Penn And Teller declare MLM industry is ‘bullshit!’
‘Penn & Teller: Bullshit’ is a weekly American tv show hosted by comedy duo Penn Jilette and Teller.
The show revolves around exposing fraud and popular common public belief. It’s sort of like MythBusters but covers a scope well beyond just that of science.
It’s also much more in your face.
Being a cable tv program Penn and Teller: Bullshit contains much more profanity and nudity then your average television show, fortunately it’s mostly tasteless and the duo use both to great effect in ridiculing whatever the shows particular weekly topic might be.
Not usually a viewer of Pen & Teller, I did tune into this weeks episode after learning it was going to be about ‘easy money’ with a particular focus on MLM business opportunities.
Here’s how it went.
The Cast
Penn and Teller: Bullshit! ‘Easy Money’ focused on three main MLM companies, Pure Romance, ManCave, and Zrii.
Pure Romance
Pure Romance is an MLM company that markets ‘sexy products’ for women. Yes, we’re talking about dildos. Erin is the representative consultant from Pure Romance and claims the company is about ‘helping women discover their true potential’… by using vibrators.
ManCave
Continuing the gender specific theme (not that guys can’t use vibrators, it’s just that Pure Romance market to women only), ManCave is about marketing the stereotypical redneck ‘guy’ image and selling products they might be interested in.
This for the most part means a product inventory of barbeque utensils, various barbecue meats and beer.
Eric is your marketing rep for ManCave. He’s been in the business 5 weeks.
Zrii
Zrii markets juices with an MLM compensation plan and is the makes up the last of the three companies that feature in the episode.
Your marketing rep for Zrii is Rob Wynkoop who’s been with Zrii for 9 months.
The critic
To balance out the three business opportunities showcased, Penn and Teller feature Robert Fitzpatrick from PyramidScheme.org.
Fitzpatrick open by declaring multilevel marketing to be ‘the worst business opportunity out there’. To say Fitzpatrick is a critic of MLM is an understatement.
Recruitment
One of the biggest criticisms of the MLM industry is the association between earning a full time income and the need to recruit. Many believe it’s this common property amongst all MLM companies that, by nature, define them as pyramid schemes.
This particular segment in the show also has footage of your typical sales pitch for the MLM industry, as well as a face to face meeting with a prospect by Zrii rep Rob.
What’s interesting here is the focus on recruitment, rather then the products being sold themselves. As Penn points out, Rob doesn’t even bring a sample of the product to the meeting… it’s all about the recruitment as this is where the real money is in MLM.
The Bottom Line: Unlimited incomes and potential
At the end of the day, this is what it’s all about: profit. In this final segment Penn and Teller explore the profit margins and thus far success generated by the three MLM sales reps featured.
One other important characteristic of the industry is also covered, the balance between an MLM sales rep blaming themselves, the company or the system.
A common used defense of network marketers of their industry is that it’s not the system that fails but rather an individual marketer. Critics on the other hand argue that it’s the industry itself, that it sets you up to fail.
Penn and Teller explore both sides of this argument.
Pyramid schemes
Although Penn and Teller don’t explicitly mention it, twice in the show they seem to refrain themselves from labelling MLM companies as pyramid schemes.
Despite the nature of the show and pyramid references, it seems from a legal perspective the term ‘pyramid scheme’ was a term they had to dance around.
Additionally the success of the show hinged on the participation of Zrii, ManCave and Pure Romance, all of which I doubt would have been involved had there been any direct association or mention of pyramid schemes.
Final Thoughts
Penn and Teller’s expose into the MLM world is quite entertaining to watch. Researching MLM companies and surrounding myself in industry jargon, facts and figures often feels like I’m in another world. I can only imagine then what it feels like for those actively involved in the industry itself.
For that reason alone it’s great to watch a perspective ‘from the outside’ so to speak.
As a final aside, I’ll leave you with the news that the Zrii rep featured in the episode, Rob, apparently left Zrii sometime after filming the episode.
It’s unclear why Rob left the company however business didn’t appear to be going that well in the footage from the show so it’s hardly surprising. Nine months with one signup is hardly anything to show for working 12 hour days.
For his next MLM venture Rob appears to have signed up to new MLM company Ximo who market some weight loss wonder drug Ephedra. Maybe Rob will have more luck this time around…
brilliant Oz.
Having known many MLM’s before, Amway, Avon, etc… they make sense from a consumer standpoint, but doing it as a “job” is just something someone has to decide for themselves if they’re cool with doing it.
If I’m just hangin out eatin the same food I’d want anyway and also making a few bucks doing it, I wouldn’t care if the guys on top make more, it’s kinda the point of a business.
I understand people’s concerns but at the end of the day, all that really matters is numbers. Is the product good? Does it sell? Is it worth it? If so, it’s a win. If not, don’t get involved. Simple as that.
[…] and Teller’s Verdice on MLMs: BS July 12, 2010 by Amthrax Funny yet accurate look at MLMs from comedians Penn and […]
As P & T see it, the problem with the whole MLM industry is that the guys at the top of the pile make most of their profit from the salespersons rather than from the end consumers. Selling motivational tapes and books, hosting conferences and generally showing their downlines how to be successful in “the business”, seems to be how those at the top in (SC)Amway make money.
Fast forward a bit and you can see the clones realising that they don’t even need an end product, just the motivational tapes etc. to make money. Throw in a bit of fundamentalist religion or $cientology and they can whip up enough frenzy to fleece the sheep until they bleed.
The flock can be then cast aside and told they are “at cause” for their own failures. Find a new flock and the story starts again.
Hey Penn & Teller thanks for your input as we are all entitled to an opinion, and thanks for the FREE advertisement as well!
Pure Romance is an awesome & classy company that in which I am truly glad to be a part of! I enjoy helping women and educating them to make households truly a “Happy Home,” if you know what I mean 😉
We discuss how to open lines of communication, how to keep things spicy, provide a safe environment for women to shop for these products, plus much more & that no bulls*#t.
do they sell males mastibation kits as well?
kits? Not sure what you need other then a giant dildo to make up a kit.
Well maybe some lube, but Pure Romance seem to have that covered.
(no pun intended).
if only woman know the burden of testosterone
Get a load of this – fresh from the GiveOpp facebook page
hahahah – give it all dude – IT ALL – John and Delwyn will love you for that and give you the spiritual guidence you seek …
This could not have been more timely as I am debating a mlmer on facebook right now. They all drink the same magical koolaid and there is nothing that can get through their thick skulls.
“Ximo who market some weight loss wonder drug Ephedra”
How ironic because Penn and teller have also attacked weight loss drugs quite vigorously between eat this and obesity.
One only hopes people would realise the futility of joining MLM schemes. They only lose money but the companies make wads of money.
Brilliantly presented. This is the state of affairs in India too. MLM is the bane to the civilised society.
hahaha. The best part is Rob –
“Pyramids don’t have products”
“So where’s the drink?”
“Don’t focus so much on the product right now”
Tool. Well done to Penn and Teller.
So good…mlm is an interesting “beast” it’s really about product quality and need for it ( plus compensation)….
Indeed, they are, just like you are. Personally, I agree with them, but each to their own.
I love how you completely bypass the main point of the argument. No one is disputing the fact you offer products to women etc… the point is, these mlm companies are designed in a way that virtually guarantees the sales person will fail or at best make little profit unless they recruit more people. And THAT is no bulls*#t.
Most binary, quadrant or “pick a shape” MLMs are actively designed to fail. Why ? Because in order to maximise return, there has to be mass attrition and turnover of product and “agents”. Adding into the the mix the 1% rule (90-9-1) of participation inequality still applies to business processes online, especially with selling overpriced repeatable consumables (the widgets that the tapes, webinars and conferences are meant to push) across the web in a network marketing environment.
99% of the agents will end up as cannon fodder / attrition for the 1% at the top who collect the monies for the network. Even if you have a database of 600,000 agents, only 1% of them will gain the maximised revenue out of the system.
OK, I’ve had enough of the BS……..including Penn and Tiller
I have been doing networking since 1993 successfully, as my friend gay likes to say, ‘the proof is in the printout’
We’ve gone from bankrupt in Boston to Beachfront in Kauai, HI…..network marketing works and if Penn and his stoodge were honest, they would realize they are in networking…..more on this later.
The pyramid thing is as old as dirt and not without foundation, that is for sure. Most people do not understand networking, even folks cashing decent checks…..so let’s get down to the nuts and blots
3 parts.
1. THE PRYAMID THING
Most people tell people they don’t have to sell anything;…..and self consuption companies …..where the ADP [monthly order] is consumed/used by the rep….these do feel and look like pyramids….and in essence the are……don’t get your undies in a bunch, this is a real problem and real business owners who are successful recognize real problems and solve them
Your job, my job, Moe, Larry & Curley’s job is to get people in a room [lving room, hotel room, webcast, etc.]….right?
Why?
So someone can tell a story [the pitch] about the product/service and the opportunity.
Why?
So people will pass money up to the ‘front of the room’ [i.e. the company]…..the company then sends back product and at the end of the month sends [on average] about 50% back to the field.
KEY: If no one goes out and retails the product…..then all of the money sent back to the room is less than the money being sent to the company.
Example: 100 people send the company $100 bucks….they get product…and…..have forwarded to the company $10,000…the company then sends back $5000……since it is preformanced based AND there is LESS money being paid the the room than the room paid the company…..people must lose money for other folks to make money. This is why the ‘pyramid’ idea surfaces….
No matter how many people in the room, no matter how many rooms …..the math never changes……there is less money being paid out than being paid in…..thus…the pyramid mentality is correct…..because that is exactly what is plays out as…..
THE DIRTY LITTLE SECRET
The distributors are the customers,,,,,,when this is the case….and it is in most company’s ….. and we stay in denial about it….we feel defensive about the word pryamid instead of doing what successful business people do – recognze problems and solve them
Not sure you agree? Look at your organizations purchases last month. Anyone buying more than the minimum? If everyone is at the minumum then the $$ paid to your group is less thant the group is $$$$ paying to the company
If there is not retail going on …..the distributors are the customers and it is pyramidal in nature
I rest my case on this one
IT IS NOT THE COMPANY’S FAULT
Reps telling other reps they don’t have to sell anything……is the problem…..if there are no retail …..there is always less money coming back to the field…..
It’s our fault, not the company….
SOME COMPANY’S GET IT
Some companies require retail sales to get paid. The cosmetic companies are like that…..meaning, not all the revune to the company is on the backs of disributors…..this is why the Mary Kay’s, Avon etc are so strong….they REQUIRE retail…..more money coming back to the room than reps are pushing up to the room……
Cell deals are like that now too……customers are required to advance.
PENN AND THE STODGE…..AND OTHER IRRESPONSIBLE NITWITS
Ratings…..all these guys want is ratings…..
Here is what these morons never do.
Talk to a pro.
#1 The biggest single tax benefit to the American tax payer is the Home-based business tax advanage….over 150 deductions. [HBBTA = Home Based Business Tax Advange]
On avereage a person will spend 2000-3000 the first year. The HBBTA will pay in CASH to that person, on average 5500….putting the rep in postive cash flow of 2500 minimum …..every year.
FACT – it is not taught in CPA school
FACT – There is not one question on the CPA exam about it
If these 2 clowns really cared they’d have done their home work and found this out…..but they pick newbies so they can look smart.
The real story is CPA’s, over 90% no nothing about this and are costing EVRY CLIENT they have a few thousand bucks a year…..This group of ‘professionals’ …CPA’s usually reject this idea based on the deducting of a room in the house as an office. THis is a CRIME against their clients.
The Fabulous Davene [my bride] and myself take pride in having over 500 people [no exxageration] fire their accounants over the past 10 years.
Take a CPA with 400 client, costing each of them 2000 a year….x20 years…..that is $24,000,000 they have cost their clients by being UNEDUCATED in their field of expertise…..Yo, Penn, you arrogant lout, there is a story.
What does this all mean?
Anyone can join a company and be in postive cash flow.
MORE BS.
Come on guys, what you do is tricks, not magic. And, just like MLM, where is the real value? Entertainment? Over 90% of magic tricks are run off the same optical illusion….so getting people to pay money to see you reformat the same, tired optical illusion is a better profession?
And what about the guys who are better than you but not cashing in?
Self promotion is EXACTLY what networking is…..and EXACTLY what you do….no problem there…..a night of laughs and ‘amazement’ for 120 bucks that is forgotten in a day or two……or 120 bucks a month for a product that may actually help someone and return to them 400 in cash from Uncle Sam?
Gee guys, if we are talking value to the end user, I am recommending a health product for 120 that puts 400 in tax savings [plus $280] in my brother pocket before I recommend his watching you and your side kick perform the exact same optical illusion 10-15 different ways.
IRRESPOBSIBLE
Come to Kauai and interview me.
Are there problems in networking? yes
That is what business is……just like being a Trickster….errr, Magicain…..or Lawyer, butcher, baker or candlestick maker…..there are problems and good Magicians, MLMers etc., find them and solve them…..bad ones don’t
The reporting is irresponsible…..you and all the sound-bite media types operate the same way…
1. what will get ratings up
2. how can we spin this so we look like the good guys/smart guys
3. let’s find a few people who are incompentent or new and make them look stupid
4. Let’s protary ourselves as experts by getting the evidence we want instead of actually doing the f#@*king work
All the same …..lazy, tired, played angles……sort of like your act.
I mean what do you do? Change the audience……just like MLMers
For you guys to come across like eithical moralist with MLM is just another illusion that explains why audiences are shrinking….
Why not go after some decent stuff? The real story?
Oh, I forgot….that would take work, an open mind and actually caring about people …..screw that right? Let’s just create the same illusion every other boring, ingnorant [re:HBBTA], lazy, sensationalist reporter does……
Creating the illusion that you guys actually know something about this industry was a failure……better stick to pulling a rabbit out of a hat…..and be grateful people are still willing to pay for that…..
believe
mark j
The real story? Since most MLMs don’t reach the critical mass inside their lead/agent databases seen in Avon or Mary Kay, and since they generally recruit “agents” who focus on the network return instead of the product (if there really is any product value at all), it’s not rocket science that the MLM will be hit with as much government litigation as possible.
I know of at least 2 states in the US that ban MLMs of various forms – Delaware and South Dakota, and added into that mix that is that other governments, such as Australia, are now levelling $1.1 million dollar fines for organisations and $200k for individuals involved in pyramid schemes.
The cycle isn’t that hard to repeat. Introduce inexperienced, unprofessional people at home as “agents” into a marketing plan that plays on their potential for greed / “fake it till you make it”, and it’s always going to be a recipe for disaster.
One of the guys had been doing it for over 9 months, and who knows what other MLM stuff he had been doing prior to that. How long does it take before you’re no longer a “newbie”?
The reason they had newbies wasn’t to try and look smart, it’s because most people (suckers) in MLM scams don’t last long before they either get sucked in to the next “big thing”, or just give up altogether. They lose thousands of dollars quite quickly and can’t afford to keep doing it, hence why you’ll easily find newbie and not someone who has been in the same MLM company for years.
Hmm where have I heard that before?
Uh, yeah. I don’t think they’d deny that. Doesn’t mean they’re being dishonest in what they’re doing. Although, it’s obvious you’d love to have people believe that is the case.
Anyway, looking at your URL link, it’s also obvious why you strongly oppose this. Ain’t it funny how the people who disagree are basically already brainwashed themselves or are trying to sell the same brainwashing BS to others…
Lance……
Are there bad companies? Yup
Bad Nurses? Yup
Bad Lawyers? Duh?
Obviously, the chicken-little- ‘the sky is falling’ is your home …..
Over 78 millionaires created by 1 company alone since 2003…..they started a business, with a decent company and did the work.
Grow up…….
Are there bad MLM companies? You bet…..
Are there good one? Well, golly Lance……..over 12 that do well in access of a billion and pay out over a half billion in commissions….
I know, I know…..you mind is made up and you don’t want to be confused with the facts……..
As Huxley said…..’the truth doesn’t cease being the truth because one denies it’
Thanks for making our job easy…..closed minded people always do….
The world is flat
Man can’t fly
The auto will never replace the horse and buggy
Your post is so far of the reality that happens it’s halarius….were you trying to be funny?
believe
mark j
world’s laziest networker
@Mark – yeah right – bullshit
keep giving Lavenia your money Mark
Unfortunately these 78 “millionaires” have had to screw at least 10 times as many people to get to that status. This is the whole problem with MLM. Sure, some people will make a fortune, but the vast majority will waste a whole lot of time, money and effort. This is the essence of the pyramid.
Mark, I do believe you’re the one ignoring the facts. I gave the recipe on how to prey on people’s greed, ignorance and profit from it. Having a complex binary or some other random network shape also helps confuse those signing up. And since liability generally lies with the downline agents and not the owners of these MLMs, it’s normative human behaviour that people will end up being done over for more money than they can afford.
In no way did you address this key point. Instead you did what I expected for a networker. You pitched that 78 people got stinking rich off other people’s hard work. Remember, the downline agents are just the peons, the ones in chattal labour increasing the commissions/profits of those at the head of these trees.
If there are 12 MLM companies that do good, than means they are the 0.000001% of the market that do good. Not a good record for MLM, especially with governments around the world litigating most of them out of existence. It means most, if not all, MLMs involve some form of evil, preying on people’s lust for money/greed.
@Mark
How is it not the company’s fault if their entire business compensation plan is set up with maximum financial benefit to those that recruit and ignore the retail side of the business?
If I start up a company with your standard hybrid ‘we’re different to all the other MLM companies but not really’ compensation plan that pays pittance for retail (unless you’re “retailing” to your downline) and pays big on recruitment, of course it’s the companies fault that a high percentage of distributors/members/marketers or whatever you want to call them focus on recruiting; inevitably causing the company to implode on itself.
Can an individual MLM associate’s downline be classified as a home based business though? You can’t sell the business, trade it or make any changes… basically you’ve got no say in how the business is run beyond marketing. You don’t even draw a salary from your ‘business’, instead you draw a commission from a parent company.
Seems a bit rich trying to lump MLM associate’s individual downlines into the home based business category.
Is this carte blanche without any requirements whatsoever? Seems strange they’d have a blanket payout. Also where are these averages coming from?
And how many thousands or even tens of thousands propped them up? It’s easy to make it sound like anyone can be an instant millionaire ‘if they just do the work and follow the system’ but the reality is far from it.
Otherwise there’d be a hell of a lot more then 78 millionares in 7 years, but the fact is it’s just not economically feasible due to the requirement of the size of a downline you need to reach millionaire status. It’s not like they became millionaires on retail now is it.
righT on Oz
Just look at what Liberty League did – just changed the Whole deal to another system – ie. Polaris – with absolutely no regaurd for the poeple involved AND the bastards charged $us300 to poeple to attend and listen to their BULLSHIT\
the rest of absolutely the same – eg. GiveLavineaOpp – no info – just same old “excitment” rubbish
BS, BS, BS – ENDLESS BS
I love Penn and Teller. Great video. The problem with MLM is that the pitch is the MLM and not the product. If the product were good the pitch would be much easier.
You know the biggest complaint with MLM’s is that only the people at the top make all the money. WELL DUH!!!
Most people who work a 9-5 job at a “regular” company are set up the same way.
Let’s say you work for UPS as a box loader making $10 an hour. Who are you making the money for? Stock holders and all the people above you. The likely hood of you having your bosses job one day aren’t in your favor. The likely hood of becoming an officer or CEO of UPS is almost impossible. So is this a pyramid scheme?
Let’s face it, most people aren’t cut out to be business owners. Most only have the abillity of being a worker bee. MLM’s are about making money, just like any for profit business. What the difference between putting up big time bucks for a fast food franchise and that failing or a few hundred bucks for for a MLM and failing?
You can’t always blame the company for the “reps” failure.
Many time the rep just doesn’t follow the program and gets frustrated and gives up. Many take failure as a negative and just quit trying. One thing in common of most people wealthy – They have failed numerous times and kept trying until they succeeded.
Many MLM’s and supposed legit companies are run under the same princepal. GREED! If you can stand the heat… Be a worker bee, there’s nothing wromg with that.
No it’s not setup the same way, and been said a thousand times: A “regular” company is setup to sell products. These MLM companies are setup in such a way that the best method of making money is to sell the “business opportunity” to others (who then sell it others, and so on).
Well that’s a shame isn’t it, considering MLM businesses work best for you when recruiting an owner, who then recruits another owner, and so on…
And hey, who said everyone WANTS to be a business owner anyway? Some people are more than happy with their current jobs.
@Dan
When you join UPS unless you’re going for a management position you should at the very least be in with a shot at the job you’re interviewing for (assuming you’re qualified). That’s a big difference right there, that the CEO position or management isn’t dangled infront of you as somehow obtainable when you interview for UPS as a janitor.
And many simply join opportunities that by nature are unsustainable and destined to collapse. As a result many of these people then get frustrated and give up or quit trying.
There is no such thing as an ‘infinitely duplicatable 100% guaranteed proven model of success that if you just follow the system you will be making bucketloads of money’. You need leads for any marketing system to work and regardless of claims of unlimited income every market has a fixed consumer capacity.
Equating working in MLM to being a queen bee is somewhat laughable. Exactly how much control over the product(s), compensation plan, the way you are paid and the manner you market the company (or business opportunity) do you have in your average MLM company?
@Dan M.
MLM is probably the concept that has the fewest real queen bees, and very large proportion of workers who only follow the recipe? I have seldom met more obedient people than I meet in MLM. They rarely ask critical questions about the concept or the decisions taken by leaders at the top.
MLM attracts many people who believe they are leaders if they have someone under them in the system. A true leader is rarely dependent on the position in a system, nor of any of these titles used in MLM (like “Triple Diamond President” and similar titles). MLM has excessive use of titles and rank schemes that just seems ridiculous to us.
Join a group of lions instead of a beehive, if you want the role as a leader. In a herd of lions, each single lion have to take responsibility during the hunt. They position themselves in relation to the rest of the herd during the hunt, while the closure of prey can be performed by any lion that is in a good position. Each of them leads themselves during the hunt.
Common jobs offer far more roles that are appropriate for a lion. Lions are not attracted to the roles offered in a beehive. We also does not understand why all the bees swarms around this one queen bee (as they do in MLM). Leadership is really about being able to lead yourself, not about having someone beneath you in a system?
(auto translated)
Hi I got interested in MLM scams recently after a Swedish MLM company called Oriflame selling cosmetics had their activities in Iran stopped and their top people in Iran thrown in jail.
Pyramid schemes are illegal in Iran so I don’t know what they were thinking establishing themselves there, apparently it was one of their most “successful” markets, having sucked in over 40 000 women “selling” their products.
In Sweden it was only reported as “Iranian islamist regime arrests Swedish businessmen of cosmetics company because they hate the fact that women can freely buy and wear cosmetics” which is just wrong if you’ve ever been to Iran it’s an extremely appearance based society, and cosmetics stores are not illegal or discouraged.
A lot of “economics commentators” (talking heads on TV) claimed that because of this all these women now would be without an income and that the islamist regime in Iran wanted to break their hopes of becoming independent and make their own money. Of course almost no one of these women made money, no one ever mentioned that.
Just because it happened to be a type of government that we despise for their repression of their population doesn’t mean they can’t be right once in a while, I can just hope that these guys at the top have to rot in a long time in an Iranian prison for tricking naïve people in poorer countries into joining a pyramid scheme.
I saw the bullshit episode now after I had googled about MLM to learn more. I feel so sorry for the guy who was into the Zrii scheme. He was so pathetic and brainwashed. I seriously think all countries should outlaw this type of business model.
Just because a pyramid scheme has a token product doesn’t mean it’s not a pyramid scheme. Some people react by blaming the victims here, I don’t think victims of economic frauds are those who should feel bad about this. I see a lot of similarities between this and cult behaviour and faith healing, where those who didn’t get healed are blamed because they didn’t have enough faith. Just in this case they say those who aren’t making money are just doing it wrong or aren’t working hard enough, or even “they don’t want it badly enough”.
I say throw the people on top of these schemes in jail and have them pay fines to their victims, it’s nothing but a fraud praying on desperate unemployed people without critical thinking.
1.Don’t sell a product you don’t believe in.
2. Don’t quit your day job when/if you start “your own business” in the MLM. Unless of course you know a thing or two about problem solving, and are resilient when dealing with spurts of “slow business” (like MOST business owners, MLM or no MLM) and established a steady MLM income….then sure….go ahead and ween off the 9-5.
3. Get over yourself if you think “Get Rich Quick” scams exist. That goes for those who believe they exist and work, and those who believe they exist and don’t work. They don’t exist. Believe it or not….if you want to make money doing ANYTHING….you have to actually get off of what you’re sitting in and WORK. Especially if you are “your own boss.”
Most mlms you lose money. Some mlms you can come out ahead if you keep your expenses real low but you are basically working for under minimum wage. It is sad because so many people have broken hopes and dreams.
I did Mary Kay and you had to pay your own samples, shipping, catalogs.
Good look into MLM. Rob FitzPatrick really understands it. It’s unfortunate that many fall for these scams and most are actually good people trying to support themselves.
“Get rich quick” scams are all part of MLM – all come in the same format: huge set up fees, not really marketing a product but marketing “business opportunity” – aka recruitment and if you fail, it’s not the business’ fault.. it’s your fault.
It’s unfortunate that this isn’t studied closely in academic institutions nor is there a clear law that is preventing these. This is actually costing many naive people more money and companies such as Amway pay politicians in a corrupt way to prevent their scheme from getting out there.
It’s up to getting people educated. It’s similar to the Nigeria 419 scams that people fall for every single day. There will always be victims.
But there is a lot of psychology involved, emphasizing the ‘money you will make’, and unfortunately, many good people will continue to fall for it.
Educate yourselves!
Oh Please
MLM is a pyramid scam no matter what flavour it is
Thats is …period
MLM’s generally operate to some extent the same way a Ponzi scheme does: If those below you are not continually recruiting new, willing contributors the flow of money to the top levels will cease.
One difference, of course, is that Ponzi operators (like Bernie Madoff, for instance) have no product to sell. The again, neither do most MLM participants because, let’s face it, the idea that they could actually sell most of that stuff for the inflated retail prices they charge is ludicrous. The only real consumer group for the MLM products is comprised of the dealers/distributors.
The must transparent of the near-pyramid MLMs are the ones that sell single products or narrow product selections (“magic” juice, dildoes, oil additives, what have you). There’s little if any pretense that there’s an actual market full of repeat customers. So, the slack between loss and profit is taken up by the upline filtration of money from those below you who are also selling solely to themselves.
The real lure of the business is a supposed self-perpetuating downline – together with the promise of “celebrity” status as you get to start marketing your own motivational materials, giving presentations at rallies, etc.
If many of these distributors took a hard look at the money, hours, effort and risks involved they’d probably find that channeling themselves into getting a degree as an engineer, accountant, lawyer or whatever – or even entering a trade such as being an electrician or a plumber – would in the long run provide them all the money they think they’re going to earn in MLM. And, needless to say, little of the risk or need to lie to others to make a living.
Just as a nitpick… Penn & Teller are actually a MAGIC duo. They have a permanent stage at Rio Hotel, Las Vegas. They’re probably most famous for the Teller catch bullet in his mouth fired by Penn through pane of glass trick.
They have a lot of humor in their magic acts, but they’re not actually a comic duo, per se. 🙂
It’s funny to see all the people defending MLM’s. I’ll guarantee you every single one of them have been scammed or are being scammed by an MLM.
Most people are incapable of admitting they made a mistake. Almost every single person that is scammed by the 419 scammers refuses to believe it. There was a priest that was arrested last year for stealing from his church and sending the money to a 419 scammer actually asked the judge if he would lower the sentence when the money came in.
Oh yes… It’s a given. Their heart is in the right place, but they do it because… they WANT to believe. Here’s a section from an article I wrote:
Three Factors That Make Scams Appealing
Why do people fall for these scams? Again, human brain seeks connections between events, in order to improve the chance of survival, and often, the connections made between events are faulty, and there are three primary reasons.
http://hubpages.com/hub/TVI-Express-Scam-Tactic-Analysis-How-and-Why-Do-People-Fall-for-a-Scam
I don’t completely agree with that. They annoy their family and friends to point where they no longer want anything to do with them, and even after they realise what a bad business decision it is and how it’d be virtually impossible to make any real money out of the scam, they still try and “recruit” others. Doesn’t sound like their heart is in the right place to me. Sounds more like greed.
Ah, but you’re not seeing it from THEIR point of view. They literally view everything through their mindset. Their “friends” and family? Ignorant fools who don’t understand this new way of doing business. Did not make any money? Must be doing it wrong. Their upline said so. We, as outsiders, see everything clearly, just like the Chinese proverb: those inside are confused; those outside are clear.
If you want to get philosophical, it’s Ontological — their entire reality is dependent on the paradigm itself. It’s fundamental.
EX: Darwin viewed the “varieties” of species, the variants, are the key to evolution and natural selection. For Buffon and Lyell, who do not believe in evolution, the varieties are degenerate forms of the core population.
I see your point too. But let’s not forget, we’re talking about adults here, not kids. When you’re a kid you can get away with just about anything, but these days, even as adults, people are looking to blame someone else for their errors in judgment. They don’t take personal responsibility anymore.
I can somewhat understand getting sucked in to the hype the first time… most of us have probably have let our guard down once, but quickly learn from our mistake and move on. But many of them go back for more, jumping from one scam to the next.
Getting sucked in once, can probably give them the benefit of the doubt … getting sucked in again and again, zero sympathy from me, ala Rob Wynkoop (Google him and you’ll see what I mean).
What does the Inishals MLM stand for?
Hi Scott, MLM is an acronym for multilevel marketing.
This is Rob Wynkoop – I was part of the taping of the show. Penn and Teller are Satirists… I knew they’d be poking fun at me.
I was new to the industry then, but haven’t given up. Though it seems I’m some poor sap with no future, I actually graduated from Vanderbilt and have a great job. I enjoy doing MLM on the side. I’ve always been a salesman – and that’s what this industry is about.
I sell products that people have a need/want for. A few of those people also know how to sell products. Those who need a great product become customers and those who want a great product to sell for a nice commission become distributors. That’s MLM in a nutshell. Twisting it any other way is uninformed.
Hi Rob. Judging by the your link there, it appears you still haven’t learnt. People like you are the reason these scams work.
Of course, they’re not scams at all, are they? We’re all just jealous we don’t have the success you do :p
@Prelaunch MLM
Some interesting comments there Rob.
Why is it that you stated on Penn and Teller then that you
It’s right there in the video! How the hell do you hold down a fulltime job whilst devoting ten to twelve hours of your time to MLM daily?!
And again I quote from the videos featured in this article where you were trying to prospect someone;
That and as Penn pointed out, you didn’t even bring any of the product to the lunch!
There’s some rather large contradictions in the video footage of yourself and the comment you’ve left. But then I suppose I’m just another uninformed person.
http://www.youtube.com/watch?v=Q35jB0bDhcw
Here’s some FUNNY STANDUP about MLM by Gerry Katzman
Heh, thanks for sharing that Gerry and good luck with the standup.
I’m not commenting to further my business, which is why I’ve left off our website. If you want to know the biz, I’m sure you can find it online by searching my name. But I’m not here to advertise.
However, being in the adult home party industry, I can honestly say, our Consultants (yes, we do call them Consultants because they “consult” about products the general public probably wouldn’t know about) make good money.
The way they do it? SALES!
Not so sure I’d put an average party at $600, I think that’s a bit of a stretch…I’d say more around $300 is average. Our company pays out 40%-50% commission. So even at a $300 party, that is still $120, basically $40 an hour since the parties can last up to 3 hours.
The only expense is the gas to get to the party and the small gift basket each Consultant wants to give their Hostess…a personal touch. 🙂 The company pays for all of the other incentives.
With our company, recruiting is NOT mandatory. It does put extra $ in your pocket, but it’s not necessary. We also have no fees. Many companies WILL let you go if you’re not pumping in enough sales. With our company, as long as I know you’re still in it to win it, participating in group discussions, online meetings, placing at least a monthly order and/or recruiting….you’re good.
Kit purchase, if you’re going to a person’s home, to show product, to sell the product, you MUST HAVE PRODUCT…which is why a KIT must be purchased. Duh. 🙂 We offer our kits discounted by 60%. If the person wants to add on, those items also will be discounted by 60%.
We clearly want a “Sales Person” or “Romance Consultant” as I prefer to call them. It’s prettier and we DO “consult”. Feel free to look the word up in the dictionary. I just did, to make sure I don’t look like an ASS! LOL 🙂
Anyways, our Consultants, I want them to succeed doing PARTIES, which is SALES. Recruiting is just an added bonus, but definitely not mandatory. It’s very hard to recruit, especially when there are so many HUGE companies out there offering the world to unsuspecting ladies and gentlemen.
Like I always tell those inquiring about my company…PLEASE be sure you know what you have to do to make the world turn. Is it something you can do? Is it something you want to do? If you’re not in it for a full-time job (meaning multiple parties weekly), then don’t expect their world to turn for you.
I am up front and honest with everyone seeking information. I do not bash other companies. I do not have our Consultants join other companies just to ‘steal’ their materials, etc. Pffft….maybe that’s why they’re large and I’m not yet! lol
Not worrying though, we’ve been in business now for almost 8 years and we’re climbing high up on that ladder, one day at a time. And doing it the honest way.
All I can say is the highest form of flattery is knowing another company (large ones) is threatened by you enough to have their Reps. go out and join your company, just to quit a week or 2 later, and take back everything you’ve given them, in trust they are there for you.
When it’s all said and done, I’d rather have a handful of ladies and men that love the company and the product they sell, rather than thousands that are nothing more than a number. That’s why I call our business a “family”.
P.S.)I’m not a PR Consultant, never was, never will be. But I am an owner of an adult novelty/home party company, and some things these men dissed, we all do, because it’s a “sales” position. But some things we all don’t do, and that’s make unnecessary things mandatory….or YOU’RE FIRED!
P.S.S.)Love the crude humor. 🙂 Right up my alley.
Hi Jeanne, you sound like a breath of fresh air in the MLM industry and if all that you’ve said is true then I wish you the best of luck in your endeavours.
Glad to see someone acknowledge the sales aspect of MLM to. All too often you hear ‘no sales’ or ‘no selling required’ which clearly a load of crap, or a hint that the company in question is more about recruiting than sales.
Oh trust me, since I’ve been in the business, the things I hear, it amazes me and also saddens me because I see ALL the people (women mostly in my industry) join these different companies because they have been blinded by the ‘glitz’. Not once thinking about if it’s something they can achieve. Probably because they think it’s going to be easy money…but it takes a lot of hard work, like any job.
A lot of Consultants we get come from other companies. They’ve been out of the ‘scene’ for awhile and decided to get back in, they shop around, come to me, I welcome them like I’d welcome anyone else. But the first thing I ask is, “do you have others that are going to support you when you start?”.
I don’t want anyone coming into my company, spending the money for a kit, and then nobody helps them get started. That just irks me because I’ve been there.
A sales position is definitely what one makes it. If they sit on their butts and do nothing, they will make nothing. But parties, like any sales position, is hard work and takes dedication.
I’ve had some ladies come and go, without even trying…guess they thought the parties would come sit in their lap.
Nope.
That’s why I’ve since changed the wording on our site to show that we need GO-GETTERS. 🙂
And yes, my company is just what I said before. I care about each one of our Consultants and I just like to know they still hold the company in their hearts and are still trying. Participation on any level is what I want from our Consultants. I do so much for them to try and give them what they want, so we make a pretty good team. 🙂
I am changing some rules around though because I am getting tired of those that I never hear from etc. Heck, I don’t even know if they’re still alive! So that is one change I’m making…if they can’t at least just attend our monthly ‘meeting’, place a monthly order, chat in our Yahoo Group with us, or recruit…then I am letting them know their time is about up.
I do give them a chance to redeem themselves, which I know most others do not…but I don’t care to be like that. And the reason I have to make this change is because if I’m unable to reach them, and a party lead comes up for their area…they’re no longer reliable.
Anyhoooo, thank you for your kind words, it’s much appreciated. 🙂
P.S.)To hear “no selling required” definitely doesn’t fit in with the home parties selling product. If you aren’t selling, then what the heck are you doing?! Weird.
So I’m thinking that may pertain more to the “pyramid scheme”? And recruiting is always welcome, the more the merrier, but I don’t make our Consultants do that.
1. It’s hard.
2. Many come to my company just to make some ‘extra’ money. I respect all of that, and that’s why I do not make it mandatory.
Generally speaking, you’re just shifting money around. Taking it in from new recruits in some way or another and rewarding existing members with it.
There’s a whole plethora of ways in which this can be done and some are quite complex in masking the money trail. All manner of complex compensation plans have been cooked up full of complex equations and language designed to confuse people.
Part of the reason I set up BehindMLM really. Although a lot of MLM company’s compensation plans and inner working make me want to bash my head against the wall, I’ll sit there and go over them trying to deconstruct them and present the meat of the plan in hopefully an easy to read and understand manner.
Unfortunately what results isn’t at all inspiring or reassuring but it’s good to know there are those in the industry who appear to be working in the right direction.
All the more power to you.
I’ve been with Pure Romance for over 2 years. For me, this business works because I DON’T have to recruit.
And although I don’t quite agree with the message Penn & Teller are sending, I do find it entertaining. And that’s all it should be taken as – entertainment.
As entertaining as Penn and Teller are (and some of their Bullsh!t episodes are bullsh!t themselves, especially the ones involving anything science) I have also noticed that the companies like Pure Romance, Passion Parties, and Slumber Parties don’t focus on recruitment but on product sales.
Every party I’ve gone to has involved 98% of the products and 2% talk of recruitment, and the latter only if a woman asks about it. You have to spend money on the kits, yes- how else are you going to show what you are selling? Beyond that you don’t have to invest in the company to move up and you don’t have to recruit if you don’t want to.
Do you get a higher buying discount and more pay if you do? Yes, but you can still make good money without it. Recruitment is not the only means to success, or even a major means, in companies like Pure Romance.
Besides, what’s wrong with a woman having a sex toy? 😉 Women can do what they want with their own bodies.
MLM is to pyramid schemes as intelligent design is to creationsim.
Damn, I’m glad to have gotten out of the mlm business.
Although it was a very expensive experience, it did give me an entrepreneurial spirit.
Now I make websites promoting physical items for Amazon. No recruiting, no expensive juices, no phony sales pitch at the coffee shop (ugh).
Some fool at work and his common law wife bought Eight Thousand Dollars worth of rubber d!%ks and are constantly pushing these “dildoe parties” claiming they are “the latest thing, all the girls are doing them these days.”
He keeps bothering all the dudes to give these catalogs to their girlfriends. One guys girl laughed and threw it out. Another said “who the heck would buy a rubber d!%k from someone they knew. Every day you’d look at this person and they’d know what your doing!”
This must be what it is, when I hear about it I immediately knew it was a scam and told him it’s a pyramid scheme. “Oh, No” he replied, it’s a great business opportunity for her.
He drives this beat up old early 90s Chrysler that is falling apart. I bet he could have got a heck of a nice car with that $8000.
I sell Pure Romance and love the products, but am no loving from when and what I’ve signed up for. I’ve been debating on not whether to stay and I’m torn, but my mind has made my decision for me. Alot of people are right about it, good and bad, when it comes down to it, I don’t think it’s really made for most people at all. Save you money!
I’m in MLM myself and have been for 3 years now. I would have to say that everything in the videos is soooo true.
However, they did not mention the endless CD’s you are coached to buy and listen too and the conference tickets you are coached to buy so that you can go and listen to all the successful people tell you about how great their lives are and how your life can be great too if you just “work hard and build your business.”
I will admit, you get tired of hearing it. But then you ask yourself, why are they successful and making 6 and in some cases 7 figure incomes and I’m not? What makes them so special and why can’t I do it too?
I’m currently a teacher. I would have to work and save my entire salary for a year to make the same income that I saw someone make in 1 month. That’s what keeps you in. It’s hope and the chance at great rewards.
The truth is, MLM do offer great rewards, but like someone said in the video, you have to move products and the best way to do that is to recruit others because you are encouraged to buy from your own business.
I’m not against MLM’s at all. I think they’ve provided many good things to many people, however; I would advise anyone who joins and MLM company to do lots of research in the company and in the team you are joining.
Mark J, I just wasted 5 minutes of my life reading your garbage. It’s hilarious how your trying to make MLM sound like a legit business.
Anyone with a half a brain knows its nothing more than a bullshit glorified pyramid scheme . Please go back to selling used cars full time and get lost….
A friend of mine worked for one MLM and that just got bought out by Pure Romance. Now she’s pitching people on her fb page to join this – it sounds cult-like to be honest. She just recruited one of her “friends” into it. So now her friend will be fleeced just like she is.
Oh and my friend is on food stamps. She had to buy the new Pure Romance kit recently because of the buy out and that was about $350 & honestly she is always broke. The average she seems to make at these “parties” is about $100 then you minus gas prices and it really seems like it’s not profitable in the least.
The average consultant sells for / buys for $1,000 per year in Pure Romance. $100 million in sales / 100,000 distributors = $1,000 per distributor.
That information was picked up from a random news story, about the sale of “Slumber Parties” to Pure Romance in January 2014.
Pure Romance is not really an income opportunity, the average sale per distributor is way too low.