Hey, I just met you, and this is Lazy... get these fast finance fixes and mail me, maybe?

Why MLM is NOT a Business

Written by

Multi-level Marketing (MLM) is not a business. Many MLMers say it is a business and act like it is one, but it simply isn't. It is a wolf in sheep's clothing.

It's a tall order for me to prove this. I'm a firm believer that big claims require big support.

To start, MLM often attempts to disguise it itself under other names in hopes that its bad reputation is not detected. That's why you see it called "Network Marketing", "Direct Sales", or even "Community Commerce." There's more on this topic here: MLM vs. Network Marketing vs. Direct Selling. For now, let's agree to call it MLM, because that's the only term that explicly states the "levels" that is indicative of every MLM.

The naming deception is not one of the reasons it is not a business. I simply needed to address it before we can move forward.

With that out of the way, here are just some of the reasons why MLM distributors are not businesses.

  1. Businesses obey the Commandment of Control

    This is something that I first read from author MJ DeMarco which I wrong about previously: The Business of MLM (or What Gives Freddy Krueger Nightmares). MLM Distributors do not have control of their business. DeMarco explains:

    "I was involved in four MLM companies. Not once do I remember dictating product decisions, research and marketing, marketing restriction, rules, cost analysis or any other activity fundamental to owning a business."

    If you aren't participating in fundamental activities related to owning a business... you can't call it a business, right?

  2. Business 101 Excludes MLM
    Tom said

    "Business 101 teaches that in order for you to be considered a business owner there are three 'musts.' You must have control of the product, you must have control of the distribution, and you must have control of the pricing. These people are not business owners, they are recruiters/sales people."

    In every MLM that I've looked at, none of these are true. MLMs claim that you can set your pricing, but they set the excessively high pricing you pay for the product. If MLM salespeople tried to charge less, they'll lose money. They can't charge more because it is already excessively high priced, people can get it at distributor cost, and they have to compete with other salespeople.

  3. Businesses obey the Commandment of Entry

    This also comes from DeMarco above. You have to be able to build a moat around your business and prevent others from competing with you. DeMarco again explains:

    "Network marketing, or multi-level marketing (MLM), always fails the Commandment of Entry—unless you own and create the MLM company yourself. If you’re in a room with 2,000 other people who do exactly what you do, you’re fighting stiff probabilities."

    One thing to keep in mind is that each of those 2,000 people are taught to recruit more people to compete with your business. There is no moat to protect your business. It is the exact opposite, where they are encouraging more people to compete against you.

    I'll get to it in a few more bullet points, but this competition is part of the reason why 99% of MLM distributors lose money.

  4. MLM Doesn't Obey the Laws of Supply and Demand

    McDonalds won't let franchise owners open up multiple ones on the same street unless there is sufficient demand. Otherwise, they would compete for few customers and go out of business.

    MLM has no problem with creating millions of distributors even if there is no one interested in buying the product. They don't ensure that there's enough demand for product for the distributor to make money. Much of the product demand can be met with a simple Ebay search.

    If you put ten McDonalds on the same block, you'd expect them to lose money and go out of business. You wouldn't blame the individual owners of the McDonalds franchise. When 99% of MLM distributors lose money, they are the ones that are blamed for the failure.

  5. More than 99% of people LOSE money
    Some MLM companies produce what is called an income disclosure statement so that their distributors can talk about the MLM as if it were a business opportunity. Analysis of these statements show that more than 99% of people lose money in MLM. Need examples? See this, this, and this. It becomes easy to see once you learn to read the fine print in the income disclosure statement. I cover how to do that in my Beachbody article.

    There are a lot of people in MLM bragging about making money. Many of them are "faking it until they make it". Some of the people at the top might actually be making money. However, we know that lottery winner is not the typical representative of what happens when you play the lottery, right?

  6. MLM is Not like Any Other Small Business
    Some MLMers claim that small businesses in general have a high failure rate. "High" is a relative term... and it doesn't come close to comparing with MLM.

    The U.S. Small Business Administration has this handy PDF of information. It seems that "7 of 10 survive the first two years" (30% failure rate over two years), "half at least 5 years", "a third at least 10 years", and "a quarter stay in business 15 years or more."

    Let's compare this to an MLM where 90% are failing every year. I'm being very generous given the proof above that 99% of them lose money. If we start with a 100,000 people and 90% fail each year, you have 10,000 people after the first year and 1000 people after two years. That's a 99% failure in MLM vs. 30% in traditional small businesses. After 5 years, you are left with a single person in MLM. In traditional small businesses you'd have 50,000.

    Do you want a 1 in 100,000 chance of being successful or a 50% chance? If you have to think about this question, please have the self-awareness to realize you are not intelligent enough to be that 1 in 100,000.

  7. It Doesn't Matter How Hard You Work

    As this article reads: "MLM supporters will claim that those who lose money just didn’t work hard enough. That’s not true. It’s simple mathematics that guarantee almost everyone will lose money. You can only make money if large numbers of people are recruited below you. That necessarily precludes almost everyone from making money, because they can’t recruit into infinity. As the pyramid below you gets wider, the new participants added have an even smaller chance of making money because there aren’t enough people in the world for everyone to make money."

    It's like telling someone that they can hit ten holes-in-one consecutively in golf. Anyone can work hard on your golf game day and night, but the circumstances of hitting ten holes-in-one are extremely difficult. If someone fails to hit ten holes-in-one, we don't tell them that they didn't work hard enough... we simply say that the goal was unattainable to start with.

    MLMers might counter that another person in the MLM attained it. It's always because they didn't have to work their way up there competing against everyone else. They were people who started at the top or brought their pyramid scheme from another MLM with them.

I hope you made it through all the above (or at least enough of them to realize that MLM is not a business).

Typically, when people understand that MLM isn't a business they ask me, "What's better?" I like to counter with "What's worse?" A minimum wage job at McDonalds is much, much better than spending your time to lose money. You might not like to take a job picking up dog poop, but it is profitable in the first hour.

While those are true, they aren't very inspiring. A McDonalds employee has a job... he isn't running a business either. A dog poop service is a business, but that might not be one you are interested.

So why not start a business on your own? Follow your passion... and see if you can find profitable ideas in that area of interest. Here's an extremely well-reviewed book to get you started: The Lean Startup

Personally, I think that every business needs a website. My business IS a website. It may sound difficult to create a website, but it is really very, very easy. I worked out a deal with Bluehost to get you started for as little as $3.49 a month. They walk you through the process very well and you get started in minutes.

Posted on January 15, 2016.

This post deals with:


... and focuses on:


Don't forget to these five minute financial fixes to save thousands!

671 Responses to “Why MLM is NOT a Business”

  1. Scott says:

    I know. I’m destroying your site. Enlightening people against communists is what I love to do.

  2. Scott says:

    ” Unfortunately, however, our law enforcement experience shows that many MLMs continue to misrepresent the amount of money participants are likely to earn.”
    This is a fraudulent statement. There is no answer because the income an individual earns has nothing to do with statistics. A distributor is an independent contractor, self-employed. There are 2 ways to earn income this way. As a sole individual and/or as a team member. Both require specific and exact methods or systems to be successful.
    The concept of success is also important which makes the statement above fraudulent. Success means different things to different people. My experience says there are people that are in MLMs because of the social feeling if belonging and friendships. Some just want and extra few hundred dollars to spend. Others want thousands of dollars and others millions. Trying to make everyone in this type of business fit into the corporate business rules is fraudulent.
    The first thing those who want changes in MLMs have to do is stop calling MLM a scam. That doesn’t help. And, with the new President is most likely going to cut the FTC budget. And, he’s more likely to side with entrepreneurs of MLM.

    • Earl says:

      That is pure crap. Nobody joining an MLM would do so if they were only going to earn a few hundred a month, which taking into account your twice weekly rah-rah meetings and the time/expense to get to and from them, would equate to possibly earning $5/hr. No, people join because of the false hopes dispensed at opportunity meetings (view any You-Tubes or Tweets of your choice). The sad reality is that in order to earn the equivalent of even a part time low-skilled job, a rep would need to sell 2-3 policies per week, which is 40-60 times the historical average, based on the 100’s of 1000’s that have worked there over the years, including during their best years in the 70’s and 80’s. And even if they sell 2-3 policies, they then have to pay their expenses from those earnings.

      Trump will have little effect on the MLM industry, as he can’t pass a law forcing people to be recruited, and with all the media exposure generated over the FTC and WakeUpNow, Vemma, Herbalife and Ackman, theres a reason why people like Jon Oliver produced his recent piece. The cat is out of the bag, and society is becoming quickly aware of the joke the MLM industry is. And to top it all off, there’s a thing called social media, something your big hitters didnt have to deal with when they earned their big commissions. Also, in case you’ve been asleep the last decade, theres this thing called the internet, where most clients prefer to shop for insurance nowadays. What Amazon did to retailing, the internet will do to you! ;)

    • Geoff says:

      Scott said, “This is a fraudulent statement. There is no answer because the income an individual earns has nothing to do with statistics. A distributor is an independent contractor, self-employed.:

      Scott, let’s look at the definition of statistics…

      Statistics: is the study of the collection, analysis, interpretation, presentation, and organization of data.

      With that definition, I’m guessing you would want to change your previous statement, because you are flat wrong. Statistics have EVERYTHING to do with what an individual can earn in MLM. If 100,000 people in Primerica have an overall success rate of less than 1%…then that is a pretty darn good indicator that a new individual WON’T BE SUCCESSFUL! Spewing your programmed MLM garbage will get you nowhere in this thread.

      Scott said, “There are 2 ways to earn income this way. As a sole individual and/or as a team member. Both require specific and exact methods or systems to be successful.”

      WRONG! JUST SIMPLY WRONG! Nobody in MLM pitches the idea of being a solo distributor trying to peddle the products…why??? Oh I’ll refresh your memory, BECAUSE THERE IS NO DEMAND FOR OVERPRICED POLICIES! Remember when you said you only have 2% of the market and you have been around for over 30 years…that’s a sign *hint hint*.

      So, if your only way to make money is to build a team, then that is a pyramid…then very few will succeed (as revealed from the STATISTICS in PRIMERICA’S INCOME DISCLOSURE, and from basic math skills), because it takes an army to make a penny in MLM.

      Scott said, “My experience says there are people that are in MLMs because of the social feeling if belonging and friendships. Some just want and extra few hundred dollars to spend. Others want thousands of dollars and others millions. Trying to make everyone in this type of business fit into the corporate business rules is fraudulent.”

      First of all, your experience is worthless, because you are clearly jaded and can’t see anything that doesn’t align with your world view. Second of all, MLM IS NOT A CLUB, IT IS A “BUSINESS”! This is such an off the wall response, I don’t think you (Scott) can actually take it seriously. Nobody joins MLM to hang out at social events, but people do come up with that excuse when they can’t handle the fact that they got hosed. Also, nobody joins for a couple hundred dollars a month, because they are warped from seeing videos of mansions, luxury cars, yachts, and money. They want the millions PERIOD.

      WTF do you mean making everyone fit into the “corporate rules” is fraudulent? Are you trying to say that Primerica is similar to Roulette and every person, much like every spin, has a unique opportunity? Again, that is FALSE, has been FALSE, continues to be FALSE, will always be FALSE! The people who came in first will ALWAYS have the advantage.

    • Earl says:

      Do you find it slightly contradictory, well actually very contradictory, that a person who sell investments thinks statistics are a waste of time? Investments are always based on projections of date based on projections of accumulated data.

      “If 100,000 people in Primerica have an overall success rate of less than 1%” Actually theres been in excess of 500,000 reps in their 40 year history. Heck, theres been 349,000 since 2009 alone. The 1%’erb positions have been locked up for decades, by the same people. Everyone joining now simply joins the churn at the bottom. Plus the 1%’ers is based on a cumulative count. They aren’t all earning that now!

  3. Scott says:

    Statistics: is the study of the collection, analysis, interpretation, presentation, and organization of data.

    What it doesn’t show is what each distributor did each day, 7 days a week, 52 weeks in a year. It doesn’t show why they joined. And yes, people join to make some extra income. We do it in financial services all the time. So, the entire statement of yours and others is fraudulent. And, try to remember that stats only show what happened and the probability of it happening again, not why it happened.
    Who cares anyway! Trump is a big backer of MLMs. The FTC is going to get cleaned out if Trump hears about the fradulent attacks on the business.
    My son went 4 years to college and racked up $60,000 in debt. The administrators, teachers, janitors and others associated with the college got paid. The ones on top got paid very well. But, my son got paid nothing. A bunch of student athletes didn’t get paid either but the coaches did and so did the school. And, he didn’t get a job for a year! So, no guarantees with your methods either.

    • Geoff says:

      Scott said, “What it doesn’t show is what each distributor did each day, 7 days a week, 52 weeks in a year. It doesn’t show why they joined. And yes, people join to make some extra income. We do it in financial services all the time. So, the entire statement of yours and others is fraudulent.”

      Woah woah woah…my statistic shows exactly what they did every day…they failed. Stop this nonsense about people not trying, not following the “system”, or don’t have a “success” mentality…that clearly doesn’t apply to this situation. If you get 99% on a test, then you did a pretty darn good job. If you are 99% confident in your results as a scientist, then you are going to take it as fact. If 99% of people fail in MLM it is not the MLMERS FAULT! It is the MLMS FAULT! PERIOD…this charade is ridiculous.

      Scott said, “And, try to remember that stats only show what happened and the probability of it happening again, not why it happened.”

      NO! WRONG! My god…how do you get through life with all of this dumb BS falling out of your mouth. Statistics like this tell you EXACTLY why failure occurred. If you get a 99% consistent result, then you understand WHY that is happening…that’s why statistics are used. Once again, you are trying to suggest that every situation is different like roulette, but it isn’t…they aren’t even remotely the same.

      Scott said, “Who cares anyway! Trump is a big backer of MLMs. The FTC is going to get cleaned out if Trump hears about the fradulent attacks on the business.”

      Uh…no. Even if Trump is a supporter of MLM, he doesn’t have that kind of power. Congress dictates the strength of the FTC and Congress funds the FTC…https://www.ftc.gov/about-ftc/budgets

      Scott said, “My son went 4 years to college and racked up $60,000 in debt. The administrators, teachers, janitors and others associated with the college got paid. The ones on top got paid very well. But, my son got paid nothing. A bunch of student athletes didn’t get paid either but the coaches did and so did the school. And, he didn’t get a job for a year! So, no guarantees with your methods either.”

      Oi vey, this tired old story again. First of all, just because you think school is a rip off DOES NOT JUSTIFY MLM! This is a stupid straw man argument, and is about as smart as someone saying “Look over there!”, and then proceeding to run away.

      There are many ways to go to school that are cheaper than $60,000.00 a year. I recently graduated and am debt free, because of community college and government grants, but even if I didn’t get the assistance, I wouldn’t have spent close to that kind of money. Don’t blame the system because you didn’t do your research.

      School is a noble profession, but people need to get paid. There is nothing wrong with administrators, teachers, and janitors getting a nice wage. They earned it, unlike MLM, and continue to help our society grow by providing an education.

      Your son got the education so that he can go and make himself a living. That’s why there is a cost…he shouldn’t be getting paid to utilize a teachers resources…this is just delusional.

      Bringing up the issues with NCAA is actually an important topic, but is NOT RELEVANT AT ALL! Why are you bringing this up in a discussion about MLM?

      I’m sorry, but did anyone ever say college had guarantees? *Crickets Chirping* You know who does give out bad guarantees? MLM! They guarantee EVERYONE the opportunity (nice loop hole) for success and yet 99% fail.

      BTW, why did your kid go to college if MLM is the best “business”? This seems to be a bizarre decision considering MLMers always preach college is the worst, and they are the best, and they know something teachers don’t…blah blah blah. It would seem you are not only full of s***, but you are also a hypocrite (I probably figured that out a long time ago though).

    • Earl says:

      “BTW, why did your kid go to college if MLM is the best “business”? ”

      This is their biggest contradiction. Their corporate office is filled by people with yucky J-O-B-S whos income average is 6x-30x greater than the average reps, and they make that money every year, not just during a best year. They also receive full benefits.

      Their entire board and senior management team are university grads, and as well holding one of those yucky J-O-B-S, and their total compensation package makes the commissions of their big dog reps look like shoe shine boys.

    • Lazy Man says:

      Scott, I’m shocked that you’d call a statement by the FTC “fraudulent.” Surely Primerica does not train its salesforce to defame United States’ regulators? Or does it?

      The important part of that statement is “the amount of money participants are likely to earn.” It has nothing to do with a “concept of success.” The FTC didn’t even have the word “success” in that statement. Why did you go off the rails on such a subjective tangent. The FTC further cited the DSA’s own information on “the amount of money participants are likely to earn” citing that it “is something that the DSA itself acknowledged more than a decade ago.”

      The FTC’s statement about “the amount of money participants are likely to earn” certainly doesn’t have anything to do a “social feeling if belonging and friendships.”

    • Earl says:

      The only social belonging people get hanging out for these rah-rah meetings is solely based on the fact that misery loves company.

      Whats even worse is that they bullshit each other…..”ya im working on several hot leads”! “ya, me too, and my mom and dad want to review our investments too”! Both knowing that the only sale theyve been involved with was the one their upline sold to them a week after being recruited…..6 months ago.

  4. Scott says:

    Perfect example of why this whole attack on MLMs is nonsense. You and your cronies have no clue what people are thinking when they join. The majority vast majority are looking for only part time income. Unless you have been in the higher tiers of MLMs you don’t know. Another reason not to believe you.

    • Earl says:

      Your 4739 RVPs, all full time, sold an average of 58 policies per hierarchy in 2015. Even at that, when you subtract expenses, theyre earning McDonalds Asst Manager wages at best. What chance do those seeking part time income have in even covering their expenses. Wrap your head around the math on that one!

  5. Scott says:

    And you included investments, residuals and all other products? Didn’t think so. Not interested in your negativity.
    You must be a bit slow. I keep saying its up to each individual. Independent contractors. What don’t you get about this? It’s nonenofnyour damn business what other people earn. And I don’t think you have correct numbers. There are 7,000 offices.

    • Earl says:

      You either haven’t been there 30 years and therefore you’re guessing, or you have and you’re lieing about your facts and figures.

      Direct from the 2015 Annual report;
      “At December 31, 2015, approximately 4,739 field offices in approximately 2,700 locations were managed by sales representatives that served as full-time RVPs.”

      Note that based on those figures, many RVPs actually share office space.

      And even if there were 7000 as you say, the sales average would then drop to 37 policies a year.

      As for investments, only 20% are licensed for that, and they represent a mere 14% of total revenues.

  6. Scott says:

    You have no idea what goes on in meetings. You have no idea why people join. You know nothing about the business.

    • Earl says:

      “You have no idea what goes on in meetings. You have no idea why people join.”

      Oh but we do, and more importantly, so does the FTC, and society in general.

  7. Scott says:

    No, you don’t know what goes on. Neither does the FTC which is going to feel the heat from Trimp who is a big supporter of ACN and MLM in general.

    • Earl says:

      At this point, I am beginning to doubt you’re a 30 yr man there. You seem to be simply spouting off common MLM cliches, all of which that can eviscerated by simply using Google.

      Trumps association with ACN was merely as a paid celebrity endorser, a relationship he severed once he learned of their devious business practices;


    • Earl says:

      The MLM/Herbalife (+Vemma, WakeUpNow, etc, etc) genie is out of the bag now. The FTC findings and public disclosure is common knowledge. Do you honestly think Trump will now ask the FTC chairman to hold a press conference stating they were 100% off-base in their results? And were that the case, the publicity/media exposure would put that industry under even more scrutiny.

  8. Scott says:

    Yes…there are thousands of MLMs to try and go after. All have different systems and most are legit. A big waste of money that can be better spent on the VA.

    • Earl says:

      “All have different systems and most are legit.”

      Then why did the FTC chairman address her opinions directly to the DSA, the industry representative for all MLMs, rather than just confront “the few bad eggs” as you suggest?

      The reason she used such a “wide brush” is because the target is industry wide. They all share the same system, and produce the same dubious results for all who join.

      The only real differences between all MLMs may be the time of day their CEO’s take a dump.

    • Lazy Man says:

      And the FTC chairman outlined many things that “legitimate MLMs” need to do. I think she used the word “legitimate” at least a dozen times. I don’t think any MLM voluntarily does the things the FTC chairman outlined, much less, “most.”

    • Earl says:

      Following the regulator’s rules concerning MLM, most of which have been on record, but not enforced for years, would be suicide.

      If a company has a hiring freeze, sure some people may be overworked (and even possibly collect overtime pay), but they will continue normal business operations.

      If MLMs stop recruiting, they would be yesterday’s news within a year at best, as recruits are by far their number one market for product/service sales.

      Ask Vemma if you have any remaining doubts.

  9. Scott says:

    Because like you, those people don’t understand the diversity of the business either. They assume like you all are the same. They aren’t.
    There are legit corporations and there some that aren’t. Most run on some form of corruption, insider trading and tax evasions.
    Rather than attacking an entire huge global industry, go after the scams. But, you need to better define it because the FTC and your group don’t define it. Crying over the idea that only a few make it to the top is rediculous. And, most make very little is also rediculous. How many athletes ever make it to the big leagues? And how many of them get paid the really big bucks? Only a handful. There is a difference though. In sports, there really is a limitation on how many can make it. With MLM, there is no limitations on how many can make it. Thus, more opportunity.
    What MLM and sports have in common, it takes an extra ordinary amount of preparation and hard work to make it happen. That is where most fail. That is the only reason people fail.

    • Lazy Man says:

      They are going after the scams. That’s what this is about.

      I think you should re-read the FTC chairwoman’s response if you think they are crying over the idea that only a few make it to the top. They do a great job of defining very specific things. The Herbalife order even goes into more detail.

      Scott, you continually confuse a hierarchical organization that isn’t based on recruiting, such as professional athletics, with a pyramid scheme that is based on recruiting. There’s a huge difference.

      Now if you took the recruiting out of MLM, you could say make the comparison that it takes hard work do all the selling, which is similar to athletics. When you keeping the recruitment scheme in MLM, you can run into a dangerous situation. As the FTC found, Vemma and Herbalife distributors weren’t actually selling products to retail customers. This is why when Vemma had to change it’s compensation plan, the CEO was left to beg people to buy the products.

      So again, the FTC is going out of its way to define which practices are acceptable and which ones are not. One of them is eliminating the income claims, implied or explicit, like you have repeatedly used here. Again, read the FTC’s article for more detail on the others.

    • Earl says:

      Lets do a little math, and see if the numbers tell a story. Lets test the theory that they prey on the recruits/reps for the bulk of their sales. I think its safe to assume that upon leaving, many reps would cancel any policies they purchased, possibly purely out of revenge, or upon finding a cheaper provider.

      On a year by year basis, lets see how many policies were lost/cancelled/not renewed/expired and compare it to reps/recruits leaving;



    • Earl says:

      Sports and MLM??? lol Thats like Wayne Gretzky telling people to join the NHL so they can be a top scorer like him.

      All the FTC has to do is look at the earnings by year of your top 100 to know the names never change.

      In 2012, you reported a total of 5653 reps who broke the $50k barrier (at least once, before expenses) since 1977. In 2014, that number rose to 5980 reps. That means over that two year period, an additional 327 reps were added to the list. However, over that two year period, there were a total of 67,978 new reps added to the existing force of 92,373.

      Now lets do some very basic math;

      -(327/67,978) Those new reps had a best case of less than 1/2% chance of earning $50k
      – (67,978 + 92,373) of the 160,351 individual reps there at some point over that two year period, they had a best case chance of 1/5% chance of making the list.

      However, we can safely assume that the majority added to the list had been with the company for years, not to mention those earners lists are merely a cumulative count based on the 100’s of 1000’s of reps in the 40 yr history.

  10. Scott says:

    Why? It’s not about statistics. But you will never understand. Pointless nonsense. As long as the shareholders are happy, and they are, the opportunity is rock solid. Has been for almost 40 years.

    • Earl says:

      Please, lets not confuse investing in an MLM with working in one. In fact, the worse the conditions are for reps, the higher the stock goes. Profits are made off the backs of the rep force.

      In 2012, net policies gained with a force of 92,373 reps was a staggering 1,548, and yet their stocks climbed. If that doesn’t illustrate that sales (the opportunity) has nothing to do with profits, I don’t know what is.

  11. Scott says:

    Once again you don’t understand. There is no help for you. If you can’t get it that it takes the same kind of effort to win in MLM as it does in sports or any endeavor then you should probably a bean counter on some obscure pointless blog website.

  12. Scott says:

    Wow! What an insightful comment. Shareholders make money from the efforts of the workforce. I’m surprised you could logically reason that one. Must have exploded your brain. You simple have nothing to say about MLMs. Using stats isn’t going to change anything.

    • Lazy Man says:

      I think it would have been more accurate to say that Earl was stating that the profits are made by exploiting the salesforce (i.e. the victims) in MLM. I’ve already shown this to be supported by Harper’s Magazine:

      “The women I interviewed for ‘The Pink Pyramid Scheme’ told me stories about struggling to patch together daycare or to survive high-risk pregnancies while working long hours scouting prospects and hosting parties without any guarantee of a sale. Debts mounted, marriages failed. They couldn’t have it all because Mary Kay’s business model (like that of any multilevel-marketing enterprise) is designed primarily to profit from, rather than enrich, its workforce.

      I added emphasis to the last line.

    • Earl says:

      “Shareholders make money from the efforts of the workforce.”

      That is correct, for standard businesses, shareholders make money from the SUCCESSES of the workforce. However, for MLMS, Shareholders make money from the FAILURES of the workforce.

  13. Scott says:

    Since none of us feel exploited, you too are full of it ?

    • Earl says:

      You are but one voice of the 1.7+M who have tried your brand of poison since 2009 alone and left. 1 voice out of the 100’s of 1000’s of licensed reps in their 40 year history even.

  14. Earl says:

    Crickets. . .

    • Lazy Man says:

      I wonder if Scott was told by Primerica that he needs to stop posting.

      In any case, I just started an interesting book that I had been looking to read for some time. It’s called Grit by Angela Duckworth. You can probably get a decent executive summary from This TED Talk by her on the it.

      What I find interesting about it is that it gets to what Scott had said a few times… that you can’t measure heart. It turns out that you can. It’s summed up well by the word grit. Duckworth noted that there’s a Grit Scale test everyone can take here. She admits that it’s not perfect, but that doesn’t mean it can’t be an extremely useful tool.

      So I’m going to challenge Scott. He seems to be pretty gritty in his numerous comments. The challenge for Scott is to get all MLMs to require that any potential recruits are independently tested by an unbiased third party to rank in the 99% that don’t fail at MLM. I’ll make it a little easier for him… he can start with any single MLM that he feels is a good company.

    • Earl says:

      The only reasons for being warned are;

      a. Presented losing arguments
      b. presented lies
      c. all of the above

      Its hard to combat facts (and verifiable sources) with cliches and hyperbole, and yet that is their typical strategy, hoping that people are too lazy to do factual research.

    • Earl says:

      Vemma…..asked to play fair……gone! Herbalife….asked to play fair…..sinking like a stone! I won’t event mention Fortune Hi Tech or WakeUpNow. The list is growing daily! Amen!

  15. Earl says:

    Do you find it odd their stock shot up strictly because Trump was elected and not because of anything related to business performance? Do you find it odd that they recently authorized a buyback of $200M in shares? The best way to control share price is to control its supply!

  16. Scott says:

    Been busy. Just a comment. Reading some of the posts from those who responded to her shows her stats do not lead to her conclusion. So, the idea that grit = heart isn’t correct.
    The “heart” idea is the desire to be somebody. In the corporate world, that desire is often squashed because you have to fit in to the “norm.” The normalcy bias is an enemy to the desire to be somebody.
    Now, “somebody” also means different things to different people. Art Williams concept centers around making a difference in people’s lives. Other people’s lives as well as their own. Making a social and economical difference as Art did with bring people to a great knowledge of term life and mutual funds to the kitchen table on a massive level. Before his educational assault on the financial industry few people ever heard of mutual funds and term to properly protect the loss of income through death. Art’s heart was kindled at the loss of his father and the struggles his mother had because of a corrupt life insurance industry selling crappy cash value whole life policies. He wanted to change that for others. He wanted to make a difference or have heart in helping people on a massive scale.
    While some approved of his concepts, they rejected the MLM concept and write books and articles in research magazines and papers. Art took the concept of buy term and invest the difference directly to the people on a massive scale and his efforts did make a difference in many people’s lives.
    Art knew it was never going to be perfect. He used to say in his talks that if you can find a better term policy then buy it. But, he knew that because of the conventional teachings of the industry that the vast majority would never get the opportunity to know how bad cash value policies are and what the alternative would be.
    His desire was never about himself becoming wealthy because his heart was in the right place trying to right a wrong that had happened to his family and others dying with too little insurance protection because of the greed of the industry and the agents selling the crap.
    As his company took shape, he realized he could make a difference in other people’s lives through helping others that help build his company. But instead of corporate politics, he used the method that allows those who have heart, desire, motivation and grit to have an opportunity to be somebody. To become wealthy by serving others in a deplorable industry full of corruption, deceit and power. Power to shut down the FTC from ever studying and affecting the insurance industry again.
    If the FTC were to beable to go after our company, the industry could again begin to turn the public back into ignorance about cash value life insurance. As is today with about 61% owning cash value, that’s still way too many that have the crap. Imagine the power the industry would have again if it went back up to 90%. The more agents we can get to get across the kitchen table with families the better off society will be. That’s heart. That’s what you cannot do not can the FTC or the Senate. But through MLM it can and has been done in the past.
    By the way for your information and reduction in your ignorance, before AL Williams (Primerica) there were strictly term insurance marketing companies. Art was an agent for two of them prior to starting his own company. They made statistically no dent into the cash value industry through their conventional business model you so love to follow. None. You can throw out stats of how many keep our policies (5 million currently) because the number or people who have cash value is still at a historic low because of our 40 year effort. Not those who write books and do info commercials. The greatest impact has and will always be direct contact across the kitchen table where I’m going right now with my heart, passion, desire and grit :-)

    • Lazy Man says:

      So Scott, it seems to me that we could roughly define “heart” (at least in part) as having the “honesty to tell others that 99% of people will lose money in MLM” (because honesty in helping them NOT lose money is important to helping them) and “require the grit test is passed” to ensure that those people are good fits (not part of the 99% who quit) BEFORE they lose money.

      I took your heart as “perseverance” not “wanting to be somebody.” There are a lot of people who want to be somebody. You don’t have to look any further than the people who lined up for American Idol. I think what you had been saying about “heart” before was more a fit for “grit” as we were talking about why 99% of people fail.

    • Earl says:

      MLMs despise corporate America as greedy, and yet those failing in MLM (ie almost everyone)earn nothing, or even lose, while those in traditional jobs always come out ahead. And newsflash, Primerica is corporate America x10. They burn through people at a combined rate of 67% annually and yet have the audacity to talk about the 1-2% who break $50k (before expenses)? Their term rates are drastically more expensive, and their investment fees are at the high end of the scale. They are not Robin Hood in any sense of the term.

    • Earl says:

      Yup, that guy Art was one hell of a guy alright. Thats why the first thing Primerica (you know, the company youre working for?) did was to dump his ass, and change the commission structures so much, that Hubert and his 24 top lieutenants left. If youre an Art fan, you cant be a Primerica fan. He wasnt the Mesiah of term insurance, he was a follower of Huberts MLM system.

      link here

  17. Scott says:

    Wow! 2 companies out of 20,000. LOL! You do, no you don’t know the Senate passed legislation back in light 1979 prohibiting the FTC to investigate the life insurance industry. So, while the FTC has a short life with MLMs until Trump is President, we aren’t worried. Greatest company in the world!
    Also noted that you have nothing to come back with about “heart.”

    • Lazy Man says:

      The FTC can look at the MLM industry. They most certainly have done that.

      Trump can’t immediately change the FTC. There are terms and such. The toothpaste is already out of the tube with Edith Ramirez comments as I link to above.

      I think I covered the heart/grit thing well. Thanks for noting it ;-).

    • Earl says:

      If Trump tries to interfere with the FTC/Herbalife ruling, he will bring 1000x the attention that John Oliver attracted in his recent MLM You-Tube expose.

      And the FTC has full authority to regulate all business opportunities, whether they be franchises or MLMs.

      And after the FTC, there is FSOC, and the SEC. . .but the most important regulator is the court of public opinion and social media. Gone are the days when MLMs can weave their craft with impunity.

    • Lazy Man says:

      Thought I’d follow-up on Scott’s comment of: “The greatest impact has and will always be direct contact across the kitchen table where I’m going right now with my heart, passion, desire and grit.”

      “When Angela Duckworth talks about grit, most people assume she just means persistence—but there’s more to it than that, the MacArthur ‘Genius’ Award winner and professor of psychology at the University of Pennsylvania told Motto. ‘I do mean hard work and not quitting things when they’re hard, but I also mean passion.’

      So to be clear, grit is combination of persistence and passion (and maybe other things). So would definitely use the Grit Scale as a good foundation for eliminating the 99% of people before they lose money in MLM. Scott, I’d be very thankful if you get that implemented at any MLM that you consider to be a good one.

  18. Scott says:

    I heard a statistic yesterday that only 3% of network marketers (MLM) recruit more than 10 people in their entire time in the business. What do you believe is the cause of this low number?

    • Lazy Man says:

      I’ll go with Math. Allow me to illustrate with an example.

      Let’s say that I become an MLMer today. Let’s also say that I’m a great recruiter. I recruit 11 people (more than 10). For simplicity, we’ll give them the names George1, George2, etc. almost like the George Foreman family. Now there are 12 people (me plus the 11 Georges). Currently only 1 in 12 people (me) have recruited 10 or more people. That’s only 8% of the MLMers in the group. Let’s say that George1 recruits 4 more people. Suddenly we have 16 people in the group, but still only one person who have recruited more than 10 people. George2 recruits another 4 people. We’re up to 20 people and still only have 1 person (me) who has recruited more than 10 people. That’s 5% and we haven’t covered George3 through George11. We also haven’t covered any potential recruits from the 8 people that George1 and George2 recruited.

      I’m hoping you can see the exponential problem here. The more people who are successful at recruiting the more the problem is exasperated because we’ve created a problem of many more people starting at square one.

    • Earl says:

      Your assessment is a little off. You’re forgetting that by the time George #4 and #5 have done some recruiting. George #1, #2 and #3 have already left the business. The only ones still there are RVP Bill and Regional Manager Steve.

    • Lazy Man says:

      It wasn’t exactly an assessment, I just wanted to walk Scott through the basics of showing that the exponential recruitment explains the stats. It isn’t about doing work at all. And yes a majority of George’s will leave, but we don’t need to deal with that to answer Scott’s original question.

    • Earl says:

      In Primerica’s case, the average recruited per rep over the last 6 years has been 2.21. And 84% of them drop out before getting licensed, leaving the rep with 1/3 of a downline, of which 34% leave each year which amounts to 1/4 of a downline per year. Is that a high failure rate as far as recruiting? Absolutely not, because during that whole period, those same recruits are approached to be “clients” and many buy as a sign of loyalty and willingness to follow the system. This process repeats itself year after year, and is better known as churn. The rep who recruits leaves, and the recruit becomes a rep, who in turn leaves. Over 1.7M have come and gone in this fashion since 2009 alone. Who wins? Certainly the corporation and shareholders, and of course the top dogs representing maybe 5% of the force. Who loses? The recruits who were sold on the dream of building an empire, with residual earnings. They are building an empire. . .for their RVP and higher!

  19. Scott says:

    Why is it a problem to start at the bottom? This isn’t a Basketball league. And, the last time I looked, most people start at the bottom in corporate America and move up the ladder based on time with the company, good looks and who they know. In MLM, you move up the ladder based on results within the guidelines. Why is that a negative?
    There are no illusions that MLM is commission based income. Commissions from personal sales and overrides of the team a person develops. And that team is pointed out by your example as hard work and consistent efforts. Just like 97% of all workers don’t care about promotions, 97% of MLM don’t either. And, that’s the problem.
    Like I said before, statistics only point out the results of actions or lack of actions. These stats prove my point that most MLMs don’t join for the big money. They join for the part-time extra spending money. Most people are not entrepreneurs but don’t want a second “job.” And I tell recruits that I don’t know who is and isn’t an entrepreneur at first. And many times they really don’t know themselves. Most people aren’t self-starters. But everyone should have an opportunity to find out.
    The average small business costs $65,000 just to start. MLM is mostly under $1,000. Ours is $124. That’s a lot less than $65,000 to find out if being self-employed or an independent contractor is something you want to do and can do. Why would you want to stop anyone from finding this out? Life is full of risks and as a society we have become way to protective from risk.

    • Earl says:

      “These stats prove my point that most MLMs don’t join for the big money. They join for the part-time extra spending money.”

      As the average rep sells 2.5 policies per year (Annual Report, pg 38), and corporate collected an average of $424 per rep (POL/marketing material), and baseshops have various expenses, its apparent that one needs to be way above average to even have a chance at breaking even. Even without a rep force, RVP’s would only average 58 policies a year, which after expenses, is McDonalds shift manager money. Nope, the real money is made by MLMing the troops, selling cds/dvds, hosting pay to attend seminars, booklets…..and what does 40,000 reps paying $85-$125 to attend a bi-annual convention bring in, especially when these are booked during off peak season times? How much do reps spend on airfare and accommodations. And don’t say attending these is not sold as a way to show your true colors and loyalty. Almost half the force attends. Few stick around long enough to attend 2 conventions thankfully!

    • Lazy Man says:

      I didn’t say anything about starting at the bottom. Scott why would you change the subject to that? I simply explained that the nature of recruiting means creating a greatly expanding group.

      In a basketball league you don’t move up by getting 11 more people. I am not sure that Google evaluates the ability of its programmers based on stuff like “good looks.” But hey, those are two different things that don’t have to creating an expanding group in order to move up. There’s also no funneling money up the chain. You asked about recruitment, so please stick to your question.

      I don’t think many people would agree that it is commission-based. Otherwise we could simply just solve the problem by giving everyone a straight commission percentage. The “team” that a person “develops” can be described as the “pyramid” that someone “builds” in MLM. A rose by any other name…

      The team that I created in my example didn’t actually do any work. They didn’t sell any product. They were just building a hierarchy. My 4-year old could demonstrate that in his class at school. It certainly wasn’t “hard work” or “consistent effort.”

      Again, it’s not that 97% of people in MLM don’t care. It’s that they can’t care because the recruiting nature requires endless expansion of people they would need to recruit.

      The statistics don’t point out results of actions or lack of actions. They show that the ever expanding nature of recruitment is unsustainable.

      Do you understand how traditional Ponzi schemes and Pyramid Schemes work? Maybe put your MLM stuff aside for a minute and focus on the math of the recruitment scenario as you described it.

    • Vogel says:

      Scott said: “And, the last time I looked, most people start at the bottom in corporate America and move up the ladder based on time with the company, good looks and who they know. In MLM, you move up the ladder based on results within the guidelines. Why is that a negative?”

      What a crock! You apparently know nothing about corporate America. Middle and lower management in corporate America doesn’t start at the bottom and work their way up. They graduate from university with a degree and then get employed in the middle of the ladder, never having to work a grunt job a day in their lives. They climb based on merit and performance.

      In MLM, you don’t move up, period. That’s a statistical fact for somewhere around 99% of participants. Everything you say about your pathetic company is BS. Worse still, even your off-topic analogies are BS.

  20. Scott says:

    Actually, many people buy life insurance because they don’t have any and should. Whether before or after being recruited, it’s a product that most people who join should have already purchased. And those who had life insurance, like myself, had the wrong kind and drastically under insured like I was. Had I not joined or quit I still was educated on the subject and ended up with 10 times the protection at the same premium. With 2 kids and one on the way, I’m very pleased that someone tried to recruit me.
    As far as buying vitamins and drinks, you will have to talk with someone else about that. And, once again, you quote stats but offer no reason why?
    Also, did you notice that the President elect is having a woman who is a member of the family that owns Amway to be head of the Dept. of Education! MLM is safe :-)

  21. Scott says:

    You have no idea about our expenses. And, an agent writing few policies has little or no expenses. Once again, you have no idea what you talk about.

    • Earl says:

      Dude, its written in your annual reports. Would you like the page and line item??? So lets see what expenses are involved in selling or at the office;
      – darn, im writing the test for the 5th time, at $30 a pop. And the test center is a 40 min drive using my gas, and has metered parking.
      – transportation to/from twice weekly meetings
      – transportation to/from a sale’s call
      – Daniel is in town, its only a $25 entrance fee, plus you gotta buy lunch, pay for parking, plus transport to/from.
      – The RVP recommends attending a $675 Landmark Forum on the weekend
      – Dont forget to buy a copy of Robert Kyosaki’s latest book
      – how bout I order one of Hectors training packages @ $125?
      – maybe i should get business cards (theyre not provided for free)
      – Everybody in the shop is ordering team jerseys, maybe i should too?
      – oops, i gotta book an $800 return flight for the bi annual convention. Plus 3 nights hotel (split 3 ways @ $60 per night).
      – I guess ill need breakfast, lunch and dinner while Im at it.
      – oh look, Primerica tee’s and caps are only $25 ea, may as well look the part.
      – cool, POL only costs $25/month
      – oh look, im gonna book that weekend retreat for $700 so i can rub shoulders with the big hitters.
      etc etc etc etc

  22. Scott says:

    Unsustainable? Amway has been doing the same thing for like 70 years! We are coming up to our 40th year anniversary. It’s obviously sustainable as long as you work and build a strong team. My point is that stats don’t tell you why an individual doesn’t do what it takes. There is plenty of people for all the MLMs out there.
    Why not start my own financial service business? Do you have any idea what the costs are? No, you don’t. Just the licensing should be a clue. And, even if I do, I’ll hire agents and still override them. But, I wouldn’t be able to let them hire and override. Why is that okay? It’s not.
    And, Google has a hierarchy with people getting paid more at the top. Salary is commissions spread over a year. And, it’s a guess on how much they will bring in profits. Don’t kid yourself.

    • Lazy Man says:

      I was talking about my example about your recruiting question that was unsustainable. I wasn’t referring to any specific MLM. Endless chain recruiting in Specific MLMs are only sustainable because so many people realize the scam and get out of it. This is why you don’t find MLM companies growing their numbers by 10x each year. They more or less churn through people at the bottom.

      So if you wanted to translate my example to MLMs, 8 of the Georges would leave because they realize that anyone who really cared to be in MLM would already be in it… and less than 5% of people are in it anyway. Because those 8 Georges have left, they aren’t recruiting 11 who are recruiting 11, etc.

      You don’t have to take my word for it, this Seeking Alpha article explained it years ago.

      I’m surprised that I have to explain this stuff to you. I thought you were supposed to be an expert?

      Please don’t compare MLM to a franchise business. It isn’t. This article isn’t about H&R Block. If you want to limit your costs in starting a real financial services business, that’s one reputable way to go.

      And again please don’t compare hierarchies based on recruitment with other hierarchies such as Google’s employment. As Vogel already explained, many managers start in the middle with their business degree. It isn’t like they start in the mail room. We’ve moved on from these false arguments weeks ago.

      I noticed that you didn’t comment on my math example for answering your question. You also didn’t get back to the whole grit test thing.

    • Earl says:

      “Salary is commissions spread over a year.”

      OMG you’re a scream!!!! Commissions can vary greatly from year to year, including decline. Salaries remain constant, and at minumum, rise with the cost of living, and typically come with benefits. As well, salaried workers are not required to reimburse their employer for any expenses incurred in doing their job.

  23. Scott says:

    Mike Sharp earns 3.5 million last year. He hasn’t worked in the field selling or recruiting for 25 years. Somehow his organization just keeps on going. That’s freedom. Everyone starts at the bottom. Everyone has the same opportunity. It’s up to each individual to take advantage of the opportunity. Can’t worry about those that quit. In this world, there are lots of quitters.

    • Lazy Man says:

      Scott wrote, “Mike Sharp earns 3.5 million last year. He hasn’t worked in the field selling or recruiting for 25 years. Somehow his organization just keeps on going.”

      Have you reported him to the FTC? These FTC guidelines seem to suggest you should!

    • Earl says:

      Thats too bad, seeing as Primerica reprted him as a $5M earner in a previous year….a $1.5M drop. Secondly, he is one of the original founders, the people none of us have ever argued making a good income. What is odd is that none have surpassed his earnings in 40 yrs? I thought everybody can surpass their upline?

    • Earl says:

      Do us a favor. At the beginning of your next opportunity night, please announce the fact that 1.7+M quitters have left since 2009 alone.

    • Earl says:

      “Mike Sharp earns 3.5 million last year. He hasn’t worked in the field selling or recruiting for 25 years.”

      So youre saying he just lays on a beach all day then? With a hierarchy his size, his expenses run in the 100’s of $1000, and I would imagine he is working just as hard as any other corporate executive, possibly harder, as they don’t have the stigma of MLM to overcome!

  24. Scott says:

    Sure! I tell them what it takes to earn part-time income or what it takes to go to RVP. I have nothing to hide. Like I keep saying, I’m looking for entrepreneurs and they will stick their own hands up if they want it. That’s how I started.
    It wasn’t easy for me when I started. But, I tried. I learned. I worked on what I learned. I figured it out. I never saw myself as a self starter nor an entrepreneur. I did start up a kung fu school when I was 23 and ran it for a couple of years until I went back to college. I had to sell my opportunity their too. I don’t see what your problem is.

    • Earl says:

      “I’ll tell my story” “I got involved because I was teaching school at a place that didn’t pay well. I had two kids and one on the way and my wife didn’t work. I went to an “opportunity” meeting and saw that I would be paid based on the sales of the product sold. And, I could build a brokerage business within the company and override my agents and they could do the same thing 6 levels deep. So, I paid my way. They paid for my license to sell insurance and I earned an extra $1,000 to $1,500 a month one to two nights a week. I didn’t make it to the top. But, I earned a great spare time income that I needed.”

      So, continue to tell your stories!!!

  25. Scott says:

    You have no business writing about MLMs. LOL! No, we don’t have those kinds of expenses. RVPs bundle together and share costs. He spoke at a convention last month. That’s about all he does anymore.

  26. Scott says:

    You have what I call LDS. Liberal derangement syndrome. Take some medication if you are going to cry over $25 for a two day event with free parking. Good grief!!! No one forced people to go and for brand new people and guests I pay for them.

    • Earl says:

      “No, we don’t have those kinds of expenses.”
      “No one forced people to go”

      Make up your mind. You say one thing, then when busted, try to justify it, or attack the messenger. The West Coast is a fairly large area. Do you pay the transportation and accomodation costs personally for everyone from Washington, Oregon, Colorado etc etc etc. Did you also pay those costs for everyone who attended Atlanta? And if you did, you’ve just proven that the “big earners” have big expenses. Either way, lose, lose!

    • Earl says:

      “for brand new people and guests I pay for them.”

      And for existing reps, theyre on their own, footing these expenses then? Because only new and potential recruits will pay you back via commissions earned when you sell to them! Lose, Lose!

  27. Scott says:

    Oooo….a 2 million dollars a year SNSD had to pay for a flight from Las Vegas to Ontario. LOL!!! Like I said, no one complains except outsiders. See, we have no problem paying for these events. The corporate mind wants everything free. The government mind wants everything free.
    Do you know that Art Williams paid cash for the home office we built back in the 80’s? He refused to be in debt. We still believe the same things. No reason for our policy and shareholders to have to flip the bill for our entertainment and training. Fabulous company and fabulous industry!

    • Earl says:

      We’re not talking about the elite 1-2%, we’re talking about new recruits, or newly licensed reps who have paid over $800 in return airfare, plus the $125 entrance fee, plus meals and accommodations to attend a bi annual convention in Atlanta. For the majority of them, and based on your own statements that 98% are going to fail, that is money they will never see again, except on your bottom line. And many of those attendees borrowed the money, or used a line of credit or their Visa cards. So much for being in dept.

  28. Scott says:

    That’s up to the person to take a vacation. Also, it’s a write-off too. Dollar for dollar. That’s right. I forgot. You have a job and been jobbed! You have to pay for all your benefits. We let the government do that with our write-offs. LOL!!!
    I’m so sorry you work for a truly boring company and boss. The boss tells you when you can go to the bathroom, eat, see your family, what kind of car you park in what kind of home he lets you afford, when and if you can afford and take a vacation. I have pity on your boring and pathetic life being brainwashed by liberal unions on the value of being enslaved with a job.

    • Earl says:

      dollar for dollar ……really? And you’re in the financial industry? Good god man! And don’t you just love Atlanta, in July, in 120f!!!

  29. Scott says:

    Yes sir! Dollar for dollar! Sorry about your pathetic job. Ask your boss to pay you $500/hr. See how he/she reacts ?
    You do know that your boss has set aside more than you are paid to pay for your benefits. This means you are paying for your own benefits. The writeoffs pay for mine meaning the government (you) are paying for mine.
    When do you get to go to the bathroom? 10am? 12pm 2pm for 10 minutes. “Boss, I have a problem and need more time.” Boss answers, “Sure! Just clock out. No crapping on my time.”

    • Earl says:

      Rep spends $1500 attending company functions. Rep earns $1500 in commissions that year
      Reps profit = 0
      Taxes owing for 0 profit=0
      Rep is still out of pocket the $1500 he spent and therefore earned nothing for the year.

      $500/hr? You truly are an Herbalife poster child!!!

      Ps my company has a pension plan where they put in $2 for every 1$ in put in. So how am I paying for my own benefits again?

      Ask for asking for bathroom breaks, I can certainly see why youre comparing your opportunity strictly against low skilled entry level jobs, and even then, at least they bring home a weekly check.

  30. Scott says:

    Herbalife? I don’t work with them. Don’t pay much attention.

    • Earl says:

      MLM products and services are interchangeable and matter little. What matters is the ability to MLM unaware victims into believing the hype, which you have graciously provided here.

      We’re not buying it, nor would anyone who’s read the various posts here, along with verifiable facts.

      Yes some make great money, but that some represents the ultra elite, accumulated over a 40 year period. As you’ve said yourself, 98% arent cut out for it, therefore of the 100% reading these posts, only 2% should be considering buying the raffle ticket that MLM represents.

  31. Scott says:

    Not interchangeable. If I were Lazyman I’d fire you for unprepared and lack the knowledge of MLM.
    Go back to unemployment, the largest pyramid of all.

  32. Scott says:

    I’ve fired you because 30yrs vs no time in your case proves I know more than you knuckleheads. All you have is stats but no way how to interpret and understand what you are looking at.

    • Earl says:

      I can’t see how the fact that 1.7M have joined and left since 2009 alone, and only 1% have ever exceeded $50k during a best 12 month period (including advances, before all expenses) in your 40 year history can be misinterpreted.

    • Earl says:

      I can’t fathom what it must be like to be solely dependent on one’s ability to recruit others, rather than just relying on one’s own product sale’s abilities (to retail customers). When the recruiting taps get switched off (ie; Vemma, Herbalife, et al) it becomes easy to recognize that success depends on recruiting (and selling to those recruits) rather than on simply marketing a product. Living a life of half truths and exaggerations must tear at the soul, watching the endless line of people coming and going throughout the years, and still being able to sleep at night. Obviously it takes a special person to succeed at MLM, all the while hoping that karma is merely a myth.

    • Earl says:

      So true. Words like integrity, honesty and transparency are foreign to the the MLM industry. Words like Lobbying, political manipulation, exaggeration, and half-truth, fanfare, fine print, and Rah-Rah are typically avoided in the corporate world. So are flashing light laser shows complete with hard driving bass music with speakers claiming “you too can be the next millionaire”. Or at least I don’t recall Steve Jobs or Bill Gates employing those methods.

    • Earl says:

      Imagine what it must be like supporting an MLM corporation, using cliche phrases, half truths and blatant exaggerations, hoping all the time that readers with basic math skills and access to their online annual reports, don’t take the time to add up all the reps added in the last 5 years to the starting number of reps and realize there is 150,000+ missing reps, and 100’s of 1000’s of missing recruits?

  33. Scott says:

    WOW! Primerica Stock growing again st 72 from 15 in 6 years. Excellent returns! What is Lazyman doing on the NYSE? LOL!!! You people are just jealous.
    It’s so apparent how people in here haven’t a clue about MLMs. They think we are employees. LOL!!!

    • Lazy Man says:

      Well in nearly 40 years Avon has lost 2%. That’s not a good return for one of the “most successful” MLM companies.

      I’m very sure that no one here thinks MLMs are employees. A few have pointed out that it would be an improvement if they were employees.

    • Earl says:

      I wonder what McDonalds stock would do if they suddenly announced that their employees will all be switching to commissions only, and will have to pay for the utilities and supplies used to cook the fries? My guess is the stock would soar, but at the expense of the employee’s bank accounts. Same difference. Our argument is not about corporate value, but rather strictly about the value of “the opportunity” being offered to recruits. Stating the CEO makes $5M relates little to the rep on the street.

    • Earl says:

      Any high schooler knows corporate profits are inversely related to the cost of doing business. Without having the overheads of providing anything for their labor force, and in fact turning many of them into clients as well, of course there’s profits to be made. However don’t confuse corporate performance with the value of “the opportunity” offered to reps. They are diametrically opposed. Any parent can save money by not feeding their kids. Same difference!

    • Earl says:

      And lets not forget, it recently shot up immediately following the election, and not because of business performance. And they’re currently in the process of buying back $200M in shares. If you knew anything about economics, you would also know the purpose of that.

  34. Scott says:

    You are throwing a red herring out there. McDonalds is a franchise and always will be retail. We are a direct marketing company and always will be.
    Your problem is that investors know a great buy when they see it. They know actually how to review the numbers in a specific industry. Our numbers and stability are very good and always have been. It’s funny because when AL Williams was on the NYSE, we did exactly the same great things. Price doubles over and over. The only thing that stopped us was Art’s mistake merging with Sandy Weil.

    • Earl says:

      How convenient of you to completely miss my point. Investors could care two poops about the “opportunity” offered to reps. They are strictly focused on the bottom line, which is profits. Profits are controlled by inflating prices and controlling costs. . .both of which directly and negatively affect the sale’s force. The less reps are paid for their services, the greater the profits. And for most, the commissions are actually paid back via the associated fees involved in working there (training materials, pay to attend seminars, sign up fees, POL, conventions). Its true many cancel any policies they buy when first recruited upon leaving, but some remain in force with absolutely no costs to maintain them, and any benefits pass directly to corporate. 67% of your reps/recruits (combined) agree with me annually.

    • Lazy Man says:

      Earl covered the point about profits: “Any high schooler knows corporate profits are inversely related to the cost of doing business. Without having the overheads of providing anything for their labor force, and in fact turning many of them into clients as well, of course there’s profits to be made. However don’t confuse corporate performance with the value of “the opportunity” offered to reps. They are diametrically opposed. Any parent can save money by not feeding their kids. Same difference!”

    • Lazy Man says:

      I think that might have been Earl’s point. Franchises actually sell more than 99.99% of its product to actual customers. It appears that MLMs sell around 97% of its product to its sales force, while not providing them benefits. You can go back and read the article to see some points about what’s wrong with that.

      Also according to Wikipedia: “Primerica, Inc. is a multi-level marketing company which sells financial products and services using a hybrid model of direct selling, franchising and distribution.” So you might want to edit Wikipedia to correct them on the franchising point. Not sure how a nearly 40 year old company that has been edited thousands of times over the last 12 years with citations is still making that mistake.

      Investors have not really considered MLMs a great buy. You can look at Avon’s terrible record that I mentioned above. You can look Blyth’s botched ViSalus spin off. NuSkin has a similarly bad record over it’s public history.

      Pretty much all publicly traded MLM companies are unmitigated disasters if you look at their performance throughout the company’s history. I think the biggest (by market cap) publicly traded one is Herbalife and there’s probably no more controversial company out there. If the best case scenario is a dumpster fire then what does that say about the others?

    • Earl says:

      Herbalife has 6 months to a year of life left, once the FTC rules kick in. We can already see where they’re headed in anticipation of being forced to operate legitimately;

      Check the 3 month trend after the rules were announced;


  35. Scott says:

    Got lost again. Happens to you all the time.
    Here’s what I see. I see you don’t understand we aren’t employees. And, we aren’t looking for employees with employee mindsets. They are essentially zombies slaves to their bosses. We look for those who want to be independent contractors who work on commissions. Most who join have never worked on commissions. Most do not know themselves well enough to know if they are really self starters. They find out soon enough and drop out or make great part-time income. Some stick around because they like the people. It is what it is. And it’s none of your business why they stick around.
    So, all your statistics are meaningless and pointless. We give opportunity. It’s not up to us but train them and help wherever we can. But it’s up to them. The stats are pointless.

  36. Scott says:

    I agree with you about the method most MLMs use to sell products. We do both. Sell the recruit and recruit the sale. We find that the best recruits are happy customers. Especially those ripped off by the life insurance industry with cash value or group policies. That was my case that the policy we had was 1/10th the coverage of Primerica at the same premium as our whole life. Wasn’t hard to recruit me.
    With many MLMs, it’s hard to tell whether the field force is being paid from the sales of the products or the distribution fee. That makes a big difference. That isn’t the case with us as the IBA and life application are separate forms and fees. And we aren’t paid from the IBA fee one dime.

    • Lazy Man says:

      The problem with: “Sell the recruit and recruit the sale” is that you focus on the recruit. That’s why MLMs are finding themselves in trouble for recruiting.

      Scott said, “With many MLMs, it’s hard to tell whether the field force is being paid from the sales of the products or the distribution fee. That makes a big difference.”

      Hey, you are starting to realize the problem with MLMs as I showed in this article. Thanks for agreeing with me about MLMs and validating this article. It took you a long time to come around, but it’s great we finally got there.

    • Earl says:

      Without recruits, and their purchases of policies, IBA fees, POL fees, training material purchases, pay-to-attend seminars, and entry fees to annual conventions, and the commissions and perks these generate to the elitist few at the top, this business would cease to exist! Retail sales are secondary at best to their existence. Recruits are not the lifeline to sales, but to purchases. Reps and recruits are merely clients!

    • Earl says:

      If a recruit decides to buy a policy, thats fine, but when selling to recruits is mandated in your procedural manual, it reeks of pyramiding.

      There’s a fine line between selling a few policies internally and selling a significant number internally, something the FTC will decide.

      2/3 of all your policies are sold to those without any previous coverage, so your’re not converting them from whole life to term. And your term rates are typically 40-107% higher priced than competitors, further confirmed by your insignificant share of the term insurance market.

      And we’ve also pointed out that your annual cancellation numbers are closely associated with those leaving the opportunity each year, which is no coincidence. Your’re not only churning reps/recruits, but you’re also churning policies.

  37. Scott says:

    MLMs are not in trouble for recruiting and you know that. There is nothing wrong with recruiting. Because a couple get snagged doesn’t mean all 20,000 of them are doing something wrong. Like I said, Trump will change the FTC.

    • Lazy Man says:

      Scott said, “Because a couple get snagged doesn’t mean all 20,000 of them are doing something wrong.”

      Do you know about how many MLMs there are in the US? It’s around 1200, not 20,000.

      Also, a high-level employee with the FTC explains why they can’t go after more than a couple, in this Bloomberg News article. In short, they need to take them through a long-lengthy trial… and the FTC hasn’t lost in the last 30 years on any such trial if they’ve ever lost. Since the FTC has limited funds (the tax payers aren’t giving it an unlimited budget) they can only go after a few companies in court.

      It’s the equivalent of saying that the police only caught 2 people stealing TVs in a riot so the other 1200 doing the same thing did not necessarily do anything wrong. This is why the told MLMs that they need to change their policies in a speech. It wasn’t a message to a few companies, it was a message to all MLM companies of what is expected by them to run legitimately.

      I don’t know of any MLM company that has voluntarily complied with the reasonable expectations. Any legitimate MLM should be the first in line to say, “See! I’m legitimate. I’m doing it!”

      Please give me a list of the MLM companies that have voluntarily complied with the FTC’s guidelines in that speech. Those guidelines aren’t particularly new as the FTC has pointed out. They’ve been in place for decades. It’s not like stealing TVs in a riot suddenly because illegal, it always was… and now the FTC is watching.

      Trump can change the FTC if it wants to, but the speech has already been said. Trump doesn’t have a time machine to take it away (… I don’t think.)

    • Lazy Man says:

      Also Scott, you moved on very fast from that point about agreeing with me on this article. I just want to make to make sure you didn’t debate that and were just deflecting it back to the FTC stuff.

    • Earl says:

      Lets replay some comments from reps from Vemma, Fortune Hi Tech, etc. . . .before they were shut down as pyramids;

      “The ones calling it a scam are the ones that work their entire lives making money for someone else. Wall street has these companies rated A+ so just because you’re misinformed doesn’t mean you’re right.”

      “pyramid schemes are never handed awards and featured in legitimate business publications such as Inc 500 and Forbes”

      “Vemma does not promise get-rich-quick money, they propose the opportunity to make an income based off of how you work.”

      “you’re poisoning this Great profession of Network Marketing. I drink verve daily because it has changed my health over the past 6 months. It’s NOWHERE comparable to the garbage like red bull. So to say that it’s based on recruitment is ignorance on your part my friend.”

      “Most people don’t understand leverage, or residual income. that’s why they put down MLM”

      “I love the people who like to put down something that is enabling 18 years olds to make more money than the people with their MBAs.”

      “You just have to hold yourself accountable for what you do, and realize if you don’t make money in FHTM, you only have yourself to blame. “

      Perhaps maybe Scott will know this one, seeing as its from one of his own big earners?;

      “This is a business about fundamentals. Showing up, bringing people, setting up appointments & becoming a passionate client.”

      Does anyone see the word “selling” in there???

    • Earl says:

      The FTC has changed tactics to save time and money. Instead of spending years in the courts and 100’s of millions of dollars proving a pyramid, they are instead mandating that MLMs offer full disclosure and follow the rules placed on them, starting with Herbalife. They have stole a page directly out of the MLM playbook on this one, and its simplicity is pure genius. Be prepared as Herbalife’s big earners start jumping ship to other MLMs in a vain attempt to save themselves. All the rafts will soon be sinking. Maybe we’ll run into Scott at McDonalds one day, on the other side of the counter?

    • Lazy Man says:

      I think there might be injunctions against Herbalife leaders moving their downlines to other MLMs. I could be wrong, but I don’t think they can just move their downline to another company like you’d typically see.

    • Earl says:

      Well they can always try the Vemma tactic and beg other MLMs to buy their product in order to stay afloat? lol

    • Earl says:

      “MLMs are not in trouble for recruiting and you know that. There is nothing wrong with recruiting.”

      Except when the main purpose of recruiting is to sell to those recruits. Without recruits, your existing force would dwindle to 20,000 reps within two years thru attrition alone, plus the number of uplines leaving when they no longer have fresh cows to milk!

  38. Scott says:

    Many have agreements to stop that. Amway does. We don’t. We did get a law stopping people who leave to sell to clients they wrote with the old company for 2 years.

    • Earl says:

      “We did get a law stopping people who leave to sell to clients they wrote with the old company for 2 years.”

      Thats odd, because according to you and others, reps “OWN” their own business. Wouldn’t most assume that business would include “THEIR OWN” clients as well???

    • Lazy Man says:

      You got a law written? Is it in some (or all) states or at the federal level? Can you point to the state or federal website citing this law?

      MonaVie claimed that people were free to move to another MLM. It looked good on paper, but they didn’t follow through. They sued people looking to move “their business” to another company if my memory is correct.

  39. Scott says:

    No sir. Not in Pridential, State Farm, or any financial service company. The clients are owned by the companies. That’s what makes this unique.

    • Earl says:

      Oh I see. So reps “own” their business, and own their “clients”, but can not deal with these clients for two years after they leave your “opportunity” behind? That makes perfect sense!!! …..not!!!

  40. Scott says:

    You apparently don’t. And you don’t know the purpose for this event. Buyback aren’t good or bad. They serve a purpose. Since Primerica’s quarterly statements were nothing but stellar, this rewarded the shareholders and the stock has skyrocketed. If more stock had been issued then there may have been a financial challenge or need. But, there isn’t.

    • Earl says:

      Stocks surged before the opening bell immediately following the previous night’s election results. 3rd quarter results were announced well later in the day with minimum effect. The surge was solely the results of the election. 2nd quarter results were quite similar and had minimal effect on share prices. The buy back was announced 10 days later with minimal, if any, effect on stock price. But nice try!

  41. Scott says:

    You are so jaded that you can’t understand a simple thing. Say I sell you a policy as a Primerica Rep. Then, I leave to work for Prudential. Within 2 years, I approach you and replace your Primerica policy with a Prudential. That would be illegal.
    What happened to bring this about was a RVP wrote a bunch of bogus policies with his team. Then left and started his own company and replaced all that bogus business. His attempt was to injure the company while starting his own. That’s what started Art Williams downfall from the company. Art was said to have tried to return the favor and that began the legal stuff that caused Sandy Weil terminate Art. The case ended without anyone winning.

    • Earl says:

      Bogus policies are remedied by charge backs, or in the case of gross negligence, fraud charges through the courts.

      This has no relation to a company controlling the clients of a 3rd party’s supposed business, especially when that 3rd party paid all expenses in earning that client’s business in the first place. The fact is, its not a business, you don’t own your clients, and you’re merely commissioned sale’s reps for a corporation.

      A truly independent business owner can do whatever they wish with their clients.

  42. Scott says:

    The company bottom line came out great! So, the shareholders got a big divident. What’s your problem? The company is in great shape! The company is now properly valued.

    • Earl says:

      The value of the stocks shot up hours before 3rd quarter results were even announced. It was strictly due to the election results. Hmmmm….wasn’t it you who announced D Trump as being pro-MLM????? You know, the same D Trump who recently settled his pyramiding university charges with a $25M settlement????

  43. Scott says:

    Tell that to all 50 states insurance commissioners. How more arrogant can you get! Well, you have been the biggest one I’ve known ?

    • Earl says:

      There are no state laws preventing a rep from carrying their “book of business” with them, in fact, its common in the insurance business, except where company rules prevent it. Quit spreading falsehoods on the internet! Ooops, forgot….you’re pro-MLM!

  44. Scott says:

    Actually it’s not common place. The book of business in all companies is owned by the companies. But how would you know. You’re arrogant.
    Let me say again, in two years they can right old clients.

    • Earl says:

      “The book of business in all companies is owned by the companies.”

      Really? If that is considered standard industry practice, why the need to create a specific rule as you alluded to in an earlier comment then? The truth is, each company is free to write their own rules. The fact that yours chose to impose a 2 year no-contact rule is your choice. But seeing as your average rep writes 2 1/2 policies a year (per your annual reports), that shouldn’t affect more than 5 policies anyways! And by then, your insurance license has expired! Too bad, so sad?

    • Lazy Man says:

      Can we get back to the “law” that Scott said they had written? I want to make sure he’s not moving on from the topic because it’s convenient for him.

    • Earl says:

      Thanks for confirming I’m not alone in noting that when confronted with factual and easily verifiable truths, he typically starts a whole new topic filled with unrelated hyperbole, or simply goes silent.

    • Earl says:

      Scott to his Corporate Social Media Dept; “Help, they appear too knowledgeable to baffle with bullshit, and attacking their character is not effective. They didn’t even fall for the “all corporations are pyramids” line. What do I do next”?

Leave a Reply

Your email address will not be published. Required fields are marked *

Previous: Typesy: Typing Software is Back?
Next: Deal: Get Amazon Prime for $73 this Weekend
Also from Lazy Man and Money
Lazy Man and Health | MLM Myth | Health MLM Scam | MonaVie Scam | Protandim Scams | How To Fix | How To Car | How To Computer