MLM Articles

Potential Questions and Objections
Don�t automatically assume your prospect is going to have a negative perception of MLM and that you have to defend network marketing. It is best to ask questions in response to their questions so you learn, figure out, where they are coming from.
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Multi-level Marketing
In very simple terms, Multi-level Marketing (MLM) is spending more time on making your customers SELL for you rather than BUY from you! It is the art of turning your customers into your trusted brand ambassadors, i.e. your sellers.
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How To Write A Well-Themed MLM Article
How To Write A Well-Themed MLM Article

Needed: A More Proactive Approach to Enforcement of Laws Against Pyramid Schemes as Applied to MLM�s
One of the insidious features of many MLM�s is that promoters often aggressively harvest the rewards from building their pyramids and disappear before enforcement agencies can catch up with them.
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Types of MLM Compensation Systems
A frequent argument of MLM promoters is that while they may agree that there are problems in the MLM industry, each will claim they have solved the problems with their new brand of MLM compensation system, which is supposedly more fair, honest, generous, etc., than all the others.
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Naked Pyramid Scheme vs. Product-Based Pyramid Scheme
To distinguish between typical pyramid schemes and those masking as MLM�s, I will introduce two terms that should help clear up the confusion between the two, along with some features which they have in common.
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Challenge to the Industry: "Prove Me Wrong"
As feedback began coming in, I began to see patterns displayed by MLM�s that were eerily similar to illegal pyramid schemes.
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I decided to investigate MLM for myself
As a long-time critic of MLM programs, I was curious to know why so many otherwise intelligent and capable persons were involved.
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Destructive Effects on the Lives of MLM Paticipants
The effects on the lives of participants is well described by Robert Fitzpatrick in excerpts from the web site of Pyramid Scheme Alert:
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The History of Pyramid Schemes and Multi-Level (or Network) Marketing (MLM)
The history of pyramid schemes in this country is fascinating, but I will include merely a brief sketch here.
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Home � MLM articles � The pyramid scheme phenomenon intertwines the growth of the multi-level marketing (MLM) industry

The pyramid scheme phenomenon intertwines the growth of the multi-level marketing (MLM) industry

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The pyramid scheme phenomenon intertwines the growth of the multi-level marketing (MLM) industry in which distributors are paid overrides on purchase of other distributors they enroll in an ever expanding, �multilevel� fashion.

• Since 1996, the Federal Trade Commission (FTC) has prosecuted more pyramid schemes than in the previous seventeen years. All of them, including Fortuna Alliance, JewelWay, Five Star Auto Club and Equinox International, were companies that operated as MLMs.

• In March, 1998, the Securities & Exchange Commission (SEC) filed suit against International Heritage, Inc., a multi-level marketing company, calling it the largest pyramid scheme in SEC history. 150,000 Americans were involved.

• Equinox International, which was shut down by the FTC this year, fielded more than 100,000 distributors, held membership in the Direct Selling Association, and in 1996 won the #1 position in INC Magazine’s list of the 500 fastest growing privately held companies.

These prosecutions show that consumers cannot distinguish a legal MLM from a pyramid scheme. With more than six million American participating in MLMs annually and many times that number having joined during the past 20 years, we face a legal and ethical minefield of enormous proportions. The fraud of the pyramid is based upon its perverse mathematics. The promised return of investment relies upon an ever-enlarging base of enrollees, which is mathematically impossible to sustain. An each-oneenrolls-five-more scheme will result in 96% of the participants always on the bottom two levels where no payback occurs.

But this mathematical trickery can be effectively obscured with monthly purchase quotas, complex organizational charts and indecipherable commission schedules. Disguising the program as “direct” sales of real products, promising high “earnings,” giving money to charity, and otherwise acting like a real company, make it very difficult for people to see the fraud. High dropout rates conceal the inevitable market saturation. Unlike franchises, the FTC has no official ruling on what even constitutes a legal MLM and does not require MLMs to disclose market or financial data to recruits.

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