No, MLMs are mostly about recruiting new members into a “downline”

that supposedly pays residue income on either people they recruit (a true pyramid) or on whatever sales they generate (which is usually nothing more than a standing order for personal use or over-use).

They claim to have a “sales” component, but this is usually downplayed considerably.

Direct selling – what I do for my sales organization, is totally and completely different, since I don’t recruit, I get paid a salary (plus benefits) and get paid commissions on all business that I generate for the company. This is legitimate selling, not the BS you find in MLM organizations (where you are an IBO – independent business owner, even though the onerous rules and other limitations put on the IBO by the parent organization really eliminates any sense that a person is able to run their own business).

I’m not sure what Mick was trying to accomplish with that post

It really didn’t answer your questions. I’ll give it a go:
MLM is a short expression for “multi-level marketing.” In multi-level marketing, people are recruited into a sales structure that relies on recruiting to generate income. In other words, a portion of the sales generated by the people you recruit goes up the ladder to you and to those above you who are in the recruiting line to which you belong.
These are called “uplines” and “downlines.”

In order for MLM to be MLM, recruiting by participants must happen. There would be no uplines or downlines if the parent company was doing all the recruiting. Most traditional businesses operate this way, and it’s one of the primary distinctions one can draw between MLM and traditional business models.

One of the major problems with the MLM model is that it adds expense to a product whether or not the person(s) being paid added any value to the transaction. If you are the 10th person in a line of sponsorship, everyone in that line gets a portion of any sale, even though they had nothing to do with the transaction.

This is also a major distinction between MLM and traditional business. In a traditional business, every step a product takes from manufacturing to end sale is a “value added step.” The manufacturing is (obviously) necessary, the transportation and handling of the product to get it to a distribution warehouse is necessary. The wholesaling and transportation of the product to a retail outlet is necessary, and the sale of the product to the customer is necessary.
Everyone who participates in each of these steps is adding value to the product, and (at least in theory) is paid for it. (I have a few issues with companies like WalMart for minimizing the pay of people who add value to their products.)

Now, to make an extremely long post a little shorter, you’ll NEVER feel like you’re in a cult if you are in one. The leaders give you reasons and illustrations that deny a cult-ish connection. When I was in MLM, they used to say, “Oh, you mean you’re in a cult if you do everything the leader tells you to do? Well, I’ll tell you, no one in MY forum does everything I tell them to do. So we can’t be a cult.”

That’s a smokescreen. Cults are not defined by “the members do everything the leader tell them to do.” It’s not a cult if you go about town with a glassy stare and chanting.

Cults are defined by control techniques, usually contrived to keep you involved in them:

If they strongly discourage contact with outside news or criticism about them, it might be a cult.

If they seek to discredit or mock critics and make a member feel guilty for criticizing the forum or considering quitting it, it might be a cult.

If they try to separate a member from family or friends, it might be a cult.

I think I’m starting to sound like Jeff Foxworthy, so I’ll stop here.

There are web sites that describe cults and organizations that come close to being cults. And some of those sites offer information about how to deal with exiting and cult or dealing with family members who are involved in them. Many of the traits that are described by experts on cults and cult-ish behavior can be found in motivational organizations associated with MLM.

Finally, let me be clear: Being involved in an MLM does not necessarily mean you are involved in a cult. It’s the methods the organizations use to get you involved and what they do to keep you involved that defines it.

With MLM, very few participants make money, and money is a huge motivator. If you are making money in MLM, you’ll stay in MLM. The existence of motivational organizations associated with MLM should be a clue about how much money you’re likely to make in MLM and how they’ll keep you involved if you’re not making money.

MLM may not be a cult, but it is often very cult-ish.

And one post-script: There must (MUST!!) be a definable product or service being retailed in order for any sales organization to be legitimate. Those sales must (MUST!!) be made to people who are not involved in the money-making side of the business. In other words, the customers cannot (CANNOT!) be purchasing products in order to meet quotas or to generate volume points. It must (MUST!!) be genuine retailing.

The movement of money through an organization without the presence of outside customers is a HUGE RED FLAG for a pyramid scheme.
Motivational organizations often sell books and audio products to participants, and these materials have no resale value outside the organization. It is these kinds of sales, and the frequent secrecy of the profits made in them, that are the basis of “pyramid scheme” accusations. That’s much of the reason you’ll find these materials being sold on eBay at a fraction of their original price. No value is you’re not involved.

Hope that helps.

It is?

So any type of direct sales is considered MLM? Or where there is recruiting involved? People on this site keep talking about MLMs being cult-like and I truly don’t feel like I am in a cult. I tried reading the files but they didn’t make any sense to me.

Hello everyone!!

I am a newbie here and just trying to gain some info. I am neither pro or anti MLM until I fully understand what MLM is. So what exactly is the definition of MLM? Is it the same as a pyramid scheme? Could someone enlighten me. I know that I could do a search in archived messages but I am at work and really don’t have time right now. Thanks in advance for answering my questions!!

What is MLM?

I have read alot of the messages posted but have missed the plot. What is MLM? could someone define this for me.

But they may not realize it because

“it worked for me!” Yeah, it did, but there was a large element of luck, specifically that the population did not run out of people willing to buy the sales kit while they were on their way up. (The sales kit is given all kinds of names and all kinds of rationale.)

We should start out matter-of-fact, and then from there, sometimes anger is appropriate.

That’s not what we want, is it?

Mick, to a degree, I think you’re correct. We don’t want to be feeding trolls.
OTOH, could an angry response be considered food for a troll? If trolls enter a forum seeking to cause upset, and the forum responds angrily, doesn’t that validate the troll’s tactic and reward the effort?
And what about lurkers and pro-MLMers who read this board and see how we react to a contrary opinion, or to those who seek to mislead the forum – or out-and-out lie to us? Does it reflect well on the forum to react with anger? Or do we simply justify all the criticisms that are leveled on ex-MLMers as “bitter” and “unable to get over it?”
Don’t get me wrong, Mick, I’m NOT saying you’re wrong for pointing out lies and discrepancies. I welcome that. That’s much of the purpose of this forum: calling out the liars and hypocrites that permeate the MLM industry.
I’m not condemning anything. I’m questioning the way we respond to those who may be “future survivors,” in need of a forum such as this one some day. Remember that people involved in MLM frequently tell lies because tactics such as those are taught and encouraged in MLM.
(Remember the “Curiosity Approach?”) Whether she was lying or parroting, Carrie will leave the forum feeling that her visit here validated her involvement in MLM.

Don’t feed the troll is a good motto

with respect to all – and with the understanding that this is PW’s sandbox and he sets the rules and I will stick to them…

This is the wrong way to handle trolls. Allowing them into any forum – especially survivors forums – is to guarantee upset.

The analogy you used in this example is not close to what happened – it would be better described as someone coming to an AA meeting and asking what alcohol is while owning a business selling it.

It is not at all that I would not wish to be polite to someone who is asking for help or, even just asking. As long as it is done honestly. This Carrie lied – pure and simple. She was asking a false question to set up people to respond, a classic trolling tactic.

I think Paine has a very good point here

If you used the analogy of a heavy drinker going into an AA meeting just to `check it out’ and hopefully convince themselves that they do not have a problem, how would the counselor and forum handle it? I would expect that the drinker would likely begin to argue his/her cause and try to convince the forum that although THEY have a problem HE/SHE doesn’t. I wouldn’t think that the forum would begin to belittle, deride or be abusive to the drinker. On the other hand if after a couple of meetings the drinker turns out to be a salesperson for a Vodka distillery and is trying to convince the forum that his/her product is non-addictive and therefore safe for the forum I would think he/she would be expelled from the forum. Paine is right. We should be more patient and gentle with the drones (but always on guard for motives) because most of us here have already walked in those shoes.
Maybe we should save our outrage and loathing for those that really deserve it. Those at the top of these pyramids who are destroying lives and families.

Some MLMs deny that they’re MLMs

Should it be any wonder that people would come here asking if their company is an MLM? Should it be any wonder that people would come here denying that their company is an MLM and asking why they are being accused of being in one?

Many people don’t understand pyramid schemes. Is it any wonder that people fall for them? Is it any mystery that people would inquire about pyramid schemes and their relationship/similarity to MLM?

For as many years as some of us have been here, we should not assume that new members know what we know. If common knowledge were common, everyone would have it.

I ask that you consider this, and consider the likely results of treating MLMers in a spiteful way. After all, they may be “survivors” one day, and if they cannot come here (because of the way they were treated while they were believers), where will they go?

Here’s a PW rule of thumb. Take it for what you can:

If I allow a borderline pro-MLM post into the group, the odds are good that I believe something good can come of a serious discussion about its content. Not about the author of the post but the CONTENT of the post.


What do we want the purpose of this club to be? Do we want it to be a haven for people who endured the MLM experience and are now trying to deal with the thoughts they believed to be true, only to find out they were manipulated and abused? Or do we want to keep it closed to anyone who doesn’t think as we do right now, even if they might come around later?

The answers to these questions are important, as they denote, at least to me, how long this blog will be necessary. Carrie didn’t start anything. She simply behaved in a way that is consistent with MLM teaching. Now I don’t know how much credibility we can salvage with her or other MLMers who may be harboring doubts and come here for help.

We need more patience, I believe. A lot more. I spend a fair amount of time deciding how to handle posts that come into the moderator’s queue – whether to delete or allow posts, whether or not to communicate with MLMers who sound sincere but have violated our rules by posting links to their MLMs along with glowing words about their opportunity, whether or not to allow members to post without moderation or be removed and banned from the forum.

I’m not sure where to begin with the way this conversation has progressed

I’m going to state some opinions of mine, hopefully avoiding any offense, and see if we can find a new perspective:

We suspect, but don’t know FOR SURE, that this Carrie is the same one involved in MLM. The signs are there, but it’s not a sure thing.

But EVEN IF SHE IS, I think we may be causing more harm than good in handling her the way this forum has, at least in this case.

Okay, so let’s make an assumption: This IS the same Carrie. She’s involved in MLM and for some reason didn’t want to reveal that in her recent first post.

How many of us hid our MLM connections when we were out recruiting for our businesses? How many of us suspected that there may be something wrong, if not with the MLM model itself, then with the general perception of MLM, and hid that part of it while promoting our products or our opportunity?

In many cases, it’s even TAUGHT that way: “Don’t tell your prospects too quickly what it is, since they’re likely to have ill-conceived notions about it.”

So Carrie comes in here asking questions that are, superficially, innocent, but at the same time, could lead to answers that may cause doubts about the legitimacy of MLM. But the way she was treated, I doubt she’ll believe anything we say or come back when she finally is convinced of the false promise of MLM and quits.

Her “trolling” behavior is TAUGHT by MLM leaders, and we just offered concrete evidence of being “bitter losers.”

Guys, we can do a lot better. But to do that, we need to rely on our experience and knowledge, and not so much on knee-jerk emotions.

There was no implied response or directive in the post

I think it should be worthy of mention here when significant A/Q leaders pass.

You wouldn’t want this board to ignore it if Yager or Britt or Winters of many of the other leaders passed on. We’ve had SO many “Whatever happened to…” posts here, that this obit satisfies a curiosity that we know exists here.

You may want to notice that other than your question (comment?), there’s been no response to the obituary. People here just don’t have that much to say about Halsey. And I think that’s the way you’d prefer it.

I can’t see the light at the end of the tunnel!!

Oh help me stay strong…some of you may remember my story. My son (now 21) involved with Quixtar for over 3 1/2 years now. Alienating everyone including us. Spending hundreds maybe thousands of dollars on WWDB, his AMO of choice, so where can i borrow money?! He is so brain washed I can’t believe it! He now lives on his own, works full time and still doesn’t have a nickel to his name. Well, we had another run in tonight because I wouldn’t give him money. He has overdrawn his bank account again, bounced a bunch of checks. But he has lots of special oxygenated water to drink (the newest Quixtar fad). I wish I could get through to him. I wish I could stop screaming at him! Why is it taking so long for him to get it?

I never said any of that

I am not here to recuit. I am just here to get the other side of the story. On any issue, there are those that are for and those that are against. I have been listening to those that are for MLM’s and wanted to here from those who are against MLM’s. I did not come here to change anyones opinion, as if that could happen anyway. I also did not say that I have found one that works. I have made a little money in the one I am in, but only time will tell if I make anymore.
While, I do disagree that all MLM’s are bad, I am not here to convince anyone of that.
For example, I did not know that Avon was considered an MLM. My wife is an Avon rep. She has been for 3 years. She has not one time recruited anyone else to sell Avon. She signed up to sell Avon because she used their products regularly, and here Avon lady moved out of state. She does not make a lot of money at it, (partly because she buys a lot of product for her personal use).
This is the reason I did not want to say which MLM I work. I knew I would be accused of attempting to recruit.

Well, perhaps you need to look at it a different way

Why use an MLM structure? It offers no benefits at all in terms of distribution of course – you “reps” aint involved in any of that, all you doing is sign people up for a utility. Why not just have it as a straight commission basis? Why have people pay a joining fee?
Why have them pay for a “web site” ? This makes no sense at all.

An MLM structure only favors those who are closer to the top – it does not serve your average “rep”. In fact your average rep pays off those above im with his joining fee and then pays every month by sharing the bulk of the profit from the customer with those above him. In fact the return to the salesman for the direct customer is what? 25c? The rest of the profit goes up the food chain.

Only someone who does not understand supply chain management would ever think that this is good way to operate. It is not.

As Hal is fond of pointing out – the only function for the bottom of the pyramid in these schemes is to funnel money up the chain.

Only a complete fool would somehow believe that increasing the amount of middlemen in a chain is somehow going to result in everyone making money.

It won’t.

And, if you get the figures from Ignite you will find exactly that.

Methinks you will have to do a better job at convincing us

Reading your reply *screams* that you are making it up. You seem to forget that we see a lot of Waynes on this list, who write the same sort of emails. It must be something that you MLM trains you in….

Why is that you have joined this forum? To tell us that you have a MLM that “works”? Or just to convince yourself that you have done the right thing….

The general advice of the forum is “Don’t do MLM”. If you wish to argue this with us, I’m sure there are plenty of other forums for you to recruit on…

I’m glad you had time to look into all this

I didn’t feel like going too deep in this one (like I said, just not the time to take care of it right now) It did get me to thinking of a possible way one may market a service if it is intended as a low level income for those involved that might work, and I was thinking they might be doing that.

If it’s a true MLM, though, they won’t go Chapter Eleven. They’ll just find a way to milk the lower level for more income.

I wasn’t going to go into the full story on that, but it is true. They set a fair price and felt it was dishonest to give one person one price and another person another price, so they’d stick to the stated price.
At first people hated it, since they couldn’t dicker and felt cheated, but then after a while they realized they would never go in and pay one price and later hear of someone else paying less, and people began to like that kind of dependability.

I missed this — I *must* have been half asleep when I read his post. I don’t even remember reading that. I definitely would have had something to say about it if I had read it.

I think he’s dealing with front-loading, where they want him to make money up front so he stays in longer. I don’t think he’s lying — at least not consciously, but I’ll remind everyone: You haven’t made the money until you’ve cashed the check and it’s in your pocket — and even then, sometimes, the check can still bounce and you’ll need to cover it. I’ve had it happen and I’m sure anyone who has run a business has seen it at least once.

Good luck

The whole premise of MLM is that a few will make tons of money off the many. It is designed to work against the average person. If it were really so easy to make money from it, then everyone who signed up for an MLM company would be rolling in cash. The reality is that most people never make any real money from it. The scheme is to get as many contacts out of the person before they throw in the towel.

I was involved in ACN for about 4 years. I worked hard. I went to every weekly, monthly and quarterly training session. I sponsored people into the business and got down a few levels. My monthly residual check even got close to $100. I made some bonuses but I figure I spent about 4 times as much as I made.

The people who make it big have shark personalities and they make it big by feeding off the rest of us.

Im just wondering

At all of the presentations they say how much they’ve made and what they are worth etc etc and always say exactly how I or anyone can get there. But is it really possible without knowing a bunch of people that are already into the same thing?

Is the general public looking for and would listen to little ole me?
I’ve looked into primerica and another one called ACN and doing one called TBA. The thing that strikes me as funny and interesting is that with tba my “sponsor” has called me every month “reminding” me to do the monthly payment. And i mean calls about 5 or 6 times reminding me. So that threw up some red flags with me.

Any thoughts ideas comments?