Department of Duh: Multi-Level Marketing Is A Scam

Ramit has a neat post on how Network Marketing and Multi-Level Marketing (MLM) are nothing more than a pyramid scheme in a cheap suit.

Having more than one firing neuron, you know this already, but it’s interesting to hear it from his perspective. See, he’s Indian and he keeps getting hit up by other Indians at the supermarket who want try to leverage their common cultural heritage into, “an exciting business opportunity.” — BEN POPKEN

I Hate Indian Network Marketers So Much [I Will Teach You To Be Rich]

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  1. Anonymously says:

    I ran across a guy selling http://www.ltdteam.com/ to me. I couldn’t find out much about it, but he mentioned buying books and tapes, so it sounded like a MLM situation to me. Does anyone know anything about that company?

    • Hadouken says:

      @Greg []: A friend of mine tried that company on me as well. At the time, I had never heard of MLM, so I went to a meeting, and even without knowing anything about this or similar scams, alarm bells were ringing every step of the way.

      They deal with Amway and QuickStar stuff, which should be more familiar.

      LTD is definitely one of these.

  2. Demingite says:

    Amway (and Quixtar, which is part of Amway) is a combination scam/cult.

    The people at the very top become extremely wealthy, e.g., Dick DeVos, who just tried to buy the governorship of Michigan (he lost, thank God).

    The great majority of people in Amway/Quixtar loss money and time, and, often, friends.

    That stuff is sinister.

  3. Nick says:

    Excellent article. Plus 10 points for use of DuckTales reference.

  4. Chairman-Meow says:

    You mean MLM is a scam ? Really ?

    Well then I think I will unload all my investments in Advantage Marketing Systems, Akani.com, Amway Asia Pacific. Ltd., Amway Japan, Ltd., Avon Products, BeautiControl Cosmetics, Changes International, Dynamic Essentials (Nature’s Bounty), Herbalife,HMI Industries (formerly Healthmore), Kaire International (Natural Health Trends Corp.), Mannatech, Market America, Nature’s Sunshine Products, NSA International, Nu Skin Enterprises, Inc., Nutrition For Life Intternational, Inc., Reliv International, Rexall Showcase International, Royal Bodycare (Globenet International), Usana, Inc.

    I will then re-invest all of it into helping that Nigerian Oil minister who needs my help getting his fortune back. That way, with his help and generosity, I can recoup all my losses annd earn my way back to riches from the comfort of my own home!

    I wait…I already lost my home….and car….and life savings….but I do have this swell cardboard box!

  5. AcilletaM says:

    FTE, don’t forget Mary Kay.

  6. Chairman-Meow says:

    Feh, I only deal in Publicly traded MLM scams. :-)

  7. Triteon says:

    Oh man, I went to a Quixtar seminar/indoctrination once. There were about 40 people in the room; about a half-dozen of us were “prospects”, the rest were current “salesmen” plus two speakers– one was the equivalent of the Majority Whip, the other was the local “regional” “manager” (top of the southern Illinois pyramid.)
    I listened to the schpeel, answered the King’s questions, didn’t drink the juice they (figuratively and literally) offered and left.
    I’ll tell you, that guy was one hell of a salesman though– had an answer for every answer I gave him. (i.e. What kind of car do you drive? [Volvo] But how would you like to drive a Porsche!)
    Man, I could be driving a Porsche by selling toothpaste over the internet, all with no money down. BTW, the guy who “recruited” me to the meeting approached me at (gulp) Best Buy.

  8. Echodork says:

    God, my mom is such a sucker for these things. A few years ago, she got sucked into Mary Kay. Two months after spending almost a thousand dollars on products, her attention got directed elsewhere and she ended up with a closet full of valueless makeup. Her latest “exciting opportunity” came with Advantage Marketing Systems, who helped her set up an “e-commerce marketplace” where consumers could pay 250% of retail for off-brand cleaning supplies. She abandoned that scheme I showed her that she was selling Wal-Mart lipstick for $16 a tube.

    Sigh.

    I wonder what the next one will be?

  9. The Unicorn says:

    Ugh, when I was looking for a job fresh out of college, I went to an “interview” at a “direct marketing company” that was COMPLETELY a scam. I ended up driving around the suburbs with this totally-convinced-he-had-made-it guy who had also just recently graduated, trying to sell office supplies door-to-door to businesses. Can you imagine? And amidst all his bullshit posturing about how he was going to become a “manager” in six months & open his own company, and ohmigod he was making so much money — he made only a piddling amount of sales while we were out AND sheepishly disappeared into the bathroom when the time came for me to pay for my lunch.

    …Lunch was at Wendy’s (I had suggested a place that would’ve been slightly more expensive, & he demurred), & my meal could not have cost more than $6.00.

    Obviously, I figured out pretty early on that this whole thing was a Colossal Bad Idea, but I seriously felt like I had been kidnapped by a cult for a day. And it made me so sad/frustrated to see all these young kids too naive, or too blinded by their own desire to quickly become successful, to see the company for what it really was.

  10. Chairman-Meow says:

    Ok one must ask…..

    “What in the hell were you doing at Best Buy

  11. Triteon says:

    Sheepishly “redeeming” a BB “gift card” from my parents. They meant well.

  12. MeOhMy says:

    I feel like I have a sign on my head. People seem to find me approachable in general, but the MLM shills really love me. Usually I can spot them a mile away.

    But this one dude…I was in an Old Navy with my wife and there was an Indian couple. My wife wears a nose stud (we’re both white). The woman stops to ask my wife about it – it’s a cultural phenomenon where she comes from, does my wife wear it for the same reason? She was either genuinely curious, and brilliant at thinking of reasons to chat people up.

    In any case, we’re chatting, the husband asks about work and I tell him a bit about my info security background, and he says “Hey I have my own business and it involves some e-commerce. I could probably use your skills. Would you be interested in doing some work for me?” I’m thinking he wants a vuln assessment or something similar, so I give him my number. A few minutes after I walked away, it finally occurred to me that he might be just another MLM shill…

    A week later he calls and asks me if I want to meet at his house, which is like an hour away. “Before we waste all that time,” I start and ask him about the work he wants me to do for him. He gives me some vague answer about motivated people, etc. “Let’s try again. What kind of need do you have for an Info Sec professional?” Same vague answers. “What the heck is your business, anyway?” He says ‘Have you ever heard of Amazon.com? It’s a lot like that.” Yeah, right. I called him out…he tried to play dumb (‘Oh, I don’t know what multi-level marketing means! This is for real!’) but he tipped his hand – when I directed him to never call me again, he played the classic “You don’t like making money???”

    I guess not. Don’t tell my boss that.

  13. The_Truth says:

    – The Unicorn

    Same thing happened to me. I moved to a new city and was looking around for a job. I got suckered along on the exact same thing, dragged from store to store to sell coupons.

    the guy was going on and on about all the cash he was making, how he was goign to be a top level manager in only a few months and how his input was invaluable to the company etc.

    As we walked around I was encouraged to ask questions, so I did, such as “How do I get involved in creating these marketing campaigns” (My background is marketing) – no real response other than, your marketing is selling these coupons to people!!!

    Some of the salesguys had blisters from all the walking, they were driving their own cars to different strip malls, which when I asked about gas refunds they said ‘Just take it out of your taxes’?

    At the end of it they didnt think I was too serious about the job (Something to do with me watching from the side as they all stood in a circle and did some teambuilding chants).

    Its sad to see these people suckered in and truly believing they can rise to the top…

  14. TedSez says:

    It’s too bad the writer has to give up what seems like a very nice cultural tradition. But the rule is that any time a stranger approaches you outside a store, for any apparent reason, he or she wants your money. Sad, but always true.

  15. Tonguetied says:

    “Nature’s Sunshine Products”

    I always wondered about that name. What other kind of sunshine is there?

  16. HaroldSlovack says:

    Very insightful writing with something every “younger” person should read BEFORE they are approached by that stranger complimenting them on their “great people skills…ideal for thisgreat business”. Wish I had read this 30 years ago before falling for the Amway “Dream Circles”. GREAT artwork, too, with the snake immerging from pyramid. A picture says a thousand words!

  17. ‘I’m going to sit at the Welcome Ta-ble, I’m going to sit at the Welcome Table one of these days… Hallelujah!’.

  18. The Unicorn says:

    @Truth–

    My guy said the SAME THING about gas/cellphone reimbursements (to even attemt to get a sale, he had to call Quill & look up whether or not the company was already a customer, then place the order, all on his own cellphone — and he lived in the suburbs, so he had to commute to downtown Chicago, then back out to the ‘burbs for his “sales,” then back downtown, then back home…probably 4+ hours, total). Yet he was acting like it was totally worth it for the killing he was going to make at tax refund time.

    I actually ended up being offered the job at the end, which was ridiculous because they first had me take a test to demonstrate how much of the salesguy’s idiodic doubletalk I had retained — & they must’ve been really desperate for people, because I truly remembered almost none of what he said (I only went through with it because I wanted to see what they would do if I failed). When I told the guy I’d “shadowed” that I needed to think it over, he started hard-selling me; and then when I asked what their benefits package was & whether or not they offered health insurance (there was “no time” to go over that when I was given my “job offer”), he started berating me for not having gotten that information on my own.

    Finally, he CALLED ME AT HOME the very same night (because man, thinking over a job offer is completely unheard-of) & then I shut him down. I think they give people comissions for bringing in new hires — he kept saying that he’d “put himself on the line” by “recommending” me, like turning down the job offer constituted a betrayal of trust. But every time I think of that godforsaken place he worked, I almost feel bad for not saving his phone number & calling him back later to convince him to leave.

    Then again, he had a Marketing degree from Indiana, & totally should’ve known better.

  19. Kornkob says:

    I actually happened across a MLM sales guy that hit on a great way to make a lot of money in a short period of time.

    Friday evening on a beautiful day he wanders by about 6:30pm selling some sort of soap/cleaner door to door. My neighbors are all at one house having a couple ‘hey– it’s a beautiful Wisconsin day on a Friday’ after work beer. 6 families, 6 bottles of ‘concentrate’ are sold (with a FREE scrubbie) after a brief demonstration in which someone’s white tennis shoes got cleaned from lawn mower green to bright white.

    Maybe my math skills are kinda off but what is 6 times $38? Now waht do green scrubbies and a quart of ‘concentrated’ cleaner cost? (Think liquid floor cleaner— pine sol extra strength)

    Oh! And 5 spray bottles because everyone who talked someone else into buying got a ‘free’ spray bottle.

    Yeah. That was sweet.


    For the record I am also suspicious of all the ‘party’ home selling schemes: Pampered Chef, those candle people, the jewlery shows— they can’t be straight up.

  20. sir_flexalot says:

    I got the most awesome story ever for you. The latest of the ltdteam.com guys propsotions my new wife to meet him at the mall to “discuss the opportunity”. Unfortunately for him he posts his cell number, which she forwards to me and I immedaitely call. At first, the guy says it’s too complicated to explain over the internet (could anything ever be too complicated to explain in writing?) and then I get to the hard questions… such as, “and how do you know my wife?” He has the nerve to say, “I know her but she doesn’t know me.” Eventually he profusely apologizes for that, after he realizes that, me being the new husband, a statement like that might offend me. Apparently he was using facebook to solicit everyone at their school… now I don’t even know if he went to that school, which would just be all kinds of wrong, but even still… wow. To casually offer to the female member of “new couples” a business opportunity by asking them to meet a strange man somewhere, I shudder to think that there would be anyone that gullible!

  21. suspicious says:

    Hi, I’m checking up on a company called Healthmore Industries and they sell an air cleaner. I responded to an ad in the paper for a job and wound up at a hotel with a fiercely selling guy. I have gone to meet with him and about 17 others of us for 2 days. This sounds very much like the mlm’s you are talking about. does anyone know anything about this company?

  22. prowlerkush says:

    Hey, so I almost got scammed into talking to one of these guys too. I work at a large company and am looking to move either within the company or out. So I was out at lunch during work and ran into some guy at a sub shop who started chit-chatting w/ me in line, and ended up w/ him telling me his wife used to work at the same place I do, now works with another large company in the area, but he runs his own business. Gives me his business card and so I (foolishly) gave him mine.

    On the card was his name, number, and web address, so (being a programmer) I immediately checked out the site. I was somewhat suspicious when all I saw was a login page, and so I searched the web a bit and found nothing else on the website, except a whois entry that wasn’t very helpful. I didn’t know what to think of the thing, and figured it was a small business a/w, and I’m not really looking join a small business (cept maybe to make some side money, like freelancing). But I didn’t think much about it afterwards.

    A week later I get a call (at work no less) from this guy, I tell him to call me after work. As soon as I get home, I try doing a bit more research on the business, but still nothing related to the website. So I try to put in random passwords to get into the site, but the page it goes to when I put in an invalid password was owned by something called “Leadership Team Development”, or LTD. So then I start looking up stuff for them and bingo. For the speil, go to:
    http://www.ltdteam.com/guest/icommerce.asp
    As soon as I suspected a scam, I googled “ltdteam scam” and chanced upon this website. And not a moment too soon. I got a call from the dude after writing the first paragraph of this post. I talked to him and made it clear that unless he was willing to pay me a crapload of money in salary format, not to waste my time. He thinks I’m going to call him back sometime. Riiight.

    Oh, and maybe its a regional thing, but if you got approached on this, I’d also watch out for the “White van speaker” scam (Wiki it if you don’t know). I’ve never seen people walking around scamming random people in the midwest, but I’ve seen it several times now out on the east coast.

  23. justthatguy says:

    Well, I think I was ready to be shammed. I was at Target buying toys for my niece’s birthday party and this chatty young girl came up and started talking to me. After chatting about kids and the Buckeyes in Columbus, Ohio, she started working me. She said that she is a part of this “Leadership Team” and that she thought I would be a great addition to the team. She then conned me into meeting with her sometime to grab coffee and she would fill me in. We then met at a coffee shop a few days later and she had some “shady” brochure with a marketing model on it and some “big name Companies” and talked about opportunities to make $2,000 to 12,000 a month. Everything from Gift Catalogs to Online marketing of new company products, of course cutting out the middle man. Shady and then when we finished she wanted to sign me up for a seminar that explains it…blah…blah …blah. She wouldn’t even let me have the brochure she went over. Kept going in circles why I didn’t need it and that I would get plenty of info at the meeting. Needless to say, I decided not to go, after reading all about the scams on the internet and not being able to find a website for them without a login. Be careful out there.

  24. justthatguy says:

    @Greg P:

    I got a schpeal from some girl at Target about LTD. I met with her and chatted about it, wouldn’t even give me the brochure we went over. Seemed shady to me too. Be careful.

  25. yarko says:

    Hi,

    This happened to me too. Robert who was in my college class, called me one day to tell me about a job. He described it as a company he was starting. As I could always use more money, I fell for it.

    Anyway, the next day a meeting was arranged between me, Robert, and the other person.

    As soon as they found me, my friend abruptly needed to leave. Foolishly I brought my portfolio, expecting this employer would want to see my skills. I became very suspicious when the portfolio wasn’t even opened.

    Here’s what happened next: the person took out a brochure explaining how the consumers pay 85% for middlemen when buying products. At the end we arranged to meet the team leader in Downtown Toronto.

    The next day, as I was having second thoughts, I called this person, and wasn’t able to get though. About 10 minutes later, my friend called urging me to go to the meeting downtown. This was very strange, he should not have known the details of the converation because he left. I asked Robert to go through some of the details described earlier, they didn’t match. I quit, and if they ever call me again, I will tell what I know.

    A warning to all: Stay away from GlobalTouch Marketing, stay away from ltdteam.

    This is a scam .

  26. Jubilance says:

    How freaking great is it that I found this page?

    A friend of mine gave a girl my number, and she gave me a 30 minute spiel at Starbucks. I wrote everything down, since I’m a freak like that, and immediately came home and Google’d it. No way am I getting involved in this thing.

    Plus, I asked the girl how she was doing in her business and she wouldn’t give me any specifics…yeah, that means I definitely won’t be joining up.

  27. speed3joe says:

    Wow. These guys really get around. I was at a KFC eating lunch peacefully, when, some guy just walked up ad told me he thought I would be a great team member. He knew this just by listening to me order my food. He asked to meet me at McDonald’s a couple days later. Short drive, so I went. Told me how I could make 50-70 thousand bucks in as little as 12-18 months. I am a college graduate, so, I listened to his approach. Although, I knew in was a scam because he would even let me keep the pamphlet. Said he needed it to show his boss he had a meeting, and to claim the mileage. Also said in the beginning he lived 4 blocks away. He Gave me some cheap business card. Kind of felt bad for the guy because he said he was in the banking industry and this business was going to allow him to “finally” retire. Be careful, Louisville. They’re out there, EVERYWHERE!!