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So, after watching Penn and Teller do a show on MLM and researching one of their guests, I decided to create a post on what I consider to be one of the new evils of our generation.
Multi-Level Marketing is a business model that sells products as well as businesses. Essentially, everyone starts on the bottom level, and as they recruit people, they raise up the rankings and earn more money.
While technically a pyramid scheme, MLMs escape instant legal action because they do sell a product, albeit how devalued it may be.
Read this article by Robert Fitzpratrick on his opinion of MLM, crafted through years of experience and research: http://www.falseprofits.com/MLM Lies.html
So, why am I concerned: I've seen it happened first hand.
My first encounter with MLM was Quixtar and Vector. Vector, which owns and runs CutCo, HEAVILY recruits college students with the promise of easy work, high pay (citing $14 an hour starting), and requiring no experience whatsoever.
One of my more annoyed points from Vector was how they dupe broke college students to spend time, money, and energy on a wasted trip. One of my friends actually got duped for this. First, he had to call everyone he knew and perform a demonstration. The demo was him showing off high-end, high-quality knives. Once the demo ended, my parents, who allowed the demo to humor him, decided they didn't want the items he sold. My friend was undaunted and offered me a position with the company. Being naive, I did no research before agreeing at that second. Once he left, I really probed the company and found they rarely, if ever, actually PAID the consultants, and the consultants were forced to buy a demo kit of $500. When I questioned the "hiring manager" about this, he said "you have to spend money to make money." I declined. A year later, once my friend quit, he stated he never received any money from his sales except for his demo knives that he managed to sell for the same price he wasted.
I've known at least 3 or 4 other people duped into the the same scheme solely because it promised easy money in a tough time. Shortly after this incident, another person introduced me to Quixtar.
While at a book store, a friend and I ran into a girl who we went to school with, but who rarely spoke to us. She stated her brother just started an internet company and was looking for people to hire. I was eager for a new job, and I accepted the offer (as did my friend). I had the first interview at a coffee shop, which was odd, and within seconds, I lost interest.
What she presented was Quixtar, which essentially is an online webstore that sells groceries and the like, I think. The actual store was de-emphasized heavily. She explained the importance of recruiting, drawing a pyramid because Quixtar (formerly Amway) was forced to do that by Congress, and how earning potential was limitless. Not knowing much about economics, I didn't argue and just seethed. Once I left, her brother called to hype it some more, explaining that you will be paid once you meet a quota, but in order to see if you met the quota, you had to pay. I didn't understand it either, did my research, and when she called back, explained how it was investigated repeatedly for scams.
In closing, I just want to make this post as an awareness thread for these impossible business models. Every day, they dupe teens, college students, and college grads to fall for it and pay them while they fail.
Has anyone had any MLM experience?
Multi-Level Marketing is a business model that sells products as well as businesses. Essentially, everyone starts on the bottom level, and as they recruit people, they raise up the rankings and earn more money.
While technically a pyramid scheme, MLMs escape instant legal action because they do sell a product, albeit how devalued it may be.
Read this article by Robert Fitzpratrick on his opinion of MLM, crafted through years of experience and research: http://www.falseprofits.com/MLM Lies.html
So, why am I concerned: I've seen it happened first hand.
My first encounter with MLM was Quixtar and Vector. Vector, which owns and runs CutCo, HEAVILY recruits college students with the promise of easy work, high pay (citing $14 an hour starting), and requiring no experience whatsoever.
One of my more annoyed points from Vector was how they dupe broke college students to spend time, money, and energy on a wasted trip. One of my friends actually got duped for this. First, he had to call everyone he knew and perform a demonstration. The demo was him showing off high-end, high-quality knives. Once the demo ended, my parents, who allowed the demo to humor him, decided they didn't want the items he sold. My friend was undaunted and offered me a position with the company. Being naive, I did no research before agreeing at that second. Once he left, I really probed the company and found they rarely, if ever, actually PAID the consultants, and the consultants were forced to buy a demo kit of $500. When I questioned the "hiring manager" about this, he said "you have to spend money to make money." I declined. A year later, once my friend quit, he stated he never received any money from his sales except for his demo knives that he managed to sell for the same price he wasted.
I've known at least 3 or 4 other people duped into the the same scheme solely because it promised easy money in a tough time. Shortly after this incident, another person introduced me to Quixtar.
While at a book store, a friend and I ran into a girl who we went to school with, but who rarely spoke to us. She stated her brother just started an internet company and was looking for people to hire. I was eager for a new job, and I accepted the offer (as did my friend). I had the first interview at a coffee shop, which was odd, and within seconds, I lost interest.
What she presented was Quixtar, which essentially is an online webstore that sells groceries and the like, I think. The actual store was de-emphasized heavily. She explained the importance of recruiting, drawing a pyramid because Quixtar (formerly Amway) was forced to do that by Congress, and how earning potential was limitless. Not knowing much about economics, I didn't argue and just seethed. Once I left, her brother called to hype it some more, explaining that you will be paid once you meet a quota, but in order to see if you met the quota, you had to pay. I didn't understand it either, did my research, and when she called back, explained how it was investigated repeatedly for scams.
In closing, I just want to make this post as an awareness thread for these impossible business models. Every day, they dupe teens, college students, and college grads to fall for it and pay them while they fail.
Has anyone had any MLM experience?