http://www.sequence-inc.com/fraudfiles/2008/07/12/more-on-why-shoptoearn-sucks-mypowermall-teamnational/

Why aren’t the laws enforced. The Direct Selling Association does tons of lobbying. They present themselves as an organization that ensures quality among members, but the reality is that the members belong because the DSA is such a strong lobby. Lobby hard enough, and the laws will not be enforced, in my opinion.

A friend of mine tried to get my husband and I involved with “Shop to Earn” after reading the entries on your website regarding “STE”, we believe that it is truly a scam. I also read what constitutes an illegal MLM business and it pretty much covers what “STE” is all about. I told my friend what I had learned – that it was an illegal scam, not ethical to recruit your friends and family for their hard earned cash, that you are not actually selling anything except a website that can be made by anyone of average IQ, etc…She insists that this is a legitimate business and not illegal because she talked to a lawyer (also a member of “STE”) and she said it is not considered MLM, but direct marketing, so it is legal. If this is a scam, then why hasn’t the FTC stepped in and shut this thing down?? Thanks.

I’ll address all of your questions as written:

“Do you disclose to your Prospecting distributors that 99% of MLM distributors are “Losing Money”? (A Gross Income is NOT necessarily a profit!)”

***No, I do not disclose that 99% of MLM are losing money because I don’t believe that. HOWEVER, I DO disclose that the majority of the people in this industry WILL FAIL and that it is a very tough industry. I try to scare people a bit to see if they are serious and know what they are getting into. I won’t BS anybody.*****

“Do you disclose to your prospecting distributors that there is roughly a 70% to 80% attrition rate? (70% to 80% of distributors drop out within the first year).”

****I do not use those exact percentages because I’m not familiar with them. HOWEVER, I do emphasize that the MAJORITY of people in this industry WILL FAIL. Then, only if they run their respective business like a business, not a hobby or get rich quick, will an individual be profitable.*****

“Do you disclose to your prospecting distributors that they will be required to make ongoing monthly product purchases to be eligible for commission from their downline? (The Pay To Plan Scheme)”

****No, because in my organization you are not required to make a minimum monthly purchase to be eligible for commission from their downline. My organization is built with a solid RETAIL BASE. You still have to reach a minimum volume each month to receive commissions, but the way to do it is through RETAIL. If an individual wants to BUY their respective way up the market plan, they could, but it would not be smart, or profitable, and they will fail within a year. Again, I’m only speaking about my organization as I don’t know how others work.****

“Do you disclose to your prospecting distributors that their MLM distributorship is analogous to having a Burger King on every single street corner since there are no territorial restrictions?”

****With all due respect, please explain why you think this. There are millions upon millions of people in the US, Canada, and around the world. I encourage distributors to do business worldwide. Tools like SKYPE allow us to speak to people all over the world, computer to computer, for FREE. Vonage allows us to speak on the phone all over the world relatively inexpensively. Distributors only working with their “friends and family” will experience saturation problems. One example: the size of my community is 60,000 people, not including suburbs and smaller towns around the area. There are 582 distributors in the same business as I am just locally. That’s 103 POTENTIAL customers apiece. Granted, 10% – 20% of those people will actually become customers. But the word of mouth spreads from there and advertising actually becomes cheaper and profit per sale goes up. Add the internet to the mix and business will continue to grow. I know this sounds like a “sales pitch” but this is not the intention. I’m just trying to answer your questions from MY EXPERIENCES; please remember, I’m not speaking for anybody else.*****

“Do you disclose to your prospecting distributors that the products they will be trying to retail is also being dumped in huge volume on Ebay at half the distributor’s cost???”

*****No, I don’t. If potential distributors aren’t deterred by the MAJORITY WILL FAIL discussion, I have a few other screening questions to be sure my business is not just a good fit for the prospect, but I want to be sure the prospect will be a good fit for me.****

Do I want people’s money? Absolutely!! That’s why I’m in business. However, I do my best to bring in people that want to run a profitable business. It would do me no good to bring somebody in, take their money, and the leave them high and dry. In this scenario, they join forums such as this, talk to their friends, and say bad things, which makes it tough to get more business. I won’t lie, when I first started my business, I lost a lot of people and did try to sign up everybody. After getting sick of people quitting after just a month or two, I decided to subscribe to the theory of quality over quantity.

The better scenario is to find serious people that want to run a profitable business with long term goals. Train them and teach them everything I know so they WILL be profitable and I earn MORE than just their initial investment and keep earning over the long haul.

Not sure if these are the answers you are looking for but they are answers from MY experiences and I won’t try to speak for others.

Hope you are having a great evening,

Mike

99% of MLM distributors LOSE money in MLM. 99% are FORCED to lose money due to the mathematical properties of the compensation plans. The model is designed for 99% to lose money and greatly enrich the top 1%. Work it out on paper or a nice spreadsheet and it’s revealed. These FACTS are not just made up from those who are Anti-MLM. These FACTS are just revealed from those who are Anti-Fraud.

Anyway, I want to ask you a couple simple questions.

Do you disclose to your Prospecting distributors that 99% of MLM distributors are “Losing Money”? (A Gross Income is NOT necessarily a profit!)

Do you disclose to your prospecting distributors that there is roughly a 70% to 80% attrition rate? (70% to 80% of distributors drop out within the first year).

Do you disclose to your prospecting distributors that they will be required to make ongoing monthly product purchases to be eligible for commission from their downline? (The Pay To Plan Scheme)

Do you disclose to your prospecting distributors that their MLM distributorship is analogous to having a Burger King on every single street corner since there are no territorial restrictions?

Do you disclose to your prospecting distributors that the products they will be trying to retail is also being dumped in huge volume on Ebay at half the distributor’s cost???

In this great country everybody is allowed their opinion and I respect that.

What works for one doesn’t work for all and in this case, I am clearly in the minority, no disputes. Just like my business, I won’t try and talk anybody into changing their minds.

Aside from Tracey, does anybody have a success story to share about business ventures in a “real business?”

I always like to hear about somebody’s success, whether it be in business, in a club, family affair, anything.

I’ve concluded that people involved in MLM eventually understand the ultimate bad truth and the ones that persist in the business are con men who believe that they can succeed the way other crooks seem to. They see success in MLM about the same way the fellow operating the 3 card monte game in the alley sees his operation. People who promote these affairs are morally deficient, but yet many of these con men have the nerve to find new recruits sitting in church pews.

Go ahead and hate your neighbor, go ahead and cheat a friend; do it in the name of heaven, you’ll be justified in the end.

The problem with MLM, and some of the promoters, is that it makes it too easy for just anybody to go into business. People think they are going to get rich quick and this is not the case.

My business is built on a solid retail foundation and this is the same principal I teach my downline. I guess this means I’m in the 1%? LOL

I’m not here to say that I’m getting rich; however, I’m able to pay my bills and each month is more profitable than the previous. I run a business that I’m proud of. Not every day is a bed of roses and it’s a lot of work, but I don’t worry about a boss and life is lived on my terms. The PROs far outweigh the CONs.

MLM and the Networking industry, just like the “brick and mortar” business world, is tough and will chew people up and spit them out without blinking an eye. It is, though, a great tool to help SERIOUS and DEDICATED people get out of their respective dead end jobs.

Anybody thinking that MLM is a great way to make tons of money in a matter of days or weeks needs to stay away and stick to buying lottery tickets.

Keep fighting the good fight and have a great night!

Mike