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.

BIG QUESTIONS:

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.