August 14, 2002
12:51 PM   Subscribe

Would you like to be part of my pyramid?

We all know someone who has tried to sell us a "multi level marketing" product. Usana and Amway are 2 popular MLM companies. Can you really make money with these pyramid schemes? There are sites that talk about avoiding scams and others that show support for those who have been burnt, but they sometimes turn around and support mlm and network marketing.

Does anyone know these people? What kind of cars do they drive? What kind of person gets into network marketing and who are these "successful independant distributers"? 1, 2, 3, 4, 5
posted by tomplus2 (44 comments total)
Lose money now!
Ask me how!
posted by dwivian at 1:16 PM on August 14, 2002

posted by catfood at 1:19 PM on August 14, 2002

There was an excellent article on Amway and the American dream in The Baffler many years ago. Here is an excerpt - it seems the full article is not online. It's a very well done piece, not sarcastic or mocking as many Baffler articles can be.

It's been a long time since I read the full piece, but the gist was that these people turn to Amway in hopes of becoming self-made millionaires (or at least pretty well-off), but it takes over your life so completely that everything you do, you do with an eye towards selling somebody something. And in the end, it leaves most people, at best, back where they started.
posted by pitchblende at 1:23 PM on August 14, 2002

In short, anytime a distributor would rather sell you his business than his product, run away.
posted by ilsa at 1:25 PM on August 14, 2002

I am the CEO of Usana, and I can confirm it is for real.
posted by gravelshoes at 1:28 PM on August 14, 2002

ilsa: in a few words you've captured it.
posted by selton at 1:29 PM on August 14, 2002

Does anyone know these people?

Yes, we all know them.

We're surrounded by people eager to make money off the labor of others. There isn't that much real difference between MLM, and any modern corporation, or the way the stock market really works.

Bloating the wallets of those at the apex of any given pyramid by getting others to do the real work. It's the American way.
posted by fold_and_mutilate at 1:30 PM on August 14, 2002

Amway is a cult. I attended one of their member meetings once without joining (the guy who was trying to get me in was my ride home, and the meeting was in a private room at a restaurant). It's scary. There's some serious mind control going on. The coldness and calculation that go into systematically sucking everyone of your friends, your family, everyone you ever come into contact with into Amway is mind-boggling. They seriously teach you how to hang out in the mall and start up conversations with people and become acquaintances, just so that you can bring them into Amway. They remind me very strongly of Scientologists.
posted by RylandDotNet at 1:32 PM on August 14, 2002

Suckers. Liars.
posted by websavvy at 1:32 PM on August 14, 2002

One of the worst I've seen is - they seem to be pretty popular among the younger set and I've seen a lot of people with decals for them on their cars when I lived in LA
posted by owillis at 1:35 PM on August 14, 2002

Is it just my experience, or are women more likely to be sucked into these MLM schemes then men? discuss.... :P
posted by f00b4r at 1:39 PM on August 14, 2002

My boss tried to get me to join a pyramid scheme selling long distance service for Qwest. Up until that point I had always considered him one of the most intelligent people I'd ever met. He swore up and down that his deal wasn't a MLM, but sure enough, I was joining his team, which was under his father-in-law's team and so on. Luckily, I switched projects shortly thereafter and got a new tech-lead.
posted by BigVACub at 1:39 PM on August 14, 2002

We're surrounded by people eager to make money off the labor of others. There isn't that much real difference between MLM, and any modern corporation, or the way the stock market really works.

Uh, no. The modern corporation is a legal form, a vehicle though which to conduct business. That business can be as good or evil as the people behind the corporation. Sure, you end with a few Enrons, and when the government tends to turn a blind eye to certain kinds of behavior, you may end up with a few more. That doesn't mean that corporations are inherently evil.

And if you seriously believe that the stock market works like MLM, you need a refresher course.
posted by monju_bosatsu at 1:42 PM on August 14, 2002

a friendship was totally destroyed when, after being regaled with this bullshit by one i had thought was waaaaay smarter, i responded point by point to the email he sent to a few hundred aquaintences and did it via a reply to all. the last communication i ever had from this person was a snarky gloating over a $300 check he had received "for just 2 weeks of spare time effort", while seemingly oblivious to the $1200 he had "invested".
posted by quonsar at 1:47 PM on August 14, 2002

Yes, we all know them.

And I used to actually be friends with some of these people until I was invited to a "party" that ended up being a hard-sell recruiting drive for Amway.

"Don't you want to be rich?" is the question they always ask when you say you're leaving.

My answer is always, "Not by screwing over my friends."

These scumbags prey on the weak and spineless. The only people who get rich from MLMs are the people who start them. They push you to sell their crap to everyone you know, which does little more than make you the gullible MLM pariah of your social circle.

My personal hell consists of me trapped in a room with 500 Jehovah's Witnesses, 500 cats and 500 Amway sales reps.

I really hope I get into heaven.
posted by hawkman at 1:48 PM on August 14, 2002

but yes. it is true. it is true that you can become incredibly rich by making that the sole focus of your being. by living, breathing and dreaming it, talking it non-stop, having enlistment conversations all the time, everywhere, with everyone, by becoming obsessed and one-dimensional, by ignoring the fact that people who used to love you run when they see you coming. so, since they ain't lying, i guess its ok.
posted by quonsar at 1:51 PM on August 14, 2002

The Herbalife scheme/scam is pretty fascinating. Street spam and MLM fun for all.
posted by keli at 1:55 PM on August 14, 2002

Is it just my experience, or are women more likely to be sucked into these MLM schemes then men?

f00b4r, the two folks that I know well who are most into this are men. One is married so I guess his wife could have some influence, but the other is single. In any case, when these guys want to get together with you for "lunch" it's a good plan to be fasting or purging or sheep shearing that day. You do NOT want to be alone with these guys. They are rather nice, but when they talk about their "business" you want to cry.
posted by nosebot at 1:55 PM on August 14, 2002

We're right on the middle of a web development for an up-and-coming MLM that has to do with health products. Its scheme is not much different than those of other MLMs, but they really know how to sting people's unconformity on their favor. One of their leaflets bears the title "Why everyone's making more money than me?", which is awfully persuasive. And truth be told, the gross earnings of a full-time dedication aren't superior to those of a standard 8-to-5 job. But it's a definitive lesson on how to trick people effectively.
posted by betobeto at 2:15 PM on August 14, 2002

The Herbalife thing is springing up around here too (North of England). Crappy posters stuck to bus shelters and leaflets through the door.

I know I'm never going to be rich. I don't have the commitment, the talent, or any cool ideas. And I know that selling herbal diet pills or toilet cleaner will not make me a millionaire.
posted by crustygeek at 2:19 PM on August 14, 2002

okay, I know that this isn't a MLM technically, but are any of you familiar with Landmark Education? I have a good friend who has become involved with them and their methods of recruitment reek of MLM.
posted by pointbeing at 2:45 PM on August 14, 2002

i was involved with a company for 3 years and it was my only form of income, i actually did it very successfully for a year and i still have the photocopies of the checks i made, week after week, for thousands of dollars. i had close personal friends who made hundreds of thousands of dollars - i saw the checks, rode in their new cars, watched them buy thousand dollar suits, etc... we were all 20 years old. the company went public, came under the scrutiny of the SEC and folded. i don't plan to ever do MLM stuff again, not b/c you can't make money (b/c you can) but b/c it sucks to try and motivate your friends and family to do the work and then suffer through having them blame you for their failure. plus you very quickly get labeled and alienated... forcing you to hang out with the only people that are in the same mindset... which are other people in the business. that's where it becomes cultish.

these days i'd rather just work for myself providing some sort of real service for people that i can be proud of, people want, and doesn't carry the stigma of mlm. i don't have to worry about the company folding, going to meetings, showing "the plan" to someone's uncle, or dealing with all the "products," but... it works really well for some people.
posted by ggggarret at 2:46 PM on August 14, 2002

sorry, here's the link.
posted by pointbeing at 2:47 PM on August 14, 2002

Looks like Landmark Education used to be EST, Werner Erhard's self-actualization craze of the 70s.
posted by GaelFC at 3:08 PM on August 14, 2002

I sent the herbalife article to some friends of mine (a married couple) when it was first published. I thought they'd find it as amusing as I did, especially considering we live in Sacramento, as does the article's author, and see those damn posters on every street corner around here (at least if Rob hasn't been by in a while). Unfortunately, the husband didn't finish the article. In fact, about halfway through he'd become convinced that selling Herbalife was a great idea. Now, several hundred dollars later, I think he's beginning to realize that he made a slight miscalculation. He has managed to sell a few bottles of the stuff, but nowhere near enough to recoup his investment. Had he read further into the article, he'd have known already that most markets are already saturated with the stuff, and people on Ebay are selling at or below cost just to get rid of it.

Such is the danger of a short attention span, I guess.
posted by Acetylene at 3:27 PM on August 14, 2002

Great discussion, thanks.

My gf (behind my overly critical eye) is looking into Usana. They do health care products. Some people say that its better than most mlms, but how? To me, its the same story with just a little different guise. mlm = mlm. network marketing = network marketing.

Anyone know Usana?
posted by tomplus2 at 3:48 PM on August 14, 2002

Amway's hardsells on the prospet of getting rich, while Landmark's hardsells on the propsect of getting happy.

Although MLM's promise of wealth for its participants can be mathematically disproven as to all but a tiny fraction, Landmark's promises of happiness cannot. From many years of observation of numerous friends who are Landmark alumni, it in fact delivers upon promises of meaningful increases in happiness for a significant minority of its participants.

In my view, what Landmark is, in fact, is a quasi-religion. It is not a literal religious faith, and indeed Landmark enthusiasts are found in most orthodox faiths, but as a practial matters is tends to occupy the same psychological space for its adherents that religious zeal does for those who are zealously religous.

Landmark's emphasis upon evangelizing and volunteering are most comparable to those of religions, not pyramid schemes. The tuition for Landmark courses on a per-hour basis is in the $10-$30 range depending upon course; not cheap, but not a give-your-worldly-possessions-to-the-guru cult, either. In terms of people getting rich, well, they say (with no evidence that this isn't true) that their compensation model for their course leaders and senior administrators is that of a major university's professors and deans, i.e., a comfortable living but nothing that would finance a 60-foot boat or a 5th Avenue penthouse.
posted by MattD at 4:00 PM on August 14, 2002

Tomplus2: Wow. Usana is absolutely appalling -- it's a naked pyramid scheme. I actually find it kind of fascinating.

Some quotes from the presentation on their Web site:
"Product orders are automatically shipped to you every four weeks". Translation: we will bill you regularly, whether you sell or not.

"Binary is people's choice." Translation: Focus your energies on recruiting other people who recruit other people. No one ever actually sells product to anyone.

"I would rather earn 1% of 100 people's efforts than 100% of my own efforts." Translation: People at the top make money. The last people into the pyramid scheme get screwed.

"Timing couldn't be better." Translation: They need to keep growing internationally, because as soon as they run out of suckers the whole thing collapses.

How to recognize a pyramid scheme. Usana seems to score 5 out of 5.
posted by fuzz at 4:15 PM on August 14, 2002

Oh, and I should clarify that the total cost of the complete Landmark curriculum, i.e., the maximum amount of money you can give to them if you do everything they offer, is maybe $10,000, with the vast majority of satisfied people taking only $2,000 or so worth of classes.
posted by MattD at 4:16 PM on August 14, 2002

as a landmark alumnus i think it is worth emphasizing two of mattd's points:

1) the vast majority of satisfied people take only $2,000 or so worth of classes

2) said vast majority of said satisfied people are the vast minority of landmark participants.
posted by quonsar at 4:46 PM on August 14, 2002

My feelings on Amway crystallized some years ago, when I went to visit a friend of mine and found that most weekends, she took care of the children of an Amway-selling couple who were dedicated to "going Diamond." This was, apparently, Amway parlance for reaching the highest level of the pyramid. (The couple were, at that point, "Ruby.")

Both the mom and dad worked regular jobs during the week, as a flight attendant and pilot, meaning that they alternated time away from their kids. Then each weekend, they were off either all day or all weekend, including overnights, doing Amway nonsense.

For all the time that they put in, there wasn't a lot of financial reward to be seen. They couldn't have quit their "day" jobs safely, they weren't living in an especially nice house or driving new cars, and they admitted that they weren't making any special investments for their kids' education or their own retirement.

But more disturbing than anything, their kids got almost no family time with them at all. Having both parents at home with the kids at the same time was such a rarity, the kids couldn't remember the last time that it had happened. I vowed from that moment on to never have anything to do with the company, simply because I could never endorse something that could so enrapture its adherents that they were persuaded to abandon their children to a neighbor in pursuit of the almighty Amway dollar.
posted by Dreama at 4:48 PM on August 14, 2002

I know this didn't start as a Landmark thread, but Landmark is certainly good for a bit of mind-boggling w.t.f. musing. I've had a couple of naive friends get dragged to Landmark seminars and they reported spookily similar experiences--lack of phones in the building so you can't call for a ride home (the Landmark person takes them to the seminar so they can't leave on their own), loooong talks with venn diagrams with something like happiness and you intersecting, numerous people opening their checkbooks and signing up for more classes during the breaks, and folks stationed in groups by the doors to give you the stinkeye if you wander out early. But the best thing about the seminars seems to be the guy who gets up in front of everyone and says, "Being in Landmark has given me the courage to get up in front of a room full of people and admit that I am a bedwetter." Now that is classic, and hell if Landmark can make bedwetters feel like Toastmasters, well that's pretty groovy too. And, in my sample size of 2, the bedwetters were different, so it isn't just the same guy every time.
posted by nosebot at 5:00 PM on August 14, 2002

Landmark is scary--I had some friends who actively tried to recruit me for it, and their tactics to persuade people to take their courses are ridiculous--"I don't have $300" "Why are you letting that stop you?" Um, dude, I have to pay my rent and buy food, you know. I was literally isolated in a small-ish room with 3 or 4 other people, and I am conviced that at least 2 of them were ringers--and they wouldn't let me leave. I literally had to run a gauntlet of volunteers trying to sell me on whatever their basic program is.

That said, I used to live in Grand Rapids, MI (home of Amway), and I don't think I ever encountered a distributor...
posted by eilatan at 5:06 PM on August 14, 2002

eilatan, they long ago exhausted the supply of marks around here.
posted by quonsar at 5:19 PM on August 14, 2002

Oh, right--I hadn't thought of that angle. Probably the whole freaking state of Michigan, too. But I also only lived there for 7 months (GR, not Michigan).
posted by eilatan at 5:25 PM on August 14, 2002

my whole point in bringing up Landmark was that their recruiting tactics were similar to MLM in that they all target friends and family as potential recruits (often alienating them in the process). also similar to MLM, it is those at the top who are making all the money. most who work for LE do so on a voluntary basis, including nearly all the speakers at their presentations. in my experience, there seems to be quite a bit of pressure involved to recruit new members and to spend time volunteering at "the Forum" (introductory seminar)...all of which generate new revenue for LE. (which, unlike other religions, appears to be the focus of LE)
posted by pointbeing at 6:01 PM on August 14, 2002

Another one to look out for: Partylite

I stupidly went to one of these parties and was treated to a two hour sales pitch on why I should throw my own Partylite party. I was encouraged to recruit my friends, but sorry, I'd like to keep them.

One of my friends is (independent of my experience) starting a career as a Partylite consultant and I wish her well, although I think her chances of succeeeding are slim to none. Not because she doesn't have the personality for it - just because you need to set up the chain working below you in order to make any money.
posted by illusionaire at 7:03 PM on August 14, 2002

fold_and_mutilate, there is a Mark Twain quote about keeping your mouth shut you ought to look into.

fuzz, as long as they are not simply defrauding people, and there is an actual product to sell, they're not really a pyramid scheme. MLM is dodgy, but it's possible to actually sell the products and make money that way if you work hard enough.

I had a friend who did one of the parties, and there were a few of the more legitimate sales programs there, like Tupperware and Longaberger baskets. But the "hit" was the orange-power-weight-loss folks, who ended up taking two hours explaining to people ... not why orange powder was healthy and good for you, but how much money you could make if you took their information about starting your own franchise. I was staying for dinner, not just a party guest, so I got to play fly on the wall. Yes, a little like scientology, I must say, or the Buddhists in New York: I saw an ad in the Voice, went to an apartment in the W 70s, and by dinnertime we were zipping in a cab down to Union Square to get recruited to donate, to buy scrolls, to pay for the newsletter .... The impossibly happy Buddhists were pret-ty scary.

Then there was the guy who wanted to sell my boss Amway laundry balls. Got roped into dinner with them once, so my boss didn't have to put up with him alone. Dinner was free, at least.

And my Dad got several contacts with a guy who wanted to get him into Pre-Paid Legal, "the fastest-growing franchise opportunity in the nation", apparently for each of the last 25 years. There was a video that sounded pretty reasonable, but a quick Google showed things were a little more challenging. At some level it's legitimate, but really it's just a referral service like 1-800-DENTIST (or LawPhone) when you get down to it, and it certainly isn't legal insurance. More like an extended warranty.

All basically legal, all basically surviving more on recruitment than on sales. Ilsa got it.
posted by dhartung at 7:45 PM on August 14, 2002

I have a really good friend who is a Mary Kay consultant. She has been one for a couple years but certainly has not hit the big bucks...she hasn't turned a profit yet. Like the others, the only way you really make money is when you have people under you who are star salespeople as well. (You certainly don't get the pink Cadillac unless you have a huge team of top sellers) The unit leaders actually tell them to do things like stand by cosmetic counters in department stores and tell people looking at, say, Estee Lauder cosmetics how much better Mary Kay is, blah blah. (I don't think my friend has done this.) But we have gone out places and I've wanted to crawl under the table when she gives a random stranger a sales pitch, etc.

I've learned not to talk about needing a job or being broke around her because she always comes back with "Well, you could always sell Mary Kay!" It seems like she's just getting deeper and deeper into debt buying all these products to stock...I'd rather not have to spend tons of money to make money, but that is just me.
posted by SisterHavana at 8:14 PM on August 14, 2002

Oh, it's too bad I got into this conversation late. I'd like to plug a site at which I'm held membership for going on 6 years now: The Make Money Fast Hall of Humiliation.
posted by thanotopsis at 6:32 AM on August 15, 2002

Good link thanotopsis, thanks.
posted by tomplus2 at 11:56 AM on August 15, 2002

illusionaire: Partylite

I'll have to disagree. As a guy, I am at a disadvantage selling these candles. It's hard to get women to hold a show with me -- guess my decision not to wear a thong was a poor one.

But, I was profitable instantly. Partylite wants NO money to start you up (you get your kit from a Starter Show, where your "show credit" is used to get product to showcase, rather than for your home). Anything you make after that is yours to keep, and you don't have to spend any money if you don't want. If things go bust, you just keep the kit for yourself. Oh, and when you DO spend money, you can buy things to show that you want to keep for yourself later, so when they are discontinued you just move them to your shelves.

If you love candles, and burn them a lot, the product is well worth the purchase (rated as the best candles in the U.S. -- the wax provider is Colonial Candle of Cape Cod). If you go to a show, the job of the consultant is to sell product, and sell more shows (so they can keep making money). The pitch is normal. I do a modest amount of side business (less than 20 hours a month) and make spending cash. Kinda neat. But, you are right -- to make the REAL money you have to recruit new salespeople. My leader is the regional head, and she has a stay-at-home husband, and a secretary, paid for with just 30 hours a week. Not bad, but she's got that foundation of about a hundred people selling candles too.

Oh, and she gets NOTHING if she doesn't sell her minimum, as well, so she can't just recruit. She's got to get out and move the wax. This is what convinced me to consider the opportunity. If the leadership was selling the job more than the material, I'd have been out of there.
posted by dwivian at 1:55 PM on August 15, 2002

Sounds like you're pretty in tune with the PartyLite system.

I did wonder if the consultant who ran my party was more jaded and more party-booking-centric than some of the other PartyLite consultants. My experience left me with no interest in being involved with PartyLite. I'm glad that it works for you.
posted by illusionaire at 2:42 PM on August 15, 2002

i don't plan to ever do MLM stuff again, not b/c you can't make money (b/c you can) but b/c it sucks to try and motivate your friends and family to do the work and then suffer through having them blame you for their failure.

The thing about MLM is that even if your friends were really motivated, you have already hit that market with the same product - so you could make $ because you sold it to say 20 friends, but if those 20 friends try to sell it, a big chunk of their possible market has already bought it from you. In regular sales, this would just mean your friends wouldn't get into the game - but in MLM, you try to convince them to get into it because you'll make more money that way. So it's not surprising that people feel upset with you.

The thing about Landmark is that it tries to sell you happiness in a weekend. I just don't think real personal change happens that way. My sister and mother got into it for a little while and freaked me out; they were totally exhilarated and weird after that weekend, and then a few weeks later back to normal, more or less. They used weird lingo for a little while, and made some self-cleansing homework phonecalls, like calling to apologize to someone, or to forgive someone - I don't remember, but it all seemed very one-sided to me. You can always tell people who've recently been through those programs because they have this fake-deep "I appreciate your existence" thing going on. And like NO sense of humor.
posted by mdn at 3:23 PM on August 15, 2002

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