We constantly hear people saying MLM is not a pyramid because its about sales (something I doubt since I still have yet to hear from a single MLMer who will provide his/her personal sales volumes).
The fact that nearly all ranks achieved in MLM are tied to sponsoring people (look at all the compensation plans, if you don;t sponsor, you can’t get to the top) how can anyone suggest the focus is not on sponsoring people to make money as oppose to sales?
This would lead to the very obvious and logical conclusion that MLM corporations are more interested in having their reps focus on finding more reps as oppose to personal sales. That is the basis of a ponzi whether its considered legal or not.
Anyone disagree? If so, show me your compensation plan and prove it.
Timeless Mom – I appreciate your answer but I think you missed the point. If its not about sales, what value does any MLMer present to society?
A ponzi scheme is simply paying people out of money brought in by subsequent additional people they bring in. The whole legality of MLM is that it supposed to be about sales. Well, if everyone does a small amount of sales and the real money is made recruiting, then the real definition of what you have is a ponzi.
My whole point is that MLM is NOT about sales. Its seems many nice people (such as yourself) understand this but clearly overlook why this is so bad.
If its not about the sales, its about the recruiting (by design), and if its about the recruiting, its merely bringing in people to make money until someone eventually is left holding the bag.
I just want to know why everyone so easily accepts these compensation plans in MLM without ever questioning this line of thinking???
Timeless Mom – one other point. If I am going to buy a franchise from you, you better believe you are going to show me your books. Its called “due diligence” and its customary with the purchase of any business. Sorry to come down on your for that, but unfortunately too many people in MLM tend to profess business knowledge yet clearly show none.
As a MOM (i assume by your name) looking to make money, that is fine not knowing the basic business principals, but facts are facts and if you would buy a business based on its history without investigating its financial statements, incomes, etc, then business really might not be for you. Best of luck.
