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Percent of Marketing Industry

I have family member that has currently fallen victim to one of these schemes and is telling me numbers that I believe to be inaccurate, "That there are more millionaires in MLM or Network Marketing than in any other industry in the USA" Can we please put up some actual numbers on the article that are sourced. —Preceding unsigned comment added by 70.139.85.43 (talk) 18:28, 1 August 2008 (UTC)

Compensation

Unilevel compensation is not the same as Stair-Step Breakaway. I fixed this by removing Unilevel from the Stair-step area and adding a Unilevel explanation. Also, the explanation of stair-step breakaway seems to be related to a particular company, not a true definition of the plan. I will fix this when I get time. —Preceding unsigned comment added by 67.170.107.32 (talk) 04:30, 22 March 2008 (UTC)

Stairstep breakaway has been fixed to be a more general definition. Djglove (talk) 23:40, 16 April 2008 (UTC)

I added Hybrid compensation plans to the article today. Would it help if I cited particular companies and documents that showed examples of these plans? Djglove (talk) 16:23, 22 April 2008 (UTC)

Do the documents use the same terms? What sources do you have for the terminology?--Insider201283 (talk) 21:26, 22 April 2008 (UTC)
Yes, I believe that many company compensation plans use the same terminology. I think that the new Direct Selling Association site may have definitions as well. Perhaps that would be better than "examples from particular companies. Djglove (talk) 20:07, 23 April 2008 (UTC)
I think the DSA definitions would be better than specific examples. — Arthur Rubin (talk) 12:46, 24 April 2008 (UTC)
I found appropriate references for the compensation plan section and cited them. Djglove (talk) 23:07, 6 May 2008 (UTC)

Different meanings UK/USA

MLM in the UK has a completely different meaning; maybe that should be mentioned in the article...

And we should also not forget the situation in other countries like in Asia. Most of Amway's current sales volume comes from Asia. And in 1998 China had banned all MLMs including Amway, although things have changed somewhat since then. See also the Amway page. -- Knverma 23:08, 9 January 2007 (UTC)
Clarification - China did not ban MLM, they banned all direct selling.--Insider201283 00:15, 10 January 2007 (UTC)
Meaning? China banned direct selling but allowed MLM? -- Knverma 00:55, 10 January 2007 (UTC)
I think it's a little misleading to say "MLM" was banned when the ban was far more widespread than that, encompassing all direct selling businesses. It implies a specific problem with the MLM model, which it wasn't. --Insider201283 01:05, 10 January 2007 (UTC)
OK, we can say that all direct selling was banned. Regarding your second line, yes China seems to have a problem particularly with the MLM model. The second China article cited on Amway page specifically mentions about ban on bonus on downline sales volume, although bonus on individual sales was allowed. -- Knverma 01:33, 10 January 2007 (UTC)
Well, that Amway edit needs to be properly sourced to an original news article, but nevertheless the ban was on Direct Selling and the concern I believe was more about large groups of people getting together and perhaps being "educated" in ways the chinese government may not approve of. --Insider201283 01:37, 10 January 2007 (UTC)
Both citations are to newspaper articles, so what is the problem? On the other hand you say "[...] I believe [...]" without citing any sources. -- Knverma 01:49, 10 January 2007 (UTC)

I would also add that the two terms are not interchangeable. Network marketing is about the structure which is created. Multilevel refers to the commissions paid on more than one level in the structure. It is quite normal for a company to have many, many levels in it's network but only to pay the independent contractors/distributors on one level. Therefore I move that we do NOT merge the two categories. (Credentials: full time network marketer for 13 years, and paid multi-level! lol)

Five scholarly paper covering business, medicine, and anthropology all say network marketing is just another name for MLM. In the face of such WP:RS all your supposed "credentials" do is bring up the WP:COI red flag faster than a 30 car pile up at the Indianapolis 500.--BruceGrubb (talk) 14:37, 2 July 2009 (UTC)

Redundant categories

I am removing the most redundant categories:

See Wikipedia:Categorization#Creating subcategories: “A good general rule is that articles should be placed in the most specific categories they reasonably fit in. For example, Queen Elizabeth should not be listed directly under People, but Queens of England might be a good place for her.” Rafał Pocztarski 08:34, 3 Dec 2004 (UTC)

You are misreading the quote. Notice it says categories (plural), not category (singular). In fact if you read the category article it is made clear that articles should be placed in several categories. It goes on to say that the category system is designed not as an hierarchical system but as a matrix system with multiple cross links. You seem to be using a criterion something like "In deciding what category to append to an article we should choose the one and only one best fitting category". That is not how the system is intended to be used. We cannot forget that this is fundamentally a navigational system. It is a mechanism that allows people to find articles and particularly related articles. It is basicly a replacement for the old system of lists such as wikipedia:Business and economics navigation. If your intention is to hide the article, then you would reduce the number of categories that it can be found in to a bare minimum. I suggest to you that a better criterion to use is "If a person browsing a category would find the article relevent to that category, then it should be included in that category". I am going to replace the categories unless you can convince me that someone looking through the marketing category, for example, would NOT find an article on multi-level marketing relevent.mydogategodshat 02:11, 4 Dec 2004 (UTC)
Someone looking through the Marketing category, can already find an entire subcategory of Multi-level marketing so this is hardly hiding anything, contrary to your accusations, and quite frankly I have no idea why would I want to hide that article in the first place. If I was indeed using the criterion of “In deciding what category to append to an article we should choose the one and only one best fitting category” then I wouldn’t have left the Multi-level marketing article in three different categories, namely Category:Multi-level marketing, Category:Direct marketing and Category:Business models, now would I? Please keep in mind that before your recent edit [1] the article was only in one category, the most appropriate one, Category:Multi-level marketing. What we have now (i.e. Category:Multi-level marketing, Category:Direct marketing, Category:Business models, Category:Marketing, Category:Promotion and marketing communications and Category:Business) is I believe exactly the situation described in Wikipedia:Categorization#Creating subcategories, but on a much larger scale. If you don’t agree that having six categories, half of which are subcategoeies of the other half, is too much and having three categories that I left in my edit [2] is enough, then it seems that we might need to request for comment. Please tell me what is your decision. (Please do not change the headers of my comments because doing so breaks the links. I know that the categories are related, I have never said they were not. I only think that half of them are redundant which in fact would be impossible if they were not related.) Rafał Pocztarski 05:09, 4 Dec 2004 (UTC)
Having been awaiting your answer for a week, I am now preserving categories: Multi-level marketing, Direct marketing and Business models, while removing redundant: Marketing, Promotion and marketing communications, Business, for reasons I have explained above. If you disagree with that, please request for comment. Rafał Pocztarski 21:01, 11 Dec 2004 (UTC)

POV? and a position on the categories argument

"Multi-level marketing (MLM) (also called network marketing (NM)) exhibits a business model which exemplifies direct marketing." (italics added) -- Sounds like POV to me. As far as I can see, multi-level marketing isn't even mentioned on the "direct marketing" page, why not if it exemplifies it. I'm not really sure that it neatly fits into traditional direct marketing.

As for the categories, I tend to agree with the multi-category organization and the point that this is not heirarchal -- DH 2005.04.07

I removed the NPOV tag as from what I read here, none of the complaints about the page are still extant. Grackle 22:44, 3 Jun 2005 (UTC)

Knverma deletes information and put following on my talk page

I deleted the following material:
  • The MLM model does not guarantee the success of any individual involved in this model. The success :will depend primarily on amount of work done by the individual like any other business model and is :not a good model for persons who bare not willing to work hard and expect results.
because it is unsourced, and actually says nothing factual. It is like saying if you don't work then :you won't achieve anything. Such things can be said in any article. If you have any more precise :statements (statistics etc) from some source, it could be added to the article. --Knverma 13:51, 19 June 2007 (UTC)
Is this within Wikipedia guidelines? 75.73.188.53 02:47, 20 June 2007 (UTC)
Yes, it is. Knverma is right - your addition of that text is against wikipedia guidelines. Wikipedia is not an instruction manual. Even though you've removed the bit about "mediocre persons", it's still inappropriate. Αργυριου (talk) 03:20, 20 June 2007 (UTC)
Thank You I am sure same guidelines are applicable to all editors equally. Because I noticed a lot of similar statements which now I know should be removed 75.73.188.53 04:13, 20 June 2007 (UTC)

Companies, Notable or not??

I'm removing the "notable" word under Multi-level_marketing#Companies section. Until we encourage more wikipedians to add companies, we cannot grow this topic and be comprehensive. If this list grows too long we can start a "List of Multi-level marketing companies" topic or category. Of course affiliate links and referral codes must be prohibited. If you are adding companies, then keep the list alphabetized and wikify it (i.e., write, [Company Name] ). --Perfecto 01:08, 8 August 2005 (UTC)

I'm reverting the change to reflect "notable". The point of the article is to provide information about Multi-level marketing not to gather a comprehensive list of MLM companies. According to Wikipedia:What Wikipedia is not, Wikipedia policy specifically states that "Wikipedia is not a soapbox, or a vehicle for propaganda and advertising", "External links to commercial organizations are acceptable if they can serve to identify major corporations associated with a topic", Wikipedia is not a "mere collection... of external links or Internet directories." Edwardian 23:01, 8 August 2005 (UTC)
IMHO (1) "notable" is POV, and (2) shouldn't we deny minor companies that have separate articles, say Kleeneze.
Based on the previous reverts I see that companies that have articles (blue links) are somehow generally accepted. Is the following a better guideline then, instead of continual reverts?: Develop an article first on your MLM company, before adding it to this list.
How about prohibiting external links in Multi-level_marketing#Companies altogether, since, as you said, an Internet directory Wikipedia is not. --Perfecto 01:32, 9 August 2005 (UTC)
You are correct. "Notable" is POV, so I have changed it for the time-being to "well-known". Personally, I think notability is sufficient for inclusion and can be reached by consensus of the average Wiki reader.
Kleeneze is indeed a minor company and not well-known outside of MLM circles nor is it notable other than it has been around for a long time. We could take it to Wikipedia:Votes for deletion if you think it should go.
I think the better guideline is this: Develop articles for MLM companies that are well-known or notable. If they are sufficiently well-known or notable (to an average reader of Wiki), then include them in the list.
Personally, I think the external links should be referenced within the appropriate articles... not here. Edwardian 06:18, 9 August 2005 (UTC)
I agree with you re: removing external links in this section. I disagree though with your suggestion that Wikipedia cover only well-known or notable companies. Any well-written article (not a stub) about an MLM company deserves listing here. As I said, the end goal I see is to encourage the list to grow for eventual move to a separate List of Multi-level marketing companies article. I mean a wiki list, not an extern link list. IMHO "well-known" or "notable" restricts Wikipedia's coverage of any industry article.
"Wikipedia is not an indiscriminate collection of items of information. That something is 100% true does not mean it is suitable for inclusion in an encyclopedia." Why should Wikipedia mention things that are not well-known or notable? Edwardian 20:01, 9 August 2005 (UTC)

We could have saved ourselves a bit of time. I just noticed that List_of_network_marketing_companies already exists. Edwardian 05:48, 13 August 2005 (UTC)

External links, stay or go?

Recently, Tregoweth removed the entire External Links section, citing " (cleaning up external links (Wikipedia is not a link repository; linking to totally-pro and totally-con sites not really helpful))." Well, anonymous visitors have been making edits again that are nothing but added HTML links. We got part of this issue cured when we spun off List of network marketing companies. My question is, do we want an External Links section or ban it altogether?

  • If it stays, then what's our acceptance criteria?
  • If it goes, then how do we encourage these (presumably) siteowners to add NPOV content instead?

--Perfecto 02:41, 12 October 2005 (UTC)

Independent Business Owner

Right now Independent Business Owner is redlinked. Is there an article that explains this term and terms like downline and other Amway type terms? Perhaps it could be called List of Multi-level marketing terms MPS 14:53, 31 October 2005 (UTC)

I do not think so. WP:Be Bold and do it. --Perfecto Maple Leaf Forever! 16:29, 31 October 2005 (UTC)

Question: Does "Independent Business Owner" have a unique meaning in MLM? It seems to be a self-explanatory term. tregoweth 16:51, 31 October 2005 (UTC)

Googling Independent Business Owner IBO [3] gets 9 of ten hits that are quixtar related. I will take your advice and start something and see where it goes. MPS 17:10, 31 October 2005 (UTC)

AFAIK only A/Q use the acronym "IBO" -- try searching without the acronym. The term really just means that the sales representatives (agents) of a given firm are independent contractors and not employes. AFAIK, all independent contractors (e.g., some plumbers, real estate agents and sculptors) are, for tax purposes of many countries, self-employed business owners. IANAL or an accountant, though. -- Perfecto Canada 02:25, 1 November 2005 (UTC)


Response: What if the requirement is just corporate sites only? Not the Associates/Distributors. Its fairly easy to tell these days if its the main site or not.

removed section

I removed the section below:

== Online MLM ==
Online MLM businesses have evolved real fast in the past 5 years. To date, there are over 5,000 websites dealing with MLM product and services. The most successful online MLM business so far is Six-Figure Income (SFI), with over 150,000 members. As these businesses are based online, many of them offer little or no real value to the members. Those businesses that offers little value often close down fast, with as much as 50% of those companies closed in less than 1 year. Many people feels the pinch and the loss in their investment with those companies.
As a result, some feel that online MLM websites are mostly fraudulent, which makes online MLM much more difficult to operate.
Some people join online MLM businesses want quick success. This is nothing wrong and there are many tools and businesses that existed to help them. These business are often called "Downline Builder" and some of those websites include Empowerism and Traffic For Less.

This was added by User:219.75.98.205 whose only other contributions were spam links. It doesn't seem to me that it adds much to this article, doesn't cite its sources, and is a thinly-veiled advertisement for the empowerism and trafficforless links. --AbsolutDan (talk) 02:36, 24 May 2006 (UTC)

I agree that the section as written is biased, but is there a place in the article for a scholarly and well-supported discussion of "online MLM"? IOW, maybe we need an online MLM section, just not this one. MPS 14:19, 24 May 2006 (UTC)

Father of Network Marketing speaks...

Self promoting post —Preceding unsigned comment added by 66.177.36.229 (talk • contribs) deleted by USER MPS

Sounds like you are Editing with a conflict of interest This is not the appropriate place to self-promote like this. I suggest you delete this post before someone else deletes it for you. Peace, MPS 03:01, 19 October 2006 (UTC)
Why bother? He hasn't actually made the edit he suggests; and I'd like to keep his earlier post up as rationalization for the merger of Network Marketing into this article. Argyriou 05:41, 19 October 2006 (UTC)
Nevermind, I'll delete it myself. Arg, if you are really interested, you can always look in the history Wikipedia talk pages are not the place for experts to claim credit for their theories. If this person wants credit for coining "Network Marketing" as a euphemism for "MLM" hen he had better publish this at a reputable source we can cite. I am not, mad, just trying to hold wikipedia to its WP:NOR standard. MPS 04:32, 20 October 2006 (UTC)

Criticism of MLM

An anonIP editor has taken to removing per se, even though Amway had made deceptive and illegal claims from the sentence in the criticism section which reads

  • Amway in particular is a frequent target for critics for generating considerable revenues from selling instructional and motivational materials to its participants. The FTC issued a decision, In re. Amway Corp. in 1976, which indicated that multi-level marketing was not illegal per se, even though Amway had made deceptive and illegal claims.

Please don't remove this information again. It is important to state, in a section on criticisms of MLM, that while MLM itself was not ruled illegal, that the biggest MLM company was found guilty of fraudulent behavior. I also reverted the paragraph about some small MLM company going bankrupt, leaving its distributors unpaid. With just the information stated, that's not a problem with MLM - lots of businesses go bankrupt, leaving creditors unpaid. Argyriou 18:44, 20 October 2006 (UTC)

The portion of criticism related to market saturation is simply an opinion. (now removed) There is no evidence suggesting that any product line being sold through Network Marketing has ever reached market saturation.—Preceding unsigned comment added by 67.170.107.32 (talk • contribs) 19:10, 24 March 2008

I've undone your removal of sourced material. Please don't do it again. Argyriou (talk) 06:27, 25 March 2008 (UTC)

Semi-protect?

Should we request semi-protection for this article? Most of the spamlinks being added are added by anonymous users; semi-protection should cut down significantly on the problem. 23 of 24 of the most recent spamlink additions were done by anonIPs. Argyriou (talk) 19:30, 8 November 2006 (UTC)

XanGo, Noni

I'm arguing with several XanGo distributors at that article, and could use some input. For one thing, the MLMers are indignant that they don't get to use the article for marketing, whereas the Tahitian Noni company has taken over the Noni article and no one has complained. If anyone here has the energy to try to NPOV the Noni article, that would be appreciated. Zora 04:05, 8 February 2007 (UTC)

Someone needs to add Shaklee to the list MLMs. Thanks.

Questnet

Its surprising to note that there is no article about Questnet, which is one of the worlds fastest growing network marketing companies, and is already world biggest E-commerce business


MLM and network marketing

Hi Britcom, I don't understand this footnote you inserted. You agree that Quixtar is a MLM? --Knverma 20:52, 30 April 2007 (UTC)

The ref note means that if you get a commission check directly from the company, then you work for a network marketing company, if you get a check from an upline rep, or take your commissions as retail profit from what your customer pays you, then it is some other kind of marketing plan. A company can be both MLM and Network Marketing, or Direct Marketing and Network Marketing, etc. (I can't say what Quixtar is, I haven't seen their biz op. ) In other words if the company rewards you for building a network, then it is "network marketing" whether or not you get multi-generational (downline) bonuses. But if the guy who sponsored you also pays you, then that is pure old fashioned MLM which existed before network marketing. I suppose one could say that network marketing is a better way to do MLM or any other kind of direct selling. --Britcom 22:54, 30 April 2007 (UTC)
Quixtar is the successor to Amway in some countries like US. The latter is of course a typical MLM and is also mentioned by your reference. In particular it has multi-level payments, although the payments come directly from the company (in most countries). This is a bit new, "direct distributors" had more responsibility earlier in Amway for product distribution and probably also payment distribution, but now Amway seems to have even removed the "direct" pin level.
Anyway even the article you cite doesn't talk of the method of payment (from company or from upline) as the difference between MLM and network marketing. The only line I found in the article about the matter is: "Network marketing is quite simply using your relationships to sell a product or service".
Also, how about looking at additional sites besides the one you gave [4] [5]. On what basis did you choose this particular website as the authoritative source? --Knverma 05:53, 1 May 2007 (UTC)
Well if there are no MLM levels, then naturally you would have to be paid either by straight commission from the company, or by point of sale retail markup. So in a way, the source does refer to method of payment.
I think the most relevant statement on the sourced site is:
...it can include multi-level marketing...
Therefore network marketing need not include MLM, it can include some other pay plan.
What that means to me is that any business where you market to your warm market and teach others to do the same qualifies as network marketing regardless of if you get any downline bonuses or not. So that means that even a non-MLM one dimensional pay plan that is marketed through your warm market would still be defined as network marketing.
The site used in my source is by Shawn Casey, JD, who is an attorney and author of several books about internet marketing. He is a well known marketing guru. Bio --Britcom 11:46, 1 May 2007 (UTC)
For the moment it seems all we can say is that some sources call them the same and other sources consider them different.
BTW do you have some particular example in mind, some company which uses network marketing but not MLM style? --Knverma 14:50, 1 May 2007 (UTC)
Three examples come to mind: (1) When PayPal first started they payed $10 for each referral who signed up and paid the new member $10 as well. (2) Cognigen Networks (Long-Distance etc.) used to pay on only one level both commission and rep bonus. Cognigen has since gone MLM at the request of many of their members. (3) Ronco usually offers its customers a free bonus product if they promise tell a friend about the Ronco product they bought.
I would say that in many cases the Terms network marketing and MLM both apply to a particular business, in other cases one may apply but not the other. --Britcom 01:24, 2 May 2007 (UTC)
If you think that network marketing has a distinct identity from MLM, please write an article about it. Really - I'd rather see an article about Network Marketing that isn't MLM propaganda than have a not-well-justified redirect. Go here, and replace the redirect with an actual article which explains Network Marketing, and how it is different from MLM. Please be sure to include sources for your claims. Αργυριου (talk) 03:43, 2 May 2007 (UTC)
Something must be must be missing in the description the situations above with PayPal and Ronco because they both sound very much like forms of pyramiding and according the FTC pyramiding is illegal in most states. On a side note anything on Robert L. Fitzpatrick author of False Profits: Seeking Financial and Spiritual Deliverance in Multi-Level Marketing and Pyramid Schemes that shows he might qualify under WP:RS?--67.16.90.86 (talk) 01:08, 5 June 2009 (UTC)

In Re Amway and price fixing

12.104.244.6 (talk · contribs) has edited the Criticisms section, saying that a citation for "However, Amway was found guilty of price fixing (by requiring "independent" distributors to sell at the low price) and making exaggerated income claims.[3]" was needed. This is untrue. The case document, which is referenced, clearly state that Amway required distributors to sell at a particular cost, in violation of price-fixing laws. It's in the summary at the top of the opinion, and detailed further down. User:Argyriou (talk) 22:16, 11 July 2007 (UTC)

The reference does not mention that "Amway was found guilty of price fixing requiring distributors to sell at low price" as mentioned in the article. If we want to keep this statement in the article, then we need citation. Else this statement should be deleted. 75.73.188.53 04:56, 12 July 2007 (UTC)
Yes it does. I'll reproduce the first paragraph of the reference for your benefit:

"This order, among other things, requires two Michigan corporations engaged in the door-to-door marketing of various household products, and two corporate officers, to cease allocating customers among their distributors; fixing wholesale and retail prices for their products; taking retaliatory action against recalcitrants; and disseminating price-listing data which fail to advise that price adherence is not obligatory. Respondents are additionally prohibited from misrepresenting potential earnings and other relevants to prospective distributors."

The details are in the other 120 pages, but the summary is the source for what is claimed here. (ESkog)(Talk) 05:07, 12 July 2007 (UTC)

Criticism section of MLM not Balanced by a Proponant section.

In addition I think that there should be more of a historic context entered into this article.

Also I think perhaps the description of MLM should include it's purpose as an advertising and marketing strategy as opposed to just being described as a business model as there may be businesses that use MLM as a means of testing the market or promoting a particular product,service or line of product/service that does not necessarily constitute the majority of that business's inventory, practice or service activities.

In the future I would hope for more facts about MLM origins, and perhaps a section that addresses the concerns of many MLM proponents. e.g. that the MLM industry is targeted and dissected unfairly as it often counters the deliberate corporate pion conditioning prevalent in modern education systems(just one example.) I mean if popular criticisms are covered maybe there should be a section covering the proponent views.

In fact I think an effort should be made to build,or find comparison statistics to chart income levels for MLM workers compared to other industry workers but I suppose that may or may not have a place in a definitive article, unless it sites any statement indicating the income success or failure rate of its investors in comparison to other investments or careers.24.1.103.99 00:41, 3 October 2007 (UTC)

The issue of balancing "criticism" sections is a thorny issue all over Wikipedia. However, in this case, it's pretty clear that MLM is, in general, a scam, and the criticism section in this see article article is actually rather mild considering the damage that MLM does, and the cult-like brainwashing that appears to be necessary to get new recruits into established MLM schemes.
This article does need more about the origins of the legitimation of pyramid schemes, and does need statistics which show just how bad a deal most MLM actually is for anyone except the scammers who start MLM companies. Argyriou (talk) 02:31, 3 October 2007 (UTC)

I do not agree that it is CLEAR that MLM is in general a scam...this is not fact nor an accurate generalization. On what basis do you say MLM damaging, in the realm of advertising promoting and marketing? As a business plan type by comparison to corporate or franchise structures? Or do you mean to the index of personal finance statistics? On any of these basis, I think one would be hard pressed to denigrate MLM in general by comparison mathematically, logically, or even ethically to any corporate, or traditional franchise business model. The start up failure rate of any business is high. The difference between most MLMs I know of and staring up a franchise is that the overhead cost is comparatively ridiculus. As for corporate schemes, The only way to financially profit from a corporation is to work for them as an employee/contractor, or invest in their shares if they are publicly traded. In most cases I'd say that only the second option offers potential to gain any kind of fortune, and often this not much better than gambling since you have almost no say in the operation of the company unless you are a major shareholder. I think it could be lucrative to be an investor but not really to be an employee. As for a traditional franchise or small business I'd rather "fail"(probably because everybody in your social network is an everyman for hisself peon work harder not smarter consumers only here mentality popular cultist and thinks your in a pyramid scheme cult) at an MLM and maybe lose a $40-$500 a year investment than FAIL at one of these. How about going $30,000 into debt because you couldn't turn a profit on a Krispy Kreme franchise you bought (now THATS damage.) traditional business models have absolutely no corner on ethics, financially or otherwise. Many corporations wantonly damage the economy and environment of any community they touch (Wal Mart). "Hollywood" is said to be the greatest polluting industrial base in the world. You mentioned brainwashing, and generating cult-like followings, This is a common practice in all areas of marketing/advertising promotion and industry. Brainwashing with dress codes,keywords, and office politics is the norm. I used to work for G.E.FA periodically we would have training sessions to reinvent our office culture and I just as often could barely contain myself from bursting out in laughter and ridicule at the buzz words they were trying to train us to use. eg one day we were no longer customer service representatives we were now customer DELIVERY representatives. We had to memorize terms like PMCSE Positive Memorable Customer Service Experience! Work for any Six Flags or Disney theme Park and you won't be an employee, you will become a backstage "actor" or "host"!(and you BETTER act like you believe in what your doing) My point is that a cult like presentation or following is hardly an indication that something is a "scam". I think its time to study MLM further if there is to be an entry for it in the wikipedia, without any real study of MLM structures perhaps there is a need for economists who can attest statistics and studies to show wether MLM is damaging to the economy then it should be cited here on the wikipedia. Anything less is POV.24.1.103.99 19:14, 9 October 2007 (UTC)

If you can find a reliable source that has anything good to say about MLM, feel free to use it. OhNoitsJamie Talk 19:17, 9 October 2007 (UTC)
this link explains exactly how MLM sets people up to fail. In a conventional franschising opportunity, new members are granted exclusive territories so that they are able, if they are good salesmen, to develop a large enough market to build a business. In MLM, there is no control over where new businesses with the same products will pop up, and due to the nature of MLM, all dealers have a greater incentive to recruit new dealers than to develop sales prospects for the product.
I've been to MLM recruiting meetings. They are cults. Argyriou (talk) 22:35, 9 October 2007 (UTC)

The wictionary defines cult as follows: Noun Wikipedia has an article on: Cult

Singular cult


Plural cults

cult (plural cults)

1. A group or doctrine with religious, philosophical or cultural identity sometimes viewed as a sect, often existent on the margins of society. 2. Devotion to a saint. 3. A group that exploits members psychologically and/or financially, typically by making members comply with leadership's demands through certain types of psychological manipulation, popularly called mind control, and through the inculcation of deep-seated anxious dependency on the group and its leaders.

the definition that could most widely be applied to MLM would likely be #3. Yet,This definition could also be used to describe any leader based community,office setting,social group,or business organization larger than mom and pop(actually how many mom and pop businesses don't try to use these kind of methods to secure the help of their heirs.) Please find me an advertising firm or product that does not use any of these measures to win consumers. so I will not argue this point it is almost entirely POV based.Yes MLMs, and any rock band,sports team,religious group or goal oriented organization of any kind with leaders for that matter are cults. I think the key word in culture is cult. I do not think it is safe to say that a group status as a "cult" alone has any definitive bearing on the ethic or viability of its products or goals.

I have been a member of an MLM for about a few months prior to my introduction to this MLM I had already attended a few meetings for others and have been approached by various people offering MLM products in my own experience they were invariaby awesome products o services that I simply could not afford to invest in at that time. I have yet to encounter any edict or mind control attempt by any representative or anyone in my upline that is not in keeping with the dynamics of a personal sales pitch or informative company newsletter. In fact if I could I would be more likely the one to use such a method against some of them to get them motivated to operate more consistantly in my favor, but that would be unethical ;). the reality is that most persons in any MLM are likely to be your average joe or jane trying to make a prospective customer or team member. They are likely to be inexperienced, and yes probably a bible thumper from a team of bible thumpers, who may have joined an MLM in hopes of securing an income that doesn't obviously involve selling out to the big bads.(although how anyone can be certain these guys aren't investing in MLMs is anyones guess.) see this article:http://en.wiki.x.io/wiki/Mayer_Amschel_Rothschild_family#Zionism and for good measure watch this video:http://myspacetv.com/index.cfm?fuseaction=vids.individual&videoid=2104576 anyway I did check out the link posted by Argyriou:http://www.mlmwatch.org/01General/10lies.html and I look forward to investigating this site and its creators thouroughly but It seems largely POV to me. btw WTH is this? it seems adware-ish to me I got the link from MLMwatch.org: http://web.archive.org/web/20010418184354/www.herbalawsuit.com/ 

example of STRONG but POV article bullet points touted as fact/authority:

"Lie #4: MLM is a new way of life that offers happiness and fulfillment. It provides a way to attain all the good things in life.

Truth: The most prominent motivational themes of the MLM industry, as shown in industry literature and presented at recruitment meetings, constitute the crassest form of materialism. Fortune 100 companies would blush at the excess of promises of wealth, luxury, and personal fulfillment put forth by MLM solicitors. These appeals actually conflicts with most people's true desire for meaningful and fulfilling work at something in which they have special talent or interest."

Total POV and probably inaccurate as an article I googled seems to illustrate unless, as is most likely,most people arent finding traditional jobs that fulfill this "meaningful"(surprised? not really) requirement: http://www.laidoffnowwhat.com/CareerSatisfaction.htm

You know - I could spend some time to bother to refute your childish assertions about the differences between MLM and legitimate coprorate work, but you're just some anonIP, and thus I don't need to take you seriously. Argyriou (talk) 17:47, 10 October 2007 (UTC)

we don't need to make this a childish argument about you and me Argy, I feel you are definately entitled to your opinion but I just wish people would make more effort to be fair in their judgment and not go off of total POV and tout it as fact or authority. I feel people should avoid allowing their prejudice and conditioned brainwashing responses to try and denegrate the efforts of others. Your argument seems to me to be that I should shut up and be quiet because the critisism was not so bad. I only feel that the Wiki about MLM could use some balanced reporting entry! since there was going to be a criticism section. I've got some decent sources here that say some good things about MLM oppurtunities.

Robert Kiyosaki author of "Rich Dad Poor Dad" is reported to have indicated that he would have joined a MLM business if he had to do it all over again. Here is a follow up interview with the investing guru: http://www.greatestnetworker.com/ArticleView.asp?ID=1531 (obviously he does not imply that all MLM are created equal..which they are not, If anyone intends to be succesful at ANYTHING they should do their "homework".)

Warren Buffet famed stock investment expert now owns three direct selling(read network Marketing) companies and says they're the best investments he's "ever made." http://www.directsellingnews.com/archive/2005Nov/archive1105_headlines.php

David Bach author of "Start Late Finish Rich" indicates that he believes direct selling industry now deserves serious consideration as a way to create a second home based income stream for yourself. ok I found a page full of heavy hitter qoutes including the boss himself Donald Trump: http://www.healthybusiness.ca/quotes.html

It makes since that MLM should eventually outpace big industry m, because instead of one administration making rash decisions and spreading a product or service by heavy investment, You have armies of already mostly loyal customers using word of mouth AND multimedia to spread their own experiences and message, which I firmly believe "peer pressure" is still stronger than any ad.

Just look at the this story taken from an article from the previously cited website posted by Argyriou http://www.mlmwatch.org/13Victims/fox.html a pity though it sounds like they did not take control of their business op, and let themselves be dictated and did not do their own homework. Pressure sales is a feature of all sales related businesses and wherever there is sales there will be pressure salesmen until sales pressure is outlawed! In which case we all might as well go live under Castro's regime(he still alive ain't he?) Myself Pressure is just not my style I have more faith in my product and self than that. Btw if being an anonip is reason enough to discount what I say then why does wikipedia allow anonip entries? (I'm just too lazy to register I will someday trust me. I just don't troll wikipedia spewing toxic POV attitudes all day. With that said I leave It to the good registered Wikipedians to continue this discussion and the development of this Wiki, until someday I am called again to reemerge from the shadows and fly as Anonip anti-critic.24.1.103.99 01:27, 11 October 2007 (UTC)

Robert Kiyosaki got totally trounced by John T. Reed in regards to Kiyosaki's claims. Direct selling does not equate to MLM (true direct selling eliminates the middle man while MLM increase the middle men) so that is a non starter, and I have no idea how Donald Trump even relates to MLM. The Ten Big Lies of Multilevel Marketing page is correct in that MLM by its very nature cannot give what it promises. The door-to-door salesmen of the 1920's and late 1940's through early 1950's largely disappeared for a reason--a brick and mortar store had better profit margins and the coming of malls (1956) and superstores (1980's) made the door-to-door salesman redundant. Also those door-to-door salesmen got their product directly from the manufacturer rathern than some downline. The MLM model as often presented can't work-simple mathematics proves it can't work.--BruceGrubb (talk) 07:35, 31 January 2008 (UTC)

POV

Whilst the article does contain some criticism of MLM, it occurs as an afterthought. The top sections of the article are pure peacockery extolling the virtues of MLM. Mayalld (talk) 22:37, 20 December 2007 (UTC)

That's a new complaint for this article. The top paragraph contains a jargon-filled, but relatively factual description of MLM; the next section gets right into questions of the legitimacy of MLMs. The next secton is an explanation of some MLM jargon; the next is criticism. I think most MLMs are scams or cults, but I don't see how this article is particularly violating WP:NPOV within the bounds of WP:RS and WP:V. Argyriou (talk) 22:51, 20 December 2007 (UTC)

I edited the mlm page yesterday (12/1/08), completely changing the introductory body text and included 2 external links as they were the source of the information. Both external links were non-commercial and non-company specific websites and whilst the body text has remand unchanged the links have since been removed. Why?

My understanding is that the DSA (direct selling association) is the one of major governing bodies of multilevel marketing and therefore it would be a creditable external link to include for people seeking more information. (http://www.dsa.org)

Additionally network marketing business school is an education site about the industry and the source of most of my information. Additionally it has good information about how to distinguish the difference between mlm and a pyramid scheme, provides a good history of mlm, and goes into more detail of the different compensation plans. It provides a lot more information that could possibly be listed in wikipedia and therefore I would think it would be another link worthy of inclusion. (http://www.network-marketing-business-school.com/network-marketing.html)

I though that wikipedia was about providing quality information. If this is the case why have these links been removed as they add value to the readers? More interesting is that fact that some of the existing external links (ten big lies of mlm and the skepic’s dictionary) claim that all mlm plans are flawed pyramid schemes. Whilst I can understand trying to be unbiased, I think that it doesn’t do wikipedia any favors when you make reference to mlm being a legitimate business model in the text, but then provide links they say it is a scam. To me this would just confuse the readers. Why is it that these links are deemed to be creditable but a link to one of the governing body’s not?

Whilst I agree that it is necessary to warn people looking to get involved with mlm about the dangers of pyramid schemes that present themselves to be a legitimate mlm company, both of the external links I included provide these warnings.

I propose that the links be returned. If you disagree please add to this discussion such I can understand why.

Thank you. Norfolkisland (talk) —Preceding comment was added at 01:38, 13 January 2008 (UTC)

Network-marketing-business-school is clearly commercial. I'm not sure about DSA, actually, but it may be commercial. And your changes to the introduction go entirely too far toward the premise that MLMs are legitimate, which has not been proven. — Arthur Rubin | (talk) 08:58, 14 January 2008 (UTC)


What about using some obviously impartial websites like the Federal Trade Commission, or The Better Bussiness Buero? It's impossible to give anybody too many ways to continue their research on their own. 67.80.96.206 (talk) 03:19, 1 February 2008 (UTC)

New Section moved from top

Editing of the page re: Amway being a Unilevel or Stairstep Breakaway plan

In both the main MLM page and also the page referring to the above topic, I am changing the usage of AMWAY as an example due to the following:

Whoever has used it has cited that AMWAY qualifies in this category because if "a distributor becomes a manager and "breaks away" from his or her original manager...The original manager loses his or her managerial overrides and, instead, receives a percentage override from the sales of the entire breakaway organisation."

This is not entirely true: A platinum (aka direct) IBO/distrubtor, when they attain this level, becomes eligible to recieve a 4% downline bonus on their own downline direct qualified distributors. Their upline direct (or above) distributor still recieves their original 4% of their downline platinums business, as applicable by the AMWAY sales and marketing plan.

For example:

The creation of the new platinum business (B), downline of the original platinum (A) now recieves the 4% leadership bonus of the platinum business (C). —Preceding unsigned comment added by Rbrb2222 (talk • contribs) 05:30, 25 January 2008 (UTC)

Market Saturation

I removed paragraph about market saturation in MLM. There is no documentation of this POV on the cited reference. It should be either proven that such saturation exists or not included. Djglove (talk) 23:23, 16 April 2008 (UTC)

The cited reference contains several pages of analysis on that topic, and the end of the reference contains other references that do support the analysis regarding market saturation. DMacks (talk) 00:39, 18 April 2008 (UTC)
Then those sources should be cited. I have never once seen empirical evidence showing proof of market saturation in any MLM product category. In fact, Direct Sales as an industry as steadily grown (nearly doubled in volume in the U.S.) over the last 10 years. This article is obviously slanted towards Anti-MLM and it is only fair that the Anti-MLM side hold to the same standards as positive information being posted. In addition it is downright ridicules to pull a paragraph that is clearly cited (on the FTC site no less), but in disagreement with the anti-slant. Again, there is not one single example of market saturation in the cited reference or in any of the reference that he/she references.Djglove (talk) 03:20, 18 April 2008 (UTC)
MLM is not the same as Direct Sales, and the sentence is properly sourced by the reference. If you can find reliable sources that market saturation has not occured, you may add that to the paragraph. — Arthur Rubin (talk) 15:31, 18 April 2008 (UTC)
No, MLM is a subste of Direct Sales, though I believe these days MLM makes up around 90% of Direct Sales. You need a reliable source that market saturation *has* occurred, not that it hasn't. --Insider201283 (talk) 17:18, 20 April 2008 (UTC)
We have a reliable source; it (was) in the article the last time I checked. — Arthur Rubin (talk) 17:20, 20 April 2008 (UTC)
What's the source? Reality itself proves this "source" is not reliable. The oldest MLM in the world, Amway, continues to have increased sales growth. The links I removed, and which you reverted without comment, despite my explanation as to their removal, also do not even come close to fulfilling WP:RS --Insider201283 (talk) 20:30, 20 April 2008 (UTC)
Ok, I see now the source is VanDruff, a self-published article on a personal website. Reliable? Are you serious? I suggest you review WP:SPS in particular. --Insider201283 (talk) 20:35, 20 April 2008 (UTC)
It's self-published, but (apparently) by a recognized expert, so it's allowable if it doesn't violate BLP. And, as for Amway, they have not had consistent sales growth, according to generally reliable sources, but they keep expanding their product line, so it may not be a problem for them until the entire MLM market is saturated. — Arthur Rubin (talk) 22:08, 20 April 2008 (UTC)
Sorry, but just because you think he's an expert doesn't make it so. I suggest you read Len Clement's anti-mlm zealots series for a good overview of why that paper of VanDruff's is so ridiculously flawed. As for Amway's sales data, I refer you to this graph. The sources for that graph are Amway's published sales data. Seems your "reliable sources" are somewhat less than reliable.--Insider201283 (talk) 22:25, 20 April 2008 (UTC)
The graph is clearly not reliable, coming from another Wiki, but shows a significant reduction in sales from 1996 to 2000. (Inflation-adjusted figures might be more interesting.) marketwaveinc and the author of "anti-mlm zealots" are clearly pro-mlm zealots, so the articles should be discounted. It's possible that, if van Druff's article is objectively false, that might be used to indicate he's not an expert.
Finally, any economist should be able to predict market saturation in the MLM model. Even if van Druff is not an expert, I'm pretty sure I can find a paper by David Friedman on MLM predicting market saturation. — Arthur Rubin (talk) 22:43, 20 April 2008 (UTC)
OOPS, but http://www.consumerfraudreporting.org seems an adequate source. — Arthur Rubin (talk) 22:56, 20 April 2008 (UTC)
Oh good grief. Market Saturation is an issue in ALL businesses, MLM is nothing special in that regard. consumerfraudreporting.org? C'mon get serious here, please. You can't just keep digging up any old website and claim it as a "reliable source". As for the "graph", the data in it is all from Amway/Alticor press releases. If you want to do your own graph to check it for reliability, feel free. As for VanDruff, he's clearly an anti-mlm zealot, so by your standard his article should clearly be discounted. As for "objectively false", please read the Clement's article and make your own decision on that. Clement's points out where his article is false. VanDruff is making the classic mistake of equating the MLM marketing strategy of recruitment with the Pyramid goal of recruitment. I see from your user page you're likely a mathematician, so I suspect you might be making the same error. To give one example of his *factual* errors, here's this comment of VanDruff - "Imagine buying a product or service in the real world and having to pay overrides and royalties to five or ten unneeded and uninvolved "distributor" layers". He doesn't understand the marketing plan. It's extremely rare for there to be "five or ten" "distribution layers" in MLM. Indeed, the FTC in FTC vs Amway found that more than 90% of the time the number of "layers" was about the same as traditional distribution - 3 or 4. If you understand the marketing plans you will see this is entirely predictable. Analyses like VanDruff's are predicated on a false understanding of the business model. He assumes it works like a pyramid, and then discusses the weakness of pyramids as if they exist with MLM. --Insider201283 (talk) 23:48, 20 April 2008 (UTC)
(outdent) Grumble. Your claim as to the FTC finding in Amway is objectively false, whether or not it's from the FTC report. As a reluctant participant in two MLMs which don't (or didn't) have non-distributor customer registration, I can assert that we can "see" 13-17 people above me in the chain, although it's unlikely they all get overrides. (I should add that neither has ever had specific bonuses for recruitment, although they both require a certain number of active subdistributors in order to receive overrides on any subdistributors.) I suspect the usual number, in the plan in which we technically have a subdistributor, is 4 regular plus 3 executive. — Arthur Rubin (talk) 00:00, 21 April 2008 (UTC)
Actually you're partly right, I checked. The actual figure given by the FTC was 70% are within 3 levels and 99% within 7 levels. So "90%" is somewhere between 3 and 7. It's obviously going to vary depending on company and compensation plan. I would almost guarantee that few of the "13-17 people above" you were getting overrides. Plans generally have limits based on sales volume. In Amway for example, once a group exceeds around $20,000-$25,000/mth in sales, the "multi-level" aspect of the compensation plan effectively stops. It doesn't matter whether this is 1 level or 50 levels. The FTC figure tells you it naturally seems to stabalise and not that different from traditional distribution. This is the part many anti-mlmers like VanDruff and others seem to have missed. --Insider201283 (talk) 00:13, 21 April 2008 (UTC)
I still see no example of any MLM/Direct Sales product line reaching saturation. (MLM makes up over 90% of Direct Sales volume). You want objective so you rely on Anti-MLM sources, but those sources are as nonobjective as the clearly pro-MLM sources that you suggest are not appropriate for this category. Name one product or product category in MLM that has been saturated (the cited source can't) and I will gladly drop the subject. You can't suggest that saturation occurs with zero evidence and then suggest that I prove it doesn't occur. It's called proving non-existence. It's like asking me to prove that UFO's have not visited the Earth. "One cannot prove something that does not exist. The proof of existence must come from those who make the claims." - Jim Walker's "List of common fallacies" Djglove (talk) 19:13, 21 April 2008 (UTC)
Wikipedia's standards are not "can't prove it's wrong so leave it in". This section clearly is not backed by WP:RS sources and should be removed. We'll give Arthur a little longer to see if he can back it up, if not it should be removed. --Insider201283 (talk) 19:50, 21 April 2008 (UTC)
Arthur, do you seriously believe that any website that anyone can publish is a legitimate source under WP:RS and we can use them to put anything in Wikipedia? If anything that "new" source is even poorer than VanDruff. --Insider201283 (talk) 21:59, 21 April 2008 (UTC)
If I wanted to make a WP:POINT, I'd delete the compensation section, as it's unreferenced. Why don't you work on finding references for YOUR assertions as to compensation schemes, instead of deleting adequately sourced criticisms. — Arthur Rubin (talk) 22:38, 21 April 2008 (UTC)
I haven't even started on the rest of the article yet :-), but please, put citation requests in where you believe they are needed. The source you have given does not even come close to WP:RS, please at least explain why you think it does. i've stated it doesn't fit WP:RS as, amongst other things, it's a self-published website, you've given no explanation at all as to why you think it is appropriate. I will take the disputed text, put it here in Talk, and we can debate it here rather than continue an edit war. --Insider201283 (talk) 22:51, 21 April 2008 (UTC)
That's not quite true. You replaced the unsourced Compensation plans section with another unsourced section. But, that's another matter. (And we're probably both pushing 3RR.) — Arthur Rubin (talk) 01:28, 22 April 2008 (UTC)
I replaced the unsourced compensation plan area with common knowledge information about MLM compensation plans. I can look at a compensation plan and categorize it by it's characteristics, however finding a source that will meet your approval is another story. I will continue to dig into this. We might want to continue the comp plan discussion in the comp plan section above. Djglove (talk) 01:43, 22 April 2008 (UTC)

Disputed Text

Another criticism is that MLM programs are set up to make most distributors fail, as there is an incentive to continue to recruit distributors even as the products have reached market saturation, thus causing the average earnings per distributor to continue to fall.[1]

Arthur Rubin claims http://www.consumerfraudreporting.org/MLM_saturation.php is a reliable source. It is an anonymously run website with no apparent authority. WP:SPS says self-published material is acceptable only when produced by an established expert on the topic who has previously been published by reliable third-party publications. The site clearly fails this test as it is anonymously run. --Insider201283 (talk) 22:57, 21 April 2008 (UTC)
I've asked for others feedback on at Wikipedia:Reliable_sources/Noticeboard#Consumerfraudreporting.org --Insider201283 (talk) 23:09, 21 April 2008 (UTC)
Fair enough. I think WP:3O would have been better. On the other hand, I disagree that it's anonymously run. — Arthur Rubin (talk) 01:25, 22 April 2008 (UTC)
Doesn't that site have Google Ads? Wouldn't that make it commercial? None the less, there is no evidence proving the point. No example of a company or product category that reached saturation. I have been called an expert in Network Marketing, I have been quoted in published books on the subject, but my MLMBlog.net site has Google Ads on it so it has been classified as a commercial site.Djglove (talk) 01:54, 22 April 2008 (UTC)
Arthur, I can find no authorship information on the website, that makes it anonymous enough. I can also not find the website cited in any reliable third-party publications. Arthur, I've read your user page and article, you're obviously an intelligent guy, yet seem to strongly believe in this "saturation" issue. Are you willing to entertain the possibility you've misunderstood something with regards to MLM? Legitimate MLMs have the exact same market forces controlling potential product saturation as any other company - the market. Many MLMs go out of business when the market for their products diminishes. Larger companies like Amway do what any other company does, if a product becomes less popular, then they drop it from their line. Heck, at one stage Amway marketed bomb shelters. VanDruff's misunderstanding seems to come from his assumption that products are only marketed through MLM because there is no or little legitimate demand for them, and that demand only arises due to the attached business opportunity. The major flaw in this argument is that if it's true, then virtually by definition it's not a legitimate MLM. Legitimate MLMs have legitimate products with legitimate demand. More than 80% of the revenues of the largest and best known MLM, Amway, come from cosmetics, skincare, and nutrition. These are not exactly unusual products that aren't marketed through traditional channels. MLM has a number of advantages however, particularly with "higher end" products - a person to person workforce who are able to educate the consumer about the benefits of the product. You can't easily do this kind of education through traditional marketing methods. VanDruff seems to be writing from the perspective of considering sham products marketed by sham companies that try to disguise themselves as legitimate MLMs. Funnily enough, even then traditional market forces still apply. If they're not shut down by the courts, they tend to go out of business through lack of further demand. --Insider201283 (talk) 02:05, 22 April 2008 (UTC)
One other thing I just realized. The claim is "there is an incentive to continue to recruit distributors even as the products have reached market saturation". This is a demonstrably false claim. If products have reached market saturation, then by definition there is no more market for the products. If there is no market for the products then there is no incentive to continue to recruit distributors since in legitimate MLMs money is only made through sale of product to end users. VanDruff seems to be under the (unfortunately all to common) misapprehension that money is made through recruitment. It is not. It's a strategy for increasing sales volume. I repeat, by definition, if the market is saturated then there is no possibility to earn income, and thus there is no incentive to recruit. --Insider201283 (talk) 02:10, 22 April 2008 (UTC)
Actually, in many MLMs, A makes more money by his downline selling to end-users, than the "traditional" profit of the difference between retail and wholesale. So, even if the market were saturated, there would be an economic benefit in recruiting. I suppose if the legitimate/traditional profit exceeds the probable override, then there would be no such incentive. I can't put it in the article, but it's obvious that if there's an economic advantage to the recuriter to recruit in a saturated market, then the market will probably saturate. Sort of a reverse tragedy of the commons. — Arthur Rubin (talk) 04:31, 22 April 2008 (UTC)
Arthur, if the downline can sell to end-users, then by definition the market isn't saturated. QED. Please, you're obviously smarter than this and are letting preconceptions cloud your thinking. --Insider201283 (talk) 12:18, 22 April 2008 (UTC)
Apparently, you didn't read what I wrote. If "A" is a member selling to a consumer "C", he often has an economic benefit (in terms of compensation) by recruiting "B" and asking "B" to sell to "C". ("B" gets the [recommended] profit margin, which may compensate to the point where there isn't a real benefit to "A".) Hence there (may be) a benefit to "A" to recruit people, even if there are no new customers available. I hope, when that is the case, the business becomes legally a "pyramid scheme", but it's not at all obvious. — Arthur Rubin (talk) 22:19, 7 May 2008 (UTC)
Arthur, if "A" is selling to "C" and he recruits "B" to sell to "C" instead - "A" makes less money. Making LESS money isn't exactly "an economic benefit" is it? For any given volume, which is the scenario you outlined, the more people you recruit to generate it, the less money you will make. There may be some exceptional situations where this isn't true, but I can't think of any.--Insider201283 (talk) 22:45, 7 May 2008 (UTC)
You apparently haven't read the compensation plans you describe. In the case of -- well, a company which shall remain nameless, which I used to participate in their plan -- the recommended markup was 10%, but, under certain circumstance, you could receive 25% for the sales of your downline, but only 10% for your own personal sales. Hence, if you transfer a customer to your downline, you make a 5% profit. In Cell Tech's 2004 compensation scheme, (a [Stairstep breakaway plan]] with the unique property that the total commission paid to you and your downline on a sale depends only on your commission level), this couldn't happen except in the relatively rare circumstance that your downline sales are inadquate to maintain your commission level. I haven't studied the 2007 commission scheme, since we no longer have a downline. — Arthur Rubin (talk) 23:18, 7 May 2008 (UTC)

mlm-thetruth.com

This site meets WP:ELNO as a link to avoid. Namely, it's a POV site that "misleads the reader by use of factually inaccurate material or unverifiable research". --Insider201283 (talk) 03:12, 6 May 2008 (UTC)

Although I disagree with you that mlm-thetruth has any misleading statements, I thought I'd remove http://www.directselling411.com/glossary-and-faq/industry-faq/, a page which has clear mistruths. — Arthur Rubin (talk) 13:51, 6 May 2008 (UTC)
That is an official site of the body representing the industry. I've read it and cannot see a single mistruth. --Insider201283 (talk) 15:48, 6 May 2008 (UTC)
Furthermore, the author of the mlm-truth page, who is not the owner of the site, seems to qualify as an expert in economics, so unless you can find a specific untruth, the link should stand. — Arthur Rubin (talk) 14:09, 6 May 2008 (UTC)
How many do you want? Here's a major falsehood that permeates his entire site and misunderstandings of the business, re FTC vs Amway -
The FTC judge dropped the charge that Amway was a pyramid scheme, subject to "retail rules" that specified that (1) 70% of products had to be sold to non-distributors
This is a completely false statement (the rest is as well, but that particular one is rather gregarious). The FTC ruled it wasn't a pyramid scheme because payment wasn't made for recruiting (the sine qua non of an illegal pyramid). Various rules, including the 70% rule, existed before the FTC case and the FTC agreed they prevented potential abuse of the marketing model. Furthermore, the 70% rule does not say what Taylor says it says and never did. In 1976 it said 70% of product purchased must be sold at wholesale (ie to downline) or retail (to an end user) to receive a bonus. The FTC has since explicitly clarified this to state that if the distributor is the legitimate end user, it counts as a retail sale. Amway's 70% rule never said anything about required sales to non-distributors, and neither did the FTC. Taylor and his accomplice FitzPatrick have spread this lie about the 70% rule all over the place. It's a lie - they made it up. You can read more on the myth, including quotes and sources, at MYTH: 70% Retail Sales Rule.Oh, and he's not an economist. He has a PhD in Applied Psychology. --Insider201283 (talk) 15:48, 6 May 2008 (UTC)
The most obvious lie in directselling411.com is that 50% of the people make money. Not even the indiviual MLM knows whether their distributors make money, as informal retail sales have to be considered. Furthermore, the people who don't make money are unlikely to respond to a survey, if survey there was, so the methodology would necessarily be faulty. Credible estimates by reputable economists seem to run 10-20%, although I can't find any online at the moment.— Arthur Rubin (talk) 01:18, 7 May 2008 (UTC)
There's a reason you can't find any online. There isn't any credible estimates by reputable economists stating that. I can't find the claim that "50% make money" on the site, but even so it's quite possibly true. The site clearly talks about "direct sellers". As credible researchers know, the majority of people who join MLMs and other direct sales groups do so not as "direct sellers" but purely as shoppers. Certain incredible researchers would have us believe that somewho who signs a form because they want products cheaper, and then gets the products cheaper, should be labelled a "failure". This is an official site, by a government recognised industry representative group, reporting actual statistics. Just because you don't want to believe the truth doesn't make the truth lies.--Insider201283 (talk) 08:30, 7 May 2008 (UTC)
You're right. http://www.directselling411.com/glossary-and-faq/industry-faq/ doesn't say that half of mlm people make money. In fact, it only has two questions related to MLM at all, one of which is "What is the difference between direct selling and multilevel marketing?". The statement that over half of direct sellers make (net) money is also unsupported by any possible study, but it's also not related to this article. — Arthur Rubin (talk) 13:25, 7 May 2008 (UTC)
If you actually bothered to read what is on the sites instead of ignoring anything contrary to your world view, you'd note that 97.9% of Direct Sellers are involved in Multi-level Compensation structures. You're a mathematician - do the math.--Insider201283 (talk) 21:52, 7 May 2008 (UTC)
In the absence of evidence to the contrary, we can assume that that survey only covers DSA members. But, even if those numbers were (generally considered) accurate, combining it with the relevant data from http://www.directselling411.com to get something relevant to this article would be WP:SYN.
Sure, but is that happening? It was simply listed in external links and you claimed it wasn't valid and removed it. It's clearly a valid site under WP:EL --Insider201283 (talk) 22:37, 7 May 2008 (UTC)
I claimed it wasn't valid, but, after reading the discussion above, the truth is that it's clearly not relevant, and nothing from that page could be included in the article because its relevance depends on facts (assertions, anyway) on other sites. I still think the statement I quoted is a lie, but it's not a lie about MLM. — Arthur Rubin (talk) 23:22, 7 May 2008 (UTC)
So, the DSA represents the Direct Selling industry. MLM is a subset of Direct Selling, so this is the industry representative body, and further more, the Direct Selling industry is 97.9% MLM. And the site is not relevant and not talking about MLM? You might be a mathematician, but your logic skills seem somewhat lacking. --Insider201283 (talk) 23:41, 7 May 2008 (UTC)
mlm-thetruth is a site that should be avoided. Any site that is takes an extremist stance, in favor, or against mlm should be avoided because you won't get a fair and balanced opinion. For example, they state that you are more likely to be profitable with roulette than in mlm. What they don't say is that the same stat is true for starting your own business. They also don't say that more people have become millionaires from mlm than playing roulette, and that's not even debatable. if the site was credible, it would also point out those things. ::::: —Preceding unsigned comment added by Bluediamond77 (talk • contribs) 02:54, 16 May 2009 (UTC)
I can see your point. However, eliminating extremist sites would leave us with hardly anything to say. (It's probably not true that more people have become millionaires from MLM than from roulette, if you exclude the founders of MLM companies. However, the number of people who have become millionaires from roulette is particularly hard to quantify, so it probably shouldn't be said. The chances of winning at roulette can be determined mathematically, so that comparison could stand.) — Arthur Rubin (talk) 23:10, 16 May 2009 (UTC)
The author of mlm-thetruth has been cited in several peer-reviewed papers. This firmly establishes him as an expert in the field and allowable under the self-published guidelines of WP:RS. Deal with it.--BruceGrubb (talk) 14:24, 2 July 2009 (UTC)

Cults and MLM

Does anyone have any citation for this statement? I might be willing to concede using "Some MLM programs..." (even that is a stretch) but I don't see any evidence that "Many MLM programs feature intense motivational programs, which can be hard to distinguish from cult propaganda."...at least no more so than corporate motivational programs. Microsoft, Apple, etc. Input? Djglove (talk) 15:52, 7 May 2008 (UTC)

I think, for any given major MLM, we can find a generally reliable source that THEY use an "intense motivational program", etc. That doesn't support the statement as written, though. — Arthur Rubin (talk) 22:08, 7 May 2008 (UTC)
I am going to change the statement to "some" and investigate this further. Djglove (talk) 20:38, 8 May 2008 (UTC)

After reading the citation for the following statement, I think that some liberty has been taken..."Some of the "Independent Business Organizations" within Amway have been accused of operating as cults." Recommend taking directly from the article stating: "So-called corporate cults are businesses whose techniques to gain employee commitment and loyalty are in some ways similar to those used by traditional cults." Djglove (talk) 20:45, 8 May 2008 (UTC)

Cultish behavior

Accusations do not count as legitimate non biased information. End the generalization to end the confusion as to whom, what and where these cultish behaviors have been observed. Otherwise, my first impression is that associate motivational training to teach them how to be effective sales people must be wrong and if it's wrong, then it's wrong for traditional conventional corporate businesses, too. Thus, loyalty to a brand and truly believing in it must be cultish. —Preceding unsigned comment added by 75.56.247.50 (talk) 00:26, 8 August 2008 (UTC)

Hmmm. Although I agree that some MLMs (including those I've been involved in) have exhibited cultish behavior, we need a reliable source to that effect. On the other hand, accusations can be reliable sources, if the person in question is considered an expert in the field. On the gripping hand, I cannot distinguish motivational training from traditional brainwashing techniques, so if we can find a reliable source for that, it should be in the articles discussing that, as well. — Arthur Rubin (talk) 14:07, 8 August 2008 (UTC)
An expert on what however? For example, can a supposed expert on cults be considered a reliable source for a groups behaviour if they've never researched the group themselves? That doesn't seem at all a "reliable source" to me --Insider201283 (talk) 16:28, 8 August 2008 (UTC)
I tend to agree that that source is not reliable, as there's no sign of whether the author is an expert. — Arthur Rubin (talk) 18:14, 8 August 2008 (UTC)
On the Quixtar or Amway article I had no luck dealing with an admin regarding the RS standard of three different supposed "cult experts" websites. Next to nobody in academia talks two of them even remotely seriously, and the third is definitely on the fringe. None of them have done *any* research into Quixtar or Amway at all. On the other hand, an author with a PhD in pyschology who spent 5 years research Amway directly, including attending meetings and interviewing folk - well, his opinion on the "cult" matter was dismissed because he's not considered an expert on cults! I don't care if you're the world's foremost expert on flying - if you've never done research into possums then you're not in a position to state whether they can fly or not (some can by the way, or an approximation of it). If you were a flying hobbist that was good at self promotion, then there's no way your opinions would be given weight on wikipedia. With "cults" however, that doesn't appear to apply. --Insider201283 (talk) 19:18, 8 August 2008 (UTC)
Actually, it's possible to provide an expert opinion that Scientology is a cult without attending meetings. In fact, it would be dangerous for a cult expert (or anyone potentially writing anything critical of Scientology) to attend Scientology meetings.... Study does not necessarily require attending meetings. Still, writing an expert opinion requires study of some sort. — Arthur Rubin (talk) 21:44, 8 August 2008 (UTC)
Attending meetings would only be one aspect of studying this type of phenomenon (i'm a former social psychologist and researcher). Neither Rick Ross (confirmed through personal communication) and Steve Hassan (from my reading of his work) have done little more than read internet reports and speak to a handful of folk - an extremely biased (I use the term statistically), self-selected sample. From my own analysis virtually all of this sample comes from one Amway sub-group and it's affiliates, with this group representing at the most 10 percent of Amway North America, and significantly less of Amway worldwide. While trying to discuss this via email with Rick Ross his response was to became abusive and brush me off as brainwashed. And this passes for "expert opinion" on wikipedia? It's not just the A/Q articles either. It appears that these "cult experts" , who are primarily self-published and self-promoting, and other "anti-cult websites", have quite a deal of credibility within the wikipedia editorial community for reasons that appear to be little more than a manifestation of confirmation bias.--Insider201283 (talk) 00:26, 9 August 2008 (UTC)
I disagree that Wikipedia, in general, is opposed to cults. Just look at Quackwatch (unless you wish to claim that they're a cult), with the fourth-party criticisms included. Now, possibly Wikipedia is biased against MLM organizations. — Arthur Rubin (talk) 02:57, 9 August 2008 (UTC)
Quackwatch I find to be much like Wikipedia - a generally good resource that can be way off base on certain topics, due to evident bias. I don't think Wikipedia is monolithic enough to say it's "against" cults (whatever that means - I'm an atheist, so I guess I'm "against" cults), but it's apparent to me that some sources more easily get granted WP:RS status than others. I'm sure that "cults" isn't the only topic this happens in. Similarly with MLM, and the bias exists not only in the wikipedia editorial community, but in the internet as a whole and mainstream media as well. I'm close to concluding that the reason for this is that the majority of enterprises that call themselves MLM are actually illegal pyramids and similar illegal schemes. They try to disguise themselves as MLMs when in fact they are not. While technically non sequitur it's not suprising that the understanding of what an MLM is suffers. On a regular basis I deal with people who make claims about Amway and other MLMs that simply are not true. The claims are however true for the many illegal schemes that falsely claim to be MLMs. There are entire sites (eg mlm-thetruth and pyramidschemealert) that rail against the evils of MLM, when much, perhaps even most, of what they talk about simply doesn't apply to MLM at all - it applies to the scams trying to hide under the legitimacy of MLM. The MLM industries poor job of educating opinion leaders (eg wikipedia/dmoz/wordpress admins on the internet) has simply amplified this problem. --Insider201283 (talk) 11:53, 9 August 2008 (UTC)
  1. ^ "MLM Saturation". Consumer Fraud Reporting. Retrieved 2008-04-21.
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