How to recognize a pyramid scheme

multilevel-marketing

A bit harsh, but John Oliver raises some interesting points in his video on Multilevel Marketing. He point out correctly that if a company relies on recruiting and sales to distributors for the majority of its income, rather than sales to end customers, it is a pyramid scheme. The video talks specifically about Herbal Life, Youngevity (the parent company of Heritage Makers), and some other companies. Note: the language is relatively frank so do not watch this if you are easily offended.

About Mark Mizen

At Creative Memories, I evaluate photographic products and related materials so that today's memories are not lost to the future and then communicate this information to Creative Memories Consultants and their customers. My interests extend from preservation of traditional photographs to the production of photo books to the expected longevity of electronic image files. My long-term objective is to direct the development of technology that meets consumers needs for high-quality products.
This entry was posted in Industry Info and tagged , , , , . Bookmark the permalink.

4 Responses to How to recognize a pyramid scheme

  1. Gracie says:

    Om my goodness! I laughed way to much but it is sad how these companies sucker people!

  2. momfawn says:

    I finally had to quit, but this was really well done.

  3. Ann says:

    So, do you think that Forever falls into the MLM category?

    • Mark Mizen says:

      Forever uses a multilevel compensation plan but does not fall under the pyramid scheme umbrella because a significant part of compensation comes from sales of actual products to end customers. The companies that are MLM pyramid schemes are the ones, like Herbal Life, where the only way to succeed is to recruit others and then to rely on those recruits for income.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s