Through the years, multi-level marketing companies and MLM distributors have played a clever game of changing the wording to hide the truth. MLM activities have been referred to as direct sales, dual marketing, network marketing, multilevel marketing, consumer direct marketing, affiliate marketing, seller assisted marketing scams, home-based business franchising, and referral marketing. (Skeptics refer to this “business model” as pyramid selling, pyramid schemes, pyramid scams, endless chain recruiting, and Ponzi schemes.)
Why all the names? To confuse potential customers and recruits. These companies know negative impressions are associated with multi-level recruiting and sales. So if they can change the name, maybe they will get to people who would otherwise be turned off by the name MLM.
The latest in this series of alternate names for multilevel marketing is “inline marketing.” The creators of this name, Nutraceuticals Inc., think their invention is so clever, that they’ve registered it as a trademark. But even they are clear about what they’re trying to bamboozle us with! The trademark “inline marketing” is described:
Goods and Services IC 035. US 100 101 102. G & S: Multi-level marketing business services
livethesource® has created a new method of person to person selling (commonly known as Network Marketing) to introduce our products to the public, we call it Inline marketing™.
But go to the trademark registration of Livethesource, and you will see that this too, is old-style multi-level marketing:
Goods and Services … IC 035. US 100 101 102. G & S: Multi-level marketing business services; Promotion and marketing services and related consulting; Providing business marketing information. FIRST USE: 20090609. FIRST USE IN COMMERCE: 20090609 …
Is it old or new? You’ll never know! But it seems consistent with the old shell game of find the ball. In this short con, the victim is supposed to guess where the ball is hidden, but magically, only the shills win. Everyone else never finds the ball, as the shell man swiftly keeps hiding it.
So it is with multi-level marketing, a business method that is nothing more than a legalized scam, in my opinion. The owners of the company get rich, a few select individuals at the top of the pyramid make out too, and nearly everyone else loses their shirt… many never realizing that they’ve been conned in a recruiting game they can never win.
The nice people at Inline Marketing want you to think you’re being recruited into something different. They say:
Everyone is familiar with Network Marketing. Network Marketing has been one of the most popular, fastest growing distribution methods for new product entries in the past several years. This traditional business model combines direct marketing with franchising. Network marketing businesses function by recruiting distributors to sell a product while offering additional sales commissions and bonuses based on personal sales, along with those of people recruited into your down-line.
Inline marketing™ is different. At livethesource we have created a new, better way of doing business. In fact, some industry insiders refer to us as a “market disruption” company…because we have thrown out an old, outdated model for something better, much better – which is sending shock waves throughout the industry.
What exactly are they “throwing out”? Even their own trademark registrations say that they’re multi-level marketing. Why are they trying to convince you that they are something different and new, when their trademark registrations make it clear that it’s the same old MLM scheme?
Interested in more doublespeak from Livethesource and Inline Marketing? Look no further than their bait to get you to sign up. They say:
Here’s why the livethesource opportunity is so unique:
- No start up costs – It’s free to join
Free? Really? NO!
What do I get when I sign up and pay the membership fee?
When you become an entrepreneur, you begin a partnership with livethesource. Your success is our success, so the partnership is something in which livethesource invests heavily. Along with access to livethesource ‘s corporate meetings and events and training support, you will receive an entrepreneur Kit containing several sales tools and support materials to help you get started. We also have a well training customer service department and order entry available 24 hours a day for your convenience. We even have an internet site with a back office for your convenience in tracking your business growth and progress.
Oh wait. I must have misunderstood. One page said it was free to join. Yeah, it’s free to “sign up,” but you have to pay a fee if you actually want to participate.
3.24 Inventory Purchases.
No inventory purchase is required to become a LTS Entrepreneur, although LTS strongly urges the purchase of an Entrepreneur’s Kit. This Kit is the ultimate source of information about LTS, its Policies and Procedures, its Products, and its Compensation Plan Any initial purchase of products or services is made entirely at the Entrepreneur’s discretion, and this fact should be stated clearly to any potential Entrepreneur
Ah yes, the “kit.” Everyone needs a kit! And we won’t force you to buy anything. It’s your choice. But you’re a loser if you don’t. How much is it going to cost you? The “kit” that I think they’re referring to runs a cool $600, according to the first item on this list of very expensive choices. If you’re more ambitious – – and who doesn’t want to set themselves up for success?? – – you could buy the Diamond Kit for $950. Add on a few extras, and you’re easily spending a couple thousand dollars.
Multi-level marketing companies skirt the laws by telling you no purchase is required, and that no one makes commission when you sign up. They only make commission when you sell something! Well, actually, they mean someone only makes commission when you buy something. (They don’t care if you ever sell that to a customer or not!)
It’s still your choice to buy products, right? Of course! But you won’t “qualify” for any commissions unless you continually make minimum purchases (cleverly called PV or “personal volume”) or con customers into purchases from you:
Autoship is not mandatory, however, an Entrepreneur needs to maintain a PV of 108 monthly to receive commissions.
No multi-level marketing plan is complete without confusing pay structures. These pay structures continually point us back to the real focus in these companies: recruiting. The Livethesource compensation plan has lots of buzz words for each of the many parts of the pay plan: uni-level commission, generation commission, dynamic compression, executive, bronze, silver, gold, platinum, diamond, ambassador, qualified level, generation pay, leg, width, bonus pool, commission rollup.
The company is careful to tell distributors about what they can and cannot say related to income. This is always a problematic area, as recruiters seem inclined to exaggerate their earnings. So Livethesource tells you:
5.3 Income Representation.
When discussing the Compensation Plan and income potential for LTS Entrepreneurs, Entrepreneurs must:
– not disclose their own income;
– explain that Entrepreneur’s individual earnings depend solely upon their level of effort and personal commitment;
– NOT give random, hypothetical examples of what is mathematically possible, nor suggest that it is easy to attain high income levels;
– NOT make false or misleading statements about the income of the Entrepreneur or that of any other Entrepreneur, exaggerate income potential, or guarantee the success of any prospect.
Sounds great, except you will be prohibited from disclosing your own income. Initially you might think this sounds good. People won’t be enticed by the high incomes of the recruiters. But since 99% of people in multi-level marketing lose money, I suggest this clause is actually cleverly designed to prohibit potential recruits from finding out how many people are losing money in these ventures.
The company virtually assures that distributors will be focused on recruiting, by making it nearly impossible to make a living on only sales from the products:
1. Retail Profit
*Purchase products from livethesource at wholesale (20% discount); sell products to customers.
* Entrepreneur Autoship(Source Plan) receives a 25% discount.
* Entrepreneur’s Customer places an order directly with livethesource . Entrepreneur receives 20% of the retail cost of the product, exclusive of S&H charges and taxes.
With the opportunity to make only 20% or 25% on the suggested retail price of products (and that’s only if you can sell it for full retail price) you’d have to sell an enormous volume of products to make a living from sales alone. How well do you think you’ll be able to sell a multi-vitamin product that costs $65 for a 30 day supply? (Yes, that’s a cost of $2.17 per day for a multi-vitamin!) Even if you can sell it, you’d make only $15 per bottle sold. And that’s before all your business expenses!
Just to make minimum wage, you’d have to sell 1,005 bottles per year with no business expenses whatsoever. That means you’d have to find 84 people willing to buy overpriced vitamins every single month. As one person attempting face-to-face selling (with no retail location allowed, and therefore no foot traffic), how likely would that be? And since you will have business expenses, and since I assume you would prefer to make more than minimum wage, you’d have to sell quite a bit more. If you want to make $20 per hour and you have business expenses of $500 per month, you’d have to sell nearly 3,000 bottles of overpriced vitamins a year. Unlikely!!!!
Have you figured out yet exactly what this “inline” is, or how this company is different than every other multi-level marketing company out there? Me neither. It is clear as mud when the company explains:
Our company markets products through multiple channels; direct sales (direct to consumer via TV, Radio, Web, Mail), retail sales (think of stores like Costco.com, Walgreens & Rite-Aid), and network marketing sales (as described above). What makes Inline marketing™ unique and so innovative is that you (the entrepreneur) earn income from all channels, not just from the sales you make or from those in your down-line. You earn from the Inline! You can literally earn income while you sleep…as someone purchases one of our retail products at a store like Walgreens, anywhere in the country…or in the world!
Our unique, inline approach insures the viability of our company for many years to come. Additionally, each channel functions independently. Products sold by entrepreneurs are not available through retail or direct sales, nor are retail products available through our entrepreneurs. Inline marketing™ is the new standard by which all (traditional) network marketing companies will be measured.
They still give us no clue what “inline” really means. But they sure use enough MLM buzzwords like “income while you sleep” and “multiple channels” and “downline.”
And like any good and legitimate multi-level marketing company, Livethesource calls you an entrepreneur when you really are not. You are a contractor, subject to the whims of the company. You don’t even own the information on your downline:
5.15 Prohibition on Cross-Sponsoring and Recruiting – Ownership of Downline Information.
The Entrepreneur has the exclusive right to collect commissions on its downline organization. However, the names, addresses, and other personal information of an Entrepreneur’s downline Entrepreneurs is, and remains at all times, the sole and separate property of LTS with the exception of those persons personally sponsored by the Entrepreneur. An Entrepreneur may not use, or cause anyone to use, this information to recruit, solicit or otherwise induce any other Entrepreneur to, in any manner, join, participate, or enter into an agreement of any kind with any other network marketing company or direct sales company during the term of the Entrepreneur’s engagement with LTS.
You can be terminated at any time “for cause” (good luck figuring out what the company will decide is cause), and you will lose your entire business. That doesn’t sound very entrepreneurial to me.
Livethesource claims their “opportunity” is “so unique.” They cite things like free to join, work at home, income from multiple channels, financial security, and financial independence. Newsflash people…. this is the same garbage that nearly every multi-level marketing company claims they offer.
Educate yourself on the evils of multi-level marketing. It is a losing proposition for almost everyone, so I recommend you don’t waste your time or money on them. Even when new companies that claim to be different, like Livethesource and their Inline Marketing. A simple analysis of their business and their claims reveals they’re talking in circles and putting lipstick on a pig.