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  #1  
Old 06-16-2010, 09:59 AM
ChrisDoyle's Avatar
ChrisDoyle ChrisDoyle is offline
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MLM as a Business Model...is it Legit?

Lets keep this one on track, and discuss whether or not the business model itself is a scam. Bearing in mind the definition of ''scam'' is a fraudulent, dishonest business scheme, lets not talk about whether or not its a good form of business, or the fact that most people who join dont become millionaires. Neither of those make it a scam.

My view of course, is that its completely legit, but because its such a *****ful business system, a scam can easily masquerade as a legit MLM. To the uninitiated, it can often be very difficult to differentiate between one or the other.

To the first person who says ''if its so *****ful why arent there many more people involved?''. In my opinion, the scams have been holding it back for decades, and the old ''is that a pyramid'' question still gets asked, though probably less often these days.
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The musings of joecool44:
Quote:
Originally Posted by Joecool44
Thise links basically had comments that looks like it waas written by Amway IBO's.
About 10 minutes later:
Quote:
Originally Posted by Joecool44
Learn to read you fvcking moron. I never claimed those pages were from IBO's.
And he admits to changing people's posts!
Quote:
By the way, I only change links when people make personal (unsubstantiated) attacks on me. I find it works quite effectively when I employ that tactic.


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  #2  
Old 06-16-2010, 10:03 AM
Erneston Erneston is offline
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Re: MLM as a Business Model...is it Legit?

Quote:
Originally Posted by ChrisDoyle View Post
My view of course, is that its completely legit, but because its such a *****ful business system, a scam can easily masquerade as a legit MLM. To the uninitiated, it can often be very difficult to differentiate between one or the other.
Not only to the uninitiated. Regulators and courts have had some problems over the years, too. As Len ****** has commented, sometimes companies that have been trading apparently legally and apparently successfully for some years have been closed down as scams, because a court's decided that they were actually operating an illegal pyramid.

Weird, isn't it?

An interesting question is "What is it about this perfectly legitimate business model of MLM that apparently lends itself to that happening?"



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  #3  
Old 06-16-2010, 10:15 AM
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ChrisDoyle ChrisDoyle is offline
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Re: MLM as a Business Model...is it Legit?

Quote:
Originally Posted by Erneston View Post
Not only to the uninitiated. Regulators and courts have had some problems over the years, too. As Len ****** has commented, sometimes companies that have been trading apparently legally and apparently successfully for some years have been closed down as scams, because a court's decided that they were actually operating an illegal pyramid.

Weird, isn't it?

An interesting question is "What is it about this perfectly legitimate business model of MLM that apparently lends itself to that happening?"
In most cases though, the companies are pulled up by the authorities and informed what it is they are doing wrong, and have the opportunity to put it right. NuSkin in the early '90s springs to mind (maybe Len can fill us in with the details of why it happened because I cant remember) They put things right and went on to become one of the biggest MLMs in the world.

Why does it lend itself to this happening? Because its such a p.owerful business model, and the scammers, knowing its not too hard to masquerade as a legal MLM, realise they can make a quick fortune before it all blows up.
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The musings of joecool44:
Quote:
Originally Posted by Joecool44
Thise links basically had comments that looks like it waas written by Amway IBO's.
About 10 minutes later:
Quote:
Originally Posted by Joecool44
Learn to read you fvcking moron. I never claimed those pages were from IBO's.
And he admits to changing people's posts!
Quote:
By the way, I only change links when people make personal (unsubstantiated) attacks on me. I find it works quite effectively when I employ that tactic.

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  #4  
Old 06-16-2010, 10:32 AM
Tombooh Tombooh is offline
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Re: MLM as a Business Model...is it Legit?

Well dishonest and poor business usually go hand in hand but I'll keep it "legit".

1.) Zero transparency; To this day Amway refuses to allow a third-party to survey price comparison. They set the terms for what "competition" means, and never release which of the products they're comparing their prices against.

Also most distributors make the claim that you shouldn't compare Amway to anything other than other mail-order catelogs. Even though if I want to buy kitchen supplies, diapers, or a vacuum it's completely legitimate to suggest I might want to go price comparison at my local Wal-Mart, Target, Best-buy, etc..

Yet they continue to make claims about how competitive their prices are. With no verifiable reference.

2.) Zero accountability; If I buy something at my local Best buy and realize it's not what I want I can exchange it that day even after opening it or if it's faulty I can exchange it for the same product. If someone screws up my order and makes me wait forever at Jackinthebox and I call the number on my receipt and complain I'll receive a gift card in the mail. Small services to be sure, but something you'll never see a Distributor do.

Companies like Amway will make claims how customers can return anything they want, or the DSA will claim how it's member companies should have ethical return policies, etc..

The kicker? Distributors don't get those rights. Amway has no return policy for Dsitributors they in fact even state their customer return policy does not apply to Distributor inventory. So as a customer, how am I to return or report a problem to my distributor? They have no ***** to do anything.

3.) Zero Respect; Amway is touted as the most respectable type of MLM company and the one I have the most experience in. But you know what they told me when I called to ask about their price comparisons back in the day since I was interested in their company but wanted more information since some of my research showed places like Kmart were way more inexpensive. The woman on the phone said that was privileged information and that if I tried to do my own research to uncover it that they would sue my ass and throw me in jail, and that post any deflamatory material would land me in massive legal trouble and that they now had my phone number on file.

I was shocked... I mean I was literally speechless, I just hung up I didn't even know what to say. That is crazy. If I brought an ad into Best buy showing that a television is cheaper at Wal-mart and they threatened to sue... the employee who said it would have been fired plus any number of other actions.

But nothing happens in an MLM because there's no transparency or accountability. There's no other way to call and file a complaint (I tried) since I wasn't a distributor they told me to basically go away.

Fear tatics and pressure selling, and secrecy to maintain profits/image is not legit at all.

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  #5  
Old 06-16-2010, 10:39 AM
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ChrisDoyle ChrisDoyle is offline
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Re: MLM as a Business Model...is it Legit?

Quote:
Originally Posted by Tombooh View Post
Well dishonest and poor business usually go hand in hand but I'll keep it "legit".

1.) Zero transparency; To this day Amway refuses to allow a third-party to survey price comparison. They set the terms for what "competition" means, and never release which of the products they're comparing their prices against.

Also most distributors make the claim that you shouldn't compare Amway to anything other than other mail-order catelogs. Even though if I want to buy kitchen supplies, diapers, or a vacuum it's completely legitimate to suggest I might want to go price comparison at my local Wal-Mart, Target, Best-buy, etc..

Yet they continue to make claims about how competitive their prices are. With no verifiable reference.

2.) Zero accountability; If I buy something at my local Best buy and realize it's not what I want I can exchange it that day even after opening it or if it's faulty I can exchange it for the same product. If someone screws up my order and makes me wait forever at Jackinthebox and I call the number on my receipt and complain I'll receive a gift card in the mail. Small services to be sure, but something you'll never see a Distributor do.

Companies like Amway will make claims how customers can return anything they want, or the DSA will claim how it's member companies should have ethical return policies, etc..

The kicker? Distributors don't get those rights. Amway has no return policy for Dsitributors they in fact even state their customer return policy does not apply to Distributor inventory. So as a customer, how am I to return or report a problem to my distributor? They have no ***** to do anything.

3.) Zero Respect; Amway is touted as the most respectable type of MLM company and the one I have the most experience in. But you know what they told me when I called to ask about their price comparisons back in the day since I was interested in their company but wanted more information since some of my research showed places like Kmart were way more inexpensive. The woman on the phone said that was privileged information and that if I tried to do my own research to uncover it that they would sue my ass and throw me in jail, and that post any deflamatory material would land me in massive legal trouble and that they now had my phone number on file.

I was shocked... I mean I was literally speechless, I just hung up I didn't even know what to say. That is crazy. If I brought an ad into Best buy showing that a television is cheaper at Wal-mart and they threatened to sue... the employee who said it would have been fired plus any number of other actions.

But nothing happens in an MLM because there's no transparency or accountability. There's no other way to call and file a complaint (I tried) since I wasn't a distributor they told me to basically go away.

Fear tatics and pressure selling, and secrecy to maintain profits/image is not legit at all.

All very interesting about Amway...... but getting back on subject. Do you believe MLM as a business model is legit?
__________________
The musings of joecool44:
Quote:
Originally Posted by Joecool44
Thise links basically had comments that looks like it waas written by Amway IBO's.
About 10 minutes later:
Quote:
Originally Posted by Joecool44
Learn to read you fvcking moron. I never claimed those pages were from IBO's.
And he admits to changing people's posts!
Quote:
By the way, I only change links when people make personal (unsubstantiated) attacks on me. I find it works quite effectively when I employ that tactic.

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  #6  
Old 06-16-2010, 10:47 AM
Tombooh Tombooh is offline
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Re: MLM as a Business Model...is it Legit?

Is Amway not a MLM business?

I made my claim from my personal experience and research, if you would like to debunk the claims of zero accountability and zero transparency then feel free to defend your point by letting us know what MLM company has those policies in place.

Also Amway is regularly proclaimed as one of the best and successful MLMs out there... so it's not like I even picked an obscure company within the model.

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  #7  
Old 06-16-2010, 10:49 AM
Erneston Erneston is offline
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Re: MLM as a Business Model...is it Legit?

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Originally Posted by iamwil View Post
How many MLMs have been shut down in comparison to the total number of MLMs?
Quote:
Originally Posted by iamwil View Post
How do MLMs compare?
Good questions.

I don't know.

An interesting question is "What's the difference in number between the proportion of purported MLM companies closed down by courts for actually being scams and the proportion of non-MLM companies closed down by courts for being scams?

I think most people reading this will have their own impression of that, won't they?

I know of many so-called MLM companies that were closed down by courts for being illegal pyramids. I've posted details of a lot of them here, in various threads, over the last year or so. So has Soapboxmom, over a much longer period.

Many have been deleted.

Weird, isn't it?

Of course, some people, especially imbeciles, in order to try to make themselves right about it, will say something like "Well, if they were closed down by a court for being a scam, then they weren't an MLM company in the first place, were they"?!

Superficially, of course, it may be true, but (a) it's arguing with hindsight because until a court said that, they were an MLM company as far as everyone knew, and (b) it avoids entirely answering the very relevant question about why it is that this is a well-known problem for MLM companies and not such a problem for other companies.

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  #8  
Old 06-16-2010, 10:53 AM
Erneston Erneston is offline
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Re: MLM as a Business Model...is it Legit?

Quote:
Originally Posted by Tombooh View Post
Is Amway not a MLM business?
It certainly is.

Quote:
Originally Posted by Tombooh View Post
Also Amway is regularly proclaimed as one of the best and successful MLMs out there... so it's not like I even picked an obscure company within the model.
It's certainly one of the most well established and most successful.

Of course, it's had its share of legal and regulatory problems, too (to put it mildly!) but that's MLM for you, isn't it? That's just the type of business model it is, compared with other businesses.

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  #9  
Old 06-16-2010, 10:57 AM
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ChrisDoyle ChrisDoyle is offline
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Re: MLM as a Business Model...is it Legit?

Quote:
Originally Posted by Tombooh View Post
Is Amway not a MLM business?

I made my claim from my personal experience and research, if you would like to debunk the claims of zero accountability and zero transparency then feel free to defend your point by letting us know what MLM company has those policies in place.

Also Amway is regularly proclaimed as one of the best and successful MLMs out there... so it's not like I even picked an obscure company within the model.
Amway is a MLM business, but its not the MLM business model. We are discussing the model itself, not how individual companies operate that model.

I dont know about Amway being proclaimed ''the best'', though it is one of the most successful.

The MLM business model is a company moving their products through a group of self employed distributors who use and retail the products and build a group of distributors who do the same.
The company pay the distributors bonuses based on the amount of product sold by themselves and their downline.
Do you think that process is legitimate?
__________________
The musings of joecool44:
Quote:
Originally Posted by Joecool44
Thise links basically had comments that looks like it waas written by Amway IBO's.
About 10 minutes later:
Quote:
Originally Posted by Joecool44
Learn to read you fvcking moron. I never claimed those pages were from IBO's.
And he admits to changing people's posts!
Quote:
By the way, I only change links when people make personal (unsubstantiated) attacks on me. I find it works quite effectively when I employ that tactic.

Reply With Quote

  #10  
Old 06-16-2010, 10:58 AM
Porkchop Express Porkchop Express is offline
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Re: MLM as a Business Model...is it Legit?

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Originally Posted by Tombooh View Post
Is Amway not a MLM business?
Because it's a business, not a business model...duh!

Apparently you can't use personal experience with one of the biggest and well known MLM's when talking about the MLM business model.

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  #11  
Old 06-16-2010, 11:00 AM
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ChrisDoyle ChrisDoyle is offline
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Re: MLM as a Business Model...is it Legit?

Quote:
Originally Posted by Erneston View Post
Good questions.

I don't know.

An interesting question is "What's the difference in number between the proportion of purported MLM companies closed down by courts for actually being scams and the proportion of non-MLM companies closed down by courts for being scams?

I think most people reading this will have their own impression of that, won't they?

I know of many so-called MLM companies that were closed down by courts for being illegal pyramids. I've posted details of a lot of them here, in various threads, over the last year or so. So has Soapboxmom, over a much longer period.

Many have been deleted.

Weird, isn't it?

Of course, some people, especially imbeciles, in order to try to make themselves right about it, will say something like "Well, if they were closed down by a court for being a scam, then they weren't an MLM company in the first place, were they"?!

Superficially, of course, it may be true, but (a) it's arguing with hindsight because until a court said that, they were an MLM company as far as everyone knew, and (b) it avoids entirely answering the very relevant question about why it is that this is a well-known problem for MLM companies and not such a problem for other companies.
If they were closed down for being a pyramid, for example, then they werent using the MLM business model were they........they were masquerading as a MLM company.
__________________
The musings of joecool44:
Quote:
Originally Posted by Joecool44
Thise links basically had comments that looks like it waas written by Amway IBO's.
About 10 minutes later:
Quote:
Originally Posted by Joecool44
Learn to read you fvcking moron. I never claimed those pages were from IBO's.
And he admits to changing people's posts!
Quote:
By the way, I only change links when people make personal (unsubstantiated) attacks on me. I find it works quite effectively when I employ that tactic.

Reply With Quote

  #12  
Old 06-16-2010, 11:06 AM
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ChrisDoyle ChrisDoyle is offline
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Re: MLM as a Business Model...is it Legit?

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Originally Posted by Porkchop Express View Post
Because it's a business, not a business model...duh!

Apparently you can't use personal experience with one of the biggest and well known MLM's when talking about the MLM business model.
Of course you can, but telling us that a certain company didnt refund your money for products, for example, is only telling us that they used the business model wrongly. In a legit MLM you will be entitled as a distributor to a 90% refund of any products you have ordered. I believe this is State Law in most States in the US (correct me if I'm wrong, I dont live there)
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The musings of joecool44:
Quote:
Originally Posted by Joecool44
Thise links basically had comments that looks like it waas written by Amway IBO's.
About 10 minutes later:
Quote:
Originally Posted by Joecool44
Learn to read you fvcking moron. I never claimed those pages were from IBO's.
And he admits to changing people's posts!
Quote:
By the way, I only change links when people make personal (unsubstantiated) attacks on me. I find it works quite effectively when I employ that tactic.

Reply With Quote

  #13  
Old 06-16-2010, 11:13 AM
Porkchop Express Porkchop Express is offline
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Re: MLM as a Business Model...is it Legit?

Quote:
Originally Posted by ChrisDoyle View Post
The MLM business model is a company moving their products through a group of self employed distributors who use and retail the products and build a group of distributors who do the same.
The company pay the distributors bonuses based on the amount of product sold by themselves and their downline.
Do you think that process is legitimate?
I don't think so. Ultimately, the model pays to recruit, not to sell product.

If it were to be about the actual product, you would then have a retail shop and you make more money selling the product yourself and keeping all profits instead of relying on residual payments.

You can say I'm wrong, which is fine, everyone has their own opinion. But if you were to sit here and tell me you are about the product first, and your downline second, then I would think you are lying to my face, and there's really nothing you can say or do that would make me change my mind.

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  #14  
Old 06-16-2010, 11:18 AM
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ChrisDoyle ChrisDoyle is offline
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Re: MLM as a Business Model...is it Legit?

Quote:
Originally Posted by Porkchop Express View Post
I don't think so. Ultimately, the model pays to recruit, not to sell product.

If it were to be about the actual product, you would then have a retail shop and you make more money selling the product yourself and keeping all profits instead of relying on residual payments.

You can say I'm wrong, which is fine, everyone has their own opinion. But if you were to sit here and tell me you are about the product first, and your downline second, then I would think you are lying to my face, and there's really nothing you can say or do that would make me change my mind.
Then you can call me a liar. I consider myself a customer first, before any business opp. I bought products for years with this company before ever receiving a bonus cheque. If I ever gave up on the business I would still carry on using the products.

If any company only pays to recruit (headhunting fees) then its a pyramid, not MLM.
__________________
The musings of joecool44:
Quote:
Originally Posted by Joecool44
Thise links basically had comments that looks like it waas written by Amway IBO's.
About 10 minutes later:
Quote:
Originally Posted by Joecool44
Learn to read you fvcking moron. I never claimed those pages were from IBO's.
And he admits to changing people's posts!
Quote:
By the way, I only change links when people make personal (unsubstantiated) attacks on me. I find it works quite effectively when I employ that tactic.

Reply With Quote

  #15  
Old 06-16-2010, 11:19 AM
Porkchop Express Porkchop Express is offline
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Re: MLM as a Business Model...is it Legit?

Quote:
Originally Posted by iamwil View Post
Are oil companies legitmate businesses?

How about auto manufacturers?

Are the problems that BP and Toyota have had....yes they are just now in the news but they've had thousands of lawsuits and regulatory issues.

How does that relate to them as legitimate businesses? And do their personal issues and folks personal problems with these companies detract from their industry being legitmate?
We are talking about MLM's. Please keep this on subject.

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  #16  
Old 06-16-2010, 11:24 AM
Porkchop Express Porkchop Express is offline
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Re: MLM as a Business Model...is it Legit?

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Originally Posted by ChrisDoyle View Post
Then you can call me a liar. I consider myself a customer first, before any business opp. I bought products for years with this company before ever receiving a bonus cheque. If I ever gave up on the business I would still carry on using the products.

If any company only pays to recruit (headhunting fees) then its a pyramid, not MLM.
Correct me if I'm wrong, but do you not have to recruit to make money in an MLM compensation setup?

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  #17  
Old 06-16-2010, 11:24 AM
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ChrisDoyle ChrisDoyle is offline
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Re: MLM as a Business Model...is it Legit?

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Originally Posted by Porkchop Express View Post
We are talking about MLM's. Please keep this on subject.

Its a very good point though, and on subject. If a car dealer is found to be scamming people and ends up being gaoled, does that mean the entire car dealership business everywhere in the world is a scam?
__________________
The musings of joecool44:
Quote:
Originally Posted by Joecool44
Thise links basically had comments that looks like it waas written by Amway IBO's.
About 10 minutes later:
Quote:
Originally Posted by Joecool44
Learn to read you fvcking moron. I never claimed those pages were from IBO's.
And he admits to changing people's posts!
Quote:
By the way, I only change links when people make personal (unsubstantiated) attacks on me. I find it works quite effectively when I employ that tactic.

Reply With Quote

  #18  
Old 06-16-2010, 11:26 AM
Porkchop Express Porkchop Express is offline
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Re: MLM as a Business Model...is it Legit?

Quote:
Originally Posted by ChrisDoyle View Post
Its a very good point though, and on subject. If a car dealer is found to be scamming people and ends up being gaoled, does that mean the entire car dealership business everywhere in the world is a scam?
But we are discussing the MLM and it's legitimacy as a business model. A car dealership is not a MLM model. BP is not an MLM model. Auto makers are not MLM models. You created this thread. Please keep it to MLMs.


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