Illegal Pyramids vs. Legal Multilevel Marketing MLM Companies

Illegal Pyramids vs. Legal Multilevel Marketing MLM Companies

Part 1 – Most business writers don’t really know the difference. Even most Network Marketing participants don’t know. But one is a beautiful concept. The oth…



miles24yo says:

is ACN a scam?

Oscar Paulo Del Rosario says:

Thank you for posting this video Lou. I live in the Philippines and I
joined a MLM company last month. I’m happy to say that the company that I
affiliated with (VMobile) focuses on giving discount on cellphone load
(prepaid/minutes) products.

VMobile is the only Filipino company that I know that have a wide range of
customers that are not part of the compensation plan.

I have been approached by numerous MLM distributors but I have not joined
them because they themselves are focusing on recruitment and not their

Thanks Lou for the very informative clip =)

Stuucky says:

If MLM’s are not a pyramid scheme, how about they operate like legitimate
businesses? Eliminate the bottom of your pyramid, the people you guys call
lazy, the ones who are not willing to put in the work. Stop feeding these
people false hope by establishing an understanding of what an MLM employee
needs to suceed. Fund your own hiring process or pay these people like
independent other contractors. If a standard was set, a minimum requirement
of necessary education and traits, MLMs would not be profitable. This is
because their real profit lies in the false hope the sell to young and
impovrished indivduals. People who obtain the traits needed to suceed do
suceed, however these are the 1%. That being said if your business relys on
the failure of 99% of your independent contractors and the fees that pay
you, you are indeed a scam.

The Tito TV Show says:

Where is part 2?

vkukolev says:

I am MLM leader. And i know that MLM is our future!

hpufo says:

Wow this guy is a joke. The illegal pyramid he drew out describes virtually
all MLMs out there and the one he drew out for Legal Distribution is flat
out wrong. 

Stuucky says:

Pyramid scheme = Fake product and income from 4th level users, MLM = Real
but Unimportant product that constitutes 10% of your companies revenue and
income from 4th level users.

Maria Donatello says:

I’m beginning to notice that AFLAC is an illegal pyramid scheme. Someone
needs to report them.
It’s not fair they force you to buy their product when you sign up as an
independent agent but the person who signs you up also takes part of your
profit and so does the person who signed him up and so forth. It’s illegal
and this company needs to be reported. It works just like Amway did.
Herbalife is the same way. You must buy the products before you sell them
and that makes you the customer.

Jeremy MGTOW says:

MLM is a scheme. DEAL WITH IT.

Adolph Delgado says:

How do you define value?

yoshyoka says:

Nope the real question is not “are there customers” but “are the MAIN
customers the retailers themeself”? If so, the main profits come from
exploiting the retailers. It really does not matter if the money stream you
receive because you have a downline is redistributed by the company or
comes directly by the downline: that simply is a legal loophole.

raishyboy says:

Donald Trump started ACN. The us Govt sue him for $40 million because of
his business dealing. This is a Pyramid scheme in a slightly different
guise. It’s a SCAM…..

Alex Villatoro says:

I’m in World Ventures. There’s nothing shady about the company. They mean
everything that they say but a few of my friends didn’t want to even join
the vacationing membership because of this confusion. Sucks because I
wanted them to travel with me.

shannon morgan says:

Why is every MLM or network marketing company always compared to AMWAY?
Let’s face it.. Amway has been around for over 40 years, they are past
their prime.. but remember! They did something NO real business with
overhead and start up costs could do. Made millionaires out of
re-distributing their products through other avenues.. the mom and pop.
Then came TUPPERWARE! In home parties! wow… not have to leave home, you
can buy stuff through the tupperware lady? Those things were breaking
points of new ways to make money and allowed the women of the time a chance
to be empowered by ” having their own business”. things have come a long
way, and many scams are out there, but this guy is right. The value comes
from customers.. If the customers are repeating, and talking about your
product to people.. you have the right product. it is not the MLM that is
the problem.. it is finding the needle in the haystack of GOOD companies to
work for. I have been through quite a few trying to find the right fit.
Just because One doesn’t fit.. does not mean another doesn’t. It is the
same as with a job, you start one, its not working out, you try another..
why would you put all network marketing companies in one lump category?
Doesn’t matter what part of the pyramid you are.. there is a pyramid on our
money. Customer to Executive, we are all part of it someway somehow. Why
not help the mom and pop by buying from them instead of the store? Some of
the products are awesome 🙂 you would never see it without those people.
the ones building something for their family based on hard work and worth..
not what some employer sees as the bottom line dollar to pay you. Just open
your eyes.. and realize not all are the same. :)

Michael Atkinson says:

How bout some statistics on the amount of people who actually make money? 

Desyl Fleurant says:

Network marketing (MLM) is sure not perfect. You know what they say with
everything!! There are usually GOOD news and BAD news.
The GOOD NEWS is after about 1-4 years of hard work with the right skills
you can take 2 vacations a year for 6 months with full pay.
The BAD NEWS is you will be bored of too much time and money because the
job will no longer be in the way of your week. Your friends will still be
fighting traffic 5 days a week, kissing up to the boss at work and trying
to get a raise while they are writing comments on here that it is a scam.
But hey!! there are 2 types of people in this world those who are right and
those who have all the time and money. 😀 

swima94 says:

What a liar. What value is the newest distributors getting?

d3rkaderk4 says:

One is a pyramid, the other is a sorta trapezoid thingy.

Sergey Lucktinov says:

I’ve went to a networking event to promote my LEGIT business (the one that
actually has employees and produces value) and 30% of people I talked there
were from some kind of MLM…. 

Stuucky says:

Illegal pyramid value flow down = 0, legal MLM (Amway) value flow down =
average $115 a month. Hey, but Amway people don’t have to make their bosses
any money. This is because they do business with a company that pays its
independent contractors on average less than minimum wage, LOL! Now they
just make their so called business partner(overlord) tons of money!

carlos paniagua says:

mca is legal??

Jonny Stone says:

Most folks believe MLM is a scam because maybe they have never succeeded it
in a company but the truth is you have to be consistent followed by a drive
in wanting to succeed. I’m with Wake Up Now and it changed my life because
its simply creating a chance to become an entrepreneur and learning the
industry. MLM has created more 6 figured makers than someone at a 9 to 5.
When you get taxes at a 9 to 5 you have to pay to taxes to receive taxes
but being a business owner you actually get more money back then your
typical worker and not knocking no one with a 9 to 5.

shizuma2007 says:

You’re all a bunch of wankers, bashing on MLM, just because you fail at it
doesn’t mean it’s a scam, if you don’t know the process and can’t figure
out the basics before thinking you’re the sh!t of the company, then you
personally should stay out of it. Let others that know how to market and
promote do the job that they can do.

Michael McCallister says:

Is mcdonalds subway and any other franchise not a pyrimid plan?

Per Thomsen says:

When you tell people about your network business it always come back to you
and say”it’s a pyramid scam”
The big difference between a pyramid scam and a real network company are
the pyramid are always one in the top earn on they in the bottom, we say if
you go in to a pyramid in the bottom and pay to the one in the top with a
bottle of wine, perfume or even gold they earn big. Now it’s your turn to
start climb to the top if you’re lucky you get there and get your
A real network company doesn’t work like that. They have a low start up
cost and a monthly fee to continue the work they are doing. The best
companies are they where you never have to sell anything but give away the
product for FREE instead and have a chance to get a residual income month
after month year after year.

Ambit Energy Consultant says:

Illegal Pyramids vs. Legal Multilevel Marketing MLM Companies says:

Even the best MLM programs aren’t nearly as good as an affiliate marketing
business model. With affiliate marketing, you have way more flexibility and
control over the business. It’s also a great way to learn how to market
other peoples products and services. Once you are profitable as an
affiliate marketer, you can take your profits and re-invest into creating
your own products and then own your own business, potentially earning you
10’s of thousands of dollars or more without going into a single penny’s
worth of debt.

MLM has absolutely nothing on affiliate marketing. It takes the same amount
of time and effort without any of the control.

allencrider says:

All MLMs are pyramid schemes.

Dario izaks says:

MlM gives you the opportunity to be your own boss,without any over heads or
a need for a high start up capital.If you work hard and be consistent you
can make it pretty big

Mildred Malin says:

Thank you for all this information, it has really helped me. After a lot
of due diligence and checking out MLMs and network marketing, I decided
‘selling’ products and convincing others to buy things that are overpriced,
hyped it will cure everything, make you younger looking, lose weight,
etc………. or convincing someone they need a lotion/potion/services
product……does not work for me. I did find a way to shop for what I
want and benefit from networking……….and IT’S FREE, no minimums,
monthly anything. You just get paid to shop for your everyday needs and
benefit when everytime………go here ……for
more information and a free membership. No strings or hidden agenda! Best
option I have discovered in the last 5 years of looking :)


You’re better off staying away from all MLM.

Craig Wegener says:

Everyone says “Pyramid Scheme” I say “Chain-Pyramid” , When you start your
own business, you always have to create a team(DOWNLINE) / (workers) and
flip them UP, into your UPLINE, so basically you start out with a pyramid
going down them flip it up? So that’s a “SCHEME” RIGHT? GET REAL because it
is REAL. It’s the COMPANY it’s self that detects if it is a “SCHEME” or
“PYRAMID SCHEME”. I’m sure the ones who are creating business’s don’t
really care about the one’s who sit there with there 9-5 jobs and bitch and
moan at others all day lol..

baddesstbitchful says:

guys don’t miss out on a great opportunity sign up now for free 

Ricky Mercado says:

I’m all for the right network marketing company and I chose the best one
for me 🙂 #rickswakeupnowlife 

Andrew Jensen says:

Starting your own business is absolutely better than working for someone
else and making them rich. You get to be your own boss rather than someone
be the boss of you. This is absolutely much more control. There are too
many people that feel you get rich with a high paying job and working for
someone else.

Vin Tusa says:

The problem with Network / Referral Marketing in general is….

The internet. The internet has greatly un-evened the playing field for the
majority of people who join Network / Referral Marketing opportunities
today (of course it’s a great advantage for some, but not for most,… read

You see, back in the day of the beginnings of Network / Referral Marketing
the playing field was much more even / level, as people basically had (or
at least they felt they had) just as good of a chance at succeeding with it
as the next person because most people were limited to real, local
word-of-mouth promoting (I remember being invited by someone I barely knew
to go to a presentation meeting at someone’s home for Amway back in about
1981) and they didn’t have to worry so much about the “Heavy Hitters” and
Top Earners in the Network / Referral Marketing Company “offering more to
help those prospects succeed” – the prospects that they (the average
person) were personally responsible for introducing to the opportunity,…
now with the internet the top Distributor’s / Earners are all a quick
“Google” search away, and nowadays most people are going to want to join
with those who are already successful in what it is they’re interested in
getting involved in, it’s just human nature. And that’s why it’s more
difficult than ever for most people to have any real success in Network /
Referral Marketing.

To be successful in the past, one just had to contact / talk to as many
people as possible and develop real connections with people, and everyone
had access to all the same tools, promotional materials, training, etc.,
and the ability to easily utilize those tools – A LEVEL PLAYING FIELD (as
opposed to needing the high-tech skills one needs today to successfully
promote and attain “viral / authority status” regarding an opportunity).

Let’s think about it for a minute,……..without the ability to develop /
implement one’s own marketing campaign via the internet (currently the most
cost effective way to reach the largest number of people and attain an
“authority status” for one’s self), most people don’t have enough “real
friends” or “people in their center / circle of influence” that would be
interested in or loyal to them if they were to introduce a Network /
Referral Marketing Opportunity to them, especially if the one introducing
the opportunity was new to Network / Referral Marketing themselves.

For example, let’s say “average Joe” finds out about a Network / Referral
Marketing Opportunity from one of his friends (let’s even say a relative,…
“Jane”) and he’s interested in learning more about it,… in today’s day
and age what will Joe most likely do at his earliest opportunity (unless
he’s been living in a cave for the past 15+ years)??,…. he’s going to
Google the Network / Referral Marketing Company. He’ll find the Companies
website, review that, AND (another HUGE problem with Network / Referral
Marketing Companies today) while he’s on the Companies Corporate Website
he’ll find the seemingly best IBO’s / Distributors to join with,… as they

Now Joe thinks about it a little more,… and says to himself “should I
join with Jane who is totally new to this Opportunity, Network / Referral
Marketing Industry herself,… (what if she quits?? what if I need some
help with getting this going or with an issue that comes up down the road,
etc.??) OR should I join with one of the people the Company is promoting
directly on their Corporate Website,… the one’s raving about all their
experience in Network / Referral Marketing and helping other people to be
successful??? ,… and Joe goes on to think to himself – I really need to
look out for my own best interests”.

What do you think will happen next more often than not, especially with
people that Jane doesn’t really have a close relationship with?? Jane is
going to end up inadvertently (and many times unknowingly) spending a lot
of time and money, etc. directing traffic to those “featured distributors”
being promoted directly on the Network / Referral Marketing Companies
Corporate Website helping to continually recruit and build HUGE downline’s
and income for those “featured distributor’s” while achieving minimal if
any success for herself.

Referral / Network Marketing Company’s shouldn’t be putting people in
“Janes’” or “Joes’” position by “featuring” select Independent Business
Owner’s / Distributor’s directly on their Corporate Websites (many times
“featured distributor’s” are located on a companies “testimonial’s page” or
“recognition’s page”, etc.), as it is extremely unfair to “Jane” and every
other “non-featured” IBO / Distributor and it ultimately makes it
exponentially much more difficult for anyone other than those “featured
distributors” to achieve any real / substantial, sustainable success.

To be fair to all, if a Referral / Network Marketing Company is TRULY
interested in “helping ALL IBO’s / Distributor’s achieve their dreams with
their “Business Opportunity”, they should simply allow IBO’s /
Distributor’s to be found through their own personal promotional efforts
and not promote or feature any individual IBO’s / Distributor’s in ANY of
their publically accessible Corporate Trainings, Promotions, etc.,… and
ESPECIALLY not directly on the Companies Corporate Website.

Additionally, to maximize one’s chances for success in Referral / Network
Marketing it would be wise to not join any Network / Referral Marketing
Company that engages in the practice of “featuring” IBO’s / Distributor’s
UNLESS one has the skills of / or is a Professional Sales Person (although
some can actually sell through sheer enthusiasm, though that is usually
short lived), and / OR has a very large and loyal circle of influence, OR
is very adept with internet marketing techniques and can create an
“authority status” for marketing the companies products / opportunity, OR
has found a company whose products are TRULY unique AND are competitively
priced with “Comparable” / “National Brand” products (or even a free
product, such as with Shopping Sherlock) so as to maximize one’s ability to
easily market them – and even then you will still be very vulnerable to
losing the majority (if not all) of the prospects you are personally
responsible for introducing to an opportunity if you do not possess one of
the other qualities above.

In closing, if you do not possess AT LEAST ONE of the aforementioned
qualities I would strongly suggest that you refrain from joining a company
that engages in the practice of “featuring” IBO’s / Distributor’s (which
are unfortunately all that I have come across at the time of writing this
post, including Shopping Sherlock), as you will unfortunately, more likely
than not, meet the fate of “Jane” and the many others (up to 99%) who fail
at Network / Referral Marketing.

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