Law Forum : MLM vs Pyramid Schemes

Discussion in 'Law Forum - Prisons - Gun Ownership' started by Knowledge Seed, May 25, 2009.

  1. Knowledge Seed

    Knowledge Seed Well-Known Member MEMBER

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    Hey family!

    Haven't been on here but I wanted drop some crucial info on you all regarding the wonderful and lawful business model known as Multilevel Marketing, and its close, but illegal, relative known as Pyramid/Ponzi Schemes.

    Below are some things that you can use to identify whether something is a Pyramid Scheme.

    1. Find out how you make money. If they tell you, "you don't have to sell anything. Just bring in more people," RUN LIKE HELL! By federal law, in order for a company to be considered legal, 70% of its income must be from the sales or use of its products and services. Most companies get over on this by requiring their distributors to be on Auto-ship to receive bonuses and paychecks. If the company is legal, they won't require you to meet your Qualifying Volume (the amount of product sold in order to qualify for bonuses) through Auto-ship. You can meet it through the purchases of your downline or customers.

    2. Find out can you purchase the product without joining the company. If you don't see links for purchasing the product(s) on the company's website, that is the sign of a scam. Also if products are heavily discounted for distributors, and customers have to pay full price, that is something to be wary of. Its ok for the company to give discounted prices to distributors but there should never be a large gap between what the distributors pay and what customers pay (At the most, Distributors should never get over a 40% discount).

    3. Find out does the money stop coming when you stop recruiting or selling. If it does, you're in a scam. Please be kind enough to yourself to read your contracts. If you see the words "on-going recruiting" or "on-going sales," RUN LIKE HELL

    I'll add more to this later.
     
  2. hiphopolx

    hiphopolx Well-Known Member MEMBER

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    I'd like to add, use your common sense. Ask your self is this a product or service you'd spend your hard earned money on?

    All businesses need to be run as such. Money for marketing and advertising will be needed. If suppliers are suggesting you can only spread the word about your business via 'word of mouth' Your being played. They're investing cash into brochures. advertising and seminars to wow folks about this' incredible business' but you on the other hand just spent a fee to be part of the company and then you need to recruit others or at least set up a meeting for them to chat with the real 'smooth talkers'. If they decide to join you get a small fee. With promises that you'll get bigger % s as you recruit more ppl. If you're a good seller of goods or services then you need to be selling for your own business and cut out as many middle men as you can. You want to be able to undercut the price of your competitors if possible. Don't be naive and believe you won't have to invest too much and still make a lot of money. There are some good products and services out there for you to sell. But be wary of the MLM businesses. The best and maybe the only way to 'cream' off that type of business is to start your own.

    I'll repeat

    Start your own MLM business.

    Don't come in to them from the bottom.

    Hotep
     
  3. Knowledge Seed

    Knowledge Seed Well-Known Member MEMBER

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    People's main problem with succeeding in MLM is, they think its not a real business. At the same time, many upline leaders don't train their downline (which is quite stupid, I might add.)

    Anyone involved in MLM/Network Marketing needs to learn several skills. They need to learn how to network, how to market, how to be a good salesperson, and how to interact with people on a personal and professional level.

    On top of that, you need a mental cleanse to get you out of the poverty or employee mind set.

    The most important asset to success in MLM, and any other endeavor for that matter, is to have a mentor/coach who has already achieved the success that you want.

    I do not recommend people start their own MLM business, especially if they've never been a distributor.
     
  4. hiphopolx

    hiphopolx Well-Known Member MEMBER

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    Those are some good points.
    But what is wrong with doing some research and starting your own business?
    Your library may have a step by step bizness plan on how to start your own MLM business. (mine has it in the reference section ). I was considering actually doing one many years ago based on the business plan in the

    [​IMG]

    Entrepreneur Magazines catalog :)?: I believe that was the comp.)of business plans on different business. They're in a loose leaf binder, with step by step plans, start up costs, all the materials you need, and a breakdown on the average high and low monetary intake these businesses make per year.

    The MLM one caught my eye bc it was the business plan with the lowest start up costs.

    Peace
     
  5. Astrologer4U

    Astrologer4U Well-Known Member MEMBER

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    Hmmm, might this all have something to do with the famous Noni juice?



    Astrologer4U
     
  6. Knowledge Seed

    Knowledge Seed Well-Known Member MEMBER

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    MLM businesses are difficult to start and run. You can't just wake and say "Hey, I'm going to start my own MLM business." Professional Network Marketers will take you for a joke if don't have a proven track record of success as a Network Marketer or Direct Sales Associate.

    There are 4 basic MLM comp plans: Binary, Matrix, Stair-step Breakaway, and Aussie 2-up.

    Two of the newer (and much better) plans are, Vitamark International's Freedom Plan and New Vision International's Vertical Pay-out.

    I'm working on a company and comp plan of my own, based on the latter two.
     
  7. Knowledge Seed

    Knowledge Seed Well-Known Member MEMBER

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    Yep. Tahitian Noni International is an MLM company.
     
  8. Astrologer4U

    Astrologer4U Well-Known Member MEMBER

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    I take it that you are no longer in the busines of Tahitian Noni/Natures born anymore... A friend of mine tried to get me into that stuff, she brought me to a meeting and Danny Glover, he was present... I hate to say it bit it is evident that he, is a part of the scheme. I got up in the middle of the meeting/lecture and excused my self. I knew that it was a terrible scam and sad to say, it is black people taking other black people for fools. Some guy, I think his name was Barry or something like that. He really disgusted me with all this bragging on how many cars he has, he even had the nerve to show several titles to the cars of these expensive vehicles he claimed were his. I was like, I can't believe all the sheep who are in the house today. No offense :em0100:


    Astrologer4U
     
  9. Knowledge Seed

    Knowledge Seed Well-Known Member MEMBER

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    Nope, I'm not with Noni anymore. The only major crime they've committed is lying about where their products come from and the capabilities of the products.

    That guy was Barry Byrd. He's not a scam artist, he just doesn't know any better. Its quite common for the "gurus" to be really be clueless as to what they are bringing people into. All they are concerned with is making money.
     
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