The strangest aspects of the human experience

Multilevel Marketing Schemes

10/07/2022

This insidious cult has permeated through most of North America, but it's so common you wouldn't recognize it.

You have to pay to join, they discourage negative thinking, they ask you only to use their approved products, try to get you to get your friends and family to join and evangelize for them, and often have a uniform depending what sect you belong to. It promises health, riches, and freedom, all while feeding you lies.

So what is this? What are some of the sects? They're definitely ones you've heard of.

Tupperwear. Mary Kay. Avon. AMWAY. Jamberry. Scentsy. You name it, there's a sect that sells it.It's the financial cult of Multi-level marketing, or MLMs.

What is an MLM ?

Also called direct marketing, direct selling, social selling, "financial freedom movement" - MLMs all generally follow a similar pattern regardless of the product being sold

Episode: File 0081: The Satanic Lead Pyramids of the Eastern Seas Pt.3

Release Date: Oct 7 2022

Researched and presented by Courtney

  • There are tiers or ranks of sellers based on two criteria: how much product/service you sell, and how many people you recruit

    • People who recruit you are called your upline, people who you recruit are your downline

  • Uplines are supposed to help "educate" and "guide" their downlines on how to grow their "business"

  • Downlines generate income for their uplines, because the upline gets a percentage of every sale their downline makes

  • These businesses promise an easy way to make money, often from your phone/anywhere/while you travel

  • They also have a starter kit of products that is required to be a seller/distributor

    • This often is around $100 but some starter kits are several hundred to a thousand dollars

    • After the initial purchase is made, you learn of other incidentals you have to pay for (websites, catalogs, party costs) but since you have already spent you fall victim to sunk cost mentality

There is an inherent problem with this business model: there are a limited number of people who can rank up, because there are a finite number of people who are in the market. The chances of being successful are very low unless you sign up early.

According to the FTC, 99% of people who are in an MLM lose money. Compare that to 39% of small businesses that are successful. After 10 years, 95% quit, compared to 30% of small businesses failing

So why are people joining MLMs?

They know who to target

  • Women

    • Especially stay at home moms

    • Women who are financially unstable

    • Women in low income areas

    • Immigrants

    • Disabled people

  • They know what to say

    • They promise "financial freedom", extra money for struggling families, the hope of being able to work from home and stay with their children

    • The products are always too good to be true

      • Can cure anything

      • Fix any problem

      • All while making you money

  • Conferences

    • Lovebombing

    • Brainwashing

    • Expensive!

    • Conferences during covid

So what's the problem? People are making bad financial decisions?

  • Products are not only a scam, but dangerous

    • Monat - hair loss, breakage. Have been found to sign customers up for auto-renewal without their knowledge. Claim to be cures for balding

    • Paparazzi - recently it's been discovered to have lead in their jewelery

    • Young Living/Doterra - promote fake cures for diseases. Lied about ingredients, lies about how to apply/application safety

  • Manipulate you into joining

    • Sell your TV

    • Eat Ramen

    • Take out a card

      • It's worth it to invest in your business

  • It's hard to leave

    • They ostracize you if you leave

    • If you have family in, they will pull you back in

    • In some areas it's hard to escape them because they're everywhere and there aren't a lot of opportunities for work, or part time work for mothers

  • False representation

    • "Free trips"

    • "Free cars"

    • "Time freedom"

    • "Financial freedom"

Is it your own business?

  • No. You don't own the business. You are a contractor, not even an employee, so you have no liability than an employee, but none of the agency of a true small business.

Is it legal?

  • Litigation(S)

    • I don't have enough time to go through all the lawsuits these businesses have gone through

    Suffice it to say, I have yet to find an MLM that has no lawsuits against them.

Income disclosure statements:

https://www.amway.ca/en_CA/income-disclosure

https://monatglobal.com/ca/income-disclosure-statement/

https://library.youngliving.com/en/us/U.S.-Annual-Income-Disclosure-Statement/134978856

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