I recently posted an article showing how to pick about an MLM’s Income Disclosure Statement to see just how badly getting involved with that company will rip you off. It got great feedback from the kind folks at Pink Truth. Pink Truth is a site for prospective, current, and former Mary Kay reps to gather, learn the horrors of MLM businesses, and support each other as they untangle their lives from the trap of MLM participation. I proposed another article on MLM lies – how to spot and deal with them. Many of their subscribers liked the idea, and this article is the result.
Pink Truth People, I dedicate this article to you.
Note: This article originally appeared on one of my other blogs, which I am closing down, but the article content is worth preserving so I moved it.
When dealing with the MLM world the easiest way to know if a rep is lying to you is simple: his lips are moving and sound is coming out. I know that sounds cliche’ but it’s true. There is so much wrong with the MLM world that it is virtually impossible to promote it without lying. Sadly, this applies even to people you know who are kind, intelligent, decent human beings. They are lying because they have been taught to believe untrue things. They are lying because they have been deceived by the MLM cult to which they belong.
MLMs are cults. There will generally be a pinnacle personality who is worshipped with religious, or nearly-religious, fervor. The folks over at PinkTruth know it all too well: Mary Kay Ash is the holy goddess of their MLM. Beneath the god-figure are the holy acolytes, the apostles and saints of the MLM religion. They will be the people who have achieved top ranks in the compensation structure, and the people who get up in front of company rallies and inspire the rank and file with tales of riches.
The god and his/her saints also have their scripture. It includes things like “The Parable of Unlimited Passive Income” and “The Ten Commandments of Duplication” and “The Book of Rank Advancement, Chapter One, Verse One.”
It’s all idolatry and crap. If you fed every cattle herd on earth a steady diet of laxatives washed down with hot pepper sauce you might – just might – produce the same amount of stinky waste that the MLM world creates with nothing but loudmouths and loudspeakers. Going back to cliche’ sayings, though, forewarned is forearmed. I will forewarn you about the biggest lies you might hear from the MLM world, and mentally arm you so well that you’ll be able to nuke the lies into radioactive dust.
Here are some of the most common lies you will hear. Putting aside my snark for a moment, I promise you have heard most or all of these. Try not to get upset when you read them. The friend or family member who brought them to you was not trying to harm you. If you believed any of them you are not to blame; the industry is very slick at telling these lies and brainwashing others to do the same. If you fell for them, if your friend or family member fell for them, you need not feel guilt. You were victims, not evil people.
The Commentary Dentist’s Official List of the Worst MLM Lies
- It’s not a pyramid
- It’s just like where you work now
- You can make big money at this
- It’s not sales
- It’s not a cult
- The product sells itself
- The product is great
- You’ll be a business owner
- If you work hard enough you will reach your goals
- If you’re not making money yet you just need to work the system more.
- You don’t have to recruit
- It’s a party, not a sleazy sales pitch meeting
- Your friends and loved ones will be glad you signed them up
- The FTC would have shut them down if they were breaking the law
Heard some or all of them? Of course you have.
It’s not a pyramid
Seriously? Of course it is. In any MLM they will tell you about duplication, team building, and the compensation at different levels. They almost always show you a chart with little stick men on it showing a nice, deep network. If you are told about all the money you can make by duplication, team building, etc. and the chart looks like this one…
…then it’s a pyramid.
Oh, sure, you’ll hear folks say it’s not, and they will go straight to the lie about the FTC, but let’s be real. Take a look at this next picture and tell me what you see. What is the word for this type of building?
Be honest, it’s a pyramid, right? Well, no. Technically it’s a ziggurat. The point is: WHO CARES? Just because the technical term is ziggurat doesn’t mean that, for all practical purposes, it somehow really is not a pyramid. It’s just a very specific kind. Just because in the eyes of the court a company might be a “legal MLM” doesn’t mean that, for all practical purposes, it’s not a scummy, vile, disgusting pyramid.
If the diagram looks like a pyramid, well, guess what? It’s a pyramid.
Your weapon against this lie: Stare at the diagram with a confused look on your face and say “I get it, but there’s something…oddly triangular about that diagram. I’ve seen that shape someplace before…I can’t quite place it…It’s on the tip of my tongue…” and then whip out a dollar bill, point to the pyramid on the back, slap your forehead in mock surprise, and say “oh! THAT’S where I saw that shape. On a PYRAMID!” The laugh your head off at the person. Bonus points if it is a high ranking rep from the company.
It’s just like where you work now
This lie gets trotted out when people call the MLM rep’s bluff and call the MLM what it is: a pyramid. The lie usually goes like this: “What, you mean a company where a few people at the top make a lot of money and everyone else makes less? Isn’t that just like where you work now?”
Well, er, HELL NO. It’s nothing like where I work now because the “only a few people make big bucks” item is not the important point. The important point is very basic: Where I work now I don’t pay the company for the dubious honor of working like a slave just to take a huge financial loss and alienate my family and friends while the company brainwashes me.
This kind of deception is called, in the science of logic and argumentation, the fallacy of the false parallel. It’s an attempt to distract from the real point by comparing things that do no not match. Another example would be saying, “What, the prison cell has four walls, a floor, and a ceiling? Isn’t that just like where you lie now?” Well, DUH. No. I live as a free citizen, not a prisoner of the state, and glossing over that important difference by comparing cosmetic similarities of the physical building is lying to distract.
Your weapon against this lie: Look innocently at the presenter and say “What, you mean a cult that’s a mind-controlling, brainwash-fest organization where people are expected to turn their brains off and just do what they are told no matter how harmful it is to them? Isn’t that just like the company you’re presenting?”
Seriously, if that does not get the point across you might need a Taser to protect yourself from the MLM rep.
You can make big money at this
Well, yeah. You can also be repeatedly struck by lightning while in an underground bomb shelter and Party Rocking. The odds of you making any money at all in an MLM are effectively zero. The system is actually designed that way, as I demonstrated in my earlier article about the Income Disclosure Sheets. Refer to that as a guide to shredding the Income Disclosure from whatever MLM is being pitched to you.
Your weapon against this lie: Ask for the disclosure and use the same method I gave in that article to demolish it. Follow up with a gently-voiced recommendation that the rep not let the door hit him in the ass on the way out of your house.
In case you missed the reference, by the way, this is Party Rocking (wait to see the dance at 1:25 into the video to get the full effect, pretty funny.)
It’s not sales
Of course it’s sales. If you are involved in a transaction in which you are presenting something which, if the other person wants it, they have to cough up money to get it then you are selling. You’re not chatting. You’re not helping them. You’re not offering them a chance to improve their lives. You’re trying to sell them something.
What’s worse is that people aren’t stupid. They know you’re trying to sell to them. People are generally aware, just from the horror stories about Amway, that MLMs suck. They know you are pushing snake oil; they know you are offering garbage and asking money in return. If you buy into the MLM world you become the hated, sleazy salesman.
The worst part of all is that the MLM company will tell you to sell to your friends and family. They’ll tell you that you’re doing the smart thing, the professional thing, and the wise thing by being in the MLM business – and then they will tell you that by selling to friends and family what you are really doing is (gag) “sharing an opportunity.”
You know those irritating telemarketing calls you get during dinner? You hate them because you know the person on the other end of the phone is selling to you. You know that, at the bottom of it all, they want your money, and they care more about getting it than they do about interrupting your dinner, your family time, or anything else. That is EXACTLY how everyone you know will perceive you if you get into an MLM, because yes, it is sales.
Your weapon against this lie: Every time the recruiter tells you it’s not sales, just bat your eyes as if you are confused and say, “but I don’t understand. If I have something, and I want them to pay for it, how is that not sales?” Keep making them answer it until their heads (figuratively) explode.
It’s not a cult
Yes, it is. We already dealt with this one near the start of the article. You’ll know it when you see it. The worshipped figure on stage, the swooning crowd, the hymn-like chants and cheers. They have books for you to buy, motivational tapes, training materials – the Holy Writ of MLM, now available for the low, low cost of everything in your bank account, your self-respect, and your soul.
So when you look around, and you see the gathered, worshipful masses, the question is, “is it a cult?”
- Like the pitcher says: OH YEAH. Do yourself a favor: Don’t drink the Kool-Aid.
Your weapon against this lie: Keep a 6-pack of Kool-Aid available. Hand a can to the speaker, and then hold the remaining cans up, plainly visible, and ask the other folks present, “Anyone else here want to drink the Kool-Aid? I gave one to (Speaker’s Name) because he already drank the Kool-Aid. Anyone else want some? I’m sure that company would love for you to drink the Kool-Aid.” Just keep hammering the idea of Kool-Aid. The MLM rep will freak out.
It sells itself
No. It doesn’t. The closest thing on earth to a product that sells itself is crystal meth – and even with that somebody has to convince you to try it the first time. If it really sold itself the company would not have sales reps. It would not need them, and would save itself the money and trouble of paying a sales force. This one is so ridiculous it doesn’t take a fancy explanation to get the point across.
Your weapon against this lie: Ask the rep to show you the starter kit – one that he or she paid for. Take it outside, along with the recruiter. Sit it on a table on the sidewalk and put a sign on it that says “MLM starter kit, $500” (or whatever the cost is) and then try to take the recruiter inside, leaving the kit outside. When he asks you what you think you’re doing just tell him “hey, you told me it sells itself. Let’s see how long it takes someone to wander by and give us $500 for it.”
The product is great
No, it’s not. Great products are sold through conventional business models, conventional production and distribution channels, etc. The MLM model is designed to let crappy products get pushed by unwitting salespeople who the company can disown at will without legal risk. Reputable products and companies do not have to operate that way – and they don’t, because the profits are higher when operating a business via conventional means. For-profit enterprises will do just about anything to maximize profit. If the MLM model were really profitable you would see Honda selling cars that way, Microsoft selling its operating system that way, and Apple hosting MLM parties.
Your weapon against this lie: Ask the recruiter to show you an announcement from Honda, PepsiCo, and all the biggest companies you can think of where they say “wow, we finally get it – MLM! That’s how we want to sell cars, soda, Windows, iPads and the like.”
You’ll own your own business
No, you won’t. You’ll be an independent contractor slaving away for someone else’s benefit. They’ll try to tell you that it’s like having a franchise. It’s not. Franchisees have a concrete relationship with a parent company, legal ties to it, shared responsibilities, etc. Most companies won’t sell you a franchise, either, unless you can prove you have the skills, experience, brains, and financial backing to make it work. Setting up a franchisee is a tough process that parent companies won’t enter into if you cannot prove it’s to their benefit.
MLM companies, on the other hand, will give any
entrepreneur, I mean businessperson, I mean – Ok, let’s call it what it is – any SUCKER the chance to fork over their personal fortune. They invest nothing in your of any value. You are an asset to be milked dry and discarded. MLM companies actually recognize that they think of you as sludge. You can tell because the rate at which they gain new reps, and lose them to financial hardship, is called the CHURN RATE. In the mind of the MLM world you’re slime to be spun around till everything of use is skimmed from you, and then drained from the vat to make room for the next sucker.
If a company’s decision to let you represent them is based solely on these two criteria:
- Are you breathing?
- Can I take your money?
Then getting involved with them does not make you a business owner. It makes you someone they tricked into forking over your hard-earned cash.
Your weapon against this lie: Show the recruiter this picture.
If you work hard enough you will reach your goals
That’s a great idea, but ignores two very important things. First, the world doesn’t work that way. If it did all those single moms who work 2 jobs, take care of several kids, and take classes at night would be millionaires. I know the American Dream says that if you work hard enough you will be successful. It’s not true. The average ditch digger works harder in a day than, say, a hedge fund manager works in his whole life. The hedge fund manager will drive his Lamborghini right by the ditch digger and never notice the guy maintaining the road that sportscar is riding on. If he does notice the ditch digger it would probably be only long enough to mentally think of him as a slacker.
Does that piss you off? It should. As George Carlin used to say: They call it the American Dream because you have to be asleep to believe it. By the way, we’re all smart enough to know that anything with George Carlin in it isn’t safe to watch at work, right? Good.
The fact of the matter is that hard work does not determine success all by itself. Does hard work help? Of course it does. Laziness doesn’t pay. That does not mean hard work guarantees anything but fatigue, though. For hard work to pay off you need to be working hard at something that has real potential for success. MLM companies do not offer any realistic hope of that potential. You could work hard at trying to dog-paddle across the Pacific Ocean but I have news for you: that’s not going to lead to anything but an eventual transformation of you from human being to shark food.
Your weapon against this lie also applies to the next one, so we’re going to save it for a moment.
If you’re not making money yet you just need to work the system more.
That’s right, people – in addition to telling you that hard work brings success, and feeding you lines about how “you determine your level of success” (placing the responsibility for success on your shoulders) they also tell you that if you’re failing it’s because you’re not working the system enough, or not working it correctly. They’re also placing the responsibility for failure on you as well.
Now, I am all about personal accountability. That being said, one can only work toward success if the game is NOT rigged – and I assure you, the MLM game is more rigged than anything you will find in a casino. Take a look at the other article, the one that deals with the Income Disclosure Statement for SendOutCards (SOC). You’ll benefit from reading it in its entirety, but if you need to get to the relevant point I’ll share the little graphic that explains how much money, in thousands of dollars per year, SOC reps make according to their Income Disclosure.
Take a good, hard look. About 96 out of 100 people playing this particular game lose. They make NOTHING. You have about the same odds of winning something in my home state’s lottery. And no, I am not making that up. Take a look at their page of odds-of-winning and prizes. You have just over 6 chances in 100 of winning SOMETHING with a NH Megabucks ticket. You have about 4 chances in 100 of not taking a loss at SendOutCards. That’s about 50% better odds when buying a LOTTERY TICKET.
And nothing you can do can change that. These are numbers from large sample sizes of people. They are statistically valid, and they are the actual numbers from the company’s pwn documentation. They have recruited well over 100,000 people before I left, and may have hit 200,000 by now. What does that mean?
It means that, for them to be right when they say hard work brings success, and that if you are not making money you’re not working the system, that 96% of the people who ever signed up are lazy, stupid, pathetic people too slothful to follow directions and too dumb to understand so-called training materials written with grade-school level English. It would be ridiculous to assume they found that many shiftless idiots. The game is rigged against you and that’s all there is to it.
Your weapon against this lie: Ask the recruiter to show you the Income Disclosure Statement for the company. Evaluate it the way I did in that other article. Then point out how well over 90% of the people there fail, and ask how he can possibly believe all those people who didn’t make money were slackers who deserved to fail.
You don’t have to recruit
Yes you do – if you want to make any income from this business model, that is. Remember that whole bit about whether or not it’s a pyramid? If they show you the “business opportunity” with the “duplication chat” showing you the compensation levels then they are showing you that all the income they are talking about comes directly from recruiting, end of story.
Your weapon against this lie: Ask the recruiter for a list of all the top income earners who reached that level without recruiting.
It’s a party, not a sleazy sales pitch meeting
Of course it’s a sleazy sales pitch. They’re asking you to lure people into a viper’s nest with promises of food, beverages, and socialization. You’re organizing the event with the goal of presenting your business. You don’t set up parties that way. You would not want to be invited to something like that, either. Don’t worry, though, the MLM recruiter will see it from the other side soon enough. After he fails out of the business like everyone else, he’ll start getting calls from other MLM participants that dropped out – asking him to join them in their new MLMs! You may have seen this happen if you left an MLM yourself.
Your weapon against this lie: Tell the recruiter that, since anyone you would sign up would benefit him more than you, that HE should fund the party, make all the invitation calls, etc. to make it happen – and that since he tells you it’s so wonderful for friends and family to hear about, tell him he has to call his own contact circle. Tell him that once he demonstrates how this is a party, not a pitch, on his own non-MLM friends and family you’ll be convinced he was right. Then ask him to get out his checkbook and phone, give you the money, and start dialing. He’ll say no more times than Shia Lebeouf in a Transformers movie:
Your friends and loved ones will be glad you signed them up
Only if they have been beaten about the head with the MLM starter kit hard enough to addle their brains. Nobody ends up happy to be signed up with a business they have to pay to participate in, but which loses them all their money and time.
Your weapon against this lie: Ask the recruiter why anyone would be happy to lose so much money.
The FTC would have shut them down already if they were breaking the law
No, they would not. the FTC is a reactive agency, not a proactive one. That means they respond to complaints; they don’t go seeking MLMs to investigate. The FTC does not have MLM-Scam-sniffing K-9 units. If they don’t get a raft of complaints they don’t act against an MLM. Remember, they are not the Superhuman Scam Police. They are a federal agency with limited funding and personnel. The FTC has to allocate its resources to do a job bigger than it can handle.
Most people who have been scammed don’t report it because it’s embarrassing. They don’t report it because they drank the Kool-Aid and blame themselves for the failure to make money in a rigged game. They don’t report it because the way the game is rigged is not easy to detect if you aren’t a financial analyst.
Even when they do report it, remember, the MLM industry has enormous sums of money, armies of lawyers, and a trade organization (the Direct Sellers Association) lobbying the government to protect the MLM world. Not only is the business model stacked against the individual, but the regulatory environment is stacked in favor of the MLM companies.
So, no, even when operating against the law the likelihood of an MLM being shut down by the FTC is small.
Your weapon against this lie: Ask the recruiter to provide you with the FTC’s latest audited statements from the MLM company. If he can’t, or won’t provide them, tell him you don’t do business with companies that have something to hide.
The MLM world is rigged. It’s participants will lie through their teeth to you even if they don’t know they are doing it. The products and services offered by MLM companies are trash or they would be using conventional business models that don’t require the support of a massive, detached sales force that the company can legally distance itself from. It’s never worth your time to get into an MLM.
The 1983 sci-fi movie Wargames summed it up best at the end when the computer, WOPR (“Whopper”) runs thousands of simulations of nuclear war and comes to the correct conclusion. It’s a strange game. The only winning move is not to play. Do something else with your time.