MLM Income Disclosures

[wserra]

Ever wonder what the average MLM distributor makes? Disappointed that the FTC bowed to industry pressure and failed to adopt the proposed bizopp rules that would mandate these disclosures? Well, thanks to Skeptic Al - true thanks, I've been meaning to do this for some time and never got around to it - you can at least get an idea.

Caveats:

(1) Some of these numbers are completely unverifiable, and others are only partially verifiable. Those that are partially verifiable come from the public companies on the list, if they have included the numbers (as most do) in SEC filings. Those from privately-held companies must be taken on faith - or not.

(2) All of these lists count only "active" distributors, and they frequently don't use the same definition of "active". Moreover, they mostly don't tell you what percentage of the overall distributor force is counted as "active". From what I've seen, it's frequently less than half. If so, of course, it's necessary to cut their numbers in half.

(3) Finally, only a few of these show the median distributor as well as the average income. The median number is a more accurate gauge of how one can expect to do, since the average is skewed upwards by the very high incomes of the few at the top of the pyramid. For those companies that don't show the median, be aware that it is just a fraction of the average. For an illustration from one of the few that shows the median, check Send Out Cards. The median is typically about half the average, but in the case of the ordinary distributor who makes up 90% of their ranks, it's much less.

Edit: change "mean" to "median".

Thanks again, Skeptic Al.

TUPPERWARE

HERBALIFE

AMWAY - UK

ARBONNE

MELALEUCA

MONAVIE

NUSKIN

SEND OUT CARDS

NUMIS

ISAGENIX

WORLDVENTURES

XANGO

XOCAI

United First Financial (first sheet)

FHTM

YOR Health

YTB - 1

YTB - 2

IGNITE

TSFL

MOXXOR

ADVOCARE

NIKKEN

ZAMZUU

USANA

JD PREMIUM

inetglobal.com

Tahitian Noni

[Thule]

This is great, thanks a lot. And thanks to Sceptic Al as well. Now, to do some good. I know some people that will be dying to spin this into something positive.

[JamesVincent]

Not touching this one.

[wserra]

I know some people that will be dying to spin this into something positive.

That would seem difficult.

[obadiah]

I believe you mean the median is a better measure. Mean=average.

[Thule]

I know some people that will be dying to spin this into something positive.

That would seem difficult.

But it's so fun to watch them try, then curse, then run off.

[wserra]

I believe you mean the median is a better measure. Mean=average.

Arghh. You're right. I guess there are some things you get wrong at some point, and then never question again - until someone corrects you.

Welcome to Quatloos, obadiah.

[Doc Bunkum]

I believe you mean the median is a better measure. Mean=average.

Okay, let's see if I have this right.

If you look at the stated earnings of the 50 Top Earners & Estimated Earnings per Month, we get numbers like:

Brig & Lita Hart Monavie (USA) $950,000
Gina & Steve Merritt Monavie (USA) $407,000
Carol & Ken Porter Monavie (USA) $400,000
... etc.

Now, if the company takes the number of active distributors (however they define "active") and factor in these exorbitant earnings to arrive at "average earnings", wouldn't that number be somewhat skewed?

[JamesVincent]

Yes it is, thats why I wasnt going to touch this one. The average MLM distributor/affiliate/personal representative earns approx. $300/ year from their MLM. The problem with using an average is that it takes all of the incomes adds it together and averages it out. So when you throw in people like Johnathan Budd, Mike Klinger, and others like them that make millions, the guy who doesnt even cover his website fees all of the sudden doubles in income. And depending on the MLM some of them have their pay listed but take out their fees after the pay is reported, like team FAM. So their average wont even be their average, just the average before their 20% comes off.

[wserra]

Now, if the company takes the number of active distributors (however they define "active") and factor in these exorbitant earnings to arrive at "average earnings", wouldn't that number be somewhat skewed?

Right. That's exactly why the median (the amount made by the distributor at the fifty percent mark of all distributors, which I mistakenly called the mean) is a much better barometer than the average (the amount you get when you add all the incomes and divide by the number of distributors).

[wserra]

The average MLM distributor/affiliate/personal representative earns approx. $300/ year from their MLM.

Even assuming that's accurate, it's the average of active distributors. I have seen definitions of "active" such as "receives at least ten monthly commissions in the last year", which probably eliminates 90% of all distributors. And, (1) as you point out, it's an average, not a median, so is skewed upwards by the few high earners, and (2) it's a gross, leaving out not only upline fees (as you point out) but the distributors' own expenses.

It's just unbelievable that the FTC caved on the proposed bizopp rule. What can be bad for the public about information? Bad for the scammers, sure, but whose side is the FTC on?

[Doc Bunkum]

Yes it is, thats why I wasnt going to touch this one. The average MLM distributor/affiliate/personal representative earns approx. $300/ year from their MLM.

I hope this post isn't considered in bad taste - please feel free to remove it if it is.

But....

Regarding the people losing their shirts on these deals. Here's a recent story on what happened to one chap.

One of the more worrying aspects of the MLM industry is people racking up long term ongoing debts they cannot pay...

Of course many when asked about this many uplines will simply advise their downlines that they’re not trying hard enough, following the business template properly or that it’s simply not their problem.

So… left out on the cold on your own by an industry that values success and ignores failure, what is the struggling MLM business owner to do?

For Ellery Bennett the answer lay in murdering his wife and then attempting to take his own life.

MLM debt leads to murder and failed suicide attempt

[JamesVincent]

Doc, I wouldnt consider its in poor taste, another object lesson. When I was younger I played a lot of D&D and other RPGs. There was a kid, I believe in Utah, that killed himself when his character was killed in an adventure. Some people take things waaayyyyy too seriously and in every field you see it. My step-dad worked with a guy who was a total geek. He was a hardware specialist when my step-dad was a systems analyst on Navy weapon systems. He used to build incredibly realistic models of war machines, tanks, planes etc. He started talking to my step-dad about deer hunting and wanted to look at shotguns with him. They went looking, my step-dad showed him his trap gun and the guy bought one just like my step-dads. He then took it home and blew his brains all over the place. Unfortunate, but true. You hear so much about things like this and you have to wonder when someone ties it to any particular profession or way of life, rather than the persons unstable mental state. The work they do or the hobbies they enjoy are just a mask for what is underneath and will come out sooner or later, no matter what. I feel extremely sorry for the ladies family when its obvious she knew what was going on and was trying to leave.

[JamesVincent]

The average MLM distributor/affiliate/personal representative earns approx. $300/ year from their MLM.

(2) it's a gross, leaving out not only upline fees (as you point out) but the distributors' own expenses.

It's just unbelievable that the FTC caved on the proposed bizopp rule. What can be bad for the public about information? Bad for the scammers, sure, but whose side is the FTC on?

They cant figure in the methods and money that the distributors put out because all of them may well use different methods. I honestly spend $0 on mine outside of the monthly autoship and built my program accordingly. It will take me longer but Im not putting out until I get money in. Most people arent hookers like me so they jump in buying programs and autoresponders and email suites and buy leads and and and... you get the picture. To get a cheap setup through Aweber or something is $20/ month, then you add in hosting fees for a lead capture, someone to make you the lead capture, upgrades for Aweber since the $20 wont go beyond like 500 people if I remeber correctly. By the time all is said and done some of them spend another $60/ month if not more. And then you start buying leads. They can range anywhere from $.30 up to $5/ lead with no guarantee, just better quality leads.

I honestly dont know why they didnt allow full release of things like that. it would make it easier to weasel out the decent ones form the crackpot ones. Another thing to look for is ones like Send Out Cards and others that are stepped to the big money. You really dont make much until you move up a couple of levels and then you can make money, but most people dont understand that. They see what a few people are doing and want to jump in thinking its the cats meow, well, it might be, three years later.

P.S. I forgot to note that most of them have a mandatory auto-ship for product beyond their monthly fees. I know with Numis you have to order one coin each month at $99. You get a discount on your monthly but it doesnt seem to be taken into account in the graph. Some of the others have them also but Im not sure what they are, just happen to have friends doing Numis and some others. One24 is too new to be in there and the other one I would want to see is MBP Today, which I have several friends doing well in and would like to see their numbers.

[wserra]

they jump in buying programs and autoresponders and email suites and buy leads and and and... you get the picture.

All of which activities the companies strongly encourage. They make a lot of money that way. Granted, they can't include inexact figures in income disclosures, but they could use language such as, "These figures don't include any distributor expenses". But why would they do something that would only make figures which are already pathetic look that much worse?

I honestly dont know why they didnt allow full release of things like that.

It's not "allow", but rather "require". You're always allowed to disseminate information, so long as it's accurate. If you were not aware of it, a few years back the FTC proposed regs which would require MLMs to publish exactly this type of information. The usual thing happened: those with a vested monetary interest raised a hue and cry, with included political pressure from the usual (read: Utah) sources. Those with only the public interest at heart don't have such a lobby, or an army of drones to sic on an agency. No one ever did explain what was wrong with disclosure, other than that it would hurt their business. End of rule.

[Skeptic Al]

wserra, you are welcome and thank you for all you do in shedding light on this blight on our society (MLM). I am hoping by making these numbers more readily available that fewer people will be victimized by these unscrupulous scam artists.

The first income disclosure I saw was from Liberty League International. They were forced to put one on their website after being successfully sued by the Attorney General of Arizona. At that time it was rare to find these on any MLM website. I was surprised by how many are now available, even though they are not always that easy to find. Obviously if these numbers weren't so dismal they would be proudly displayed by the MLM "Industry". And as we all know the numbers are actually worse (if that's possible) than the ones posted when you factor in inactive members and don't use averages.

Yet with all that, MLM supporters try to spin or ignore these numbers. As you can witness on scam.com where I originally posted the IDS's. The three amigos over there hijack every thread and it devolves into a meaningless mess. Check out the MLM Income Disclosures thread to see what I mean. But that is their goal, obfuscate, deflect and divert, that's all they got.

All we have on our side are the facts and the truth proving that all these pay to play, "product" based recruitment schemes are scams.

Keep up the good work.

[JamesVincent]

I dont know if they would all be scams by not disclosing something that should be common sense. If you look into the industry first and then pick out one to deal with after doing research, then you should know what your getting into. The ones that scream about it are the ones that jump in without looking and lose everything they have because of it, but its no real different than people who arent experienced stock traders doing their own stock trades and losing. Should we sue Scottrade and places like that because of it? Theres a lot of work involved in MLMs and the people that are looking for a get rich quick plan dont make it and theres a lot of shady people in the industry that will prey on people like that, not denying that. But its not the industry as a whole, the same jacka**es can be found in other places.

Having said all that I still dont understand what the deal was with federal regulation. Disclosure can never hurt, would have helped me find a company when I was looking for one. Business people want to know whats going on before hand and stupid people dont.

[littleroundman]

Here's a thought:

Is it just coincidental that the 95% of people who fail at MLM all seem to have the same character defect, in that they "jump in without looking" and all are under the same misapprehension that there are millions to be made and "anyone can do it" if they just "follow the plan"

Is this phenomena due to some sort of MLM "hundredth monkey theory" where large numbers of people apparently spontaneously decide fame and fortune lies in that bottle of overhyped juice or magic power instant coffee ????

Just who is responsible for the misleading information ???

MLM sycophants deny they're responsible, in fact, they blame the "independent business associates" for either not working hard enough, not researching or quitting.

MLM companies wash their hands by pointing the finger at "rogue" or overenthusiastic members.

SOMEONE must be out there spreading the lies.

Either that , or it's the greatest sequence of coincidences in the history of the planet.

[JamesVincent]

Here's a thought:

Is it just coincidental that the 95% of people who fail at MLM all seem to have the same character defect, in that they "jump in without looking" and all are under the same misapprehension that there are millions to be made and "anyone can do it" if they just "follow the plan"



Is this phenomena due to some sort of MLM "hundredth monkey theory" where large numbers of people apparently spontaneously decide fame and fortune lies in that bottle of overhyped juice or magic power instant coffee ????

Just who is responsible for the misleading information ???

MLM sycophants deny they're responsible, in fact, they blame the "independent business associates" for either not working hard enough, not researching or quitting.

MLM companies wash their hands by pointing the finger at "rogue" or overenthusiastic members.

SOMEONE must be out there spreading the lies.

Either that , or it's the greatest sequence of coincidences in the history of the planet.

You hit a lot of the problems in one. There are a lot of un-ethical companies and individuals that prey on people desperate for anything, especially in this economy. Network marketing is not a new thing, but has been around for many years. One of the biggest of the old-time marketing programs, Amway, was not a scam but a model very hard to succeed in. Like most sales volume/ recruitment models it is almost impossible for Joe Schmoe to make anything in it. There are still companies out there relying on that model, like Xango, ACT, and others. It all sounds great until someone starts into it and realizes on top of their monthly fees, they have to guarantee the monthly sales volume requirement by purchasing the product themselves or they dont get diddly.

Other companies use great speeches and shows to promote their products and plan but dont follow up with the incoming people. Then you hear the upline isnt supporting me and you have people in the upline saying your not working hard enough. Again, there are companies out there doing this type of business, the problem is their recruitment strategies are to bring in multiple people as fast as possible and the guys making money dont have the time to support their downline because their bringing in as many as they can so they can get a check. A little research and looking at the comp plan will tell you if you are able to do this or not.

One of the biggest things to even have a chance in the field is a lot of research. Most of the companies that are going to stiff you have had legal actions in the past and you can find that with a little research. Ive looked into a few MLMs on here and found all kinds of things in the founders past. And the most important thing to remember is it is a business. There isnt a get rich plan out there, its a working model that can give you flexibility in achieving a decent income, in about 2-3 years of work. A lot of people fail in the first few months because they dont think that way. They see someone making a million a year and they want that money, but they dont ask how long it took and how much work went into it. Anyone can make that money if they want, but its not an easy street like people are either lead to or already believe.

[wserra]

its a working model that can give you flexibility in achieving a decent income, in about 2-3 years of work.

OK, James, I'll bite. Which ones do you believe offer a realistic possibility of doing that?