One of the biggest Ponzi Schemes in U.S History & MLM Talk

lukep said:
You know, I don't always look for evidence of US Court Cases on Blogspot blogs, but when I do, I look for it on Indian blogspot blogs. :thumbsup:

Lulz... But even if this was precisely true, so what?

As I explained above, my wife and I have an herbalife membership to get their products cheap for ourselves. Would we count as the 4% in that statistic?

I think you're letting your experience with a few bad apple MLMs paint your picture of all MLMs... Some have withstood the test of time, bro.



Bizness as usual in the land of the lawsuit.
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Herbalife might be a good product, but I wouldn't know because I haven't tried it. However most MLMs do not make money from products. They make money via recruiting people. The entire industry is fucking slimy and worse than anything the rebill people do.

I wrote the algo for one of the first single leg force matrix MLMs.
 


lukep said:
You know, I don't always look for evidence of US Court Cases on Blogspot blogs, but when I do, I look for it on Indian blogspot blogs. :thumbsup:

Lulz... But even if this was precisely true, so what?

As I explained above, my wife and I have an herbalife membership to get their products cheap for ourselves. Would we count as the 4% in that statistic?

I think you're letting your experience with a few bad apple MLMs paint your picture of all MLMs... Some have withstood the test of time, bro.



Bizness as usual in the land of the lawsuit.
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Governments and Bankers have stood the test of time also. I'm talking about Amway, not Herbalife. What exactly is your point?
 
crackp0t said:
Herbalife might be a good product, but I wouldn't know because I haven't tried it. However most MLMs do not make money from products. They make money via recruiting people. The entire industry is fucking slimy and worse than anything the rebill people do.
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MLMs certainly do tend to pull the slimeballs out of the woodwork... I totally know what you mean.

There are some decent ones run by decent ppl though; they are just few and far between.


bodiddley said:
Governments and Bankers have stood the test of time also. I'm talking about Amway, not Herbalife. What exactly is your point?
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It was an example of how the 4% 'legit customers' scenario isn't really just 4% customers.
 
Have you guys heard of organogold?

I guess it is then similar business as in the OP. People have to pay $500 - $2k to even be bale to earn money and they only make money by referrals then. One of my friend makes a stable 3k - 5k a month by referring people, but still, it's bullshit.
 
rollo_cinema.gif
 
Step 1: Buy wholesale overpriced fruit juice
Step 2: wait
Step 3: wait
Step 4: Sell overpriced wine at cost
Step 5: No profit.
 
One of my girl crushes invited me for a "date" so I went along with her. Turns out that our "date" was an MLM recruitment meeting. I was too ashamed and embarrassed to say no and run away, so I spent the next 4 hours listening to some boring talk about how I can achieve financial security by recruiting my friends. The speaker said that I don't even have to sell their shitty products to earn money; all I have to do is to recruit my friends to join the MLM and make a "small" investment.

Their products are shitty but expensive. Like 3-5x more expensive than in stores. Of course, they include some ridiculous and unproven benefits like anti-cancer, anti-colds, whatever. Needless to say, I never came back and I unfriended her on Facebook. LOL
 
Using MLM to sell products instantly turns your company into scum regardless of the quality of your product.

However, there are definitely people making a lot of money in MLMs.

Primerica is one that a few of my friends are apart of. They talk a big game and proclaim they make $1000000000000 a year but over the last couple years, I've determined the harder working guys (of my friends) are making around 40-60k/yr.

The minute someone tries to sell me on MLM I act like a major dick to them until they stop trying to sell me. I immediately de-friend my friends that join that shit to show them how they are about to ruin their entire network of friends and family with that BS.

My biggest problem with MLM is the incentives are built on recruitment which foster a business model build on show-boating and lieing. I do not believe a work out of someones mouth in MLM and that includes the post above with the screenshot
 
Well, truth be told, a ponzi scheme is preferable to a pyramid scheme. A ponzi scheme doesn't make the victims lose anything but their cash, a pyramid scheme makes victims lose their cash, friends, family and self-respect.

Ponzis can go on for a while too as evidenced by Bernie Maddof and fiat money.

I really don't understand why people get taken by MLM, but my understanding is that it's primarily people of lesser intelligence and middle aged women that are the target group. After all, women do spend thousands on worthless anti aging creams.
 
crackp0t said:
Do I have something to share? Why yes, yes I do!

I didn't read your entire post, because frankly I think people who buy into MLMs are semi-retarded and should probably be prevented from reproducing.

I wrote MLM software for a while and I'll tell you no one ever made money via the product. The product is just there to make it legal. The real money is in the referrals. If you can't run conf calls and be a hype man that can make flava flav look like an amateur then you won't be any good.

I once had an MLM person tell me "You're not thinking like an MLMer. You're thinking logically!".

I have mlmers and OP you're probably retarded.
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Not really. In MLM world the money "from referrals" is actually money from sales.

Look at it this way (outside of MLM world):

Lets say you are web designer, you provide design for $1000.
You have a friend John and say to him - hey buddy, help me find a client, I will pay you 20%.
John could not find a client, but has a friend Peter and says to him - hey, help me find a client for web design service, I will pay you $100 if you do.

Peter finds the client, client pays you 1000, you pay John 200, John pays 100 to Peter.
Product is sold, people who marketed it split the commission.
Everybody is happy, nobody is "stupid" for participating.

All money came from the actual sale, not "from referrals".

Honest MLM is as simple as that.

People do not understand this core principle, they mix it up with shady shemes etc and talk shit about MLM in general, while it is just another very normal and good sales strategy.
 
blureach said:
Using MLM to sell products instantly turns your company into scum regardless of the quality of your product.
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There is a good quote:

Expert said:
mlm is just multi tiered am
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You can have a product and sell it via affiliate model.
You can have a product and sell it via MLM model.

It does not make you any worse if you chose MLM, because it is the same affiliate model just with part of commissions getting split through more levels.

But the person who makes the same makes the most money.

Many affiliate programs have 2nd tier reff. program where you can refer other people. You get some small % of their sales and they get their whole commission, same way if you had not referred them.

There is nothing wrong with that.


Problem is with shady MLM tactics, not with MLM in general.
 
super said:
Not really. In MLM world the money "from referrals" is actually money from sales.

Look at it this way (outside of MLM world):

Lets say you are web designer, you provide design for $1000.
You have a friend John and say to him - hey buddy, help me find a client, I will pay you 20%.
John could not find a client, but has a friend Peter and says to him - hey, help me find a client for web design service, I will pay you $100 if you do.

Peter finds the client, client pays you 1000, you pay John 200, John pays 100 to Peter.
Product is sold, people who marketed it split the commission.
Everybody is happy, nobody is "stupid" for participating.

All money came from the actual sale, not "from referrals".
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What? No. The only reason the vast majority of MLM companies sell product(s) is because the law requires them to do so. It's illegal for them to sell just memberships, and give commissions based on referrals. You need to provide some type of product or service. That's why lots of them just offer retarded shit, like $2/month hosting. MLM companies sell due to their compensation plans, not their products.

Reminds me of a potential from ages ago. He had this huge, complex compensation plan all mapped out in his mind. Some triple diamond shaped reversing matrix, or some shit, I can't remember. Took him about 30 mins to explain it to me over the phone though. He was all enthusiastic about it, absolutely certain this idea was going to make him a millionaire.

Then I asked what (if any) product he's selling. He goes silent for a few seconds, then his answer was pure gold. "I'm not sure. My wife breeds poodles, so I was thinking we could maybe sell those".

That was the last time I talked to him.
 
Oh, and the ones that did the best in this space are those who took advantage of the NINJA loans, and setup fast growing organizations with comp plans around them. Wouldn't call them MLM per-se, as it was more structured than that.

Those guys made a tidy profit though.
 
Kiopa_Matt said:
What? No. The only reason the vast majority of MLM companies sell product(s) is because the law requires them to do so. It's illegal for them to sell just memberships, and give commissions based on referrals. You need to provide some type of product or service. That's why lots of them just offer retarded shit, like $2/month hosting. MLM companies sell due to their compensation plans, not their products.

Reminds me of a potential from ages ago. He had this huge, complex compensation plan all mapped out in his mind. Some triple diamond shaped reversing matrix, or some shit, I can't remember. Took him about 30 mins to explain it to me over the phone though. He was all enthusiastic about it, absolutely certain this idea was going to make him a millionaire.

Then I asked what (if any) product he's selling. He goes silent for a few seconds, then his answer was pure gold. "I'm not sure. My wife breeds poodles, so I was thinking we could maybe sell those".

That was the last time I talked to him.
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Those are shady companies. I am talking about genuine product and genuine scheme.

If you agree that selling your product through affiliate model is ok, than it is ok to sell it through MLM.
The only difference is that with affiliate model you pay 20% (example) commission to the one who made a sale for you and with MLM model you also pay 20% (oir whatever) to the one who made a sale for you plus you pay few more percents to the ones who referred that "affiliate" (so basically multi tiered affiliate model).
Commissions comes from the sale. Plus a small percentage of commisions from your referrals.

Most of the affiliate programs have 2nd tier referral program (you can refer people and get part of their income). What is wrong with it?
So genuine MLM is set up the same, just instead of having 2 tiers, it has unlimited tiers.

And I agree that genuine MLM schemes are minority, but why discredit it as a whole if it is possible to easily set up genuine MLM sales channel for your product?

Imagine that same example - you sell design services. You get first level "affiliate", he gest second level affiliate and so on. Then when someone makes the sale he gets the commission from the sale + plus some income tickles up the ladder for referrals. But ALL income is generated from the sale - those $200 out of $1000 design service sale goes to affiliates/mlmer and $800 goes to you as a designer.
Where is the shadiness here?

So what you are saying is that most MLM companies are shady - I agree.
What I am saying is: if you want you can set up genuine MLM sales channel for your genuine product.
In that model - you do not pay anything for just referrals, you only pay when actual sale is made (distribute the commissions through the tiers). You also do not make referred people buy anything in order to join.
 
Back in the day, I've setup the back-end for hundreds or even thousands of smallish MLM companies. Trust me, vast majority are all bullshit.

The multi-level, but unlimited width of levels isn't generally known as MLM. It's known as a "multi-tiered direct / network marketing" program. MLMs are generally pyramid shaped (ie. forced matrix), so say 3x5 matrix. First 3 people you recruit are on your 1st level, then the next guy is bumped down to your 2nd level under one of your first 3 recruits.

Then of course, there's recycling, reversing, split level matrixes, and tons of other really retarded shit. Point is, these companies entice new members with their comp plans, not their products. "All you need is 3 recruits, and shortly after will have an organization of 850,000 people, all kicking up a commission to you!" type of bullshit. Or the "signup under me, and the spillover from all my recruits will get credited to you!" line.

That, and the entire MLM industry in general has its head in the clouds. There's nothing tangible there. It's all just hype, hype, hype... nobody ever steps back and bothers to setup a real business. It's just a bunch of lemmings running around trying to sell each other intangible dreams.

Not saying you can't make good coin off MLM if you're a good bullshitter and manage to put yourself at "guru" status so you can speak at conferences, and sell courses full of pure bullshit for $1997, but just saying... it's not real.

Trust me, I was setting up MLM back-ends for over 5 years, day-in, day-out.
 
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