Multi-Level Marketing Income Disclosures

31 December 2012

Some multi-level marketing (MLM) companies release income disclosures or earnings disclosures. These documents theoretically provide insight into how much distributors earn in commissions or overrides.

However, the disclosures are generally worthless. What is more important than the information in these documents? The information that is not disclosed in the documents.

Multilevel marketing companies purposely omit important information that would allow potential distributors or investors to have real insight into these plans. In general, earnings disclosure statements often fail to provide the following information that is critical to understanding the plans and the results

Total distributors throughout the year
How the total distributor count is calculated (as of a certain date, using averages, or other methodology)
Number of new distributors during the year
Number of distributors who quit during the year
Turnover rate
Number of distributors earning $0
Definition of “active” distributor
Total number of distributors at a supervisor or leader level (i.e. have recruited other distributors)
Total number of “active” distributors at a supervisor or leader level
Amount of product purchased by each level of distributor for the year

Below are links to the earnings disclosures found for various multi-level marketing companies:

If you have any income disclosure statements for the above MLMs (or other major multilevel marketing companies), please send them to the email address on my Contact page.

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12 April 2013 at 7:00 am | #

[...] and regulators to determine if they are in the business of recruiting or selling products. They disclose just enough facts and figures to make it appear that they are being transparent. But they hide enough information that no one [...]

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