Monday, April 1, 2013

MLMs, Pyramids and A Hope of A Quick Buck

We have all been there... bombarded by hundreds of ads and commercials on how to make money fast, and, best of all, do it in the comfort of your own home. The salespeople make you feel guilty and stupid by showing off all the "successful" people who jumped in and made millions. MLMs, Multi Level Marketing schemes, or how I prefer calling them, scams, because after all those years, I still don't know anyone who actually made any significant amount of money out of them. That does not include those who set those scams up and profit from the people who fall prey to their marketing gimmicks and smooth talk.

I have seen Amway, coming and going in the early 1990s, then there was Herbalife, and numerous others, including some fancy "video e-mail/conferencing" in the mid 2000s, which seems to be making a comeback on Facebook in the recent months. For all of them, the idea is the same, but the math (and it's rather simple math) does not work, as you run out of potential customers very quickly.

However, there is always someone who's inventing new tricks to make money using old ideas.
As a good precaution, it's worth diving into this extensive article, published by The Verge, which explores the never ending variations on the good, old pyramid scheme:

Income At Home, Herbalife, and the $8 billion pyramid

It's also worth looking at some statistics on what is actually an average success rate for an MLM-type business:

The Likelihood of MLM Success

and, see the idea from a skeptical point of view:

MLM Watch