Multi- Marketing Websites

[gphw01]

I have a friend who is involved with a multi- marketing project.She sent me the link and when I tried to read about what it was..........it never did, all it asked for was my name, address, phone#, etc. info.I told her I wasn't interested, she insists it is a " money maker". I'm thinking.........." ya' right, I don't think so". They ask for $300.00 to join and become a member. Sounds real " fishy" to me. A member..........a member of what? I thought these things were frauds and illegal. Am I right ?

[wserra]

I assume that you mean multi-level marketing, and so moved your question to the appropriate forum.

I have a friend who is involved with a multi- marketing project.She sent me the link and when I tried to read about what it was..........it never did, all it asked for was my name, address, phone#, etc. info.

Not at all unusual in this "industry", especially for those ripoffs that have no product, but just sell the "opportunity to get rich". You are certainly right to be suspicious of anyone who does this.

I told her I wasn't interested, she insists it is a " money maker".

She is probably becoming increasingly desperate to just get back the money she gave these scammers. She has found out that the only way to do this is to recruit new suckers, rather than actually sell anything. Again, all too common in this "industry".

I'm thinking.........." ya' right, I don't think so". They ask for $300.00 to join and become a member. Sounds real " fishy" to me. A member..........a member of what? I thought these things were frauds and illegal. Am I right ?

In a word, yes, you are. As to the legality of this stuff - there is an excellent chance that the folks your friend is trying to recruit you to join are in fact running a pyramid scheme. MLMs are not in theory pyramids, but virtually all are in practice. The FTC's acid test is whether more than 70% of "products" (those that have no products are by definition pyramids, since all they have to sell is the non-existent "opportunity") are sold to "end users" - people who are not themselves members of the organization. Perhaps one percent of MLMs pass this test. Try to get documentation that your friend's group sells 70% of its stuff to non-members - but don't try too hard, because you're not getting it.

But the FTC (especially under the current administration) doesn't have close to the necessary resources to police all of these internet scams - not to mention bowing to industry pressure, as it just did in the proposed "business opportunity" rulemaking. Until that changes, virtually all of these things will continue to be scams, at the least in the sense that virtually no one except the thieves who start them will make any money.

If you want to post the name of the specific ripoff, I'm sure you'll get further responses.

[soapboxmom]

gphw01,

Welcome to the forum.

I would like to share one thing with you that you are welcome to pass on to your friend. MLM is a numbers game. Below is a post showing the numbers for Advantage Conferences, an aussie two up, with zero retail sales of its conference (product). So, the numbers that follow are the total number of people that are needed to sustain the exponentially exploding pyramid. These "opportunities" boast a 99% loss rate for the unfortunate participants who are not originators, early entrants or the recruiters from heck.

It is time for a little fun with math.

Let's suppose we have a whopping 95 reps left after a high of 500 and total of over 600 in 5 years. Please note there have been no retail sales of the conference. For those reps that purchased an MMC-IV to break even they need at least 4 sales each to cover the 2 hand-ups, their own pruchase and a fraction of the expenses for attendance and advertising.

95 ( x 4) = 380 (x 4) =1,520.....6,080...24,320...97,280...
389,120......1,556,480....6,225,920....24,903,680.....99,614,720...398,458,880....
1,593,835,520.....6,375,342,080

Let's give each of those 95 15 total sales so they can make the $100,000.00 minumum they were expecting or had as a goal. 95 x 15 = 1425 (x15) = 21,375.....320,625......4,809,375......72,140,625.....1,082,109,375.....
16,231,640,625

Some opportunity, isn't it? That example assumes all folks quit after just one year. Ouch!

Soapboxmom

P.S.
http://www.scam.com/showpost.php?p=499060&postcount=2 That post shows the earnings for Melaleuca. That should be enough to discourage the most enthusiastic of recruits.