What is Wrong With MLM - Frequently Asked Questions


WWWMLM FAQ Table of Contents:

What about THIS particular MLM? What about THIS new MLM variation?
Isn't MLM a great way to start a business? Aren't there legitimate MLMs?
What is Wrong With MLM??? A fantastic "ground floor" opportunity!
Should I join to get a discount? What if I do not join, but just buy?
MLM: an entrepreneur's dream, or nightmare? Van Druff is an MLM sore LOSER!
You must have an AX TO GRIND! Health care products and MLM...
Are you saying that MLM is a cult? Why are you so NEGATIVE?
You are short on FACTS, man! What qualifies YOU to warn ME against MLM?
Success is up to the individual? MLM is just a new form of franchising...
How DARE you compare ME with pyramid SCUM? MLM: Opportunity for the unemployed?
Aren't "real world" org charts shaped like pyramids? What's Wrong With What's Wrong With MLM?
Aren't there good MLMs as well as bad? Baby out with the bath water???
What about corporate downsizing and layoffs? How can something be illegitimate AND legal?
A business loss is a business loss! Materialism Mashmerialism...
Should Christians be involved? But I'm doing MLM to support my Ministry!
Can I get my money back from an MLM? Can I print out copies of the article?
MLM practitioner's reactions to article? Go to the original WWWMLM article

Why Do You Allow The MLM Ads?

The MLM ads that are often (mistakenly?) featured on these pages can be thought of as humorous grist of the very points I am trying to make.† The ad revenue is miniscule, but you must admit that the desperation and hype may be more persuasive than the article itself.† And no, they are not fake; if you think I am exaggerating the "wrong withs", then look to the ads!† So donít wonder at why they are there; they are allowed because they are funny, no? Take a breather from the polemic and enjoy.


What do you think of THIS PARTICULAR (fill in the blanks) MLM?

We do not track the MLM du jour.

New MLMs pop up like jack-in-the-boxes all the time. Thus, ours is a general case against the technique.

In the article, our approach is to simply yell out that the MLM emperor "has NO CLOTHES". For those with the capability to "snap out of it", this should suffice. Pointing out particular freckles on the emperor's hiney is not necessary. The man is stark naked, for crying out loud. Once seen, criticizing particular MLMs or MLMers seems unnecessary.

And if we are not correct, if our generalizations are not accurate, then we are just idiots in the crowd. Saying the emperor is naked--if he is not--does not make him so.

You be the judge. Do the points made fit the reality you see, or not?


This new MLM has a really great new approach... I am told that it is not an MLM at all, but a Network Discombobulation Matrix Downline (or somesuch)...

You know the old story about the donkey who wanted to be a horse. He had his act down pretty good, but there was always that embarrassing "HEE HAW" that would come out when he got excited.

Why bother the ruse? Why dress an MLM up as something it is not?

Not only are MLMers playing this shell-game with terminology to try to further obscure the pyramid aspect when recruiting, they also often initially try to hide the fact that they are MLMs when they go to sell product. More on the motive and need for this below--if it is not already clear from the article.


Isn't MLM a great way to start a business?

No. The reasons for this were detailed in the article.

Author's note: If as you read through this, some of the questions seem a little repetitive and the assertions time-worn, imagine going though our daily mail!


I want to start a business and see MLM as a low-risk way to do it. Don't you agree that MLM is a great opportunity for small-business start-ups?

No.

Due to the OVERWHELMING negative public opinion of MLM--even if there were in fact nothing wrong with it (and there is, in my opinion)--is this not reason enough to steer clear of it?

It is hard enough to make it in business, why have an MLM albatross tied around your neck?

If you run in the Olympics, you play to win. You would not go onto the track with a ball and chain tied to your leg. Why go into ANY business ... with the ball and chain of MLM negative perception around your leg?

Since there are few people not already stung by the MLM con, why would you handicap yourself with what I call "the MLM stink"? The MLM con has largely run its course, and most people can recognize it by smell. [More on this later.]

This is no secret. Practicing MLMers know of this problem all to well. That is why those who insist on trying to make this faulty marketing system "work" (exploit more people) are doing their best to obfuscate the ML (multi level) aspect as long as possible and with considerable, deliberate stealth.

But for all the camouflage, you can smell this skunk from a mile away.

Some have accused me of adding to the MLM "perception problem" with my article. But I did not make the emperor naked; I am only pointing out the obvious for those who care to know.


I have found SUCH AND SUCH (fill in the blanks) MLM that is really great. Are you suggesting that ALL MLMs are pyramid schemes? Aren't there legitimate MLMs?

In so far as a company is "ML"... it is pyramidic and thus illegitimate; it could not work by legitimate means and is a con. Many MLM companies downplay this in experience, and, to the extent they do, they can certainly be honest and ethical in other aspects.

Let me say that again. In so far as an "MLM" company is "ML" (pyramidic) then it is fraudulent and illegitimate. In so far as a company Ms (markets) products and services (rather than "the dream") then it can be just like any company. Some MLMs emphasize product selling rather than MLM "math magic", and thus they can avoid many, if not most, of the "Wrong Withs" I point out. On the other hand, there are many MLM companies for whom the product is merely the cover for building a collapsible pyramid.

Thus, MLM companies can run the gamut from 99% pyramid scheme to 1%. But to qualify as being an MLM, it must be at least somewhat "ML", even if this is downplayed, right?

Really bad are the MLM hucksters who ask for 5-50K$ up front and so forth. These are the real menace, and the main target of my article.

But still, to lose time and reputation in an insipid MLM selling (fill in the blanks)--even if it is not openly predatory--is bad enough. The dynamics of failure are the same. And even if you are not being asked to put up a lot of up front cash, remember that time is money.

And I hope that my article helps somewhat to clarify what is wrong with MLM, so that if you MUST do it, you can avoid these pitfalls as much as possible.

For those who are trying to reform MLM from inside: I will be the first to admit that if the "ML" pyramid aspect is systematically de-emphasized... at some point it becomes insignificant and many of my "What's Wrong Withs" no longer fit.


Why do you think there is anything at all wrong with multi-level marketing?

No, I am not kidding.

I seriously wonder how many MLMers who write me have REALLY read the article first. A page is pulled up, lightly scanned, the gist is got, and "been there done that". Or, the gist is got and a knee-jerk flame is sent that is wildly off-the-mark. Or, a question is asked that was dealt with CLEARLY in the article, and thus ends up sounding rather daft, as above.


I visited your web page and think you should join my new (fill in the blanks) MLM. It really is great. I know you have been burned in the past, but here is a chance to make a success of yourself. A fantastic "ground floor" opportunity...

Either extreme hubris, chutzpah, or an auto-sender which searched for the word "MLM" in web-postings and broadband sent. About twenty a day...


I like the product sold by a particular MLM. Should I join to get a discount?

This is a personal decision that you must make for yourself.

Some modern versions are more like buying clubs than serious MLMs. Since the cost of entry is low in these cases, the level of exploitation goes down dramatically, in terms of money. And at least people can use the products, even if they are overpriced due to paying royalties to multiple levels.

A consideration here might be how sordid the culture of the particular MLM is in terms of slander, hype, materialism, etc., and whether you think you can stomach this.

The question, to put it bluntly, is whether or not you think it worth it to put up with the inevitable chicanery and other sordid accouterments of the MLM in particular, just to get a "discounted" price.


I like the products of a particular MLM, but do not wish to join. But they keep trying to recruit me...

It is a common experience to find it very difficult to simply buy product from some MLMers. For the aggressive MLMer there is no firewall between selling product and commandeering people's lives and livelihoods by sheer bullying. The distinction between selling product and high-pressure recruiting is blurred. For these types--even if restraint is attempted--you can see them angling, the eyes expectant, bursting with anticipation for anything you might say that would provide an excuse for launching into "the pitch". The subdued reality here, despite denials to the contrary, is that the product is merely the pretext to sell "the dream". And here you come again...

And the comedy of this rapacious recruitment should not be missed, even if it is a massive insult to those being proselytized.

Imagine going in to simply buy an ice cream cone and getting harangued by the scoop-jockey into becoming an ice cream man? Imagine going in to buy shoes and being harangued by the shoe salesperson that you ought to quit your life's vocation and "grab the golden shoehorn." If you protest this overbearing silliness, you are a "loser" (...in so many words) and the whole MLM spiel. To endure all these insults and machinations just to get a pair of shoes is a bit much, no?


MLM is an entrepreneur's dream that you just happen to disagree with.

One of the chief tragedies of MLM is that it blunts the entrepreneurial energies that might be otherwise profitably channeled. It leaves a wake of failures behind who might otherwise have been successful business starters.

It nips the entrepreneurial spark in the bud, to mix metaphors.

For this it should be clearly and forcefully condemned, as many think MLM can be made to work (via MLM propaganda), and that they are just "losers".

This is why I point out that MLM can NEVER work as advertised, unless you consider successful exploitation and hucksterism to be "working".

It is hoped that a few can snap out of this dismal pathology and become real business starters and successes.


I JUST KNOW you lost your shirt in an MLM in the past. You're just a sore loser.

Nope. Wrong.

[Author's note: something like 75% of ALL the MLM flames I get have this presumption in it. I suppose it is a common enough experience that the assumption is not wholly without merit... <smiles>]

Mine is a theoretical case against the practice. Might I suggest that you decide whether my analysis is right or wrong without trying to second guess my history--and getting it all wrong?


Let me guess your motivation. It is just sour-grapes since you could not make it work (or fill in the blanks of some other motivation off-the-mark).

To ward off future muddleheaded guesses, I will here disclose my motivation.

It is Section IV. I care enough to speak out against what I see as wrong.

And if my premises are correct, then MLM is to some extent exploitative and dishonest and will not work. In most cases and for most people it is the waste of money, time, friends, credibility, and life... that I (and now others) are making a clarion call to warn people about.

That there are good things about MLM as well is not my concern in this critique. To give two extreme analogies of the silliness of this logic, Osama Bin Laden had "good things" about him, as did Hitler. But these "good things" were not the salient issues, now were they?


What about Melalueca products (or fill in the blank with other health care products) that I cannot get ANYWHERE but through an MLM?

As to Melalueca, it is a good example of an MLM "buying club" of sorts; hardly big game worth this kind of firepower.

As to selling medical products with MLM, we have perhaps a more serious problem than just losing your money. For we ought to be suspicious about the "snake oil" aspect of any product thus marketed. (Excuse me, it is tree oil, not snake. <grins>)

I had decided early on not to use to use many examples (more on this later), but cannot resist one here.

A church friend of ours was going to a Melalueca meeting one evening, and asked our opinion in advance. I gave her a verbal summary of the article, especially focusing on the hyperbole endemic to such marketing approaches and the associated health risks, telling her a few horror stories as evidence. About 2am the following morning, she called in a panic screaming "I'M BLIND, I'M BLIND," and so we raced over to her apartment. The place stunk like a toxic waste area, so we put towels over our faces and rescued her and her 3-year-old son out of the house. What had happened was that she had heard at the meeting that it was a good idea to put the stuff in a vaporizer, as it had "antiseptic qualities". She did so to the results mentioned. Her "friend" who advised her thus tried the same that evening (even convinced herself it was a good idea) and ended up in the hospital with several layers of her eyes burnt off.

We cannot blame Melalueca or the product for this nonsense; it was never intended for such use. But we can blame the snake oil marketing "plan" which was doomed to this or worse.

How could Amway, or Melalueca, or any MLM supplier anticipate what might be said next in a meeting to ward it off? It is impossible. The only option is to be quick to clean up the inevitable messes after the fact.

So, while good health care products CAN be sold by MLM companies, let the buyer beware of what he/she heard it would do or how to use a product in an MLM meeting. And ought not we be suspicious that an MLM marketed health care product might not sell any other way?

Are you going to believe what you heard in such a meeting? Are you going to risk your life?

And why is this product not being sold in the "big dog" market if it is really so great? Why would a company with a verifiably excellent health care product be fumbling around with a tainted and suspicious marketing strategy such as MLM? Perhaps this is the only place they can sell this product... or make these claims?

This does not mean all health care products sold via MLM are flimflam. These are just questions that need be asked--and answered!


Why are you condemning the MLM technique instead of the really bad MLMs?

I am convinced that all MLMs have serious defects. You might disagree, as many do, but this is my considered opinion. And I believe, as stated above, there is value in pointing these things out.

It is my premise that MLM is fundamentally flawed. While some MLMs are worse than others, they all suffer from the same failure dynamics in general. These dynamics can, and have, been detailed.

As well, by pointing out in general the overall problems of MLM I cannot be accused of attacking a particular company, which has certain philosophical and legal benefits, if you follow me.

Essentially, what I have detailed are moral and ethical issues that transcend the "style" of any particular MLM. If the shoe fits....

For example, there are rude bank robbers and nice ones; ones who use squirt guns stuck in their pockets and ones that use AK-47s out in the open; ones that steal a few dollars and ones that get off with millions; ones who are repeat offenders and ones who learn after a single failure.

What has this to do with whether or not bank robbery is wrong?

Nothing.

Bank robbery is immoral... independent of style or technique or manners or other atmospherics, interesting as these may be to discuss.

Do you see the point? If the thing is inherently wrong, HOW--even WHY--you do it is really not the issue, is it?

Suppose you catch a bank robber red-handed, and he justifies himself by saying "I just needed a little extra money." Well, that much is obvious; it is just that this is an illegitimate WAY to get it.

And this ought be pointed out, no?

Or suppose a bank-robber offers up this excuse: "What is wrong with wanting to make a little extra money for my family?" Er, uh.... well, nothing, of course. And this is really not the point, now is it? It is HOW you are getting the money that is the problem....


Are you suggesting that MLM is a CULT???

Cults are generally regarded as religions, and MLM is a business system. Since they have different aims (God and money) any use of the term "cult" will be somewhat tangential and obtuse. Nonetheless, there are many similarities in technique between MLMs and cults that are rather obvious. I am not alone in noticing this.

MLM seems to require a whole life decision to make "work".

What seems odd to me is that in many ways MLM has more influence than even religion in people's lives: evoking more passion and more defensiveness and more energy for those who seek to practice it.

On top of this, consider the radical commitment and obedience demanded by MLM "apostles", and how many people actually make a zealous attempt to follow them.

When the MLM "piper" plays his flute, people, it seems, turn into lemmings.

If you think I am overstating the case here, think about how often, and to what extent, a potent "religion" or new cult can sweep people off their feet; get them to change their behavior and thoughts and friends and lifestyles? If people were anything near this faithful, obedient, and zealous to their spiritual path, our world would be a very different place indeed.

And yet dress such radical epistemology and behavior changes up in MLM clothes and people will abandon what they have long believed, dreamed of, and labored for all their lives... all to chase an elusive pot of gold at the end of an MLM rainbow. How does this happen to sensible people?

The temptation--and effect--is absurd, when you step back to look at it. One does have to wonder if something spiritual might be going on here, even if it is not a religion by name. What person, on such a flimsy financial pretext, would otherwise give so much of their life over--without careful consideration--to anything else?

The sirens of MLM appear to have a special music to lead people onto the rocks.

In this same vein, how often do you see people recklessly abandoning long-held ethics and values just for "a little extra money"? I mean, burglars and convenience store robbers can also make a little extra on the side, but is there a mass exodus from the middle classes? Yet with a plastic MLM carrot dangling, many otherwise sensible, sober people will abandon their lives to what is clearly immoral activity. How often in the rest of reality do you see this? Is not the thing exceptionally unusual?

The MLM dream weaver appears to be a potent spell caster.


Why are you so NEGATIVE? Can't you say ANYTHING good about MLM?

You might have noticed the title of the article.

It is not meant to be an objective review, but a critique, as the title screams. This is a targeted analysis of what is wrong with multi-level marketing.

Certainly there are "good things" as well, but these were beyond the scope of my article, except to be fair, in passing, when making certain points.

There are good things about a grass fire as well. But still we should try to put one out that is raging toward our neighbors, no? Or ... should we rather be found extolling the virtues of grass fires while our friends' houses are consumed? What do you think?


Why is your case so general? Your article is short on FACTS! Where are your SOURCES?

This was deliberate. You may disagree with it, and it may be a valid criticism, but it was intentional.

Here was my rationale. If the "emperor" is wearing nothing but the confidence of his tailors, simply pointing out "He's naked, you goofs!" will pierce the sophistry. Get it?

As the saying goes, "a word to the wise will suffice".

I wrote the article in 1990, and then got this general idea and went back and gutted the thing of every specific I could stomach. A few company names, situations, etc. remained because I could not bear to remove them. On the whole, though, I was pretty proud of myself.

Think of it this way, if the MLM "emperor" has no clothes, and if after yelling out the obvious, certain people still don't "get it"... do you think that more facts and figures, charts, sources, credential, endorsements, testimonials, or navel close-ups will help?

I hope you see my point. Why over-prove something anyway? By gutting the specifics (at least most), I take away an element of defensiveness as well and, thus, hope to be more persuasive IN GENERAL.

If what you mean by sources is "where I got this stuff", it is probably 98% original material gained from direct observation. So there were no sources. The concepts and ideas and opinions are mine.

The question is, then, am I correctly depicting the reality of MLM? Are my generalizations accurate representations of what really goes on in MLM?


If you have not lost money in an MLM yourself, why should anyone listen to YOU?

Perhaps a couple of simple examples will explain why.

Suppose you come to visit me at my house and I tell you NOT to drink a vaguely labeled bottle of poison sitting on the counter. Well, you would be ill-advised to ignore my warning on the basis that I had never drunk the stuff myself.

If a doctor tells you that smoking is bad for your health, will you ignore his advice on the basis that he has never smoked himself?

Such counsel must be judged on the merit of whether it is true or not.

If my analysis about what is wrong with MLM has any veracity, the ideas will stick with you. Try as you might, they will haunt you. Truth, once exposed, leaves a residue of conscience in even the most intransigent mind. If not, these ideas will fade, like all mere opinions.

Let time and experience be the test....


All people need is good training and determination to make MLM work. Success is up to each individual....

Here we go again....

If a person runs smack-dab into a brick wall, shall we encourage them to do it again with more determination, telling them "success is up to each individual" and directing their bandaged heads back to the bricks, or should we rather direct them to run in the open fields. Sure, they may trip over a rock out there, but their "chances" of success go from near zero to something rather hopeful.


MLM is just a new form of franchising, which was controversial in its day and now is standard business practice. Will not MLM be accepted in the future as well?

Franchising is very different from MLM, as it involves purchasing a protected market of some sort from the company in question. This is part of what you are paying for with the cost of the franchise: the right to market these customers or in this area, this way, or whatever.

This does not mean there will not be outside competition, just that for your investment the company and you are agreeing in the franchise to protect your interests--and theirs--when selling products in this area or to these customers or in this way, etc., by not overtly undercutting your business. And this "right to market" is agreed to in advance via a "franchise".

MLM is nearly the antithesis of this. MLM is an overt plot to recruit competitors in your backyard. In fact, YOU are even supposed to contribute to your own demise! Again, we are not talking about other companies competing, which is a given, but your MLM company overtly and without apology attempting to undercut your business, by design.

Another KEY difference is that when people buy franchises they are purchasing the good-will value of the name of the firm, which is presumably worth something. In an MLM, just by being an MLM, the company ought to pay you to sign up, as having the MLM albatross of negative public opinion hung around your neck can only be considered a massive disadvantage in starting a small business.


You are lumping the MLMs that do "front-end loading" in with the great MLM (fill in the blanks) that I am involved with. How DARE you include me with these blackguards!

So you do admit that front-end loading is obviously a flash-in-the-pan pyramid scheme and is thus morally reprehensible and wicked....

But dragging the robbery out over time, is this the solution? Is this not just as evil, if selling a false pyramid dream, perhaps more so?

Is this not Chinese water torture?

What I mean is, if someone must continue to exploit people in this MLM scheme "business", they might as well cut-and-run as drag out the abuse. Get what you want and show your colors early on. Why make people feel even worse to lose both their money and time?

Personally, I would rather be held-up with a gun quickly than be kidnapped, brainwashed, and tortured for months on end.

So do not be so hard on your front-loading cohorts. They may be kinder than you in the long run.

In so far as an MLM is pyramidic, it can NEVER work, even in theory. Given this, how long you drag the process out is not really the issue, is it?


Why can you not see the OPPORTUNITY of MLM for the unemployed? What is the difference between MLM and any small business?

I grow weary in answering questions that should have been clear from the article. But just in case I was not as lucid as I think I was about this, let's have YET ANOTHER go at it...

Imagine you are a teenager in the mall, looking for an "opportunity" to work. You see a clothing store with "help wanted". You go in and ask for an application and how much the "job" pays, and you are told to wait in a very long line that extends out the door and into the mall. As you are standing in line, you notice a certain smell, a sort of stink. Perhaps this is why there are very few, if any, customers walking into this store, only nervous applicants.

When you get to the front, you are told that the "job" is really a "business" and will cost YOU to participate in. If you pay the nice lady sitting at a desk (there seem to be more desks here than clothing racks...), you can then sell the fine products they have on display. But you have to buy the inventory yourself on top of the fee to be "hired". And MOST IMPORTANTLY, you are told that to succeed, you must do what she is doing, recruit others to make them "successes" like her.

You do the math on the clothing profits, and indeed it is not likely for you to even make minimum wage just selling product, and besides this... there are all these other people in line as well. The profit, it appears, is to find others who will pay, like you, to be "hired" into this "ground floor" opportunity.

You should set up a similar store next door, you are told.

You walk out confused, and as you pass the long line , the thought strikes you that all these many people will be attempting to recruit EVEN MORE PEOPLE in geometric expansion to set up a store "next door".

What do you think, a good opportunity?

If such an absurd clothing "store" were ACTUALLY to show up in your local mall, could you really NOT see the difference between it and the other businesses: the way they hire, the likelihood of saturation, etc.?

Can "success" be had through voracious "recruiting" of competitors? How could this possibly be sustainable?

With MLM, of course, there is no mall or line--just nice meetings in homes; the odd lunch with a "friend"; the seminar at the hotel--so that you cannot see the absurd line forming of those whom you will be "competing" against for yet even more recruits.

Great opportunity, eh?

Even a teenager should not fall for such a daffy idea... Trust your nose!


Some non-MLM businesses (or churches, etc.) are exploitative as well. Should we condemn them all because a few have run amuck?

Is there a fundamental dynamic that will FORCE all businesses (or churches, etc.) to fail?

In the article, I point out the dynamics of why MLMs fail and end up exploiting people, and that THEY ARE DESIGNED and destined to do this. It is not an accident or random occurrence or due to external or unrelated factors. And if the failure dynamics detailed concerning MLM are real, then we should condemn the whole.

The issue that must be addressed is if MLMs are "doomed by design" at the outset.

If a church, business, or any other enterprise has a chance of succeeding, then this is a different thing. It is a calculated risk, not a swan song. Many will fail, but the successes will be worth it.

And this is a substantial difference.


Aren't "real world" organization charts shaped like a pyramid?

Yes, and so is this child's toy on the floor here. I hope that you're not suggesting that all things with any semblance of similarity are the same?

With pyramid schemes shape is not the problem, as some MLM simpletons have disingenuously retreated to.

The problem is not in triangles, but in modus operandi, and this is analogously referred to by the term "pyramid". But the shape is not the problem, but rather that in pyramid schemes the organization is set up to expand exponentially with no way to stop or control growth, as in a legitimate business. "Pyramid schemes" are thus frauds.


What about corporate downsizing and layoffs? What about the many small business failures? What about (fill in the blanks)....?

That legitimate efforts fail is no excuse for selling out to failure as a technique.

That people in the "real world" have ethical problems is no excuse for selling out to being a con man.

That people die is no excuse for suicide.

In each case, the former happens as a matter of attrition for causes not necessarily related. The latter is by design.

You might disagree with me on the veracity and surety of the failure mechanisms of MLM, but please see the difference between this and chance failure.

I may (by some odd chance) hit a brick wall today. But this is very different than running deliberately into one.

Get it?

And I do not feel exactly comfortable defending all of "real world" corporate America's sins in any case. To quote Dale Dauten "The Corporate Curmudgeon" on layoffs and downsizing: "Why are CEOs who slash jobs so proud of themselves? Instead of bragging about "cutting fat," they ought to be getting up before their employees and saying, "We did such a lousy job of planning and hiring that we have more people than work. And we are so broke and so dim-witted that we can't come up with any way to get more work. So our only solution is to send a lot of good people home. I am ashamed and I am sorry."

If this honesty is needed in corporate America, consider the situation with runaway-train mad-dash recruitment within MLM. Just who is going to apologize? It was GUARANTEED and DESIGNED to do this, after all.

Again, the difference is between a mistake and being "doomed by design".


Fugi Saito has written a third revision of "What's Wrong With What's Wrong With Multi-Level Marketing". Based on Fugi's continued expert criticism and input, I have modified the article in many particulars.

Fugi's case, if I may summarize, is that if the "Big Myth" (the get-rich-scheme aspect) is debunked and dispatched with, then an MLM can be run much like a regular business. Since Fugi (and many like him) are honestly striving to redeem MLM, you can understand why they see me as "not helping," to say the least. They think I am perpetuating stereotypes.

The reader will have to judge whether or not my analysis of the MLM industry is accurate; if the "shoe fits", so to speak. Have I painted with too broad a brush? Or have I pegged it right-on in the fundamentals, and been fair in all else? Fugi, clearly, thinks I have overstated and exaggerated the case.

Where Fugi and I wholeheartedly agree is when it comes to dispelling the "Big Myth," as he terms it. If people take Fugi's advice and really market as individuals selling product and not in marketing the "Big Myth" of a "money making opportunity," then I will admit that the pyramid "Wrong With" rather proportionately fades from view. I just have to wonder, though, if once the "Big Myth" is popped, what will really be left? Might an MLM minus the "Big Myth" be something else entirely? An SLM?

At the end of the day, the real dispute is this: Is MLM a good idea that just needs some "tweaking", or a flawed technique that is riddled with systemic problems? Have a few bad people made MLM look bad, or rather has MLM made a lot of bad people out of good--and attracted even worse--by its very nature? Even if several of the "Wrong Withs" can be avoided by ethical reformers, can all?


Why are you calling something "illegitimate" or "immoral" that is LEGAL? How can something be illegitimate/immoral AND legal.

In the US, the general rule is that if a company produces over 50% of its revenues by selling real product (or services) then it is "legal". This does not make it moral, but it is legal in the US.

Someone smart once said: "Morality is a form of Advance Regret Management."

Think about it...


I lost a LOT of money in an insurance business. And I lost a LITTLE money in several MLMs. I do not see the difference. A business loss is a business loss!

To illustrate a key difference, if you could prove that an insurance company oversold distributorships in a territory by fraudulently representing the opportunity or market, then you would have yourself a very nice lawsuit, because this is illegal.

Where is the redress and accountability in an MLM?

Lloyds of London perpetrated something akin to an MLM oversaturation gaff a few years back. Look at the damage this has done, not just to the investors who got ripped off (and they are suing) but to Lloyds reputation as a whole. This one episode of oversaturation has brought down one of the best "brand" NAMES (pardon the pun) in the world.

This is the answer to "Where is the redress?", if any. It is in the rotten image that comes from unethical and exploitative business practices. And rot produces stink.

The real estate or insurance or semiconductor or any other business market will have its times of over-supply due to saturation and over-enthusiasm, and these are indeed devastating. But they will correct and go on. But the "market" of MLM is the dupes to be conned to buy into the MLM math dream, and we as a society have already been around that block. The "market" has already been had, thank you very much.

This is what I call the "MLM stink".

They say the sense of smell is the best to conjure memories....


You seem to assume people will agree with you that greed and materialism are wrong. Are you not just "labeling" with negative terms what is in fact normal self-interest?

What I meant by my comments concerning materialism in the article, as I am sure you know, is not the ordinate enjoyment of things material.

Materialism--used in the popular sense, rather than the classical--is an over-focus on getting and possessing, a lust for more and more and more at the expense of things relational, ethical, spiritual, etc. It is disgusting when abject and, thus, universally condemned by nearly every philosophy and religion.

An analogy would be the difference between social drinking and being slobbering drunk.

Most people have a normal desire for more and better. MLMers, on the other hand, are drooling...


Are there special problems for Christians practicing MLM?

Beyond the general points already made, I would submit one more for Christians.

MLM growth feeds on discontentment. The message to be conveyed, implied or obvious, is: "Don't waste your life working for 'Corporate America'." "Why bother getting a college degree (or job, or whatever)... just to work for 'The Man'?" "Your spouse doesn't make enough money," and so forth. "You need more," is the gist. Dissatisfaction is thus stoked and prodded by MLM materials and culture. Discontent appears to be the preferred fuel for the MLM engine.

Yet Christian doctrine is clear that believers are to "be content" (Hebrews 13:5, Philippians 4:11-12, 1Timothy 6:6-11) and motivated NOT by grumbling or greed or discontent, but rather by the Holy Spirit. For a professing Christian, how can this stark difference of emphasis and motivation be resolved with "standard" MLM practice, presentations, and culture?


Isn't MLM a great way for Christian ministries to support themselves?

No. It is a great way for missionaries or laypeople or ministers to get derailed from their mission, waste a lot of money and time, alienate a lot of people, and lead a few unfortunate others down the same ruinous path. Athena Dean (in her books, which are linked at the end of the article) makes a good real-life case-study of this pitfall for Christians.

Often this temptation flies under the banner of "tentmaking", a reference to the Apostle Paul who made tents and thus supported his own ministry so as not to be a burden on anyone else. My wife Laura and I are very keen on "tentmaking" ourselves as a personal practice. But MLM is completely at odds with the spirit of this noble discipline. Paul wanted NOT to be a burden on anyone, and this is quite different than openly conning and exploiting people. Even if the ML pyramid scheme aspect is downplayed (and it can only be subdued, not eliminated, right?), should ministers be hawking their wares within the church fellowship? WWJD?

Christians are enjoined in Ephesians 4:28 "not to steal", but rather to do "something useful" so that they can "have something to share with those in need". If you have read this far, you will likely have ascertained that the get-rich by magic pyramid-dream is nothing less than stealing, and you don't even have to be a Christian to know that this is wrong. If you are in, get out. If you are thinking about it, DON'T DO IT. Do something honest and useful instead.


Can I get my money back from the MLM I just joined?

Likely yes.

The MLM "bluff" is that you will not ask for it, so most do not. If you choose to ask for your money back, you might have to endure a nasty "deprogramming" session and you'll be putting yourself in harm's way for even more "sales pitch". So it is socially awkward.

But I would encourage you to ask for your money back, if you really want out. Otherwise, the victims will just pile up and this "friend" will be holding up a fat check at the next meeting boasting of his/her "success," at your loss, and the exploitative cycle will just go on. So brace yourself and just do it. You might be surprised to find that since so few have the guts to try, that you might even get your money back without much fuss.

Amway, in particular, is very good about refunding people's money who want out. But how many are brave enough to ask?

This is how MLM "works" for those who make money at it. This is the game.


Can I print out copies of this article and give them out to people?

Yes, as long as it is not for profit, not modified, and printed out whole, with the URL included. All other rights are reserved. Any for profit use is strictly forbidden without express permission from the author.


I want to give a copy of the article to a friend who is trying to "sign me up". Do you think this will do any good?

I have given out many copies, and it is an excellent way to ward off over-aggressive types. I encourage you to use it in like manner.

But perhaps you are thinking more of helping your friend than protecting yourself. This was certainly my motive in writing the article, not just to ward off foul spirits.

In general, over the years I have noticed three fairly distinct categories of response by practicing MLMers when exposed to ideas such as in my article.

1) A hearty laugh and quick repentance, and enthusiasm to help others (about 20%). All these people need is a flash of insight or for someone else to yell out the obvious. When the pretense of the power of suggestion is broken ... they laugh at themselves and the situation and move on.

2) A general dread and feeling of shame, drug out for days, weeks, even months. This is due to partial denial; a refusal to see it all so clearly all at once. But once these ideas have been shouted out, it is hard to be so credulous in the future, and a general funk ensues. The pretense is broken. The claim of innocence is no longer valid. But still not willing to "deal with it", they experience ever more wide swathes of stridency and (then) depression. Gradually they fizzle out, but are not sure WHY and still do not "completely agree" that MLM is fundamentally flawed (about 50%). These are those who see the naked emperor in a flash of insight, but can squint a little and still pretend he has on a beautiful robe. But more and more the eyes cramp when squinting, and when the eyes pop back open THERE HE IS naked as a jaybird in plain fact. "Ouch", they say, and go back into the squint of denial to avoid the embarrassment...

3) Total rejection. Here I cannot help but think of an MLM lawyer in Austin who when handed the article and saw the title threw out both arms, turned his head sideways to the point of snapping, and said "I will NOT read that" and marched away. You would think a cross had been stuck in a vampire's face! In general, these people seem to know intuitively that to let such ideas into their heads means the end of the MLM delusion. So, even if they do listen or read they do so with ONLY the view of seeing "what the enemy is saying" or thinking about how to respond, etc. In other words, they are not really listening (about 30%). These are those who are the "positive thinkers," cutting off any corrective feedback. Or worse still, they are the fraudulent tailors who wove the "beautiful robe" in the first place, and so do not want to see the extent of their debauchery. These are the eye closers or outright charlatans.

Interestingly, these three responses are similar to any detected mistake or sin, are they not? It is convicting to reflect and see in myself all three of these responses to the various errors in my own life.

Better we all get real good at number 1, methinks!


email Author Dean Van Druff

A humorous synopsis of "The Emperor's New Clothes" as a closing parable

This is an addendum to the article "What's Wrong With Multi-Level Marketing", the outline to which is:

I) Market Saturation Just who is in charge of this here train?
II) Pyramid Structure Denial is more than just a river in Egypt... it seems
III) Morality and Ethics How low will people stoop when there is no one left to sell to?
IV) Relationship Issues Friends as "marks" and neighborhoods as markets

   


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