top of page

Informational Main Page

Concise 4 Points of Multi level marketing

No Retail

The goal of MLMs is not to retail to outside customers but to recruit within the pyramid.

MLMs products are hugely overpriced due to endless chain "commission" obligations and convoluted pay structures. These MLM products can not and are not meant to compete with legitimate market demands in the a free market.

There is no money to be made in MLM through sales of products to non-participants, the primary way to make money is to recruit more distributors within. Mathematically, it does not make sense to sell but to recruit within for income.

What sense does it make to endlessly recruit your competitor? That just shows MLM is not primarily about sales to non participants. If recruits at the top of the pyramid get better "discounts" then recruits on bottom, why would customers buy from bottom pyramid recruits? 

Top Weighted 

The vast majority of the money distribution of MLMs goes to the top fraction of 1% of the pyramid. As per numerous studies, over 50% of money distribution goes to the 1%

In standard retail, the commission will not go over 4-5 levels. The majority of the commission percentage will go towards the front line sales and will diminish as the levels go up, for example from the initial sales associate to store manager, then to branch, finally to regional. This is completely contrasted in MLMs. The front line doesn't receive the majority of the commission, but the very few at the top of the pyramid which is a self defeating principle in regards to fair compensation. MLMs have an endless or ongoing commission chain which is doomed for saturation and demonstrates a scam

Pay to Play

Mandatory overpriced mass perpetual purchases are  incentivized. This keeps the money flow to the top of pyramid. It is a form of laundering 

Every MLM Recruit is required to pay to go to seminars, and pay for "education material". The speakers at MLM seminars or ceremonies are often at the very top of the pyramid and do not represent the vast majority of MLM participants. Not only are products laundered for top weighted money transfer but also "education material" purchases

Personal expenses are not reimbursed.

In order to receive the right to recruit as an MLM distributor and earn various incentives such as discounted price, ongoing payments would have to be made on a perpetual basis

Ongoing Recruiting

The promises of vast, perpetual income is based out of recruiting. It is promoted though MLMs through your recruits which are your downlines or legs, their efforts get distributed to you without you doing anything. (This is why people join, not selling to outside customers)

Recruitment is the main focus. It doesn't matter if different terms like mentorship or affiliate marketing is promoted, the principle is the same.

The recruiting of MLM is ongoing. In contrast to standard companies that don't keep hiring due to supply and demand. In contrast with standard retail, product cycles and market demand are always kept in mind, so why keep hiring beyond what is needed?

if you don't remember anything else, remember points above

Anchor 1

Downloadables (Books, data, stats)

In this section you can download free books or data explaining the deception of Pyramid Schemes. This section also includes links to other book you can buy off Amazon.com. We make no money from this

 Books (FREe  download

Book Cover 1.PNG

The Case For and Against Multi-Level Marketing

By Jon M Taylor

book 2.PNG

In Defense of the Pyramid Scheme

by Dr. Lasdwun N. Luzes 

book 3.PNG

The 5 Red Flags

By Jon M Taylor

BOKKK COVER.PNG

Download Full Books Here

Click the blue button below each book to download (PDF)

Read through your computer, phone, tablet or print them out 

Merchants of Deception

by Eric Scheibeler (Amway Whistleblower)

Comment: When reading works from the specific author Jon M Taylor,  please ignore his writings about a hypothetical MLM that doesn't cause harm to society. It doesn't exist. Robert L Fitzpatrick from Pyramid Scheme Alert concurs. The backstory is Jon M Taylor was devoutly in a religious cult so he wasn't aware of the cult indoctrination aspect of MLMs that parallel his own life. He was only attempting to reconcile MLMs as a business model, in doing so missing possible aspects of undue influence and thought stopping predispositions. Too bad he is no longer alive to defend himself.

 Books (Amazon.com)

logoooo.PNG
Books.PNG
amazon book picture.PNG
book amazon 2.PNG

False Profits is an in-depth examination of the multi-level marketing industry and related illegal pyramid scheme phenomenon which have grown rapidly in the US and abroad in the last 15 years. The examination looks at the MLM field from the perspective of its social, personal and spiritual effects on those enrolled and solicited.

smoke and mirrors.PNG

Amway distributors tout their business as "the best business opportunity in the world." Yet of the five million or so Americans whove been involved over its 40 year history, fewer than 1% have made a profit, and fewer than one-tenth of one percent have established the large incomes that they claim are achievable by all.

Ruth Carter has written a clear, concise account based on her 15 years of experience as a distributor and five years of insider information as the employee of a Diamond. The book attacks head-on the accusations of deception, cultism, and greed which are so often leveled at the Amway business. Here at last are the reasons why, clearly explained by a former insider.

Amway Motivational Organizations: Behind the Smoke and Mirrors takes a serious look at:
- a real Diamonds annual income and expenses
- what is the "system"?
- who makes money in the system?
- what is a cult?

- why is Amway accused of cultism?

mlm book 4.PNG

Leaving an MLM (multi-level marketing company) can be a difficult experience. This guided journal offers plenty of space for writing and also includes ten helpful prompts to encourage reflection and deeper understanding of the false beliefs and misconceptions that MLMs encourage.

Topics covered include

  • Shame and embarrassment over treatment of others

  • Losing friends and mentors after leaving MLM

  • Blaming self for "failure" at MLM

  • The pressure to keep buying inventory

  • Spiritual and religious manipulation

  • Lies about MLM earnings

  • Brainwashing and discouraging research into MLMs

  • Misrepresentation about ease of selling MLM products

 Statistics, Regulations, Other (free download)

gggl.PNG

The  Myth of  "Income Opportunity"  in Multi-Level Marketing 2008 Update with Income Analysis of  Ten  Multi-level Marketing Schemes  and Income Analysis of  Amway/Quixtar  and its Secret "Tools" Business  by Robert L. FitzPatrick©2008 
 

 

(Preview)
nu skin.PNG
(Preview)

NU SKIN ENTERPRISES, INC. DISTRIBUTOR COMPENSATION SUMMARY

NuSkin Data

dsasdsd.PNG

A Statistical and Business Model Examination of the  Economic Legitimacy of Multi-Level Marketing 


 Robert L. FitzPatrick, Report Editor and Analyst Charlotte, NC Feb. 28, 2014 

(Preview)
ps 3409.PNG

The Pyramid Scheme Legalization Act of 2017 

 


 By Douglas M. Brooks, Bruce Craig and Robert Fitzpatrick 

(Preview)
giguhuihiu.PNG

MLM Chronology - by Douglas M. Brooks


This is a very helpful timeline to briefly explain the history of the MLM Pyramid Scheme by Douglas M. Brooks. This is a helpful for understanding chronologically. 

(Preview)
Capture 222.PNG

10 Big Truths about Multi-Level Marketing: Hidden, Obscured and Denied…

This is a partial book. Truth #7 exposes the lack of regulation in the MLM (Mult-Level Marketing) industry. This is a truth that MLM recruiters would refrain to expose and try get around. 

(Preview)
MLM LIST PICCC.PNG

MLM List (Alphabetical Order)

Print or download this MLM list to use this as a reference on what to avoid. Bring this to career fairs to make your job search more time efficient. Share this list with others and contact us to update the list.

(Preview)
twelve TEST IMAGE.PNG

Twelve Tests for Evaluating a Network Marketing (MLM) "Opportunity"

By Jon M. Taylor, Ph.D., Consumer Awareness Institute

Slide Screenshot.PNG

Multi-Page Slides by Pershing Square Capital Management exposing the MLM, Herbalife

See the documentary Betting on Zero

 Cult Information 

cult picture.PNG
(Preview)

Freedom of Mind: Undoing Undue Influence and the B.I.T.E Model 

Behavior Control 

Information Control

Thought Control

Emotional Control

hjhggg.PNG

Influence Continuum

From The B.I.T.E Model 

 

Behavior, Information, Thought and Emotional Control

(Preview)
Anchor 2
IMAGE BOOOK.PNG

Coercive Techniques in Business Opportunity Cults

By Douglas M. Brooks

Government Sources

In this section you can access external links of The Federal Trade Commission and different govt. sources in responds to multilevel marketing (product based pyramid schemes). You will notice very convoluted language on this matter. You will notice the condemnation of illegal pyramid schemes which are straight money based, and as they condemn illegal pyramid schemes they indirectly condemn multi-level marketing in principle (..if it looks like a duck, it quacks like a duck). To justify Multilevel marketing they bring up nonsensical points that conflict with the multi-level marketing platform. Such examples include condemning the infinite expansion of recruits of illegal pyramid schemes and at the same time mentioning legitimate MLMs don't focus on recruiting internally but the sale of products to outside recruits, which is far from the truth. These articles have mixed languages and some make valid points exposing the flaws of MLM. These articles show that the legal existence of product based pyramid schemes through extensive lobbing doesn't exist with rationality.

Consumers are on their own for evaluating MLMs. At best, government sources would only display a half truth and not give the full picture. There's no consumer protection from the financial harm of MLMs. Unlike franchises MLMs are not required to disclose any financial information that would make it obvious of being a financial trap with the loss rates, average incomes or operating cost. 

 Federal Trade Commission 

- This article struggles to make a solid distinction between a multi-level marketing and pyramid schemes (because in principle there is no distinction). The points that try to validate MLMs don't exist, or hardly at all because the MLMs platform is contradictory to promote outside retail sales.This article is evidence that MLM existence from aggressive lobbying don't exist with logic and sound reasoning.

Summarizing Comments
(Click for Link)

- See list of various articles. Articles include various companies and the predatory targeting practices of Latinos

Summarizing Comments
(Click for Link)

 New York Attorney general 

(Click for Link)
Summarizing Comments

- Highlighted Quote: "A legitimate multi-level marketing company emphasizes reliable products or services. A pyramid scheme uses products or services to disguise its quest for collecting money from the investors on the bottom levels to pay other investors further up the pyramid."

-(PSTC Comment) MLMs ARE pyramid schemes that launder products to recruit investors at bottom levels to pay upper levels. 

 California Attorney General 

(Click for Link)
Summarizing Comments

Highlighted Quote:

"If an opportunity has one or more of the following, it could be a pyramid scheme:

  • You make money mainly based on how many people you recruit and the money they pay to join, instead of through sales of products to the public. This is the number one sign of a pyramid scheme."

 Florida Attorney General 

(Click for Link)
Summarizing Comments

- This article states 5 points on how to choose a multilevel marketing company. Those points are valid questions to ask, however with further research of those questions beyond the article, you will find out MLM is a flawed model. In the link those reasons to support MLM are nonsensical. This article avoids the fact ALL MLMs are about recruiting rather than selling as well as avoiding the fact it is inevitable market saturation will happen from MLM. 

 Illinious Attorney general 

MULTILEVEL MARKETING    

Things You Should Know About..

(Click for Link)

- This article represents 7 valid problems of multi-level marketing and the IL attorney general seems not as pro-MLM as some others.

 

There is no registration requirement for MLMs unlike franchises. Why are MLMs are not obligated to disclose certain financial data, unlike franchises. MLMs can keep certain information to themselves away from the public. For example, average earnings per distributor and loss rates.

Summarizing Comments

 INdiana Attorney general 

(Click for Link)
Summarizing Comments

- This article fails to mention that in principle MLMs are pyramid schemes however makes a valid point that "Multi-level marketing plans paying commissions based on sales by lower level distributors may eventually result in a financial loss due to a reduction of new distributors joining at lower levels."  The may needs to be crossed out in the article since the lost rates are close to 99.9 percent.

 Washington Attorney general 

(Click for Link)
Summarizing Comments

Highlighted Quote: No. This office does not endorse or approve any marketing program. Anyone who says that their program is approved by the Attorney General is engaging in a deceptive act.

Ask why would this article even mention the quote above, unless MLMs or pyramid schemes actually made those false claims on a frequent enough basis

Anchor 3

 FBI (Federal Bureau of Investigation 

The Corporate Psychopath

By Paul Babiak, Ph.D., and Mary Ellen O’Toole, Ph.D.
(Click for Link)
Summarizing Comments

Highlighted Quote: "There also is the risk for economic crimes to be committed. For the corporate executive and the criminal justice professional, the issue is the possibility of fraud. Today’s corporate psychopath may be highly educated—several with Ph.D., M.D., and J.D. degrees have been studied—and capable of circumventing financial controls and successfully passing corporate audits."

Media