Merchants of Deception - Selling the Pipe Dreams of Multi-Level Marketing

Over the course of my 40 years I have seen many "business opportunities." Especially when I was in Huntsville many Multi-Level Marketing opportunities presented themselves. It seems that in Huntsville there is a group of people who jump from one "opportunity" to another. As I attended these recruiting meetings and listened to the CDs and looked at the DVDs and VCR tapes something didn't seem exactly right.

These materials always promoted the idea of being in business greater than the opportunity. It didn't matter what you were selling, it mattered that you were selling it. Today you will see someone selling soap tomorrow it is something else. But it was always about building residual income on those lower than you.

How do They Work?

You pay a sum of money let us say 100 bucks. (This could be much more than 100 bucks or as little as 50 bucks, but you are paying to become a distributor of the product.) You then are expected to sell a certain amount of product a month or purchase that amount yourself, (let us say 20 dollars a month.) The product you are selling is extremely overpriced. Let us assume that you are selling a bar of soap, instead of a little over a dollar at walmart, you might pay 4-5 dollars for your wholesale price. (They argue that this is the best quality product you have ever seen. However even if that is true, is it 4 times better than the average soap?) Of that 4-5 dollars you may see .40 to .50 cents coming to you. So you pay 200-300% more than you should have to get back 10%. (Work out the numbers in your "opportunity")

Finally, you are expected to recruit others into the "opportunity." You get a percentage of that which those you recruit and those they recruit sales.

Who is Gonna Pay that Much?

The problem is that you will not be able to sell the high priced product to hardly anybody but other "distributors" who have to buy the product or they will get kicked out the system. I saw one opportunity where multivitamins were being sold for around 50 dollars with a wholesale price of around 45 dollars. One can go to their local health food store and find multivitamins for under 10 dollars. No one will buy that and those who do will feel cheated once they realize what these products should be selling for.

Other Things in the System

But more than that, the whole system really hides from the distributors what they are really spending in the system. You don't just have to buy the products, but you are expected to attend the meetings and buy the materials that help you "sell." The leaders make their money not from selling the product, but from selling the audio CDs and DVDs that the distributors are expected to purchase to learn how to sell the products.

Most of the multilevel marketing schemes work the same way. Please look closer before you invest your time and effort into a scheme that is designed to simply make money for those who are selling tapes to allegedly help you make money. In addition, I would encourage you to download the free book Merchants of Deception that tells the inside story of how one of these systems work.

Why do I Write This?

Why do I write on this? Because 5-6 folks have contacted me in the last few months regarding various schemes that would be simply throwing my money and effort down the drain. It is about stewardship. For taking this stand, I have been called weak, duped, and stupid. One individual accused me of trying to keep black folks down for not opening up to them the wonders of business ownership. I argue that business ownership is important and fine, hey I am a business owner, but a scam is not a business no matter how attractive the marketing materials.