I must say it is an HONOR to receive an article comment, much less a positive one, from someone who has been doing this as long as you have. I wrote this article after an MLM ‘claimed’ a family member of mine, as I was educating myself using websites like yours. The point is, it’s me that should be thanking you for your decades of work and dedication to this cause.

Even though it is nearly 2 years old, I still get a great deal of traffic on this article. I would be happy to let my followers know about your free e-book through this post. Maybe between the two of us, we can wake a few people up on this issue.

Thanks for writing, and good luck!

Thank you for a well-written and insightful article. Everyone considering MLM should read it!
I am the sponsor of the web site you recommended at the end. From 15 years’ research, anlaysis of over 350 MLMs, I can tell you that all your observations are “on the money.”
This week marks the completion of an ebook summarizing thousands of pages of research and worldwide feedback. It is titled “The Case (for and) against Multi-level Marketing.” The statistics showing that 99.6% of MLM participants lose money is based on the statistics of MLM companies for which average earnings data was available. The ebook can be downloaded free of charge from my web site at http://www.mlm-thetruth.com.
Happy New Year, and keep up the good work.

Jon M. Taylor, MBA , Ph.D.

Good luck!

And you need to be careful about using Paul Zane Pilzer as a good example of an unbiased third party who endorses the MLM business model. The guy makes MILLIONS of dollars per year writing self-help books and CDs for people who work in MLM businesses. And regarding the Warren Buffet comment . . . again, you need to be careful. If you actually research this, you will find that the only people repeating this ‘fact’ are people involved in the MLM business. Warren Buffet does NOT run Berkshire Hathaway like an MLM. Here is the real story: in February of 2003, Warren Buffet invested in “The Pampered Chef.” Of course, unethical MLMers quickly spun this into “Warren Buffet runs his company like an MLM!” . . . and yet another urban legend was born. Here is the link to the CNN Money article:

http://money.cnn.com/magazines/fsb/fsb_archive/2003/02/01/336873/index.htm

I sincerely hope you take the time to read it.

I guess we will just have to agree to disagree. Thank you for allowing me to comment and for sharing my post.

The fact is, you are painting with as broad a brush as I am. Taking the position that all MLMs are wonderful by definition is nothing more than blind, biased, and flawed logic. I understand your attempt at defending your company specifically, but I haven’t said one negative thing about them. In fact, I’ve allowed you post over 1,000 words on my blog PRAISING your company. I could have just as easily removed your comments, then proceeded to blast your company’s business model without giving you a chance to present your side. At this point, your cries of unfairness are unjustified.

As I’ve stated before, it seems your company is one of the rare MLMs that does not promote recruitment of others (the foundation of any pyramid scheme), does not promise excessive sales, does not mandate the purchase of overpriced supplies, and does not force members to pay for their own training. I am honestly very happy for you, and wish you nothing but good things in the future.

As with any industry, there are MLMs that do business ethically and well and with unique and well-priced products and services. There are other MLMs that don’t do business well, have over-priced products or services, and promise that distributors will get rich quick. These companies, of course, do a disservice to the reputation of the industry.

SendOutCards and many MLMs include training. We have free training online, in person, and by phone weekly. It is strictly optional to attend an annual training convention, for example.

And re: companies not offering health insurance as a measure of whether they really care about their employees or independent contractors? Do you realize that the cost of health insurance in this country is out of control and many companies can’t afford to contribute towards health insurance for their people? I have worked as an employee in the past for several small companies and non-profits that did not offer health insurance or any other benefits.

MLMs are not for everyone and MLMs that present the business this way also do not serve the company or industry well. I was told that SendOutCards was work and that it may take several years or more to build the business to a full-time income, depending on my financial goals and my time investment. Starting your own business is cost-prohibitive for most people; franchises cost $100,000+, having a storefront is expensive, the costs of education and licensing to become a Realtor or other professional is expensive. A good MLM, for the right person, can offer a low-risk and low-cost way to have a home-based business.

SendOutCards has never alienated me from my friends or family or business associates. My support group is delighted to receive a real and customized greeting card in the mail and many of them use the service to also easily keep in touch with people in a memorable way.

Obviously, as you are honest to admit, you have never heard of SendOutCards, one of the Inc. 500 fastest growing companies in 2009, which means that you have not researched all MLMs. Again, my objection to your article was re: the harsh, unprofessional, and mean-spirited language you use to describe all MLMs and their CEOs.

Also, the government’s definition of a Pyramid Scheme as you state above is completely inaccurate. According to the Federal Government, the purchase of products or services is a MAJOR part of any Pyramid Scheme, and always has been. Here is the definition directly from the Federal Trade Commission (FTC) website:

Pyramid schemes all share one overriding characteristic. They promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public. There are two tell-tale signs that a product is simply being used to disguise a pyramid scheme: inventory loading and a lack of retail sales. Inventory loading occurs when a company’s incentive program forces recruits to buy more products than they could ever sell, often at inflated prices. A lack of retail sales is also a red flag that a pyramid exists. Many pyramid schemes will claim that their product is selling like hot cakes. However, on closer examination, the sales occur only between people inside the pyramid structure or to new recruits joining the structure, not to consumers out in the general public.

So again . . . if you’re not purchasing products at inflated prices and/or being promised “hot cake-like” sales volumes, I think you’re in the clear. Thanks again for commenting.

First of all, you are not using the term “pyramid” correctly. The government describes “pyramid schemes” as companies where you receive commissions just for signing someone up and no product or service is purchased. Many reputable MLMs are providing great products and services and some are offering products or services at prices lower than retail. I work in the Network Marketing industry and am honored to work as a representative for SendOutCards. I have met the company founder, staff and many top distributors and they operate from the greatest integrity and professionalism.

As with any industry, there are people and companies who do it well and others who do not operate with ethics or who don’t offer good quality products or services. Additionally, I love working from home or when I travel and it allows me an incredible lifestyle and flexibility. SendOutCards never presents the business as a “get rich quick” business. This is work and takes time and commitment and the company and other distributors will always be honest to say that. You are doing a disservice to MLMs such as SendOutCards who are doing business right when you paint the whole industry with such a broad negative and mean-spirited brush.