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The MLM Epidemic in 13 Maps

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Re: The MLM Epidemic in 13 Maps

#41

Post by mprev »

StanAngeloff wrote: post #34

Over the past 15 years, I've had the opportunity to work with more than a dozen MLM companies in the UK. This won't be a popular opinion, however I believe great quality products and a self-regulating industry can create businesses that are far from being a Ponzi scheme but are legitimate companies with ethics, great support and opportunity to earn decent money.

What "great products" need to go through MLM? Arguably, it's easier than ever to launch a product direct to buyers. And it's neither easy nor cheap to build a multi-level network of distributors.

None of the UK-active MLM schemes I've seen has an ethical reason for using MLM rather than legitimate sales channels.

Let's look at some. Cleaning products that are vastly more expensive (in part to fund the MLM commissions) than High Street equivalents. Questionable dietary supplements that rely on woo-woo rather than scientific backing. And of course, electricity, gas, and phone service with the added margin to pay for all those ad-emblazoned Minis and, again, MLM commissions.

Maybe it's like communism. People like to say that, on paper, it's a great idea (I disagree but that's not the point). Those same people also say that it has never been implemented properly, and so it's not the fault of the idea that it has always led to national scale human misery.

In your view, MLM could lead to ethical companies with great products etc. But the past few decades show that every time it's tried, MLM actually preys on the dreams/needs of the vulnerable, adds huge margins to mostly crap products, and the people who get suckered end up mostly losing money.

MLM is a horrible idea that leads to horrible outcomes.

Re: The MLM Epidemic in 13 Maps

#42

Post by detaro »

StanAngeloff wrote: post #34

Over the past 15 years, I've had the opportunity to work with more than a dozen MLM companies in the UK. This won't be a popular opinion, however I believe great quality products and a self-regulating industry can create businesses that are far from being a Ponzi scheme but are legitimate companies with ethics, great support and opportunity to earn decent money.

Examples of such companies?

Re: The MLM Epidemic in 13 Maps

#43

Post by noxToken »

StanAngeloff wrote: post #34

Over the past 15 years, I've had the opportunity to work with more than a dozen MLM companies in the UK. This won't be a popular opinion, however I believe great quality products and a self-regulating industry can create businesses that are far from being a Ponzi scheme but are legitimate companies with ethics, great support and opportunity to earn decent money.

At the core of it, MLM is a legitimate business strategy to get a relatively unknown product distributed through a network effect.

I create a meal replacement smoothie. Some friends want to try it, so I hook them up. Then friends-of-friends ask about this smoothie that isn't available, so I let them sell the product to other people in exchange for a cut. I quickly realize that I don't have the capital for to materials. Product is moving too fast, so I ask them to pay up front for some of the materials.

The problem is that this benign relationship that helps both of us can be easily made predatory.

Re: The MLM Epidemic in 13 Maps

#44

Post by Osiris »

throwawaysea wrote: post #10
encorekt wrote: post #3

Earlier quoted context omitted.

Absolutely -- it's that promise of financial freedom and products that "basically sell themselves" except you're stuck with the inventory because 10 people are working on the same friends to get them to buy Younique mascara.

Actually, MLMs are required to repurchase unsold inventory: https://www.mlmlaw.com/library/cases/mlm/ftc/amway.htm

My wife did Mary Kay and they had a clause regarding buy back: They would pay 90% of what you paid to buy it and you'd be blacklisted - you could never by a MK consultant again.

So even if an MLM has that type of program they probably make sure people know it'd be bad for them to exercise it.

Re: The MLM Epidemic in 13 Maps

#45

Post by Osiris »

yellowapple wrote: post #33
devmunchies wrote: post #6

I wonder why MLM's are so rampant in the mountain west. I know "mormons" and "sales experience from missionary work" but the analysis can go deeper. From personal, anecdotal experience, a lot of these MLM people I've seen are moms. Could it be that that area is so sales heavy that stay-at-home moms want to run their own thing so they get into MLM on the side?

Having been raised Mormon, it ain't surprising in the slightest that so many of these are concentrated in and around Utah/Idaho. There are a multitude of factors at play here: - Like you mentioned, door-to-door proselytism translates well to door-to-door sales. - Mormon communities tend to be very tight-knit and immediately trusting of fellow Mormons, so once you have a critical mass of LDS followers selling your "in…

> The Church of Jesus Christ of Latter-Day Saints actively discourages any sort of rational individual thought

As an active member, I can say that this comment is untrue. The Church actively encourages education. A simple example is the amount of money it pours into the BYU education system. There is a big emphasis on acquiring knowledge and wisdom.

I actually think that the first two factors are more important and more relate to the culture of the state of Utah than of the Church as a whole.

Re: The MLM Epidemic in 13 Maps

#46

Post by kevin_thibedeau »

didgeoridoo wrote: post #26
jbob2000 wrote: post #13

Earlier quoted context omitted.

These companies are active in areas of low education. They aren't present in coastal cities because that tends to be where smart, educated people congregate. Checkout this map of Red vs. Blue states: http://www.rasmussenreports.com/var/plain/storage/images/med... There is a slight correlation with Red states and high MLM activity. Hmmm....

This map shows MA, MD, and VT as “red”. These are three of the most reliable Democrat-voting states in the country. Something is wrong with your map.

This needs to be at a county level. Many blue states are deeply red outside their cities.

Re: The MLM Epidemic in 13 Maps

#47

Post by Spooky23 »

bilbo0s wrote: post #24
Spooky23 wrote: post #7

When I worked retail sales in the 90s there was an Amway cult meeting nearby. Every few weeks, they would drop in after a pep-rally type thing and try to waste your time looking at the most expensive thing and talk about their amazing business. Then they'd drop the pitch (at the time it was about their e-commerce business). Once you ran into them, you could spot them. It was a mix of desperate mid-life crisis guys lo…

> It was a mix of desperate mid-life crisis guys looking for cash, clean-cut naive younger people, and diligent moms starting a business. Something struck me as a bit familiar about those descriptions. And then I remembered, around here, it matches up with the demographics of the gig economy types. Uber, food delivery, etc. Only difference being the gig economy types are drawn more from the poor. I wonder if the desp…

You have to have a job and at least some cash to do MLM.

Gig jobs are basically the equivalent of day labor. The people doing Uber gigs would be digging ditches or humping things around years ago.

Re: The MLM Epidemic in 13 Maps

#48

Post by wp381640 »

throwawaysea wrote: post #10
encorekt wrote: post #3

Earlier quoted context omitted.

Absolutely -- it's that promise of financial freedom and products that "basically sell themselves" except you're stuck with the inventory because 10 people are working on the same friends to get them to buy Younique mascara.

Actually, MLMs are required to repurchase unsold inventory: https://www.mlmlaw.com/library/cases/mlm/ftc/amway.htm

Most have penalties for repurchasing such as restocking and delivery fees that mean they still make good

That is before going into the psychological pressure applied to distributors to not "fail" by asking for a restock, and the incentive schemes that mean many distributors continue stocking up on unsold goods to maintain commission and reward levels

Re: The MLM Epidemic in 13 Maps

#49

Post by TomMckenny »

Spooky23 wrote: post #7

When I worked retail sales in the 90s there was an Amway cult meeting nearby. Every few weeks, they would drop in after a pep-rally type thing and try to waste your time looking at the most expensive thing and talk about their amazing business. Then they'd drop the pitch (at the time it was about their e-commerce business). Once you ran into them, you could spot them. It was a mix of desperate mid-life crisis guys lo…

Fun Fact: the current secretary of education is a multi-billionaire because her family runs Amway.

Re: The MLM Epidemic in 13 Maps

#50

Post by Spooky23 »

yardie wrote: post #40
bilbo0s wrote: post #24

Earlier quoted context omitted.

> It was a mix of desperate mid-life crisis guys looking for cash, clean-cut naive younger people, and diligent moms starting a business. Something struck me as a bit familiar about those descriptions. And then I remembered, around here, it matches up with the demographics of the gig economy types. Uber, food delivery, etc. Only difference being the gig economy types are drawn more from the poor. I wonder if the desp…

> the desperate who are middle or upper middle class I find they tend to do both. The poor won't have the capital nor credit to be an Uber driver. The middle class will engage in both. I've had my share of Uber/Lyft drivers also hawking Herbalife.

Uber is all of the above. Some people are middle class folks selling car depreciation at a loss. As rates drop there are fewer of these folks.

A lot of these guys now are subcontractors in my area. Drivers frequently don’t match the picture and the standards for the cars drop. My final Uber ride was a male driver (expecting a female) in a 2006/7 Odyessy that was beat to shit.

I used to do work in systems for motor carrier regulation and its likely that the car and driver were unsuitable for passenger service. I had to get to the airport, but I deleted the app immediately afterwards.

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