re: MLM scams

[boost]

so my girlfriend is trying to find a job in chicago because shes going to be staying here for the summer. She just was telling me on skype about how shes going to sell makeup on the side or as her main job if it works out/she cant find another job. She explained that her friend has been doing it and that she would hook her up and show her the ropes. This triggered a reg flag in my head right away and I started to casually ask more about it. She goes on to tell me that its cool because her friend will get a bonus from the company for getting her onboard. I say "so she gets a cut of what you make" -- "well no, the company just gives her a bonus" -- "and that bonus comes from where? thin air?"

Anyways she started to get kinda defensive so I feigned defeat and went on to do some research. I found lots of sites explaining this company as a pyramid scheme and read some really sad stories about women getting way too deep in their inventory because of pressure from above to push product. So after reading a ton I link my girlfriend to a few sites and have her read them. At first see seemed non-receptive but the more she read I think she realized that I was really just looking out for her and that this was indeed a scam. Obviously shes not going to do it now.

Heres the problem though, one of the companies I saw discussed as a MLM ( multi level marketing scheme) was Melaleuca, a company of which my mom uses the productsand receives packages from on the regular. Im still reading up on this stuff and it seems like a milder scam than the mary kay make up scam that my gf was almost sucked into. But none the less there are some strange rules regarding minimum orders and membership fees. I think Im going to read more and then confront/ask my mom about this stuff. I was wondering though if anyone had any experience with this stuff or anything like it.

[Galapogos]

They're all scams in the sense that they are just set up to reward the people who started it obviously. But people actually can make a living doing these things. Some are setup more "scammy" than others. If the only reasonable way the salesperson can make decent profit is by recruiting others then it's a bad one because the pool of recruits will dry up.

Then there's some that are pretty legit MLMs. It all depends on their business plan. If the money is coming from the products then it's pretty good. But still not a great job because that door to door sales style sucks imo. Too many band class fundraisers in my past.

[boost]

ah cool. Well then from what Ive read I think the melaleuca one is a "good" one. But still Im gonna talk to my mom and make sure shes not selling them and whatnot. I dont think thats the case but still to order from them there are minimum orders and Ive seen an abundance of their products around our house that certainly are not getting used as fast as they are coming in. So ya... scary stuff either way.

[jdubs]

My wife is in one of these: Nuskin

I too got interested and looked into it online, and there seems to be different levels of "scamminess" in the different MLMs. The one my wife works in is pretty huge and does a ton of business selling these products. She has to sit in on all these "team calls" , that are like motivational, instructional calls- telling them how to sell the program over the hpone mostly. Supposedly her coach makes pretty decent bread, but my wife has to make many calls a day ( not completely cold calls, but almost), and still hasnt gotten 1 person to sign up , after working in it for 4-5 months. She somehow is still motivated to try, so I gotta give her credit for that! I am pretty sceptical, obv, still about the whole thing. It seems to me like mostly a way to make a little extra $ , but not very many people are able to do it as their sole job. anyways thats my experience.

[Pythonic]

Boost - Sign her up for Vector, lol

[boost]

I remember there was an episode of king of the hill in which peggy got involved in one of these selling energy bars or something, she ends up recruiting bill. It was a really funny episode imo.

[Andrew]

There's a difference between a multi-level-marketing company and a pyramid scheme (a term which really doesn't fit).

Multi-Level companies are out there to provide someone with a product or service. In fact if I remember rightly Sprint Mobile began as a MLM phone company before they broke into the market. MLMs are set up so that if you recruit a person into the company you get a a bonus as well as a bonus when they provide someone with products.

However the Pyramid Schemes (the true scams) are based on self consumption. Each "agent" is required to buy the products provided and they make more money brining people into the company than they do for selling their goods. This company is only focused on you bringing in new people so they can bring in new people so that......without actually providing a proper product/service.

A MLM be a good career if you're good at it. A "Pyramid" is all about making money by having your recruits spend money.

[jdubs]

interesting, I read where just about all MLMs are actually pyramid things now, so your post goes against that idea. For example my wife is in an MLM, but has to buy a certain amount of "personal volume" every month to keep her "executive" status. And her job seems to be to get more people "into the business" , not selling the products that they make. This sounds like a pyramid to me, but look up MLM on google and all these companies pop up as MLMs. Maybe MLM is the new credible sounding term for pyramid.

[Andrew]

interesting, I read where just about all MLMs are actually pyramid things now, so your post goes against that idea. For example my wife is in an MLM, but has to buy a certain amount of "personal volume" every month to keep her "executive" status. And her job seems to be to get more people "into the business" , not selling the products that they make. This sounds like a pyramid to me, but look up MLM on google and all these companies pop up as MLMs. Maybe MLM is the new credible sounding term for pyramid.

The bold part is the important part. A true MLM (one that is actually focused on being a business) will say that your wife has to sell a certain amount of volume in order to maintain her status. It's the "personal volume" which means what she is in is more Pyramid than MLM. They are not interested in getting their products out there, but instead interested in self-generated money for the people at the top.

However there are some MLMs which shade the law/this area by being easier if you self-produce. Mary Kay is sometimes like this but they ARE about getting out there and selling.

To make it easier to follow if they constantly talk about self-selling rather than looking for clients, stay away. However MLMs are all painted with the same brush (especially on the internet) and there are some good ones to be in. And don't always listen to what's said on the net