I don’t have the wording down and it’s one they won’t answer honestly to us, but it might get them thinking.
Start with asking them how many legs they have, then about how many they’ve had that quit on them. Basically create a baseline of how long it takes them to recruit one person and how long that person lasts.
Then focus on how long it takes for each of their legs to recruit someone and how long they last.
Then ask them, “If it took you 2 years to build up to 3 legs, then why do you think each person below you will do it any faster?”
It’s not a cure-all, but the idea is to get them to start thinking about how long it’s taken them to get a few legs under them, then to figure out how long it takes their legs to get legs and how quick their turnover is.
Along with that, when they point out how great a product it is and that it “sells itself,” ask, “If it’s so great, why aren’t I sold on it?”
And from there ask why, if it sells itself, their legs turn over so quickly and it’s so hard to get people to join. They’ve seen a large sampling of people that don’t care. Where are the people that do care and like it? If it sells itself, why is it that most people leave the program and that it’s so hard to recruit people?
As I said, these are not points they’d admit to, but the general thrust is something we can use along with other questions to try to get them to think it through and to get them to start thinking, in the back of their minds, that things may not be as they seem.
There are several things to look at when pondering this: First and foremost, are they mentioning “meetings”, or tapes/CDs or other “training materials” that cost extra money??? Many MLMs have “training systems” that follow them, and their main purpose is to earn more money from unsuspecting and trusting new recruits. As an example, Amway is actually a GREAT home-based company to deal with – but almost every IBO is connected to some sort of Motivational blog whose expenses far outweigh any profit one could ever make selling Amway products.
Look realistically at the products: are they either priced competitively; or are so unique that the average consumer can’t find them in retail stores?? Especially right now, given the downturn in the economy, it’s going to be hard to retail expensive juice or candles or toys or whatever, when the average folks can buy similar items at WalMart.
And what claims is the company making about your income?? Most home-based businesses, at best, will bring you some extra spending money. Often, you will be earning minimum-wage-per-hour; and that’s OK if you’re having fun, too. The moment the company starts making claims about wealth, or retirement, or luxury vacations/cars/homes….
be VERY afraid – the reason a few people are making LOTS of money is because a LOT of people are losing money!!
My favorite “Scam-MLM” website is ebay….LOL!! That where disgruntled ex-MLMers dump their inventory – and that’s where your competition will be. Check and see what prices the products are REALLY selling for – it’s usually eye-opening!
a person that I just adore just called me about something called Photomax……did a bit of searching and it does indeed look to be a mlm of standard issue.
When I researched it most of what came up was individual websites trying to sell the product.
can anyone pass on any info on this one?
you cannot make any money promoting Photomax. (It is a division of NuSkin, one of the well known MLM companies). While it is a legitimate photo processing service, it is not on the cutting edge of internet photo services. Furthermore, because of the intense competition in that business and because they have nothing unique to offer, there is not enough money for any significant commissions. The team that recruited me promoted the service as a way to make enough residual income that I could “walk away in 36 months” and be rich.
After I signed up for $200 it was revealed to me that if I really wanted to succeed I had to be “coachable” and needed to invest $2,000 (it was payday loans no credit check from Ghloans.Com Inc.) to “fast track”. After I paid the money and asked them to coach me on how to get rich with Photomax it was explained that it really wasn’t realistic to expect commissions enrolling people in the service to do the job. The only way to get there was to sign up people like me as recruiters. Looking back, I see it was the classic bait and switch con, just an MLM version.
I was encouraged to buy leads at about $3 each from the lead system the blog the recruited me. I literally spent thousands of dollars buying and calling the “leads.” I built up a reasonable “downline,” none of whom produced one dollar of income for me or themselves. Looking back I suspect the principals of this team were (maybe still are) being enriched by sale of the leads.
Run, run away as fast as you can. I have tried about 10 MLM companies in the last 15 years, every time thinking I had finally found the “right one.” I was obviously under grand illusions, always thinking the MLM concept is just fine. Photomax was my last MLM stop, a very expensive one.
Run away like the wind. Play the lottery if you like living with dreams, you’ll have a slightly better chance of getting rich.
My sister in law is strongly involved in Isagenix. I know it’s a MN, so I know the odds are slim of making money but I don’t know anything else about their model. My wife joined under her sister but is not doing anything other than buying product on occasion. I did go through the cleanse and lost a few pounds but didn’t enjoy the process at all.
I did a Google search under “Isagenix” and “scam” and nothing came up on the business model end of it, but rather on the products the sell. Does anyone have more info on the business model? I would like to be armed with the right info should the topic come up again with my sister in law.
This same sister in law is now in another MN for travel. She tried to get us into it because we travel a lot and she said it could save us money. I told her I had zero desire to attend a meeting on it; but my wife now uses her sister’s web site to purchase airfare, car rental etc. I see we are getting charged $5 each time we transact anything through the web site. I don’t know the name of the MN, but if anyone knows, I’d like to find out more in the sense of whether we really would save on our travel if we had our own web site through MN without trying to bring anyone on under us; or is the savings far outweighted by the cost of getting involved.
They had a show about this on Oprah before and I believe it was called a dinner party. It’s sad becasue it preys on those who are desperate. One youtube video about this actually tells people to pawn things or borrow money to do this.
Perhaps I’m just making up my own definitions, but I consider “pyramid scheme” to be the umbrella term for all of these types of scams. Endless chains and Ponzi schemes, and MLM, would be types of pyramids, due to the shape of the structure that creates a financial return for the one, or few, at the top.
PW’s Distinction Of The Day:
The biggest difference between a pyramid scheme and a traditional business is, of course, the flow of money. In a traditional business, the flow is two-way (up and down) through the structure. In a pyramid, the flow is one-way (up to the top).
PW’s Recommendation Of The Day:
So whenever MLMers likens their businesses to businesses like IBM, Microsoft, McDonald’s or whatever, you have a basic distinction to throw back at ’em: the flow of money. (Remember to pose it as a question so that they have to go look it up somewhere.)
Unless you provide a product or service you cannot send money through the mail. Used to be called chain letters back in the 80’s. Wait till all of a sudden you see something in the local newspaper how the Fed’s are stepping in and you’ll see it come to crashing halt. Sort of like musical chairs when the music stops.
but then you have to prove the person opening the package is really getting the money or you have to prove fraud and that’s not easy.
Yes, you can give up to $12,000 to someone each year as a non-taxed gift, but do you want to give money to someone else when others may not give it to you?
I get confused on the finer points of some of this, but I think, technically, it’s a Ponzi scheme, which is a type of pyramid scheme. I’m not sure if there’s a delineation between the two.
I’d ask him about it, since he seems to think these magic money machines work pretty well, see if he’s tried it and made money.
Oh, wait. Yes, he has. He makes huge amounts of money. We know it’s true because after trying to sell overpriced domain names to us, he told us how well off he’s doing.
There seems to be a lot of those going around today. Especially on youtube. You see some person open up a fedex package that contains hundreds or thousands of dollars. How is this legal? I think this is just a pyramid scheme. Of course they all say it’s totall legal because you can get a certain amount of money from someone as a gift. They had these years ago and I know someone who lost 2k. I’m surpised these sort of operations haven’t gotten shut down yet.