Hundreds of thousands of Americans get sucked into Multi-Level Marketing (MLM) companies each year. From Mary Kay to Amway to Herbalife to PrePaid Legal (now Legal Shield), the list is seemingly endless. Each offers its own special spin on the products it sells, but the main focus of an MLM is on recruiting new members.
MLMs live and die by the recruitment of new members, who make the bulk of the product purchases from the company. Little of the product is resold to an actual end user, but the MLM company doesn’t care. The sale has been made to the distributor (or associate or representative or member or consultant or whatever term you like).Continue reading
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. Continue reading
I’m no fan of multi-level marketing companies (MLMs), and Amway – Quixtar – Alticor is the mother of all MLMs. Amway Corporation was founded in 1959 by Rich DeVos and Jay Van Andel. It was originally called Ja-Ri Corporation, and the name was changed to Amway in 1963.
A reorganization occurred in 1999, through which Alticor became the holding company for Amway, an internet-based company called Quixtar, Access Business Group, and Pyxis Innovations. In 2001, the Quixtar name replaced “Amway” for the North American MLM business. (They were apparently trying to get away from all the negative feelings associated with “Amway.”)Continue reading
Have you ever had an invite from a friend, associate, or a stranger that left you in the lurch wondering just what the invite was all about? Maybe, just out of the blue, an old acquaintance that you have not seen since high school calls you up and invites you to see something that is so important that you absolutely must do it! Your old friend is very vague about just what this “something” is.
Even if you become suspicious and ask if it is “Amway?” Your friend might respond and say something like this: “I can’t really talk about it over the phone; you will just have to see this for yourself.” Your curiosity has been piqued.Continue reading
Multi-level marketing will go down in history as one of the great frauds of our times. It deceptively wraps its harmful scam with the real needs and desires of people today – additional income, stay home with the family, independence, entrepreneurship, high income without high investment or training, and a group that will help you succeed. MLM is an Enron story, glossy and exciting to those who invest. But in the end, it causes massive harm, employs sophisticated deception, and it is corrupting our government.
MLM is an American-based “sales ” scam, and has spread to more than 70 other countries, just as Nigeria has spread its famous “bank account” scam worldwide.Continue reading
I find this interesting… D.J. Poyfair is the attorney representing Usana Health Sciences to the death against Barry Minkow. He is also the attorney who is representing a group of 15 “independent business owners” against Amway (Quixtar).
It appears as though Poyfair thinks Amway is an evil pyramid scheme, while Usana is …. oh, I don’t know… better? Less bad???
There was recently a hearing in California in the Quixtar IBO case, and there are a couple of interesting portions. Here’s one (bold added by me): Continue reading
I’ve had the pleasure to come into contact recently with Eric Scheibeler, a former “independent business owner” for Amway. He did well by all public accounts, rising quickly up the ranks with his wife. I’ve been reading his book, Merchants of Deception, which details his rise and fall in Amway.
The story is disturbing in so many ways. Here is a page from Eric’s website, reprinted because I think it’s really interesting to see this overview of what multi-level marketing (MLM) businesses are really like. Continue reading
Eric Scheibeler was once a highly successful IBO (independent business owner) with Amway. He reached the “Founder’s Emerald” status, which represented the top 1/25th of 1% of the IBO’s. After developing his pyramid for almost ten years, Eric discovered documentation that revealed the fraud behind the company.
Eric thought the fraud was just at the Kingpin level of the organization, to which he had worked so hard to elevate himself. He reported his findings directly to Amway’s President, Dick Devos. Eric thought that DeVos would take action against the distributors who were defrauding so many below them.Continue reading