Multi-level Marketing: In The Wrong Hands, Ripe For Abuse

Multi-level marketing plans … did you know?

According to a number of industry experts, it all lies in how the compensation plan works. And each companys plan works in a different way. Some operators succumb to the temptation to milk the IRs rather than help them make sales, giving rise to the industrys sometimes-deserved reputation for exploiting the people at the bottom of the chain the so-called downline. According to Jeff Ernsthausen, writing in Harpers Magazine , such companies can create incentives for sales reps to focus on inventory sales to these recruits, rather than on sales to end consumers.the distinction between a legitimate business and pyramid scheme hinges on whether these commissions come mainly from retail sales to final consumers or inventory sales to other distributors. Vigorous industry efforts and lawmakers in some countries have attacked some of the worst problems. Its possible that the best policeman is the Internet where the more spurious charges flourish in sketchy personal blogs but dont make it onto reputable sites. Abuses still happen sometimes; unknowing IRs (independent representatives) and unscrupulous operators can team up to bring these practices into play: Top-weighted compensation plans. Bosses upstream in the sales network, sometimes a number of them, get as much money per sale as the person who makes it. A reversal of the normal way to pay commission to salesmen in the field. Stockpiling. Requiring IRs to purchase large amounts of inventory to join the network, or to qualify for commissions. Channel-stuffing. Coming up with frequent revisions or updates to products that IRs have already purchased, making them out of date and unsalable so that IRs have to get rid of them often by giving them away, so that they have to buy more just to stay in business. Inadequate controls. Failing to keep overly-aggressive IRs from making false or misleading claims of income just to recruit new members to the network. Pay to play. Requiring IRs to pay exorbitant fees just to join the network or to maintain their status in it, incenting upstream people to make money simply by getting more people to join. Spurious sales tools. Requiring IRs to purchase high-priced training session and sales tools like books and DVDs of uneven quality and value. Often a way to milk more money out of poor performers before they leave the network. Cult-like culture. Motivations a key part of all sales organizations; some MLMs amp it up with messianic language and a powerful sense of purpose and community so that IRs stick with it to be loyal and keep friends, even when losing money. Many Asian MLMs, according to Benjamin Tan of the Direct Sales Association of Singapore, have developed and signed on to a rigorous code of ethics to prevent thse abuses of the model. But he admits that laws addressing these practices, strong in Singapore , can be weak or unenforced elsewhere in Asia. In many cases its all up to the management style of the individual company, their skill in running such a business, and the long-term benefit they see in doing so ethically and responsibly. (Derived from a number of industry experts, especially Jon Taylor Ph.D, author of The Case for and Against Multi-Level Marketing.)
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Multi-level marketing scam: 1 held

A Bandrabased advertiser, Manjunath Hegde (52), was arrested for cheating and has been remanded in police custody till August 22. QNet is being probed for allegedly duping thousands of investors by selling them plastic and glass products that were termed as miraculous for treating diseases like cancer, said the police. The firm has reportedly attracted investments between Rs 30,000 and Rs 7 lakh. “Hegde, who is an advertiser, was arrested from his Bandra home. We have seized a hard disk and commission receipts and suspect he may be linked to Vijay Esvaran, the prime accused ,” the police said. Astatement from QNet read: “We do not commit any magical cures and the scientific properties of the Bio-Disc on our website are duly certified by relevant agencies. We do not have control on how some distributors represent it… We also don’t force anyone to join our net work and commissions are not linked to people joining the network , but rather on the sale of products.” Two teams have been sent to Bangalore and Chennai for investigations. FEATURED ARTICLES
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My Experience With Multi-Level Marketing

Fitzpatrick, President of Pyramid Scheme Alert , state that in many MLM companies the sale of products is simply a ruse for what in effect is a money transfer scheme, in which a few high level distributors make large sums of money while most participants lose their investments. In all cases, the big money that is promised to the last ones to join depends on “endless chain” expansion, which cannot occur. In addition, former Amway distributors have alleged that many high level distributors in the Amway system make most their profits from the sales of motivational and instructional materials to their “downline” distributors, rather than from the sale of Amway products to consumers. Given the losses suffered by the millions of participants joining the schemes annually, why do they join and why would many stay active in these organizations? As can be seen from the Amway Quixtar Motivational Organizations entry at my Freedom of Mind Center site, sometimes these schemes employ the same mind control techniques that abusive cults use. Recruitment rallies may run till early hours of the morning; the schemes are presented as the “last best hope.” Critics and doubters are cast “losers” and “dream stealers.” In this way, Amway’s recruiting organizations (as well as other, similar MLM schemes), can themselves be considered destructive cult groups. But these groups are commercial cults that are offering a type of transcendental ideology that is not much different from that found among the religious cults. Their salvation lies ns a financial promise. Early in 2007, several Quixtar distributors, which it dubs “independent business owners” (IBOs), filed suit in the United States District Court in San Francisco, applying the Racketeer Influenced and Corrupt Organization (RICO) statutes, and alleging that Quixtar (which at the time was still part of Amway) functions as a massive consumer fraud. On November 3rd, 2010 the parties announced a proposed class action settlement valued at $150 million.
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Beware the “Main Street Bubble” of Multi-Level Marketing groups without U.S. Government Protection

According to the Direct Selling Association , over 80% of these independent contractors are women. Most work part-time although some do enjoy a full-time opportunity with direct sales companies. Multi-Level Marketing Companies There are hundreds, if not thousands, of multi-level marketing companies. Most of these companies are based around home shows where a hostess invites her friends to her home for product or service demonstrations. Attendees are then offered a chance to purchase while the hostess of the party earns incentives and credit toward her own product purchases based on the sales of her party. The demonstrator will earn a commission based on the sales of the party. Direct selling businesses include toys and clothing for children, kitchen supplies, home decor, jewelry, crafts, adult novelties and much more. There is a direct selling business for virtually any interest and many companies within each category. The commission structures and upfront costs will vary by company as well as how deep of a downline (recruits) the demonstrator can have and earn from their sales. Choosing a Direct Sales Company When searching for a direct sales opportunity, talk with others who have also pursued a work from home business with that company. In conducting research, it is important to distinguish between multi-level marketing opportunities and pyramid schemes . Find out about the pros and cons, upfront costs, ongoing costs and commission structure for the business. Ask about the amount of support available for new and existing demonstrators.
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Multi level marketing Sales opportunities

(951) 317-4289 multi level network marketing Getting in the right multi level network marketing company is truly going to determine your success! Wake up Now will bring out your full potential. No more searching around for network marketing.wake up Now is the best multi level company out there! Our compensation plan and our products are second to non. multi level network marketing Join our wake up now team and start saving, managing and making money. If you use the products and service we will save you more then you pay for your membership. Which is the best part about this multi level network marketing company wake up now. wake up Now has a 92% retention rate meaning 92% of people that join stay in. the reason for that is like i said earlier we save people more money then what they spend on their monthly membership fee.
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Multi-level marketing plans are often pyramid schemes

The conversation ended with the comment, I cannot believe how many friendships I have seen this business ruin. These models want and demand the personal sale. They do not want a person to use more scalable techniques. Those that do can actually run afoul of certain programs guidelines. Its also why they dont share the setup costs with the referrer. If you did, then you could create a truly successful online campaign. Its a Cult That You Pay to Join More than anything, network marketers sell a dream, and they sell a dream through a series of ongoing indoctrination. Everything about the network marketing business is based not on reality, but on a buy-in of what could be. It operates like a religion in that they have an answer for everything where all success comes from proper behavior and all failure stems from an individual shortcoming. These are faith-based organizations with no room to question and little tolerance for true creativity. They need and demand obedience. That they have a disproportionately large percentage of very religious usually Christian members is unsurprising.
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Multi-level Marketing Businesses

Sign in Sign in to YouTube Sign in with your Google Account (YouTube, Google+, Gmail, Orkut, Picasa, or Chrome) to dislike Shane Jeremy James’s video. Add to Sign in to YouTube Sign in with your Google Account (YouTube, Google+, Gmail, Orkut, Picasa, or Chrome) to add Shane Jeremy James’s video to your playlist. This video is powerful and will show you how to overcome the objection of the multi level marketing pyramid. Multi level marketing pyramid term is very misunderstood. Multi-level marketing is a marketing strategy in which the distrubator is rewarded not only for sales they personally generate, but also for the sales of others they bring into the organization, creating a downline of people and a hierarchy of multiple levels of income. There are many terms which include MLM network marketing,direct selling, and referral marketing.MLM companies have been a frequent subject of criticism as a multi level marketing pyramid. In the video I explain a very fun way to over the objection of multi level marketing pyramid. Sometimes when people don’t understand the network marketing business you will hear things regarding, price-fixing of products, very high start-up costs, emphasis on recruitment of lower-tiered salespeople over actual sales, having people to purchase and use the company’s products for sole benefit the company makes money, exploitation of family and personal relationships which are used to make more money in network marketing and sometimes exaggerated compensation schemes, and cult-like techniques which some people have to become a part of. Many network marketing companies operate with a very high standard, and most people who call network marketing a pyramid scheme don’t understand the industry. To watch more videos and have more success in network marketing go to Shane Jeremy James has trained and coached thousands and thousands of people in the network marketing industry to acheive great things and overcome the objection of multi level marketing pyramid.
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The Cult of Multi-Level Marketing

You’ll face pressure. Expect to be required or pressured to buy samples, marketing materials, training courses and tapes, attend seminars, and more. You’re very likely to spend far more than you’ll ever bring in from sales. You turn your friends and family into “prospects.” MLM programs typically suggest you sell to and recruit people you know well. Do you really want to be constantly beseeching those closest to you? As with any business opportunity, before investing your time and money in a multi-level marketing program, do your homework. Ask to speak to participants who do not recruit any others and who sell only to non-program customers. Ask for the average and medium income, not just a few examples. And ask how much money the average person makes in comparison to the total they spend on any and all products and services related to the program (including training). If they told you the truth, you’ll find it’s just about break-even at best. Get on the Internet and look for information about your particular program, including lawsuits or websites set up by people who’ve left. Check out info from the FTC and .
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Strategies: Is multi-level marketing a good choice for you?

Author page According to the Direct Selling Association [1] , in 2011 alone some 92 million multi-level marketing (MLM) plan operators, or direct selling businesses, grossed over $154 billion world-wide. While MLM plans can be a profitable business model, caution is warranted for prospective market entrants as they must comply with many provincial requirements and ensure that their proposed business model is not deemed to be an illegal pyramid scheme under the Competition Act (Act). Competition Act Under the Act, a multi-level marketing plan is defined as a plan that promotes the supply of a product, where participants in the plan receive compensation for supplying such product to other participants. While MLM plans are not deemed illegal under the Act, they may become a criminal offence where misleading representations are made by MLM plan operators or participants with respect to (i) compensationactually receivedby typical participants in the plan; or (ii) compensationlikely to be receivedby typical participants in the plan. In addition, in order to avoid falling under the definition of a pyramid scheme, MLM operators should be careful when requiring participants to purchase merchandise as a condition of adherence to the plan. Indeed, such purchase can only be required where the products are sold at the operators cost and for the purpose of facilitating future sales, as in the case of start-up kits or product samples. An MLM plan may also become illegal when it requires selling unreasonable quantities of products to participants (inventory loading) and it does not allow the return of products on reasonable commercial terms. Therefore, in contrast to an illegal pyramid scheme, a legitimate MLM has a real, marketable product or service to sell one that is sold to the general public without requiring consumers to pay an additional fee to join the MLM program. In addition, while MLM Plans may pay commissions to a long string of distributors, such commissions should primarily be earned in relation to actual retail sales, and not for recruiting new participants. Communication Responsibilities MLM operators must be careful so as to not give a misleading impression about how easy it will be to gain revenue as a participant in the MLM plan. Indeed, the Act prohibits the making of representations relating to compensation without fair, reasonable and timely disclosure of the amount of compensation received or likely to be received by typical participants in the plan. Pursuant to the Competition Bureaus Multi-level Marketing Plans and Schemes of Pyramid Selling Enforcement Guidelines (the MLM Guidelines), a typical participant is a participant in the MLM plan who earns an income similar to that of the majority of participants under the MLM plan.
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Multi Level Marketing Pyramid

Alvin Sim, the CEO of Exoro , offers his opinion on MLM and explains why it is not helping the entrepreneurial scene in Singapore. Most MLM marketers (MLMers in short) are self-proclaimed entrepreneurs by their definition of Not working for others. True to a certain extent, its no wonder the entrepreneurship failure rate in Singapore is so high. The concept is simple: Fork out some entrance fee to purchase loads of unknown products, while this fee translates into commission which flows upwards. Effectively the higher up you are in the system, the more money you make. Not much deviated from its illegal counterpart, MLM can become synonymous with other kind of marketing shams, such as pyramid schemes. Common characteristic of MLM products is the significantly long period before visible signs of effectiveness appear. By the time MLMers realize this product scam, they would have already pitched it to at least 20 other people, a little too late for regrets. In the first place, MLMers pitch always starts and ends with money, hardly any mention and/or knowledge about the products. These products serve primarily as a trade-tool for monetary transactions and ultimately, it is just a game of passing the bag around. No doubt successful companies like TupperWare and Amway made their mark through MLM, the only difference is that these companies had really good products. How can one be successful in selling something which he/she doesnat believe in? Since MLMers only believe in money, forget about the products, Im just going to set up my own MLM selling money a aPay me $500 now, and I will give you the rights to pitch this to 5 other people, and you get 5% commission per level downa.
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(They were really good products though!) In college, I worked for a fast-food franchise owner who was big into Amway. She bought all their cleaning products for the restaurant. She was convinced that this company was her ticket to early retirement and possibly multi-millionaire-dom. As far as I know, shes still trying to become a Diamond. The BBB sometimes gets calls about multi-level marketing (MLM) opportunities. Are they scams? While any particular scenario could be a scam, the short answer is no. MLM is a legitimate business model that has made certain individuals extremely wealthy. However, it isnt easy. Many people who get into network marketing dont have the personality or the tenacity to make a go of it. They chicken out of making cold calls or meeting strangers at Perkins.
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multi level network marketing

Considering that some form of relationship is already made with these folks, they’re generally much more responsive to listening to a new sales method. Even though people enterprise master’s comfortable industry aren’t fascinated, they may on the other hand distribute the word about the business or even supply the owner titles of latest tips. This technique involving creating Network marketing leads is normally chosen above getting in touch with. Interest Marketing This process regarding building Multilevel marketing sales opportunities consists of using strange ways of produce desire for a service or product. One of many typical means of using this method is actually possessing unique workshops as well as classes for coaching reasons. These kinds of is not necessarily product sales delivering presentations, but useful times in which expertly incorporate your Multi level marketing company into the display. Folks who enroll in instructional classes honestly never sense forced must be sales page just isn’t given ahead of the finish from your session. Your occasion, people are currently attracted to exactly what the company needs to make available, which is the reason this procedure is recognized to since fascination advertising. Websites and also Post Websites An alternate way to garner curiosity about any network marketing clients are by making use of article sites along with blogs. A business person may release information pertinent for the service or product this company delivers around the individual blog and also permit website visitors to leave comments when they’d just like. Entrepreneurs can also publish useful posts with regards to the company’s items or even solutions to article internet sites by way of example Article city. These really should be info instead of income driven as a way to maintain your reader’s attention.
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Multi-Level Marketing (MLM) “The naked truth revealed”

You have the support of a multi-level marketing company who supplies the product, with marketing support and sometimes training. They will not call themselves a multi-level marketing scheme and some do not actually sell a product or service, they may just offer an investment opportunity. Most multi-level marketing businesses offer a plan that claims that you will receive commissions by selling their product as well as commissions on the sales of people you recruit. Typically, you sign up, send money for the product or business package and your recruits do the same and their recruits do the same. Everyone is sending the multi-level marketing company money to be a member. Legitimate? The whole scheme depends on you recruiting people to distribute the product and of course the people you recruit must recruit and on and on it goes. Not all multi-level marketing schemes are fraudulent. A legit multi-level marketing business is designed to move product through a large distribution network. If you are considering joining a multi-level marketing business, do your research. As with any business venture, investigate the business and its products first. Advantage Get as much information as you can, including copies of their sales literature, business plan and/or marketing plan. There is a ton of information on the Internet, use it to your advantage.
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