by another group of hopeful investors.
This pattern of 50-70% of all distributors quitting within one year holds true also for NuSkin, the industry's second largest MLM. NuSkin also exemplifies the accompanying pattern in which a tiny percent of the distributors gain the majority of all company rebates. In 1998, NuSkin paid out 2/3rds of its entire rebates to just 200 upliners out of more than 63,000 "active" distributors. The money they received came directly from the unprofitably investments of the 99.7% of the others.
In 1995, Excel Communications, another "fast growing" MLM, reported to regulators an 86% turnover rate of distributors and 48% drop-out rate among all customers.
To obscure their dismal numbers, some MLMs classify their distributors as "active" and "inactive." The Active group includes only recent participants and those still buying products or receiving rebates. Payout and retention statistics are then disclosed only on the "active" group.
If ALL distributors who participate are included the losses and the average incomes are exposed as much worse. And, if all the distributors who enroll and quit over several years are included, the odds of success for a new distributor/investor are shown to be absurdly low. Yet, these companies typically advertise their business as "an opportunity of a life time" with "unlimited potential."
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: If you strip MLM of its hallmark activity of continuously reselling distributorships and examine its foundation, the one-to-one retailing of products to customers, you encounter an unproductive and impractical system of sales upon which the entire structure is supposed to rest. Personal retailing 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 awkwardly engage in business transactions with close friends and relatives. The unfeasibility of door-to-door retailing is why MLM is, in reality, a business that just keeps reselling the opportunity to sign up more distributors.
Lie #3: Eventually all products will be sold by MLM, a new form of marketing. Retail stores, shopping malls, catalogues and most forms of advertising will soon be rendered obsolete by MLM.
Truth: MLM is not new. It has been around since the late 1960's. Yet, today it still represents less than one percent of US retail sales. In year 2000, total US retail sales were $3.232 trillion, according to the Dept. of Commerce. MLM's total sales are about $10 billion. That is about 1/3rd of one percent and most of this sales volume is accounted for by the purchases of hopeful new distributors who are actually paying the price of admission to a business they will soon abandon. Not only are MLM sales insignificant in the marketplace, but MLM fails as a sales model also on the other key factor  maintaining customers. Most MLM customers quit buying the goods as soon as they quit seeking the "business opportunity." There is no brand loyalty.
These basic facts show that, as a marketing model, 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 that uses the language of marketing and sales of products. Its real products are distributorships which are sold with 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 who might join your 'downline,' the 'big fish' as they are called.
MLM's growth is a manifestation not of its value to the economy, customers or distributors but of the recently high levels of economic fear and insecurity and rising expectations of quick and easy wealth. It is growing in the same way day trading on the stock market, legalized gambling and lotteries are.
Lie #4: MLM is a new way of life that offers happiness and fulfillment. It is a means to attain all the good things in life.
Truth: The most prominent motivating appeal of the MLM industry as shown in industry literature and presented at recruitment meetings is the crassest form of materialism. Fortune 100 companies would blush at the excess of promises of wealth and luxury put forth by MLM solicitors. These promises are presented as the ticket to personal fulfillment. MLM's overreaching appeal to wealth and luxury conflicts with most people's true desire for meaningful and fulfilling work in something in which they have special talent or interest. In short, the culture of this business side tracks many people from their personal values and desires to express their unique talents and aspirations.
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 is a fulfillment of 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 all the great religions and faiths of humankind. 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 are 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 lifetime customers.
Truth: The commercialization of family and friendship relations or the use of 'warm leads' which is required in the MLM marketing program is a destructive element in the community and very unhealthy for individuals involved. Capitalizing upon family ties and loyalties of friendships in order to build a business can destroy ones social foundation. It places stress on relationships that may never return to their original bases of love, loyalty and support. Beyond its destructive social aspects, experience shows that few people enjoy or appreciate being solicited by friends and relatives to buy products.
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: decades of experience involving millions of people have proven that making money in MLM requires extraordinary time commitment as well as considerable personal wiliness, persistence and deception. Beyond the sheer hard work and special aptitude required, the business model inherently consumes more areas of ones life and greater segments of time. 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.
Under the guise of creating money independently and in your free time, the system gains control and dominance over people's entire lives and requires rigid conformity to the program. This accounts for 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 marketing materials reveal that much of the message is fear-driven and based upon deception about income potential. Solicitations frequently 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 professions or services. Conventional professions, trades and business are routinely demeaned and ridiculed for not offering 'unlimited income.' Employment is cast as wage enslavement for 'losers.' MLM is presented as the last best hope for many people. This approach, in addition to being deceptive, frequently has a discouraging effect on 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 from carrying additional lines. Most MLM contracts make termination of the distributorship easy and immediate for the company. Short of termination, downlines can be taken away with a variety of means. Participation requires rigid adherence to the '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 is in no way a protection from anti-pyramid scheme statutes or unfair trade practices set forth in federal and state law. MLMs that sell useful, quality products have been successfully prosecuted under anti-pyramid scheme laws by state and federal officials. MLM is a legal form of business only under certain rigid conditions set forth by the FTC and state Attorneys General. Many MLMs are currently in gross violation of 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 non-distributors. This standard would place most MLM companies outside the law. The largest of all MLMs acknowledges that only 18% of its sales are made to non-distributors.
Not realli, some are, some not...Originally posted by amsuck:I agree wat numby say . all r the lie in MLM
Lie #6: Success in MLM is easy. Friends and relatives are the natural prospects. Those who love and support you will become your lifetime customers.
Truth: The commercialization of family and friendship relations or the use of 'warm leads' which is required in the MLM marketing program is a destructive element in the community and very unhealthy for individuals involved. Capitalizing upon family ties and loyalties of friendships in order to build a business can destroy ones social foundation. It places stress on relationships that may never return to their original bases of love, loyalty and support. Beyond its destructive social aspects, experience shows that few people enjoy or appreciate being solicited by friends and relatives to buy products.
Lie #5: MLM is a spiritual movement.This is very true
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 is a fulfillment of 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 all the great religions and faiths of humankind. 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 are based entirely upon their purchases. If the purchases and enrollment decline, so does the 'communion.'
Lie #4: MLM is a new way of life that offers happiness and fulfillment. It is a means to attain all the good things in life.And may i ask, why not?
Truth: The most prominent motivating appeal of the MLM industry as shown in industry literature and presented at recruitment meetings is the crassest form of materialism. Fortune 100 companies would blush at the excess of promises of wealth and luxury put forth by MLM solicitors. These promises are presented as the ticket to personal fulfillment. MLM's overreaching appeal to wealth and luxury conflicts with most people's true desire for meaningful and fulfilling work in something in which they have special talent or interest. In short, the culture of this business side tracks many people from their personal values and desires to express their unique talents and aspirations.
All this lie , i heard when i was at enyouth coffeeOriginally posted by laurence82:Not realli, some are, some not...
Too bad i only made rebuttals against four or five points
Will do in length for the rest when i got much time...
Tiam Tiam Lah...Originally posted by laurence82:And may i ask, why not?
This para got three parts that can be separated and very inconsistent with one another.
First is the sentences on MLM presenting an opportunity of wealth and luxury. Again, nuthing the writer has written to give us enuff info to make value judgements on why couldnt MLM present opportunity of wealth and luxury
Second, will luxury and wealth actually impede people desire for true and meaningful work? I liken this statement to the 'money is the root of all evil', when its actually 'for the love of money that is the root of all evil'
Pray, do tell, is there anything to prove that wealth and meaningful are mutually exclusive? How about a philanthropist distributing his wealth to the charity? Sheesh, also, another statement, is people's true desire about meaningful and fulfilling work? What is people true desire? Some people think making money is meaningful and fulfilling you know.
Besides, the writer didnt even add the word 'should' to encourage people to lead a meaningful life or work. He is just assuming he know everyone's true desire, and people do have different perspective of what is meaningful and fulfilling.
Lastly, what is the aspects of MLM cultuire that 'sidetracks' people from their true desire, whatever their true desires may be. And look at the bombastic and the waxing of lyricals abt achieving unique talents and aspirations. The writer has the flair of a scam master, many who sway the hearts of the victims by yakking nonsense such as true inspirations and desires.
i forgot i havent post in this topic for one month...Originally posted by norman78:Hey Laurence, i've read your opinions and stand. I totally agree with your stand. In line with what you had written, these are some of my opinions.
There are some misconception about MLM, i'm sure. But we must be aware of who are writing these articles. Are they by a begrudged individual? If so, then the articles written would be prejudiced wouldn't it? But of course, i stand by the fact that no profession or business are without its disadvantages or undesirable aspects. In every venture, the beginning is always the toughest.
You may be a top notch attorney but you have to put in long hours at work when you first started out as a junior before you made senior partner. Michael Dell is sitting on his billions now but wasn't he scratching his head in his dormitory room in Austin Uni when he first started out PC Limited(now known as Dell corporation)? Everyone CAN be a success story and i stand by that fact. It is our personal traits that determines how far we can go that makes us successful. If i do go into the MLM industry, i should forage into it with full knowledge of what i'm up against. And should i fail, i should be asking myself why and not to point my fingers in accusation. Is it because i haven't understood enough? Is it because i didn't do enough? Or was i given an empty promise?
I am in no way perfect. I probably will never be. But i'm learning. I believe MLM can work for any individual, provided he has the tools and enough knowledge about the industry before he convinces himself to start. And only HE should convince himself, not being coerced by ruthless network marketeers.
PS: Laurence, we're waiting with bated breath for your "truth" buster on the next myth.
Lie #3: Eventually all products will be sold by MLM, a new form of marketing. Retail stores, shopping malls, catalogues and most forms of advertising will soon be rendered obsolete by MLM.Actually, i am confused by who this myth number three trying to discourage. The MLM business owner or the distributors as a whole?
Truth: MLM is not new. It has been around since the late 1960's. Yet, today it still represents less than one percent of US retail sales. In year 2000, total US retail sales were $3.232 trillion, according to the Dept. of Commerce. MLM's total sales are about $10 billion. That is about 1/3rd of one percent and most of this sales volume is accounted for by the purchases of hopeful new distributors who are actually paying the price of admission to a business they will soon abandon. Not only are MLM sales insignificant in the marketplace, but MLM fails as a sales model also on the other key factor  maintaining customers. Most MLM customers quit buying the goods as soon as they quit seeking the "business opportunity."; There is no brand loyalty.
These basic facts show that, as a marketing model, 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 that uses the language of marketing and sales of products. Its real products are distributorships which are sold with 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 who might join your 'downline,' the 'big fish' as they are called.
MLM's growth is a manifestation not of its value to the economy, customers or distributors but of the recently high levels of economic fear and insecurity and rising expectations of quick and easy wealth. It is growing in the same way day trading on the stock market, legalized gambling and lotteries are.
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.True, its not the most popular nor is it the most effective way. But again, as i stressed, it all depends on what business you are looking at. You arent going to open numerous retail shops just to sell industrial strength petrochemical stuff, neither are you going to make direct sales out of heavy machineries.
Truth: If you strip MLM of its hallmark activity of continuously reselling distributorships and examine its foundation, the one-to-one retailing of products to customers, you encounter an unproductive and impractical system of sales upon which the entire structure is supposed to rest. Personal retailing 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 awkwardly engage in business transactions with close friends and relatives. The unfeasibility of door-to-door retailing is why MLM is, in reality, a business that just keeps reselling the opportunity to sign up more distributors.
nah, actualy i am not rebutting for rebutting sakeOriginally posted by leddy:wah u very enthu... about this.... explain each lie hheee
Lie #1: MLM is a business offering better opportunities for making large sums of money than all other conventional business and professional models.For those data above, can anyone from those companies confirm it? Or he is liable to be sued?
Truth: For almost everyone who invests MLM turns out to be a losing financial proposition. This is not an opinion, but a historical fact. Consider some notable examples from among the largest MLMs.
In the largest of all MLMs, Amway, only 1/2 of one percent of all distributors make it to the basic level of "direct" distributor, and the average income of all Amway distributors is about $40 a month. That is gross income before taxes and expenses. When costs are factored, it is obvious that nearly all suffer a loss. Making it to "direct", however, is not a ticket to profitability, but to greater losses. When the Wisconsin Attorney General filed charges against Amway, tax returns from all distributors in the state revealed an average net loss of $918 for that state's "direct" distributors.
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 type of 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.
The vast majority of the losers in MLM drop out within a year. In a 1999 court case brought against Melaleuca, one of the country's largest MLMs, the company claimed it has the highest "retention" rate among distributors in the entire MLM industry. Melaleuca boasted a drop-out rate is 5.5% per month. This equates to about 60% per year, if the dropouts are replaced each month.
In its annual report to the SEC, Pre-Paid Legal, another large MLM, revealed that more than 1/2 of all its customers and distributors quit each year and are replaced by another group of hopeful investors.
This pattern of 50-70% of all distributors quitting within one year holds true also for NuSkin, the industry's second largest MLM. NuSkin also exemplifies the accompanying pattern in which a tiny percent of the distributors gain the majority of all company rebates. In 1998, NuSkin paid out 2/3rds of its entire rebates to just 200 upliners out of more than 63,000 "active" distributors. The money they received came directly from the unprofitably investments of the 99.7% of the others.
In 1995, Excel Communications, another "fast growing" MLM, reported to regulators an 86% turnover rate of distributors and 48% drop-out rate among all customers.
To obscure their dismal numbers, some MLMs classify their distributors as "active" and "inactive." The Active group includes only recent participants and those still buying products or receiving rebates. Payout and retention statistics are then disclosed only on the "active" group.
If ALL distributors who participate are included the losses and the average incomes are exposed as much worse. And, if all the distributors who enroll and quit over several years are included, the odds of success for a new distributor/investor are shown to be absurdly low. Yet, these companies typically advertise their business as "an opportunity of a life time" with "unlimited potential."