The direct selling industry has experienced significant growth, with a 12% increase in 2022-23, reaching Rs 21,282 crore, and an 8.3% compound annual growth rate (CAGR) between 2019-20 and 2022-23.

Multi-level marketing (MLM) companies have been using various tactics to recruit and retain members, including misleading promotions, high-pressure lobbying, and free gifts to attract customers.

The MLM business model has been criticized for incentivizing salespeople to buy their own products, with nearly half of the revenue being used to pay commissions, and only 27% of distributors receiving commissions.

Some MLM companies, such as Optavia-Medifast, have generated significant revenue, with $1,600 million in revenue for 2022, but have also experienced a decline in revenue, with a 34.7% decrease in Q2.

Other companies, such as LifeVantage, have seen an increase in revenue, with a 289% year-over-year increase in adjusted EBITDA in Q2 2024.

The COVID-19 pandemic has had a significant impact on the profits of MLM companies, with some experiencing a surge in profits, while others have seen a decline.

Companies such as Suntech and PM-International have reported significant profits, with Suntech estimating to quadruple its profits to $8 million.

However, other companies, such as Avon and Tupperware, have experienced a decline in stock value, with Avon's stock value falling from $30 to $3 in 10 years.

The demographic characteristics of people who join MLMs vary, but often target women and low-income individuals, with women being more likely to experience stress-related psychological sequelae and low-income individuals being more susceptible to financial exploitation.

MLM companies use social media and online advertising to recruit and retain members, often by advertising high-paying jobs or promising high returns to attract investors.

Some MLM companies, such as Trades of Hope, use guilt and religious tactics to pressure sales and recruit new members, with an initial buy-in of $150 and monthly website costs.

The use of conditional join systems is common in MLM companies, with 96% of marketing businesses using this system, and commissions accounting for 44% of marketing turnover.

The MLM industry has faced significant challenges in recent years, leading to a decline in popularity and a shift towards more traditional direct sales models.

Some companies, such as QNet, have been banned in several countries due to their fraudulent activities, which include exploiting financial difficulties and inexperience to recruit members.

Overall, the MLM business model has been experiencing significant trends in recent years, with some companies experiencing a surge in profits, while others have seen a decline, due to various factors such as the pandemic, economic circumstances, and business models.

The average financial outcomes of individuals participating in MLMs are generally unfavorable, with 90-99% of participants losing money.

Individuals can protect themselves from MLM scams by being aware of the tactics used by these companies, such as emotional manipulation, cognitive biases, and high-pressure sales tactics.

Regulating communication and media can also help prevent fraud, and awareness is key to recognizing and avoiding fraud tactics.

By being informed and cautious, individuals can avoid falling victim to MLM scams and protect their financial well-being.

The direct selling industry has experienced significant growth, with a 12% increase in 2022-23, reaching Rs 21,282 crore, and an 8.3% compound annual growth rate (CAGR) between 2019-20 and 2022-23.

Title:

Content:     The Economic Times daily newspaper is available online now.

    Direct selling industry grew 12% in 2022-23, crosses Rs 21,000 crore in turnover: IDSA

    Synopsis

    Indian Direct Selling Association and Kantar's report revealed a 12% industry growth to Rs 21,282 crore turnover. The sector aims to strengthen with government support, distinguishing from fraudulent schemes through regulatory amendments.

    India’s direct selling industry grew over 12% year-on-year in 2022-23, clocking an overall industry turnover of Rs 21,282 crore, an annual survey report released by the Indian Direct Selling Association (IDSA) and compiled by market researcher Kantar said on Wednesday.

    The report noted that the sector grew 8.3% by CAGR in the four-year period between 2019-20 and 2022-23.

    According to the report, wellness and nutraceutical products contributed 73.5%, while cosmetics and personal care accounted for 11.3% of the industry’s overall turnover. The number of active direct sellers touched around 86 lakh from 84 lakh in 2021–22, the survey said.

    Vivek Katoch, chairperson of IDSA, said in a statement: “The direct selling industry is poised to strengthen further in the years to come on the back of a promising regulatory framework by the government.”

    India ranked 11th in the global direct selling ranking in 2022, up from 15th in 2019.

    Direct selling companies sell to consumers through direct-seller members and not through retailers. Amway, Oriflame, Herbalife and other direct selling companies have been pushing for tighter regulation and clarity from the government, to differentiate them from multi-level-marketing ponzi companies.

    Mid last year, the consumer affairs ministry modified the Consumer Protection (Direct Selling) Rules, 2021, through a notification, to distinguish between fraudulent pyramid and money-circulation schemes and legitimate, direct-selling players. IDSA executives have said further clarity is needed in the definition of 'network of sellers'.

    (You can now subscribe to our Economic Times WhatsApp channel)
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    Stories you might be interested in

Multi-level marketing (MLM) companies have been using various tactics to recruit and retain members, including misleading promotions, high-pressure lobbying, and free gifts to attract customers.

Title:

Content: Misleading Leakage Promotion Membership Violations Customs Arrest 6 Staff of Tourism Promotion Company
July 06, 2022 23: 09
Eastern Network Television
More News Clips
Two men were among the six arrested. (photo by Yu Hung-kee)
Earlier, the Customs and Excise Department received reports from members of the public that a travel and holiday promotion company in Tsim Sha Tsui was suspected of violating the Trade Descriptions Ordinance by selling travel membership to the public through misleading and unscrupulous business practices.
The commander of the Unfair Trade Practices Investigation Unit of the Customs and Excise Department, Mr Yeung Yuk-man, said that some staff of the company had allegedly omitted and hidden important information during the sale of tourist membership and had failed to show customers that they were still required to pay an additional fee to use the relevant services after paying the membership fee.
Among them, some victims pointed out that during the sale process, the merchant falsely claimed to the victim that he could obtain membership for free.
However, when the victim signs the document, the salesperson immediately changes his language and tells the victim that he needs to purchase a designated amount of travel membership before he can become a member.
Finally, because the victim could not resist repeated lobbying by the sales staff, he was unable to pay the full amount to purchase the membership.
Following investigations, the Customs and Excise Department (C & ED) today (6 June) arrested six staff members (aged between 21 and 63) of the company and seized a number of items suspected to be related to the case, including documents and mobile phones.
Initial investigations revealed that the company involved in the case would sell membership in a zigzag manner, such as actively contacting customers through telephone interviews. After obtaining the names and contact details of the customers, the staff would contact the company again and invite the customers to attend the "travel talks" in person, and collect free gifts as a promotion.
When customers attend the seminar, the staff will strongly promote the travel membership scheme, the general cost is about 80,000 to 100,000 HK dollars. The whole sales process lasts for several hours. During the period, the company will have a number of staff to lobby. If the customers express their departure, they will be discouraged by the staff concerned.
In addition, the staff of the company involved in the sale of the membership scheme did not explain the terms and conditions of the relevant contract to the customer. Even if the customer paid the full fee, he still had to bear other additional costs, otherwise he would not be able to enjoy the relevant services.
At the same time, there are staff who are more sophisticated, prompting customers to purchase some higher amount of travel membership.
With the relaxation of travel restrictions, the Customs and Excise Department (C & amp; ED) urges members of the public to choose the relevant services carefully to patronise reputable companies, and to carefully read the contract terms and conditions.

The MLM business model has been criticized for incentivizing salespeople to buy their own products, with nearly half of the revenue being used to pay commissions, and only 27% of distributors receiving commissions.

Title:

Content: [Street Industry Watch] In the Year of the Pandemic, many people joined the "marketing" to pull down the line, but nearly half of the revenue was used to pay "multi-level" commissions.
Photo Credit: Central News Agency
What we want you to know is
At the same time, the body product channel and product spokesperson can further bring the "offline", which is the start of expanding the business and crossing the threshold of receiving commissions.
But this threshold seems easy, but not everyone can climb, because whether it is old or new distributors, most of them only contribute to the commission of the supporting role......
In the summer of 2020, it is supposed to be the graduation season of college students and the time when social newcomers are pouring out of the cage, but I saw a youthful face at a few lively junctions in the business district of Banqiao, and started the work of “listing people ” for housing construction.
Single-handed advertising placard, carrying a backpack leaning against the road light pole, the other holding a thin, seemingly split reference book, on the hot sun, earning the card holder's hard hourly salary, and paving the way for future job hunting.
When a PT (Part Time, Part-time, Part-time, Part-time) job that was originally labeled as a middle-aged, second-degree employment face, there were many young faces, can not help but make people shiver in the heat of the day!
The virus has hit households and disrupted the job market, affecting youth employment.
We have to admit that the epidemic has disrupted the pace of new people entering society and seeking jobs. Although it is at a time when the virus has not really invaded the door, the job market has been chaotic.
According to the Ministry of Labor ’ s “Youth Employment Status ” report, there are about 280,000 college graduates in 2020, a decrease of 5.4% compared to 2019. This reflects not only the decrease in the number of children and the decrease in the number of college students, but also the explosion of life extension in 2020. If further deduction is further deducted, the number of people who can work (including military service) is a low of nearly 5 years (223,000), a decrease of 12% compared to 2019. And...
As of the end of January 2021, only 68.3%, about 152,000 people, of the post-secondary students who graduated in 2020 and are working people, joined the ranks of labor / agriculture / public insurance, which is not only a low point in the past five years, but also a decrease of 24% compared with the previous year.
In other words, there are many college graduates, after more than half a year of job search, still have not successfully entered the workplace; the pressure of job search and living economy, so that they have to make very choices in this extraordinary period.
The job market is cold, and marketing continues to expand its organization, becoming a potential employment option for new people in society.
In 2021, the virus officially "invaded the door" in May, before graduating from college in the new year.
The alert of the epidemic, so that this year's job market has a cold wind, but also the unemployment rate in July this year (4.53%), blowing up the same period of high in the past decade, recently graduated social fresh people, inevitably have to face the fear of graduation, namely unemployment.
However, there is a saying in the workplace: Despite the economic downturn, business jobs such as insurance and distribution are always recruiting.
If this is not true, we can try to turn off or turn on the query function of the above industries on the job search platform to achieve a full personal experience.
However, in 2020, the number of people registered for the personal insurance business survey (85,000) increased by 5% compared to the previous year, and the number of new entrants to the marketing business is also a million people.
This is the type of occupation that people need to earn life, some people are joining is no retreat, but some people are carrying a dream forward, but the dream is very rich, the reality is very bones, when we dream in the winter, do not forget to pragmatically understand the mode of operation of the industry.
Today, let ’ s talk about selling!
Most people's stereotypes of marketing remain in the "brainwashing" of marketing conferences, constantly inculcating that this is a "personal business," getting rid of being hired as social animals, and directly attacking the freedom of wealth, and in addition, trying to give individuals the self-esteem and ability to think independently, suggesting that "thinking for themselves, not having to discuss with others."
Perhaps, some people have experienced this process of marketing to pull members off the line, some people join, some people feel that it is a "cult", but making money, quality of life, and self-empowerment (Self-empowerment) these material and psychological skills, is indeed for most people have a certain hypnotic effect.
However, most of our understanding of marketing is just the “recruitment ” discourse, and we do not have a deep understanding of how it works.
Perhaps, when we understand the logic of the industry, we can better understand why the so-called brainwashing conference is a starting point for marketing recruitment.
Multi-level marketing requires multiple distributors as sales and marketing channels
According to the Fair Trade Commission ’ s “Multi-level Marketing Business Development Survey ”, nearly 3.5 million distributors (each“ individual ” who joined members or purchased goods is an independent distributor) of 314 marketing entities (such as Anli, Ruxin, etc.) in 2020 generated a turnover of 98 billion yuan, a slight increase of 5% over the previous year. In contrast to the population over 20 years of age (more than 19.4 million people), about one in six people join the ranks of distributors.
Since all distributors replace all types of retail channels, they not only have the function of the channel, but also have the function of marketing, that is, word-of-mouth marketing, so whether they emphasize themselves as retail (sales) orientation, product recommendation (head-pulling) orientation, or emphasis on membership, they are ultimately based on "people" and "organizational hierarchy".
And the product channel and marketing costs saved by the marketing business are converted into the commission of the distributor.
Therefore, when we contact distributors and ask them why they are involved in the marketing industry, they will almost unanimously reply, "The product is great!"
Distributors continue to pay for new members by pulling down the line, expanding the organization and expanding the commission
That being said, it ’ s one thing to see how great a product is in the domain of a distributor, and constantly adding new blood is the highest goal for continuous marketing, expanding the organization, and increasing revenue and commission revenue.
Similarly, according to the Fair Trade Association report, the number of new entrants to the market in 2020 is about 1 million, and for the past five years, the number of new entrants has remained at around 1 million each year.
And in 314 marketing businesses, 96% of the joining system is to take "conditional join", of which, the most important is "order goods" (62%), "pay a deposit or membership fee" (59%), so "conditional join" is not only contributing to the marketing business and the top level of the sales (the one who pulls you in), but also contributing to the level of the commission.
In contrast, if someone joins, someone exits. The number of MLM merchants who quit in 2020 is about 450,000, and the number of exits in each of the past five years has been around 400,000 to 500,000.
The main reason for exiting is “non-renewal of contract ” (83%), which means no longer operating, no longer consuming, and the product is no longer considered“ great ”.
However, in this process, there will always be new blood distributors who will contribute to the expansion of the organization and the commission generated after the consumption of the product.
Whether old or new distributors, most are only supporting players who contribute commissions
As has been mentioned, the distributor at the same time with the product channel and product marketing (endorsement) people, their own recognition of the product, use, and purchase, to become a new member of the body and teaching.
Of course, once you can further bring in new members, new distributors, or offline, it is the beginning of expanding your business and crossing the threshold of receiving commissions.
It seems that the threshold is easy, but not everyone can climb it.
According to a survey conducted by the Fair Trade Association, 222 of the 314 marketing businesses (about 70%), and more than 60% of its distributors will make stable orders to the company; however, only 27% of all marketing companies (about 960,000 people) receive commissions, and the average commission per person is 45,000 yuan.
Therefore, most distributors who order goods either maintain their status as distributors by buying products, or sincerely recognize and continue to use the products; and by bringing in new distributors, order sales, and achieve a commission threshold, and can earn a stable salary or even become rich in this industry, not only are rare, but also the successful cases seen in various conferences or education and training survivors. "The Beautiful Misunderstanding We Have".
It doesn ’ t matter if the product is worth the price
In addition to the threshold, this kind of personal marketing and sales channels, to achieve the "multi-level" (that is, constantly expanding the organization down the line) of the business of distribution, not only eat personal interpersonal skills, "multi-level" commission distribution will indirectly increase product prices.
According to a survey conducted by the fair society, the import cost of the pyramid scheme business accounts for only 28% of the turnover, but the commission accounts for 44% of the turnover, in other words, the real cost of selling a commodity of $100 is only $28, $44 is used as the commission of the pyramid scheme business, and the remaining $28 is the administrative expenses and profits of the pyramid scheme. Whether the essence of a product is value for money is one thing, the marketing business will compress its own profits, expand its commission expenditure, and recruit and expand the organization with a strategy of large is beautiful, so that we can find: there are so many people who have joined the ranks of marketing!
Marketing has always been a very special industry, in which a small number of people have been able to earn their fair share of commissions, and become the mainstay of business operations, but the vast majority of people are only a supporting part of this multi-level marketing structure, and by paying membership fees, buying and using products, they become a part of the source of commissions.
Back to the intention of writing this article, no matter how difficult the job search for new people in society during the epidemic, I hope that by understanding the operation mode of an industry, I can assess whether to use the marketing industry as the first job to enter the society.
Through the Fair Commission report, we have gained a profound understanding, no matter how many of these people successfully earn high commissions and create successful careers, this data is hinting at us: if this industry is the main occupation, not only requires a certain degree of interpersonal relationships and skills, there may be a period of social novices can not understand life or career experience.
Source: Ministry of Labor “Youth Employment Status ”, Fair Trading Commission“ Multi-level Marketing Business Development Survey ”
Extended reading
Editorial responsibility: Ding Zhaojiu
Editor ： Weng Shihang
Tags:

Some MLM companies, such as Optavia-Medifast, have generated significant revenue, with $1,600 million in revenue for 2022, but have also experienced a decline in revenue, with a 34.7% decrease in Q2.

Title:

Content: Optavia – Limited Network Marketing Visibility Leads To Decline?

By Team Business For Home

Optavia-Medifast, a Billion Dollar network marketing company, reportedly generated $1,600 million in revenue for 2022. The company has strong financials with a healthy cash position and no debt, but its sales have plummeted. Their Q2 report showed that the company revenue was down 34.7% to $296 million. For more specific details on this report, you can refer to the article here.

According to the OPTAVIA website:

“Optavia offers four components to support you as you begin your journey toward Lifelong Transformation, One Healthy Habit at a Time. Your independent OPTAVIA Coach guides and supports you throughout your journey to optimal health & wellbeing.”

If any network Marketing company has a strong decline it is very hard to turn the decline around. We have observed strong lack of independent distributor recognition.

Optavia – Medifast in Facts and Figures

Facts and figures as of the day of publication of this article:

  • Business for Home rating: A+
  • Current Business for Home Momentum Rank: 70 out of the 900+ world-wide network marketing companies in the BFH database.
  • Similarweb Rank: 61,126 globally, which ranks it 31 out of the 900+ world-wide network marketing companies in the BFH database.
  • Optavia – Medifast has 0 reviews on Business for Home, which ranks it at position 377 out of the 900+ world-wide network marketing companies in the BFH database.
  • Number of Recommended Distributors: 0
  • Business for Home Pageviews: 18,555
  • CEO of Optavia – Medifast: Daniel R. Chard
  • Company location: United States

Data provide by the proprietary Business for Home Intelligence Engine

(article continues below)

Why Optavia is downgraded to a Business for Home A-grade

There are various reasons contributing to a lower rank, such as incomplete information, sparse press releases, lack of transparency, lack of presence of top earners and top leaders, and distributor and social media influencers visibility.

Incomplete Information

Business for Home relies on comprehensive, factual, and substantiated information to accurately assess a company. However, the information shared by Optavia – Medifast appears to be either fragmented or unsubstantiated, adversely affecting its credibility for network marketing prospects.

Sparse Press Releases

Regular and informative press releases and success stories are vitally essential to keep the wider industry abreast of the sales force achievements and decisions. Missing out on this, Optavia – Medifast loses the chance to directly communicate its progresses with prospects.

Absence of Top Earners and Top Leaders visibility

Visible successful (top) earners are vital to any Network Marketing company. They serve not just as inspiration for prospects, but also proof of the company’s success. With a noticeable lack of top earners, Optavia – Medifast is missing out on a key aspect of its appeal.

Distributor Presence

The lack of strong presence in the industry by Optavia – Medifast’s distributors compared to Triple A grade companies adds to its challenges. A visible robust distribution network is vital to make the products more accessible and visible to consumers. Companies sharing consistently success stories are getting the eyeballs on their business opportunity.

How Optavia – Medifast could improve their visibility

Publishing success stories and company press release offer several advantages for Optavia. Here are some of the key advantages of publishing success stories and links to several high performing articles from different companies as examples of a shining marketing strategy anno 2023 :).

Inspiration Motivation, Credibility and Trust

Success stories serve as sources of inspiration and motivation for others. When people read about others who have overcome challenges and achieved their goals, they are often motivated to pursue their own aspirations. They can enhance your credibility and build trust with your audience. Real-life examples of achievements provide evidence that your strategies, products, or services are effective and can deliver results.

Social Proof and Differentiation:

Success stories provide social proof that your offerings have been valuable to others. Potential customers or clients are more likely to engage with your products or services if they see that others have benefited from them. In competitive markets, success stories can set you apart from competitors. Demonstrating your track record of achieving results can give you a unique selling point.

Overall, success stories and press releases have the power to inspire, educate, and foster connections. Whether in the business, personal development, or social spheres, sharing stories of achievement can bring about positive change and growth in Network Marketing.

Optavia – Medifast Conclusion

Based on the information provided by Business for Home, it seems that Optavia – Medifast has the potential to generate decent income for an independent distributor.

However, their limited Network Marketing transparency suggests caution when evaluating the company’s profitability for a Network Marketing Professional. The company seems to have a strategy like Network Marketing company Melaleuca:

“Do not talk about the Network Marketing opportunity, focus on the products.”

That seems not to work to well anymore.

The post Optavia – Limited Network Marketing Visibility Leads To Decline? appeared first on Direct Selling Facts, Figures and News.

Source:: https://www.businessforhome.org/2023/11/optavia-limited-network-marketing-visibility-leads-to-decline/

Other companies, such as LifeVantage, have seen an increase in revenue, with a 289% year-over-year increase in adjusted EBITDA in Q2 2024.

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Content: Advertisement
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LifeVantage Corporation (NASDAQ:LFVN) Q2 2024 Earnings Call Transcript

LifeVantage Corporation (NASDAQ:LFVN) Q2 2024 Earnings Call Transcript January 30, 2024

LifeVantage Corporation isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good day, ladies and gentlemen. Thank you for standing by. Welcome to today's Conference Call to Discuss LifeVantage's Second Quarter of Fiscal 2024 Results. [Operator Instructions] Hosting today's conference will be Reed Anderson with ICR. As a reminder, today's conference is being recorded. And now I'd like to turn the conference over to Mr. Anderson. Please go ahead, sir.

Reed Anderson : Thank you. Good afternoon, and welcome to LifeVantage Corporation's conference call to discuss results for the second quarter of fiscal 2024. On the call today from LifeVantage with prepared remarks are Steve Fife, President and Chief Executive Officer; and Carl Aure, Chief Financial Officer. By now, everyone should have access to the earnings release, which went out this afternoon at approximately 4:05 p.m. Eastern Time. If you have not received the release, it is available on the Investor Relations portion of Life Image's website at www.lifevantage.com. This call is being webcast, and a replay will be available on the company's website as well. Before we begin, we would like to remind everyone that our prepared remarks contain forward-looking statements and management may make additional forward-looking statements in response to your questions.

These statements do not guarantee future performance, and therefore, undue reliance should not be placed upon them. These statements are based on current expectations of the company's management and involve inherent risks and uncertainties, including those identified in the Risk Factors section of LifeVantage's most recently filed Forms 10-K and 10-Q. Please note that during today's call, we will discuss non-GAAP financial measures, including results on an adjusted basis. Management believes these financial measures can facilitate a more complete analysis and greater transparency into LifeVantage's ongoing results of operations, particularly when comparing underlying operating metrics from period to period. We've included a reconciliation of these non-GAAP measures with today's release.

This call also contains time-sensitive information that is accurate only as of the date of the live broadcast, January 30, 2024. The LifeVantage assumes no obligation to update any forward-looking projections that may be made in today's release or call. Now I will turn the call over to Steve Fife, the President and Chief Executive Officer of LifeVantage.

Steve Fife : Thanks, Reed, and good afternoon, everyone. Thank you for joining us today. During our second quarter, we continued to advance our strategic transformation and execute well against the core elements of LV360. I significantly improving profitability was a key takeaway from our latest results. Adjusted EBITDA increased 289% year-over-year to $3.1 million. In the second quarter, and our adjusted EBITDA margin was up 450 basis points to 6%, reflecting ongoing efforts to strengthen our core business and drive productivity. We are very pleased with the trends we are seeing in revenue for consultants. In each of the last 4 quarters, which coincides with the introduction and implementation of several key LV360 initiatives, our revenue per consultant has grown at a solid double-digit rate.

For example, in the second quarter, revenue per consultant increased over 13% year-over-year. While total revenue in the second quarter were down slightly versus last year, robust demand for TrueScience, liquid collagen, coupled with the positive trends we are seeing in consultant productivity and our performance in markets like Japan, where Q2 revenues were up 3.9% on a currency-neutral basis, give us a high degree of confidence in our long-term growth outlook. Revenue attributable to liquid collagen, including the Healthy Glow Essential Stack, which bundles liquid collagen with Protandim Nrf2 Synergizer exceeded $13 million in the second quarter, an increase of over 44% versus a year ago. In the Americas region, where the product was first introduced in June 2022, we continue to experience strong growth with sales up approximately 13% on a year-over-year basis.

In the U.S., consultant penetration of liquid collagen rose to 31.6% in the quarter up from 27.2% in Q1 with a continued focus on Healthy Glow Essential Stacks. Customer penetration was 27.2% in the U.S. during this Q2 compared to 28.1% in Q1 and 26.9% in Q4 of fiscal '23. International sales of liquid Collagen accounted for approximately 22% of Q2 liquid collagen revenue, mostly reflecting results from Australia, New Zealand and Japan, where the product was first introduced in March 2023. In late September 2023, we expanded the international launch of liquid collagen with the initial rollout into Mexico, and this was followed by introduction to the Philippines and Canadian markets in November. We are also pleased with the recent progress on other new innovative products.

For example, early in the second quarter, we introduced TrueScience True Renew daily firming complex, a clean cosmetic retinal alternative that is proven to tackle 11 visible signs of aging. Importantly, this unique product is a perfect complement to Protandim Nrf2 Synergizer and TrueScience liquid collagen, further building on the power of our core positioning around being the activation company, along with creating momentum for our TrueScience activated skin care line. A couple of weeks ago, we held our annual global kickoff event where we unveiled the launch date for the next phase of LV360 along with new sales incentives and additional consultant tools. Rise era was announced as a theme for the year with a strong call to action to consultants to rise and build on the strong foundation LV360 has laid for the future.

We've streamlined and simplified the message for consultants to drive growth and success by focusing on 3 basic behaviors of network marketing, enrolling, retaining and rank advancing for [ERA] era. This focus is supported by a new Rise Eera incentive that enables consultants to earn enticing lifestyle and business prices including shareable items like luggage and travel vouchers based on achievement in enrolling, retaining and advancing. Cape Town, South Africa, including an African safari was revealed as the first-ever executive destination trip under the new Evolve compensation plan. Qualification criteria for this once-in-a-lifetime trip is based on era behavior and achievements through the year with travel scheduled for February 2025. New consultant tools were also launched at our global kickoff event, including the new Evolve Possibilities pathway, which emphasizes 4 pivotal consultant ranks within the Evolve compensation plan and what is unlocked at each stage to inspire and motivate rank advancements.

Our major events continue to be an important element driving consultant behavior and capitalizing on the strength of our broader LifeVantage community. The global kickoff in January, set the tone for calendar 2024, and we will build on this excitement with our upcoming in-person Momentum academies in March. The next phase of our LV360 transformation will commence in a few days at the start of February, Evolve our contemporary compensation plan and reward circle our unique customer loyalty program, we'll be launching in Mexico, Canada and Europe. Recall, we first launched these programs in the U.S., Japan, Australia, New Zealand and March of 2023, as part of LV360 and they have been key elements of our success over the past year. In addition to our Rise Era initiatives in our Phase II launch, we've established an optimization team to lead ongoing strategic efforts to build our active account base.

The team is focused on 3 areas: first, ensuring our enrollers, the group of consultants actively enrolling consultants and customers each month is increasing, arming our enrollers with a strong dollar per hour earnings potential message, so the business is seen as an enticing business opportunity for those looking for a side hustle. Second, that there is a clear replicable path to enrolling someone in your first 30 days as a consultant. And finally, that we are making it easy for our rating product fans to share their incredible results and our unique product story in new, innovative and compelling ways. We will be updating you on the progress of these optimization efforts in coming quarters. In summary, we are pleased with progress on our strategic transformation, LV360.

Our improved outlook for profitability in fiscal 2024 despite a still challenging top line environment underscores our confidence in the trajectory of key initiatives as well as the strength of our competitive position. Engagement levels remain high across the entire organization. And we look forward to our business momentum continuing to build as we expand our efforts across all our international markets over the next several quarters. We remain focused on executing our plan while remaining agile to ensure we are optimizing the key elements of LV360 to drive sustainable, profitable growth and value for shareholders. Capital allocation continues to be a key area of focus. And during the second quarter, we remain steadfast in our balanced approach of returning excess capital to shareholders through dividends and share repurchase.

Carl will cover this in more detail in his section. Now let me turn the call over to Carl Aure, our Chief Financial Officer, to review our second quarter financial results. Carl?

Carl Aure : Thank you, Steve, and good afternoon, everyone. Let me walk you through our second quarter financial results. Please note that I will be discussing our non-GAAP adjusted results. You can refer to the GAAP to non-GAAP reconciliations in today's press release for additional details. Second quarter revenue was $51.6 million, down 3.8% on a year-over-year basis and foreign currency negatively impacted revenue by $0.2 million. Excluding the negative impact of foreign currency fluctuations, second quarter revenue was down by $1.8 million or 3.4% as compared to the prior year period. Revenue in the Americas region decreased 1.6% to $39.1 million in the quarter, primarily driven by a 9.5% decrease in total active accounts, partially offset by higher average revenue per account, resulting from changes in product mix due to continued penetration of our TrueScience Liquid Collagen product.

Revenue in our Asia Pacific and Europe region decreased 10% to $12.6 million in the quarter, driven by an 18.2% decrease in total active accounts the closure of our e-commerce business in China and the negative impacts from foreign currency exchange rate fluctuations. Excluding the negative impact from foreign currency fluctuations, second quarter revenue in our Asia Pacific and Europe region was down 8% as compared to the prior year period. The foreign currency impact continues to be driven by fluctuations in Japan, accounting for $300,000 of the impact. Adjusting for this impact, revenue in Japan increased 3.9% on a constant currency basis in the quarter as compared to the prior year period. Gross margin was 78.6% for the second quarter compared to 78.1% in the prior year period.

The increase in gross margin was primarily due to changes in sales mix along with lower shipping related expenses in the quarter, resulting from changes in shipping methods. Commissions and incentive expense in the second quarter decreased $1.8 million year-over-year. As a percentage of revenue, commissions and incentive expense decreased 180 basis points to 42.1% versus 1 year ago levels, which was primarily driven by changes in sales mix, impacts from our Evolved compensation plan as well as the timing and magnitude of promotional and incentive programs. Non-GAAP adjusted SG&A expense was $17.4 million compared with $19.4 million in the prior year quarter and was down 230 basis points as a percentage of revenue to 33.8%. Adjusted non-GAAP operating income was $1.4 million, compared with a loss of $0.9 million in the prior year period.

Adjusted non-GAAP net income was $1.4 million or $0.10 per fully diluted share in the second quarter, compared to adjusted net loss of $0.8 million or $0.07 per fully diluted share in the comparable period last year. We recorded a tax benefit of $0.5 million in the second quarter of 2024 compared to $17,000 in the prior year period. The increase in tax benefit was primarily due to changes in taxable income and the favorable impact of discrete items. We expect that our effective tax rate will fluctuate slightly during the remainder of fiscal 2024 as the impact of discrete items and other permanent differences are recognized. Adjusted EBITDA for the second quarter was $3.1 million or 6% of revenues compared to $0.8 million and 1.5% in the same period a year ago.

Please note that all of the adjustments from GAAP to non-GAAP that I discuss today are reconciled in our earnings press release issued this afternoon. We ended the second quarter in a strong financial position, with $17.3 million of cash and no debt. We also continue to maintain $5 million of availability under our revolving line of credit. Capital expenditures totaled $0.5 million in the second quarter. We anticipate total capital expenditures for fiscal 2024 to be approximately $2.5 million. In addition to maintaining a strong balance sheet, we continue to focus on our capital allocation priorities to drive value for stockholders. During the second quarter, we used approximately $1.9 million in cash to repurchase approximately 288,000 common shares under our share repurchase authorization.

And through the first 6 months of fiscal 2024, we have used approximately $2.7 million to repurchase approximately 433,000 shares. As of December 31, 2023, there is $24.2 million remaining under our stock repurchase authorization. We also announced a quarterly cash dividend of $0.035 per common share of stock or approximately $450,000 in the aggregate. This dividend will be paid on March 15, 2024, to stockholders of record on March 1. Since the beginning of fiscal 2024, including this latest dividend announcement, we will have paid cash dividends of $0.505 per share or approximately $6.4 million in the aggregate. So far this fiscal year, we will have returned over $9 million in total value to our stockholders through share repurchases and dividends.

Turning to our fiscal 2024 outlook. We anticipate our fiscal 2024 revenue will be in the range of $207 million to $213 million, from the previous range of $216 million to $226 million. Additionally, we continue to anticipate adjusted non-GAAP EBITDA in the range of $16 million to $18 million with adjusted non-GAAP earnings per share in the range of $0.57 to $0.67 per share, increasing from the previous range of $0.52 to $0.62 per share. For fiscal year 2024, we expect our annual effective tax rate to be approximately 22% to 24%. Included in our fiscal 2024 guidance is over $2 million of nonrecurring expenses related to an expiring sponsorship agreement and costs associated with the rollout of LV360 to our remaining markets. We remain committed to improving our adjusted EBITDA margins, and we believe we are on track to reach our long-term target of low double digits.

And with that, let me turn the call back over to the operator for questions. Operator?

See also Jim Cramer is Bullish on These 10 Stocks and 15 Cheapest Countries to Get Second Citizenship.

To continue reading the Q&A session, please click here.

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Title:

Content: SUIC, Midas's Partner Suntech Has Successfully Introduced Customized Products and Services To Its VIP Multiple Level Marketing Companies. Suntech Estimates To Quadruple Profits to $8 Million. SUIC Midas Will Partner With 20 Global PSP Partners in 2022 To

Autor: Accesswire
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SUIC, Midas's Partner Suntech Has Successfully Introduced Customized Products and Services To Its VIP Multiple Level Marketing Companies. Suntech Estimates To Quadruple Profits to $8 Million. SUIC Midas Will Partner With 20 Global PSP Partners in 2022 To NEW YORK, NY / ACCESSWIRE / September 21, 2021 / Sino United Worldwide Consolidated Ltd. (OTC PINK:SUIC) and Midas Touch's PSP partner in Taiwan, Suntech, has successfully introduced the four products and services to its existing VIP MLM customers. …

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Companies such as Suntech and PM-International have reported significant profits, with Suntech estimating to quadruple its profits to $8 million.

However, other companies, such as Avon and Tupperware, have experienced a decline in stock value, with Avon's stock value falling from $30 to $3 in 10 years.

Title:

Content: 'Direct Selling' - Avon, Tupperware - Is Extinct

Nov. 18, 2022 11:25 AM ETHLF, MED, NTCO, NUS, PRI, TUP, USNA3 Comments
Robert FitzPatrick
394 Followers

Summary

  • Direct Selling became obsolete generations ago. So how is it that millions today get recruited for "income opportunity" in "direct selling" and billions are traded on "direct selling" stocks?
  • Avon and Tupperware are cited by "multi-level marketing," or MLM, promoters as "proof" that MLM, e.g., Amway, Herbalife, is "direct selling."
  • Usable data on actual income and churn rates of MLM "direct sellers," market saturation, and retail sales to actual customers are not provided.
  • In fact, Avon and Tupperware for years have been walking dinosaurs, still trying to do "person-to-person" sales to end-users with commodity products, while MLMs hype "unlimited" income.
  • The shrunken and devolved state of Avon and Tupperware today reveals that direct selling is extinct. MLM is not, and never was, direct selling.

It is generally accepted that "direct selling" was killed off generations ago by mass merchandising, big box stores, mail-order and then the internet, among other societal changes. The "Fuller Brush man" is long gone. No one's at home. No one wants or needs or has time for a "personal" salesperson. Everything's in stores or online. And, even when "direct selling" still lived, no one ever went into that tough line of work thinking they would get rich from it.

Yet, each year, millions are recruited, and pay thousands, for the "opportunity" to work as "direct sellers," with promises and expectations of "unlimited" income. The number involved today is many, many times greater than ever worked in that "extinct" field decades ago. Billions are being traded on Wall Street for shares of "direct selling" companies. How can this be?

In my book, Ponzinomics, the Untold Story of Multi-Level Marketing, I document the death of "direct selling" and the 1945 invention of "multi-level marketing," or MLM. I describe how "MLM" falsely assumed direct selling's revered old identity. I trace MLM from its Adam, a little California-based company called "Nutrilite," to today's "industry" led by Amway, Herbalife (HLF) down 64% YTD, Nuskin (NUS) down 31%, USANA Health Sciences (USNA) down 49%, Primerica, Inc. (PRI) down 13%, and Medifast (MED) down 45%. MLM's financial solicitations for consumers to become "direct sellers" have reached into – and led to losses for – virtually every household in America.

In the newly invented "MLM," the main source of revenue shifted from end-user customers to the salespeople themselves who are incentivized to "be their own customer" by buying their own products. Obviously, no one makes money purchasing their own inventory, but MLM offered a unique reason to do so – "unlimited" income potential.

No More Need to Knock on Doors

All MLM "direct sellers" can potentially gain "unlimited" income by recruiting an "endless" chain of other "direct sellers." No need to pound the pavement and get rudely rejected at front doors any more. Each "direct seller" on the chain has to meet a quota to "qualify" for future rewards from their recruits who, in turn, are their "own customers" and recruiters too, ad infinitum. The chain can grow without continuous personal effort. The qualifying quota can usually be met by just making a personal monthly purchase of inventory. "Commissions" on all these transactions, all the way down to the "last ones in," flow up the chain. In the MLM pay plan, most of the total commissions go to the top 1%. So, all new "direct sellers" try mightily to recruit (and buy) their way to those top ranks. Of course, only a tiny few can ever be at the top.

Some people argued this is a pyramid recruiting scheme, inherently unfair and deceptive, and a counterfeit of direct selling. In the design and the pay plan, bottom ranks – the vast majority – will inevitably lose. They said constantly adding salespeople in any area destroys profitable retail selling potential, if any exists to start with. They cited data on 90-99% loss rates and huge churn rates among new "recruits" and asked, where are the retail "customers"?

While offering no data on retail customers or salespeople losses or market saturation, MLM promoters offered "proof" that MLM is direct selling by pointing to two long-established and respected direct selling companies in their ranks, Avon and Tupperware (TUP). Both companies were members of the Direct Selling Association, DSA, and both were "direct selling" icons, Avon for its "ladies" and Tupperware for its "parties." To any pyramid scheme accusations, MLM promoters indignantly countered: "Are you calling Avon and Tupperware pyramid schemes?"

Walking Dinosaurs

The truth for both companies is very different from the MLM-spin. Avon and Tupperware used to have differentiated products and real consumer demand. Their salespeople made money from their own retail sales. But moving into the 21st Century, Avon and Tupperware became walking dinosaurs, vestiges of the extinct era of "direct selling." They were still trying to base their businesses on their historical brands and on person-to-person retail sales to real customers, as direct selling companies always used to do.

Despite MLM's citing Avon and Tupperware, and thereby bestowing legitimacy on the "MLM" members of the Direct Selling Association, deep differences between those icons of the old era and MLM burst into public view in 2013-14. The two companies publicly quit the Direct Selling Association, charging ethics violations and DSA-member connections to pyramid schemes.

Avon's Long Good-Bye

Avon had been a true direct seller for decades before MLM was invented. But as the door-to-door model faded, Avon began a long decline. In 2000, Avon began shifting its focus to "incentivizing" salespeople to recruit more salespeople and getting them to buy inventory, MLM-style. In 2009, during the Great Recession, Avon ran its most expensive ad in history, on television during the Super Bowl. The ad never mentioned any Avon products! It only solicited "salespeople." Still, global revenue dropped continuously over the next 10 years. Avon stock value fell from over $30 to just over $3.

Finally, Avon split off its faltering North American business and sold it to the Korean company, LG Household & Health Care. Avon claimed to have 250,000 sales representatives in North America. The remaining global business was later sold to the Brazilian MLM, Natura (NTCO) down 50% YTD, which also owns the retailer, Body Shop. Though Avon global was much larger, Avon shareholders traded 3 shares of Avon for just one in Natura.

The Korean-owned segment of Avon in North America is now classic MLM, selling the proverbial MLM "income opportunity" along with "health" supplements, make-up, jewelry, clothing, scented candles, even toothpaste.

On the Canadian Avon website, Avon promotes the "income opportunity," urging prospects in large bold black type: "Think big. Sell Avon part-time, full-time, you decide how much! It’s your business, your way!"

A disclosure (legally required in Canada, but not in the USA) appears midway down a long webpage in tiny, barely visible gray lettering: "The 2020 earnings of a typical Avon Leadership Representative was between $0 and $2,620 in commissions and bonuses." That's $0 to $50 a week, before subtracting all costs! And the "disclosure" does not break out how much of that tiny return comes from personal sales or the "downline."

Avon quietly rejoined the Direct Selling Association. The Brazilian company, Natura, which took over Avon's global business in 2020, has lost over 60% of its stock value in the last year.

Tupperware on the Brink

Tupperware was one of the first "party plan" companies, which are technically a small subset of MLM. They employ an "endless" recruiting chain, but are more rooted in retail sales transacted at "parties." Tupperware used to have a popular brand with innovative, differentiated products. But, as true direct selling began to disappear, Tupperware went into decline. It added MLM-type "health and beauty" commodities to bolster recruiting appeal but then deleted them. This year, it began also selling its products in Target department stores. Its kitchen-related goods are generally not distinct from other brands. A 10-months "Income disclosure" for Canada (not published in the USA) showed that half the "party planners" were classified "inactive," earning less than $30 for the period on average. 94% of the "active" ones reportedly received about $12 a week on average, before expenses.

In the last 5 years, the stock value of Tupperware has dropped over 90%. Its latest financials warned investors the company may violate loan agreements, setting off speculation Tupperware might declare bankruptcy.

The shrunken and devolved state of Avon and Tupperware, the most famous brand-icons of "direct selling," makes citing them as a defense of "multi-level marketing" as extinct as their old business model.

This article was written by

394 Followers
Robert L. FitzPatrick is the author of the new book, Ponzinomics, the Untold Story of Multi-Level Marketing (2020),the first comprehensive history and analysis of the "MLM" phenomenon, addressing its political influence, propaganda techniques and use of cult persuasion. FitzPatrick is an expert in examining and revealing deception and fraud in Ponzi schemes, pyramid schemes and bogus home-based businesses. He served as expert or consultant in more than 30 court cases involving pyramid schemes and multi-level marketing. He is co-author of False Profits (1997), an examination of the values and beliefs that support the delusions of pyramid schemes. He was featured on NBC Dateline, ABC World News, and CBS 60 Minutes, the documentary film, Betting on Zero and the podcast, The Dream.He has been quoted in many newspapers around the world, including the New York Times and Wall Street Journal. His booklet, Pyramid Nation, has been translated to Chinese and used by government regulators in writing China's first laws on pyramid schemes. His booklet, "The 10 Big Lies of Multi-Level Marketing", has been translated into four languages and posted on numerous websites. His White Paper, "The Main Street Bubble", which details the extensive influence-buying of the direct selling industry was featured in a CNBC Documentary, Selling the American Dream. In 2005, he delivered a seminar to in Colombo, Sri Lanka to central banking representatives from that country as well as India, Bangladesh, Bhutan, Maldives and Nepal. Robert FitzPatrick has developed informational resources for consumers, journalists, academics and regulators including a multi-media PowerPoint presentation and a statistical analysis of the losses suffered by participants in pyramid selling schemes. He also published a widely read booklet on the landmark federal case brought against the Amway Corporation. He is a expert network member of GLG Research, and Coleman Research Group, as well as other networks of experts who are referred to clients for consultation, speaking and report writing. In this capacity, he has provided expert consultation to financial many analysts who sought information about multi-level marketing companies and pyramid and Ponzi schemes. Robert FitzPatrick co-founded and serves as president of Pyramid Scheme Alert, the first international organization to expose and prevent pyramid scheme fraud. He personally responds to hundreds of consumer and news media inquiries each year. He has served as consultant and expert witness for Attorney General or State Attorney offices in four states, the US Dept. of Justice, and in numerous cases involving distributor fraud and pyramid schemes. Robert FitzPatrick is not an investor in multi-level marketing companies. He has never owned and never plans to own stocks of multi-level marketing companies. He has never been compensated based on any stock's performance. He does not offer investment advice and he is not an attorney.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: This article is for educational purposes only. It discusses fundamentals of the "direct selling" business model and the evolution of "multi-level marketing."

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The demographic characteristics of people who join MLMs vary, but often target women and low-income individuals, with women being more likely to experience stress-related psychological sequelae and low-income individuals being more susceptible to financial exploitation.

Title:

Content: Women ’ s psychological resilience is worse than men ’ s?
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According to a study published in the December 2021 Journal of Clinical Psychiatry, screening for stress-related psychological sequelae shows that women are more likely than men to experience stress-related psychological sequelae (SRPS), such as symptoms of major depression, generalized anxiety, and post-traumatic stress syndrome; however, when contextual factors affecting gender differences are taken into account, gender and stress-related psychological sequelae Relationships are no longer relevant.
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In life, we can be aware of the stressors of women at the side and give assistance, especially women who are often given the responsibility of caring for children and families more than men. It is recommended that men should be more supportive and tolerant of their other partners, which can help maintain women's mental health and create a happy and happy life.
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Deputy Director Dai Yi-chun reminded that in addition to regular mood and stress testing, you can also understand your stress level through your physical state, such as if you have stiff shoulder and neck muscles, often have headaches, sleep is not good, easily tired and other conditions, indicating that there is a certain degree of stress, and you need to relax in time.
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MLM companies use social media and online advertising to recruit and retain members, often by advertising high-paying jobs or promising high returns to attract investors.

Title:

Content: 17 people arrested or investigated for job search Ponzi scheme
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17 people have been arrested or investigated in an island-wide anti-fraud operation on suspicion of job-hunting scams.
Police today (March 20) issued two notices in response to job search fraud, saying that the authorities received a number of job search related Ponzi-like scams between December last year and March this year.
The so-called Ponzi scheme refers to an investment plan with a virtual high rate of return as bait, attracting investors to invest, and converting the funds of new investors into high interest payments to the old investors.
Police say scammers advertise high-paying marketing jobs on the internet, social media and messaging apps to lure job seekers to fake job search platforms.
Scammers provide online jobs on the platform, job seekers can earn commissions by completing simple tasks such as using e-commerce shopping, but job seekers must first register for free membership on the platform.
In order to recruit new members, the platform also implements a reward mechanism to provide additional shopping rebates when existing members recruit new members and new members complete a certain number of tasks.
After registering as a member, job-seekers will be required to recharge the member account in order to start the task to earn commissions.
All deposits and withdrawals are made in cryptocurrency.
Most job seekers will initially earn commissions and profits, so they mistakenly believe that the work is regular, and will continue to charge more money for the account under the instructions of the scammers, until they can not earn extra commissions and the account money can not be withdrawn.
Law enforcement officers from the Commercial Affairs Bureau (CAD) of the Singapore Police Force conducted multiple operations at the same time on March 17 and 18, arresting three men aged between 26 and 30.
Initial investigations revealed that the fake job search platform is believed to be a Ponzi scheme through a multi-level marketing strategy. The scammers are constantly recruiting new job seekers and using their “top up ” amount to distribute“ commissions ” to old job seekers, thereby attracting them to continue to “top up ” and profit from it.
The three men were suspected of carrying out publicity to recruit potential job seekers.
Police also conducted a number of operations between March 8 and 18, and arrested seven men and seven women suspected of e-commerce affiliate business fraud.
Four of the men, aged between 19 and 26, were believed to have sold their Singpass and bank account information to strangers for payment. The information was used by the scammers to register commercial bank accounts to transfer the stolen money.
Under Section 242A of the Criminal Code, false representation of position without relation to goods and services is punishable by up to 20 years in prison, a fine, or both.
A police investigation is ongoing.
The police reminded the public not to accept job offers that are simple but offer great rewards, and to verify the authenticity of the job offer with the company that provided the job.
In addition, the public should not send money to people they do not know or meet.
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Some MLM companies, such as Trades of Hope, use guilt and religious tactics to pressure sales and recruit new members, with an initial buy-in of $150 and monthly website costs.

Title:

Content: Multi-level Marketing scheme "disguised as an advocacy organization" draws criticism

Here's another multi-level-marketing scheme to be aware of. It's called "Trades of Hope" and Hannah Alonzo describes it as an MLM scheme "disguised as an advocacy organization." Here's how the Trades of Hope website pitches the business to potential "partners" and "advocates" (that's what they call folks who join the MLM to sell merchandise and recruiting additional sellers for their downline):

"Create job opportunities for women leading their families out of poverty and human trafficking by shopping ethically made home decor!"

The company works with "Artisan partners" across the globe, who create the products that are then sold by folks who sign up for the MLM. Trades of Hope describes their relationship with the artisans:

We pay our Artisan partners 100% of their asking price (they set the price!) for a product order before you even see that product on our website! We are in a business partnership with them. Not a charity. Our Artisans receive 3 to 6 times what they would normally make in their region. The Fair Trade communities that are helping them get their product to market follow guidelines of checks and balances to give back, not just to the Artisan, but to their community as a whole as well. This includes things like wells, children's schools, education for adults, land, and developing homes. It is life changing. Fair Trade is about providing a living wage for those in extreme poverty and giving them a chance for a better life.

If the business just worked with artisans to sell their products to the public, I'd have no problem with it, and would actually see it as a positive thing. However, Trades of Hope doesn't simply support artisans—its business model is based on recruiting sellers who then recruit other sellers, which makes it a typical MLM. The recruitment page of the Trades of Hope website clearly states: "Enjoy The Rewards and The Partner Does All The Work!" The problem is, though, that very few people are actually "enjoying the rewards," as it's been shown time and again that 99% of people who participate in MLMs lose money.

Over on Reddit, in the terrific subreddit r/antiMLM ("Stop MLM schemes from draining your friends dry. Multi Level Marketing (MLM) schemes are a drain on our society. Its participants either build the pyramid taller or get squashed by it.") I found some interesting discussions of Trades of Hope. Here's some insight from a former member:

I escaped from them. It's basically an MLM. You don't need to keep product on hand, you have a personal seller website and you pressure people to host parties. Their schtick is that they sell items made by people in developing countries so they use a lot of guilt and religious crap to pressure people into buying the items. We were told to post things on Facebook like "help this family out of poverty one bracelet at a time" etc. I finally noped out after realizing that their method is stupid and sustainable development can be found in ways that don't require me to guilt my friends and family into having stupid online parties. As MLMs go, the buy in is $150 so people don't lose their houses over this. The website is $12 or $13 a month. So not like lularoe requiring $4000+ buy ins but it's def an MLM, there's a lot of pressure to recruit and maintain a downline.

If you want to learn more about Trades of Hope, Hannah Alonzo recently posted a terrific deep dive into the company. Her analysis includes a critique of the company's recruitment structure, as well as critical commentary on how the entire operation oozes with "White savior complex."

The use of conditional join systems is common in MLM companies, with 96% of marketing businesses using this system, and commissions accounting for 44% of marketing turnover.

The MLM industry has faced significant challenges in recent years, leading to a decline in popularity and a shift towards more traditional direct sales models.

Some companies, such as QNet, have been banned in several countries due to their fraudulent activities, which include exploiting financial difficulties and inexperience to recruit members.

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QNet victims: "We ate the beatings...
Watch what happens to us! ”
30.
NOVEMBER
2023.
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Karen Abdel Nour -
In the Shouf, he mortgaged his house and his car.
At the end of the day, he sold his jewelry.
In the Bekaa, the conflict within the family flared up after one of its members involved the entire family.
One of the men who took the oath of divorce against his wife in one of the villages after she borrowed without his knowledge and drowned him in debt.
The chaos also reached clerics and members of the security forces (former and current) after some of them fell into the trap.
What is the story of QNet, which is covered up by marketing activity to promote a fraudulent business?
This is the testimony of one of the victims: “Young people are sticking with you day and night until you get $3,000 and see how your life changes.
And if you don ’ t have them, it ’ s simple.
They convince you in a professional way that you recover within a month, and take advantage of your financial situation.
Before you start, you are forced to attend conferences aimed at brainwashing you with religious rituals and stimulating positive energy, and show you the testimonies of people who have become above the wind after they were underground, and of course you discover two dimensions that it is all an illusion.
I mean you want to miss more than 30 thousand dollars on the company to recover your money, by convincing people in your role to join the network, provided that they are close to the closest so that you do not think one day you will withdraw.
When you have eaten, you have two choices: You have left for the sake of those who have worn out with you, or you have a black face.
I ate the beating and pawned all my jewelry and I don & apos; t know what to do
Be careful what happens to me. ”
That's how the trap is set.
Zahi (pseudonym) also tells us what happened to him: “I was a rogue in difficult circumstances and my son was going to miss college.
My co-worker kept asking me if I could arrange a grant.
Suddenly Shifto offered his resignation and started traveling and wearing brands and driving a new car.
I asked him once about his job, he said, “Family business. ”
what do you say you come with me, I & apos; m waiting for a scholarship from here and there
You get $3,000 and take 20 nights at a hotel. ”
Last March, after I was unable to secure the grant, I agreed on the condition that I know what the nature of the job is and if there are taboos, ” he replied: “If you don ’ t trust me?
I sold my car, I mortgaged things from my house, and I took out a loan.
we will find the second day in one of the hotels in the capital until they handed over the money, and when he explained to me about the job, I felt that it was a haram job and told him I won & apos; t enter
but they reach a stage of experience they will tell you and you are happy
Then I missed a conference that was attended by more than 350 people, most of them Syrians and some of them Iraqis.
They presented testimonies of people and cited Quranic verses to convince us that work is halal, and told us about the dream car and the travels of life.
And they stopped us from clicking about the company, and we only get information from us directly...
I didn & apos; t finish even though they insisted I miss my brother and friends to get my money back
And I lost the money even though I could have legally refunded it within 7 days, but they hide it.
“The hotel was built with a roof over its head. ”
Sarah (pseudonym) also did not hesitate to tell us what she experienced.
“They took my mobile phone from me, opened it and started asking me about every name in my name.
who is he and what is he doing and what is his situation
And this is how they plan to control it.
They take you on the Circle of Influence, which means that you are hunting someone close to you.
They asked me to call some people and who I was until the time you told me.
And I have 48 hours to get two people, one on my right and one on my left, and this is the only way to start paying back my money...
You call people and talk normally and ask them about their situation, and say that you have started a new job, and they hear that the job changed my life, but on condition that you do not give details about the nature of the work.
and they come back a few times and convince them to get the money and join the network
And when we meet, the appearances must be overwhelming, from the way of dress and the people around them, and they become to give me a teacher.
All of this is part of the trap that they set up and forced others to sign it, or else they will fly the Egyptians. ”
About QNet
It is a foreign company and one of the Pyramid Scheme (Pyramid Scheme) marketing companies, banned in many countries, which lurks behind the cover of legally legislated network marketing, in order to circumvent the law.
The company ostensibly carries out some kind of marketing, but in reality it uses certain products and offers (watches, stones to ward off negative energy, hotel stay), to cover up subsequent frauds.
Its danger lies in targeting people who are inexperienced and inexperienced, or who suffer from financial difficulties, and it tempts them to profit quickly.
As for the beneficiaries, they are at the top of the pyramid and make huge profits.
The fact that the company's business is mainly based on secrecy and oral marketing, it does not pay any taxes to the State.
While it is active in places such as Dubai, Turkey and Malaysia, as well as in countries where money laundering is active, other countries, such as Saudi Arabia, India, Togo and Nigeria, have banned it.
Involving victims and turning them into perpetrators is one of the most important goals.
In the first session, the marketer deliberately reminds the “victim ” that she is out of shape and that a world of dreams is waiting for her to pull her out of her bitter reality.
All of a sudden, she is offered access to the network.
The conditions are simple: securing at least $3,000 in cash for one of the products mentioned, which in fact does not exceed hundreds of dollars; in addition to recruiting two people, one on the right and the other on the left, to convince them to enter the network, and so on.
The profit comes tirelessly through the “victim ” receiving $300 for every addition to the network.
Huge profits for the head of the pyramid, then, and crumbs for the victims.
Lebanon in the Goal
On April 27, 2016, the General Directorate of Internal Security Forces – Public Relations Division announced that, as a result of close follow-up, the Beirut Judicial Detachment in the Judicial Police Unit was able to arrest people who were carrying out sorcery operations in one of the cafes of Verdun, all of them Syrian affiliates.
They were also seized with a laptop, necklaces, wristwatches, positive energy necklaces, and notebooks and books promoting QNet.
The gang soon "spawned" again with other people and under a different cover.
However, ironically, the company was legally registered in Lebanon on 16 / 03 / 2017 under the number 2884, taking the name QNet Limited.
Strange and wondrous!
The company ’ s activity here subsided for years until it re-emerged as the economic crisis deepened, taking advantage of the many Lebanese need for additional income.
The members of the “gang ” relied on the lack of awareness of some, especially in closed and crowded areas such as in some religious environments, mountain areas and clubs.
How do they succeed in their goals?
For starters, they practice a kind of brainwashing on their victims for four days at a time, intensifying meetings and contacts and turning the focus of the supposed “victim ” thinking.
They then exploit vulnerabilities according to the reality of each of the victims, until they agree to enter the pyramid.
“Military ” and religious leaders.
Those in the company ’ s orbit did not just create their own secret society, blocking the truth of their work from the “victim ” until they were caught, that is, joining the network and paying the money.
But it is remarkable that they have increasingly penetrated Lebanese society in all its sects, regions and categories under the slogan: “Have positive energy and do not give up.
You finish your race today, and you only finish it at the finish line. ”
They went so far as to “hunt ” a number of members of the security forces — some of them who left their corps and became more involved, and others who are active and continue to serve.
There are clerics (in more than one denomination) who ended up taking off their religious uniforms and engaging...
Then travel in luxury cars and around the world.
The head of the Druze monotheistic sect, for example, recognized the seriousness of the situation, especially after luring members of some “religious ” families into the trap.
She warned in a statement of the danger of being encouraged to join QNet, and that any dressed person who joined it would be outside the religious rules that are based on the fear of God and virtue and prohibit dealing in falsehood and harming others.
Here, there are those who see the need for action by other religious authorities, especially since the company ’ s members are spread out across different environments.
I'm the victim...
I'm the executioner.
Followers gather that QNet ’ s activity includes fraudulent acts that fall under the crime of money laundering.
In a quick economic reading, there is no product for sale, since the first offers – watches, water filters, etc. – are merely a way to justify the payment of the “victim ” in thousands of dollars, when the aim is to catch them and bring them into the pyramid.
The talk of quick and easy profit contrasts with the simplest principles of transparent work, which is difficult, and may be impossible, to make large profits in a short time.
In this context, lawyer Imad al-Khazen, in an interview with Nidaa al-Watan, points out that what is happening is illegal, but the crime of fraud must be proven.
In the first stage, the “victim ” is provided with the bait to be inserted into the pyramid and then turned into a broker to implicate others.
However, there is nothing to prevent the intervention of the Financial Public Prosecution – as well as the Cybercrime Bureau – to prosecute them.
He called on those who signed into the company ’ s window to file complaints within the legal deadline for the Public Prosecution to act on them.
Someone was caught in the trap without understanding its subtleties.
Some understood the goals but were discouraged by greed.
There are also those who remain convinced of the legitimacy and legality of the business simply because QNET is a global foreign company.
But in any case, we are faced with a recipe ready to turn overnight into a victim and executioner at the same time.
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Overall, the MLM business model has been experiencing significant trends in recent years, with some companies experiencing a surge in profits, while others have seen a decline, due to various factors such as the pandemic, economic circumstances, and business models.

The average financial outcomes of individuals participating in MLMs are generally unfavorable, with 90-99% of participants losing money.

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Individuals can protect themselves from MLM scams by being aware of the tactics used by these companies, such as emotional manipulation, cognitive biases, and high-pressure sales tactics.

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Content: Victims of greed.
Beware of losing your money with the illusion of employment and 5 signs to alert you
Monday ، 22 July 2024 10: 27 PM
Crime of employing funds - archival
Books: Waveform Wish
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In the recent period, there have been many competent authorities investigating cases of fraud and fraud related to the seizure of citizens' funds, many reports and issues related to the employment of citizens' funds and the loss of their money by the illusion of employing them in many phantom companies that are accustomed to fraud on citizens.
The fact is that the operators of such companies are only trying to collect the largest amount in a short time by enticing dealers with actual profits in the first month or two and then the dealers tell other people and entice them to profit and offer their money to these companies, which often declare bankruptcy or escape in a short time.
How to avoid falling into the trap of fraud:
Dozens of citizens fall into the trap of employing money and fraud and taking their money, illusion of attractive monthly profits, so we give you 5 reasons to confirm you fraud the company and try to steal your money.
There are many signs that make you wake up before losing your money, so if you find these factors, beware of getting involved with these companies.
5 reasons why the company is trying to steal your money:
* Short term of establishment of the company, which usually will not exceed 3 years
* Announcement of an attractive profit rate from the first month
* If you announce a fixed percentage of profits per month
* If the company requests to enter customers through you in exchange for increased profit
* There is a clause in the employment contract stating that the amount must be received by the company for a long time
Some think that he can get profits in the first month or two and then withdraw the capital and thus ensure the profit, but was unable to do so these companies thought about it before, so you find in their contracts a paragraph that states that the client must deliver the amount to the company for a long time, sometimes up to 3 years, which you can not withdraw the capital whenever you want.

Regulating communication and media can also help prevent fraud, and awareness is key to recognizing and avoiding fraud tactics.

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Content: Justification file
Fast Profit Traps
Lawyer Oraib stresses the need to regulate the means of communication and the role of the media in awareness Judicial police research shows that the main reason for the complainants to fall into the traps of fraud and deception and the seizure of their money is greed, as they respond to the wishes of professionals to master the calculations of profits and pretend that they live extravagance after winning the profits of the virtual world.
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By being informed and cautious, individuals can avoid falling victim to MLM scams and protect their financial well-being.

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Content: Using gimmicks and tricks to manipulate the public psyche
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(Morning Post) Order to be quick, otherwise you will miss the offer; falsely claim to be a friend or family member to gain trust; play tricks to lure victims into investing more money, step by step can not pull away - fraud cases in recent years, fraudsters skillfully manipulate the psychology of the general public, using gimmicks and tricks to lure people into the hook.
The findings were shared by Chief Psychologist of the Singapore Police Force, Carolyn Misir, at the online opening ceremony of the 5th Asian Conference on Criminal and Action Psychology on Monday (18 July).
Caroline said that fraud gangs are accustomed to persuasion techniques and cognitive biases, and if the victim is inclined to be emotional and not thinking, it is easy to fall into the trap set by criminals.
Last year, fraud cases rose by more than 50% year-on-year, and losses exceeded 600 million yuan.
Despite the police ’ s continued crackdown on crime, fraud cases in Singapore rose 52.9% year on year last year, defrauding people of at least $633 million, mostly from overseas, and using the latest technology to assist in the crime.
Speaking at the opening ceremony, Sun Xueling, Minister of Social and Family Development and Minister of Home Affairs, said that China is focused on tackling three challenges, namely fraud, drug abuse and juvenile sex crimes.
“Each of us has a psychological weakness and may crave too much, trust too much, or let our guard down … Through psychology and behavioral science, we can better understand the motivations, reasoning, and thinking processes of fraud gangs to help us improve safety and security. ”
For the first time, the triennial Asian Conference on Criminal and Action Psychology was held online for four days, with nearly 1,500 participants from home and abroad in the field of psychological and behavioral sciences.
The conference also invited four international experts to share a range of topics, including fraud, crime and behavioral psychology.
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