03 Dec

Good MLMs and Bad MLMs

pyramid-selling-scamDefenders of multi-level marketing (MLM) will tell you that some companies “do it” right, while some companies “do it” wrong.

The fact that a multi-level marketing company like Mary Kay Cosmetics has been around for more than 55 years does not define whether it is a fraud or scam. Remember Enron (in business more than 15 years prior to the fraud being discovered) and Bernie Madoff (whose investment firm was in business for more than 40 years before his Ponzi scheme was revealed)? Length of time in operation has nothing to do with whether something is a scam or a fraud. Being traded on the New York Stock Exchange is not an indicator of legitimacy either.

Mary Kay Inc. is a wolf in sheep’s clothing. It lies to women, presenting its recruiting scam as a legitimate business opportunity. It uses images of pink Cadillacs and diamond rings to entice women, and to fool them into believing that many women are having success as consultants and sales directors. All the while the company is selling products to its distributors (with a pathetically small amount of those products being sold to third party customers) and profiting from doing so. But the bottom line is that 99% of participants in MLM will lose money.

While morons will tell you that [insert any MLM name] is a legitimate business with a wonderful opportunity for distributors to earn money, the truth is that MLMs are pyramid schemes in which almost everyone is guaranteed to lose money. There is no such thing as a good (or better) multi-level marketing company.

2 thoughts on “Good MLMs and Bad MLMs

  1. All of them are scams. Think about it WHY WOULD THEY NEED YOU if they were about actually selling product? Any normal company would go out and try to get their product into Walmart, Target, Meijer, Walgreens, etc along with shipping it direct to consumers through Amazon, Ebay, and their own website. Nobody buys stuff from their friends and family. It’s very awkward and really inconvenient when you can walk into a store, look over a vast selection of different products, and walk out with what you need right here and now. I also really really hate it when some coworker is hitting me up to buy some chocolate bar, etc for their kids, let alone some scammy MLM product like a $65 bottle of lotion.

    Once the impossibility of “direct selling” is dismissed you see exactly why they would need you, YOU ARE THE END CUSTOMER! You end up buying hundreds of dollars of makeup, lotion, snake oil juice, etc that you would NEVER rationally purchase under the delusion that you will make money selling this unsellable junk.

    Every few years some coworker of mine gets involved in one of these. One guys cousin got him into some scammy $65 bottle of toxic lotion that he was pitching, going to conferences, trying to get some other dummy to sell, (why would you want a COMPETITOR at work selling the same crap in your turf???) The worst was some dude whose girlfriend filled up their garage with a thousand dollars of rubber dicks! He was passing out catalogs to guys asking them to give them to their girlfriends and come to some “dildo party, all the girls are doing them these days.” Of course when I investigated the company I found just as I suspected it was an MLM scam with some youtube video of a woman making the exact same sales pitch verbatim with some “Tom” giant spinning, LED flashing dildo as an attention getting prop. One guy summed it up correctly when he told how horrified his girlfriend was when he told her about the sales pitch “Oh my GOD, who would want to buy something like that from SOMEONE YOU KNOW!!! They would see you every day and know you have something like that!”

    Recently MLM has intruded into my life once again when I met this Korean woman. She gives me all these strange brands of Toothpaste, mouthwash, lotion, vitamins that her “friend is selling” when I looked on the back I saw “Amway” and was like “uh oh” then looked up some of the other brands and found out they are MLMs targeting the Korean community. Some Korean guy even sold her “FIVE WATER COOLERS FILTRATION SYSTEM” she keeps in a storage locker and doesn’t even use or need. She also gave this guy her bank account # and every month gets a $300 fee charged by this scammy company. I can’t really find much info about this “Coway” company, but with this guy personally selling the stuff, putting up flyers at a local Korean Restaurant, I assume it’s another MLM direct selling scam. I told her multiple times to call the bank and change her bank account number but she refuses to take my advise.

    (Note that these days even legitimate products and services are somewhat “scammy” with companies wanting your CC# or bank account# to “subscribe” and get endlessly charged.) Hollywood video tried this just before they went under, Planet Fitness REFUSES to take CASH or even a CC and demands you bank account# for this Wall Street hustle filling up old vacant strip malls around the country. I refuse to buy stuff this way and prefer plain old cash at the store. My brother got bugged to death by my elderly mother to order some snake oil remedy for psoriasis she saw in the readers digest. They endlessly charged is CC and mailed all kinds of other snake oil product he didn’t even order. He couldn’t even get them to stop and had to CANCEL HIS CREDIT CARD to escape that crooked racket.

    To sum it up, in my opinion any company going the “direct selling” route is a scam, the “business owners” ARE the end customers.

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