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Multi-level marketing – Wikipedia
Marketing
Marketing management
Key concepts
Distribution
Pricing
Retail
Service
Activation
Brand licensing
Brand management
Co-creation
Corporate identity
Dominance
Effectiveness
Ethics
Promotion
Segmentation
Strategy
Account-based marketing
Digital marketing
Product marketing
Social marketing
Influencer marketing
Attribution
Annoyance factor
Horizontal integration
Vertical integration
Promotional content
Advertising
Branding
Corporate anniversary
Direct marketing
Loyalty marketing
Mobile marketing
On-hold messaging
Personal selling
Premiums
Prizes
Product placement
Propaganda
Publicity
Sales promotion
Sex in advertising
Underwriting spot
Promotional media
Behavioral targeting
Brand ambassador
Display advertising
Drip marketing
In-game advertising
Mobile advertising
Native advertising
New media
Online advertising
Out-of-home advertising
Point of sale
Product demonstration
Promotional merchandise
Visual merchandising
Web banner
Word-of-mouth
Research
Market research
Marketing research
Mystery shopping
their similarity to traditional illegal pyramid schemes
price fixing of products or services,
collusion and racketeering in backroom deals where secret compensation packages are created between the MLM company and a few individual participants, to the detriment of others
high initial entry costs (for marketing kit and first products),
emphasis on recruitment of others over actual sales (especially sales to non-participants)
encouraging if not requiring members to purchase and use the company’s products,
exploitation of personal relationships as both sales and recruiting targets,
complex and exaggerated compensation schemes,
false product claims
the company or leading distributors making major money off participant-attended conventions, training events and materials, advertising materials, and
cult-like techniques which some groups use to enhance their members’ enthusiasm and devotion.[13][24]
This section needs expansion. You can help by adding to it. (June 2020)

A typical Multi-level marketing MLM binary tree structure. The blue individual will receive compensation from the sales of the downline red members.
The Times: “The Government investigation claims to have revealed that just 10% of Amway’s agents in Britain make any profit, with less than one in ten selling a single item of the group’s products.”[35]
Eric Scheibeler, a high level “Emerald” Amway member: “UK Justice Norris found in 2008 that out of an IBO [Independent Business Owners] population of 33,000, ‘only about 90 made sufficient incomes to cover the costs of actively building their business.’ That’s a 99.7 percent loss rate for investors.”[36]
Newsweek: based on Mona Vie’s own 2007 income disclosure statement “fewer than 1 percent qualified for commissions and of those, only 10 percent made more than $100 a week.”[37]
Business Students Focus on Ethics: “In the USA, the average annual income from MLM for 90% MLM members is no more than US $5,000, which is far from being a sufficient means of making a living (San Lian Life Weekly 1998)”[38]
USA Today has had several articles:
“While earning potential varies by company and sales ability, DSA says the median annual income for those in direct sales is $2,400.”[39]
In an October 15, 2010 article, it was stated that documents of a MLM called Fortune Hi-Tech Marketing reveal that 30 percent of its representatives make no money and that 54 percent of the remaining 70 percent only make $93 a month, before costs. Fortune was under investigation by the Attorneys General of Texas, Kentucky, North Dakota, and North Carolina with Missouri, South Carolina, Illinois, and Florida following up complaints against the company.[40] The FTC eventually stated that Fortune Hi-Tech Marketing was a pyramid scheme and that checks totaling more than $3.7 million were being mailed to the victims.[41]
A February 10, 2011 article stated “It can be very difficult, if not impossible, for most individuals to make a lot of money through the direct sale of products to consumers. And big money is what recruiters often allude to in their pitches.”[42]
“Roland Whitsell, a former business professor who spent 40 years researching and teaching the pitfalls of multilevel marketing”: “You’d be hard-pressed to find anyone making over $1.50 an hour, (t)he primary product is opportunity. The strongest, most powerful motivational force today is false hope.”[42]
- Based on the results of a 2018 poll conducted with 1,049 MLM sellers, the majority (60%) earned an average of less than $100 in sales over a five year period, and 20% never made a single sale. The majority of sellers made less than 70 cents per hour.[43][44] Nearly 32 percent of those polled acquired credit card debt to finance their MLM involvement.[45]
Binary option
Destiny Group
List of multi-level marketing companies
Saradha Group financial scandal
Tiens
- Federal Trade Commission article
Source: en.wikipedia.org
Author: Authority control
LCCN: sh85088350
NDL: 01084463

