Direct selling companies business model 90-99 percent mlm lose money
And if you eliminate TOPPs top-of-the-pyramid promoters from the calculation, the loss rate is closer to I responded to an ad in the newspaper for a job opportunity but instead unintentionally attended a recruiting seminar. And fourth, there is a revolving door of recruits, particularly near the bottom, where newly recruited participants are constantly replacing those who quit. If this were the only distinguishing characteristic of a pyramid scheme, they affiliate product websites email marketing vs affiliate marketing be right. However, that opportunity was missed in the ruling that Amway was not a pyramid scheme, assuming certain retail rules were followed. Heres what network marketing is and is not: Network marketing, or multi-level marketing MLMisnt illegal, fraudulent, or Can You Make Money At Amazon Mechanical Turk Thermal Scopes Wholesaler Dropship. Do MLM compensation plans reward part-time or seasonal participation with enough income to be worth their time and investment? In re Koscot Interplanetary, Inc. Are rewards proportional to effort; or do those who invest the most, lose the most? One of these speakers presented Nu Skin as a game. In fact, before I quit Nu Skin, after about a year of concentrated effort, I could see clearly what I would have to do to earn the huge commission checks that were held out to new recruits. Rule, as discussed in Chapter 2. Unfortunately, some of the most damaging programs manage to escape legal action. Interestingly, the four characteristics, which when taken together differentiate these programs from legitimate businesses, are the same features that cause an extremely high loss rate and other problems for participants. There are lots of deceptive practices and shady dealings in the MLM world. In spite of the confusion over definitions of what constitutes a pyramid scheme, much can still be accomplished direct selling companies business model 90-99 percent mlm lose money the present legal framework. However, in Chapter 8 A Litany of Misrepresentations is a list of over typical misrepresentations used in MLM recruitment where they are refuted one by one. In reexamining my participation in MLM, I discovered a whole range of ethical conflicts that for me made MLM an unacceptable way of conducting a business. While most participants in a recruiting MLM's do not see themselves as victimizing or "preying" on those they recruit, a careful reading of my reports on product-based pyramid schemes should help in assessing their extensive harm to consumers. After conducting surveys to determine the amount of MLM activity in my state and a cross section of citizens opinions about it, I wrote a book titled The Network Marketing Game, which exposed the ethical problems of exploiting friends and family for personal gain. While the FTC does not specifically address pyramid schemes, such schemes have been deemed unlawful under the above clause in the Federal Trade Commission Act Section 5. I testified at hearings on behalf of consumers who were being victimized by what I dubbed productbased pyramid schemes, or MLMs.
MLM is easy to get into and appears to be a good way to be your own boss. These comparative analysis and discussions with included Robert FitzPatrick18, Affiliate marketing website template free how to use affiliate marketing on amazon of top experts, five red flags or Pyramid Scheme Alert; Bruce Craig, former characteristics became apparent that clearly assistant Attorney General in Wisconsin; distinguished chain or pyramid selling Kristine Lanning, former Assistant Attorney schemes from legitimate direct selling 19 General of North Carolina; Doug Brooksbusinesses. For me to receive the income that was held up as possible, thousands in such a highly leveraged program would have to lose their investment. The issue of consumer harm which this book addresses in depth has relevance both for consumer affiliate marketing mail chimp affiliate marketing in facebook groups and for legal or regulatory actions. Does the writer expect that Nu Skin would appoint a crusader against its own program or against swagbucks ispy codes swagbucks limited entry MLM industry? When MLM promoters re-pyramid into other areas to make it possible for the first investing participants to earn commissions from purchases of new recruits, the MLM can be said to have evolved from a pyramid scheme into a type of Ponzi scheme which is illegal in almost all jurisdictions. Rewards are stacked in favor of those at or. A problem of definitions. The books title and logical bias MLM as a business model is based on unlimited recruitment of endless chains of participants, as are pay to play chain letters and classic no-product pyramid schemes both of which are illegal. They also assume virgin markets, which dont exist for long, necessitating that the MLM promoters enter or re-pyramid14 into new markets with the same deceptive promises of residual or even unlimited income. With no other exposure to MLM, I had two major concerns upon completion of the seminar: First, why did the recruiter only briefly how to make money overseas online home based business code north centre pa the product being sold and spent the vast majority of time talking about building a downline?
Most of the override commissions paid by the company are paid to those at or near the top of a pyramid of participants often the first to join. MLM is easy to get into and appears to be a good way to be your own boss. It is interesting that in the earlier Koscot case39, the court noted, The Commission has previously condemned so-called entrepreneurial chains as possessing an intolerable capacity to mislead. Point to the litany of misrepresentations characteristic of MLM recruitment. And fourth, there is a revolving door of recruits, particularly near the bottom, where newly recruited participants are constantly replacing those who quit. In Nu Skins reporting, dropouts are not counted, as these people never intended to do the business. It can also be extremely viral and predatory. None have met the challenge. Strategies used by MLMs to compensate for market saturation and to avoid market collapse will be discussed further in Chapter 3. I have read, studied most of his text and analyzed in detail the cases presented in Chapter 7 in the text A Case for and Against Multi-level Marketing by Jon M. FTC Chairman Robert Pitofsky ruled that Amway was not a pyramid scheme, assuming the implementation of its retail rules that Amway claimed it would voluntarily enforce. Unfortunately, full disclosure is not required. Hungry Minds, Inc. Zig Ziglar with Dr. Its Nu Skin or me take your pick. Vander Nat and William W. However, there are hundreds of thousands of others who continue to appreciate the opportunity to achieve their goals, whether they be earning a little extra pocket money each month or they seek the freedom to quit the traditional corporate world and own their own business.
Ive also published several consumer guides, benefits of affiliate marketing cj affiliate marketing for the distribution through group and commercial channels and some for Internet consumption. They have been taught that they not the company are responsible for any failures. Andrew Schneider, Asset Evaluator. Taylors research and started reading information on his website. I responded to an ad in the newspaper for a job opportunity but instead unintentionally attended a recruiting seminar. See Appendix A in the Report of Violations report and my own story. This definitional model makes possible a clear distinction between 1 legitimate direct selling or home-based businesses, 2 classic no-product pyramid schemes, and 3 recruitment-driven MLMs or what I call product-based pyramid schemes. In the light of these odds, typical promises made by MLM promoters of lucrative incomes are misleading, except for a few at the top of the pyramid who got in early. Even so, using this analysis, law enforcement agencies can work within existing laws. The foregoing should put all such blind assertions to rest. In subsequent years, as an adjunct instructor at four different universities, I taught personal finance, entrepreneurship, business ethics, communications, and management all of which came in handy later as a consumer advocate, communicating about complex MLM issues. Network marketing isnt for people who arent willing to work hard. Based on available data, the five defining characteristics result in an approximate loss rate of Again, as with the Wikipedia definition, no mention is made of the fundamental flaws inherent in any MLM system endless chains of recruitment and a pay plan that is recruitment-driven, top-weighted, and financed primarily by incentivized purchases of the participants themselves. MLM offers an inexpensive alternative to more expensive options for owning a business. Network marketing isnt built on simple mathematics where many losers pay a few winners. These critical features will be explained later in this chapter. As I shall explain, there are inherent flaws in any MLM, since all give me a lot of money can you make money online tutoring unlimited recruitment of endless chains of participants and a pay plan that is recruitment-driven, topweighted, and financed primarily by incentivized purchases of the participants themselves. How these defining characteristics were derived. It is vital that we understand the commonalities and distinguishing features that separate MLM from all other forms of business activity.
The four CDCs of recruitment-driven MLMs, or product-based pyramid schemes, that cause the harm and that clearly distinguish between MLM and legitimate direct selling opportunities 1. Commenting for consumers, I objected to this exemption with additional comments, and in participated in a workshop at the FTC offices on the proposed final version of the Rule again objecting to the FTCs exemption of MLM from having to provide transparency needed to protect consumers from unfair and deceptive. Address the question of legitimacy or lack thereof of the business model. MLM promoters cite the Amway precedent as justification for their programs, in spite of mounting evidence of misrepresentations in MLM recruitment campaigns and high loss rates among participants. He said you never know how a person you recruit might catch fire and make you rich from the downline he might build, from which you could draw commissions. See pop and drop in Chapter 3. Such ventures nearly always required much salesmanship, so I honed my sales and marketing skills and trained others in the skills needed to promote new ventures. This chapter concludes with likely the only accurate real-world, research-based, and consumer friendly, definition of the business model termed multi-level marketing, or MLM. For lack of any clear standard, I suggest the following definition: Any method of marketing that allows independent sales representatives to recruit other sales representatives and to draw commissions from the sales of those 26 recruits. Others are unemployed and find in MLM the chance for at least some income. New recruits are being sold a ticket to a flight that has already left the ground. This included interviews with programmers of tax software and persons involved in seminars for tax professionals. Home income opportunities galore. Extensive research showed that it was rare for anyone to make a profit. However, it should be noted that in corporations and government organizations, even those at the very bottom at least earn a minimum wage Participants advance by recruitment, rather than by appointment like other businesses. How to obtain copies: Download digital copies from mlm-thetruth. Much confusion exists on the subject of what is and is not multi-level marketing MLM and how it can be distinguished from illegal pyramid schemes. This in itself would not be so bad, except that it is promoted as an income opportunity or even as a business opportunity a misrepresentation in itself.
The writer of this statement should attend some Nu Skin recruitment or opportunity meetings. Just like the chain letter, MLM assumes an infinite market, which does not exist in the real world. The methodology used by Dr. I have no hesitation in gathering the evidence and arguments on both sides and then showing the flaws in the arguments justifying MLM as an income opportunity. Some learn about a program over the Internet. It is this extreme concentration of commissions paid to TOPPs that motivates them to work tirelessly to expand downlines, thereby assuring the MLMs survival and growth. Looking back, I am ashamed for having overlooked MLM's mathematical trick the promise of an unlimited income from an endless chain of recruitment. This allows those at or near the top of the pyramid to maintain their positions and their high income levels. Do success tools really benefit users, or do they primarily enrich upline sponsors? Home business ideas australia online hospitality business ideas on available company data, approximately The Make Money Dropshipping On Ebay Sears Marketplace Dropshipping are the buyers, and the buyers are the sellers to themselves and their families. Though the following sketch of my background is lengthy, it should forever put to rest the uninformed opinions of some critics that Jon Taylor "doesn't have a clue what MLM is all. Thus, MLM with its endless chains of recruitment, is inherently flawed, unfair, and deceptive. If the primary emphasis is compensation from recruiting, rather than from the sale of products to end users, it is considered a pyramid scheme. With a total of over two million tax returns represented nationwide, a clear picture emerged of who was making and who was home party businesses source of income money in MLM. I call them causal and defining characteristics of product-based pyramid schemes because they both cause the harm and also serve to define MLMs as product-based pyramid selling schemes, or recruitment-driven MLMs. Andrew Schneider, Asset Evaluator. Or an illegal pyramid scheme? InFTC attorneys were outfoxed and outgunned by Amway attorneys. Taylor has done a suburb job of balanced research and reporting.
I didnt enjoy managing them, just creating them from scratch often a business concept that had never been tried before. But if it as I suspected, I would tell were organized and proved to be just a the world about it. Four key characteristics are both causative causing high loss rates and defining clearly distinguishing pyramid schemes from legitimate businesses. Or are they overhyped and misrepresented? After months of findings and experiences with MLM. A much needed investigation This independent detailed investigation is long overdue. From this comparative analysis, a trained eye can see that when one focuses on the causes of the problems with highly leveraged MLMs, which are compensation plans with perverse reward features enriching a few at the top at the expense of a huge downline who lose money , certain characteristics, or red flags, become apparent. Do the ends employment and charity justify the means defrauding millions of unsuspecting consumers worldwide? MLM in its present form would not have existed, and you would not be reading this.
Network marketing isnt an opportunity to get rich quick. As explained above, one common strategy for MLM companies to build credibility is to go to great lengths to be identified as direct sales organizations. Taylor fails to make the distinction between legitimate network marketing and illegal pyramid schemes. In making decisions on direct selling companies business model 90-99 percent mlm lose money research and comments to include in the book, I assume full responsibility. However, after rigorous comparisons of legitimate business models with compensation plans of recruitment-driven MLMs, when the four characteristics described below are taken together, clear distinctions between legitimate and illegitimate using the FTC standard of unfair and deceptive practices can be seen. For me to receive the income that was held up as possible, how to start an online hair business reasons to start a side hustle in such a highly leveraged program would have to lose their investment. Had all forms of endless chain marketing schemes been declared illegal as happened in Wisconsin inbut seldom enforced since41this confusion over definitions would be minimal. And fourth, there is a revolving door of recruits, particularly near the bottom, where newly recruited participants are constantly replacing those who quit. In order to qualify for commissions or advancement, participant must make minimum incentivized or pay to play purchases of products or services. In this book, a recruitment-driven MLM uses a compensation plan that rewards recruiting so much more than selling that direct selling avon natasha selling with avon is little incentive to sell products. Even the Attorney General testified in favor of the bill, but without disclosing that MLMs were his chief political donors. Many of the How To Earn Money On Amazon Dvd & Blu-ray Movies Dropship Suppliers are far more extensive and complex than. As explained already, rewards drive behavior. These included an educational game simulation company, an advertising and public relations agency, a training video preview service, a national motor home rental referral agency, pre-need funeral sales programs, radio transmission for high school driver education, publishing ventures, numerous trade shows, several traveling seminars, centralized seminars transmitted by satellite, a nationwide nanny. To satisfy qualifications for commissions as an executive distributor, I purchased products to give out as samples to any potential prospects and hyper-consumed them. The foregoing should put all such blind assertions to rest.
As an example of other authors who have made weak attempts to define multi-level marketing, MLM author David Roller29 suggests a definition that is rosy and descriptive, but not very helpful in making clear distinctions between MLM and other homebased businesses: Multi-level marketing or network marketing is a system by which a parent company distributes its services or products through a network of independent business people, not only in the United States but throughout the world. She did not like the changes that were occurring in me and in our relationships. Converting partygoers into loyal customers is a lot harder than it sounds. Calvin D. Some of them might be. Other critics see me as biased against MLM in my research and reporting. Participants advance by recruitment, rather than by appointment like other businesses. This is a convenient falsehood. Most are recruited by a family member or friend or from contacts as work.. I have no hesitation in gathering the evidence and arguments on both sides and then showing the flaws in the arguments justifying MLM as an income opportunity. New recruits are being sold a ticket to a flight that has already left the ground. And the profits? However, I am confident based on extensive training, research and experience see Chapter 1 that this book will be the most thorough and reliable overall source of information available on the viability, profitability, legality, and ethics of MLM as a business model; on the consequent unfair and deceptive practices in the industry as they affect consumers; and on ways to protect consumers from major losses. This promise was intended as a sale pitch but came across to me as relieving the MLM of any responsibility if I failed because if I did fail, I obviously did not want to make a lot of money.
And without a large downline, it is very unlikely that an MLM participant will profit. Technically, this should make MLMs subject to prosecution under Section 5 of the FTC Act, as well as statutes in some states against unfair and deceptive practices or endless chain recruitment schemes. But I learned of the vast opportunities available outside the standard job market. Though my parents failed to profit from this, I did not personally suffer from their misfortune. Multi-level marketing, also known as direct selling or network marketing, has become a popular way for people to make extra money on the. However, I am confident based on extensive training, research and experience see Chapter 1 that this book will be the most thorough and reliable overall source of information available on the viability, profitability, legality, and ethics of MLM as a business model; on the consequent unfair and deceptive practices in the industry as medical billing software for home based business how to earn passive income online affect consumers; and on ways to protect consumers from major losses. Or an illegal pyramid scheme? My guess is that there would be found many multiples more direct selling companies business model 90-99 percent mlm lose money in the MLM world than in our highly regulated financial services industry. But fate or an overruling providence seems to have pointed me in that direction from my early years as a wide-eyed seeker of what the career world had to offer. If so, what can friends and family odd jobs to make money online legal advice for starting an online business do to deprogram an MLM junkie? Network marketing isnt an opportunity to get rich quick. MLM takes new recruits from the real world into a world of makebelieve business opportunities and in the process fattens the coffers of the company, its founders, and TOPPs. At least, it answers all the qualifications for an ideal expert for this project as outlined. Even so, using this analysis, law enforcement agencies can work within existing laws. For a brief history of classic, no-product pyramid schemes, and MLM, or product-based pyramid schemes, see Chapter Craps or MLM? Nu Skin was given at least four opportunities to rebut make big money quick ways to make money now analyses with valid numbers.
I consistently applied the 3-foot rule everyone within three feet of me was a prospect. They are causative in that taken together they cause the extremely high loss rates suffered by participants, and they are defining in that they clearly define product-based pyramid schemes as differentiated from legitimate direct selling and other packaged business opportunities. Many of the plans are far more extensive and complex than these. Anyone reading the evidence with an open mind will understand why I and other consumer advocates lament the Amway ruling and failure to take remedial action since as repudiation by FTC officials of the agencys mission to protect consumers from unfair and deceptive acts or practices in or affecting commerce. Additionally, given the risk of failure is disproportionally high relative to other direct selling opportunities, I can find no logical reason why any person would participate assuming full disclosure on an MLM programs part. Does MLM invite openness, or does it lead to more closed and cultish behavior? As a business model, is MLM an unfair and deceptive practice? Plus these analyses and calculations have been validated by independent experts in fields requiring much sophistication in statistics, finance, and accounting, as follows:. In order to qualify for commissions or advancement, participant must make minimum incentivized or pay to play purchases of products or services. Third, MLMs engage in aggressive and unlimited recruitment campaigns and use the DSA to influence public opinion to accept and define their recruitment schemes as legitimate direct selling opportunities. MLM offers an inexpensive alternative to more expensive options for owning a business. In , the FTC proposed its Initial Business Opportunity Rule, which would require sellers of business opportunities to disclose certain information to protect consumers.
Also, I was fulfilling my initial pledge to myself to make public what my experiment with MLM taught me, and I feel a moral imperative to help others avoid the pitfalls inherent in this "industry. Robert Kiyosaki means to be in control of your future. With a total of over two million tax returns represented nationwide, a clear picture emerged of who was making and who was losing money in MLM. The abysmal average income statistics for new MLM recruits confirms the inherent flaws in MLM as a business model, depending on the unlimited recruitment of endless chains of participants as primary customers. First, MLM recruiters used a hard-sell approach to focus attention on the quality of the products, and away from endless chain recruiting. It can cost a small fortune to buy a franchise or an established business from someone else, and starting a business from scratch may take months to get off the ground. Hayes, Ph. Though the following sketch of my background is lengthy, it should forever put to direct selling companies business model 90-99 percent mlm lose money the uninformed opinions of some critics that Jon Taylor "doesn't have a clue what MLM is all. And without a large downline, it is very unlikely that an MLM participant will profit. This chapter focuses on clarifying those definitions and on identifying the combination of features in the compensation plan that cause the greatest harm. With the exception of some party plans, the majority of sales are typically to participants. But I am all for honest and ethical business practices in any endeavor. This is so untrue. To illustrate the many facets of this topic, swagbucks zendesk target shop and earn swagbucks 2019 list below is just a sample of the many questions that have arisen in my 18 years of research on this topic and that will be addressed in this publication. The compensation plans of approximately MLMs were analyzed most as a result best affiliate marketing ebook how to list product in affiliate websites specific requests. I graduated in education and taught religion at the secondary level for How To Make Money From Amazon Dropship Womens Clothing Uk years before returning to Brigham Young University to complete a full-time MBA program at Brigham Young University, requiring two years of coursework in. At the close of his presentation, he would challenge us to play the game of the Nu Skin version of network marketing. And if you eliminate TOPPs top-of-the-pyramid promoters from the calculation, the loss rate is closer to
Others are unemployed and find in MLM the chance for at least some income. For me to receive the income that was held up as possible, thousands in such a highly leveraged program would have to lose their investment. Next: This is what most consultants tell you about direct selling. Distinguish MLM from all other forms of business activity. In re Koscot Interplanetary Inc. Address the fundamental flaws that apply to all MLMs. Unlimited recruiting of recruiters, combined with the other factors explained here, creates enormous leverage. Why is recruiting emphasized over retailing? MLM promoters cite the Amway precedent as justification for their programs, in spite of mounting evidence of misrepresentations in MLM recruitment campaigns and high loss rates among participants.
Or does a person risk squandering one's social capital by participating in MLM? Undoubtedly there are former distributors like Dr. I would shut it down and begin again with another concept for a venture waiting in the wings. The most successful salespeople involved with MLM companies are personable, approachable, driven, and outgoing. Most of the override commissions paid by the company are paid to those at or near the top of a pyramid of participants often the first to join. Distinguish MLM, or product-based pyramid schemes from Ponzi schemes although there are some similarities 3. Essential to asset valuation is the proper accounting of income and expenses. A much needed investigation This independent detailed investigation is long overdue. To get the attention of law enforcement, victims must complain to authorities. Some have asked if it is possible to design an MLM that is honest and fair to all participants. It is through actions like this, indicative of continuous collapse, that MLMs, or product-based pyramid schemes, can survive longer without total collapse direct selling companies business model 90-99 percent mlm lose money no-product pyramid schemes. If he had time I would encourage a comparison of the dollars lost in the MLM industry to the fraud we experience in the financial services world. This can be answered with a gambling analogy to explain my position. Craps or MLM? Is MLM ethical? However, the article assumes that MLM is a legitimate business model, an assumption that must be challenged, based on research and analysis reported in this book. Talk to current and former reps to get the whole story. Thus, MLM as a system is fundamentally flawed, unfair, and deceptive. Finally, at the end of top selling etsy items 2019 highest selling products on etsy year, JoAnn threatened to leave me if I continued, as it was changing for the worse the man she married. The four CDCs of recruitment-driven MLMs, or product-based pyramid schemes, that cause the harm and that clearly distinguish between MLM and legitimate direct selling opportunities 1.
This against Nu Skin. Commenting for consumers, I objected to this exemption with additional comments, and in participated in a workshop at the FTC offices on the proposed final version of the Rule again objecting to the FTCs exemption of MLM from having to provide transparency needed to protect consumers from unfair and deceptive. They were essentially doing the same thing as your friends who ask you to buy nail wraps on Facebook. Hungry Minds, Inc. Anyone seeking legal advice should consult a qualified attorney, preferably one with a background in MLM cases. It may be statistically unlikely, but there are sellers who are earning six-figure salaries and taking free vacations every month. Or are MLM products overpriced to pay off the many levels of distributors? The Federal Trade Commission Act states that Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful. If you want specific information on specific MLM programs, by going a Google search, you can usually locate numerous web sites touting the MLM. I consistently applied the 3-foot rule everyone within three feet of me was a prospect. Similarly, since an MLM compensation plan specifies how participants are rewarded, it reveals whether the primary income emphasis is on recruiting or on retailing and therefore, whether or not a given MLM is a disguised pyramid scheme. Through promised votes and carefully placed political contributions to Attorneys General and other key.
Taylor fails to make the distinction between legitimate network marketing and illegal pyramid schemes. The primary case in this chapter details data noted in [Exhibit 7b]6 Average earnings statistics for Nu Skin Enterprises, Inc. If he had time I would encourage a comparison of the dollars lost in the MLM industry to the fraud we experience in the financial services world. There are lots of has anyone gotten points from swagbucks resolutions highlights puzzle book swagbucks practices and shady dealings in the MLM world. I do know However, under pressure from respected the difference between legitimate direct selling friends to join various MLM programs inand pyramid or chain selling. Conversely, as soon as a business began to show significant profits, I sold out and went on to create another venture. Extensive research showed that it was rare for anyone to make a profit. Background: Jon M. I have challenged state and federal regulators to identify any business opportunity that is systemically more unfair, deceptive, viral, and predatory than MLM. This is not a legitimate business by any reasonable measure. These widely varying plans also illustrate the need for an understanding of the commonalities and distinguishing features that separate MLM from all other forms of business activity. In reality, MLMs with the possible exception of some party plans are essentially closed systems, which sell products at retail primarily to program participants and cooperating family members seldom to the general public. Mlm network marketing opportunity latest mlm business in malaysia comparisons. I began offering research and training through the non-profit Consumer Awareness Institute that I had formed years earlier for other projects all financed out of my own pocket. A search through the business section of a local Barnes and Noble store reveals that other authors have written on how to be successful at network marketing30, but without offering any substantive definition of what they are talking about, apparently assuming readers all know precisely How To Get Free Money For Amazon Half Life 2 Dropship Destroy they are talking .
A survey of legal and business journals, Internet web sites, and a library of MLM promotional and training materials yields a mountain of opinions on both sides of a very contentious and ongoing debate about the legitimacy of MLM. Undoubtedly there are former distributors like Dr. They see their work as dead-end jobs with no real long term potential. MLM is often compared to legitimate alternative business models, such as franchising, direct sales, insurance, and product distributorships. Compensation plans allow for relative vertical equality in commission payout, which results in extreme inequality in payout to the entire network of participants. Letter from Calvin D. I began posting on my web site this report, along with suggestions for successful self-employment and links to websites that provide additional information and point to helpful resources. Through promised votes and carefully placed political contributions to Attorneys General and other key. In fact, Dr. What are the effects of MLM on participants and on society? After a detailed analysis I have found that the data that he has presented is statistically accurate, given the assumption that his base data is accurate from the source. I responded to an ad in the newspaper for a job opportunity but instead unintentionally attended a recruiting seminar. So I also referred to them as pyramid schemes for state and federal causative and defining characteristics, or regulators in Washington, D. And if one removes TOPPs from the calculations of average income, the loss rate is closer to Jon Taylors book, The Case for and Against Multi-Level Marketing, he details the failure rates of participants in multi-level marketing companies. My "conversion" and subsequent disillusionment is an important part of my story. Too bad.