The multi-level marketing industry has seen significant growth and changes, with some companies reporting revenue increases and others facing profit declines.

The direct selling industry grew 12% in 2022-23, driven by wellness products which accounted for 73.5% of turnover.

Suntech, an MLM company, is estimated to quadruple profits to $8 million with $1 billion in sales.

Avon and Tupperware have seen their stock value decline, with Avon's falling from over $30 to just over $3 in 10 years.

The pandemic has significantly impacted the MLM industry, with some companies growing due to increased demand for home-based products.

The government modified Consumer Protection Rules in 2021 to distinguish legitimate MLM players from ponzi schemes.

Many MLM companies have been criticized for deceptive practices that can lead to worker financial losses.

90-99% of MLM participants typically lose money.

The promise of wealth and financial freedom attracts people to MLM companies.

Low initial costs and no need for a physical store or staff attract potential workers to MLM companies.

Many people are drawn to MLM companies for the sense of community and teamwork they offer, as well as the desire for economic freedom, autonomy, and flexibility.

Australians aged 25 to 44, particularly young people, are most susceptible to recruitment scams, while women aged 30-39 with a master's degree are susceptible to MLM recruitment tactics through dating apps and emotional manipulation.

MLM companies often target low-income individuals, stay-at-home parents, and those seeking flexible job opportunities, as well as people with limited resources, capacity, or experiencing depression.

Loss aversion drives individuals to join and remain in MLM companies to avoid losses despite potential gains.

Some MLM companies are closing or switching to a direct sales model due to changing market conditions and regulatory scrutiny.

The multi-level marketing industry has seen significant growth and changes, with some companies reporting revenue increases and others facing profit declines.

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
21.09.2021, 12:00  |   |   |

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. …

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. Suntech estimates To quadruple profits to $8 Million. SUIC Midas Touch will partner with 20 global PSP partners in 2022 to promote these products and services.

Suntech Taiwan is the largest Taiwan O2O Company, with over 50,000 Merchants and 15 Million users. Suntech Taiwan is going to lead these VIP MLM companies' enterprise-wide business transformation and design exclusive product and service packages. These MLM companies include: PM-International, Taiwan, which is a branch of PM-International AG, Luxembourg. It has more than 30 subsidiaries in more than 40 countries. It provides high-quality nutritious and fitness foods and beauty care products carried through its own brands. PM-International has been recognized as one the Top 100 Direct Sales companies worldwide and is currently ranked 10th in 2021; and the Tsingshan Group of Companies has ten major business groups with a global scope covering more than 30 countries around the world. The holding group has captured the focus of major international media. Among the accolades it has gathered over the decades, its biotechnology company has received high recognition and won, among others, the Taiwan Biotechnology Award, the Taiwan's No. 1 Brand Award, and the Taiwan Golden Quality Award.

"Thanks to the breakthrough innovations and products of SUIC, Midas Touch, Suntech is estimating an increase in net profits to four-fold, expected to reach $8 million on its $1 billion sales turnover. Midas Touch products and services provide instant, emergency funds for our partner merchants and customers. This has been a big success especially during this critical period of pandemic. We are set to increase customer lifetime value with our advanced DeFi business models and strategies," says Joa Chen, Suntech's General Manager.

SUIC Midas is now finalizing and identifying additional 20 PSP partners this year through 2022, with over two million merchants that will bring an aggregate sales turnover of $20 billion, generating $8 million profits for each of the PSP partners as a result. SUIC Midas Touch will fully support these 20 PSP's to earn a total of $160 million in net profits and achieve a total $20 billion in aggregate sales turnover.

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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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The direct selling industry grew 12% in 2022-23, driven by wellness products which accounted for 73.5% of turnover.

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)
    (Catch all the Business News, Breaking News Budget 2024 News, Budget 2024 Live Coverage, Events and Latest News Updates on The Economic Times.)

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    Stories you might be interested in

Suntech, an MLM company, is estimated to quadruple profits to $8 million with $1 billion in sales.

Avon and Tupperware have seen their stock value decline, with Avon's falling from over $30 to just over $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 pandemic has significantly impacted the MLM industry, with some companies growing due to increased demand for home-based products.

Title:

Content: Educational Development Corp.: Growth Risk Might Be Overblown

Moat Investing
1.46K Followers

Summary

  • EDUC is the exclusive US co-publisher of educational children's books produced by famous Usborne Publishing by leveraging multilevel marketing (MLM) strategy.
  • It has strong fundamentals, fair valuation, and a compelling growth story that is being ignored by the market.
  • We arrived at a target price of $12.4 to $14.6 without incorporating any future growth and expansion in operating margins.

Investment Idea

Educational Development Corporation (NASDAQ:EDUC) has an attractive value proposition, strong financials, and optionality of significant growth ahead due to structural changes caused by COVID. On top of that, the valuation is reasonable, and management has skin in the game (owns 23% of shares outstanding). For these reasons, we remain bullish.

Business Overview

EDUC is the exclusive US co-publisher of educational children's books produced in the UK by Usborne Publishing, and EDUC also exclusively publishes books through their ownership of Kane Miller.

The business operates in two segments:

Home Business Division (Usborne Books & More or "UBAM") -(95% of revenues) - This segment sells books through consultants directly to consumers using a multilevel marketing model (MLM). Consultants sell books by hosting home parties, social media, and hosting book fairs with schools and public libraries.

Publishing Division – (5% of revenues) - Sells books to bookstores, toy stores, and other retail outlets.

If you would like to get the gist of our thesis, you can watch our YouTube video below.

Value Proposition

The children's books market is very competitive and fragmented. There are more than 135 publishers of children's books in the US. EDUC is competing with Scholastic and Pearson, which have extensive resources to run marketing campaigns and are well-positioned in both online and offline distribution channels. Although EDUC has a little moat, they have some strengths to their business model that will allow long-term value creation.

They have an exclusive and long-term relationship with Usborne. Therefore, clients of the Usborne in the US must acquire their books via EDUC. Also, there is a consensus that Usborne books are high quality and among the industry's best.

Their sales are a function of the number of active sales consultants. Commissions paid to consultants are a variable cost, and they are only paid when sales are made. Although this makes SG&A grow as the top line grows, since it's not a fixed cost to the business, it allows EDUC to achieve significant operating leverage. Also, it allows them to scale quickly and have flexibility.

Direct sales strategies like multilevel marketing are commonly referred to as pyramid and Ponzi schemes. However, the table below shows that it does work sustainably and increases revenue growth over the long run despite the negative press.

Source: S&P Capital IQ

Why might EDUC be mispriced?

There are multiple factors. Firstly, it's a micro-cap. This usually means there is limited analyst coverage, and due to the stock's illiquidity, there is low institutional interest. These factors, coupled with others, leave the company under the market radar despite its business is doing well and has promising perspectives.

Second, there is negative press around the MLM business models. The MLM model deployed by EDUC is vastly different from dodgy tactics used by other players. For example, many MLM models require the seller to purchase the inventory from the company before selling. However, this reduces the risk for the company and puts extra pressure on the seller, which can be left with expensive inventory that cannot be sold or returned. In the case of EDUC, there is no requirement to hold inventory.

Third, markets might be believing that the business's tailwinds are temporary due to COVID. Amidst Covid, schools were closed, and parents were working from home; this drove home-based learning and benefited EDUC. Additionally, unemployment rates soared, and many were left looking for work. This allowed EDUC almost to double its consultant count from 33 to 60 thousand. We believe the post-pandemic work from home trend will persist, supporting their sales. Furthermore, the active consultant might not fall back to the pre-pandemic level as these roles are usually part-time work which fits nicely with the trending gig economy.

The evidence speaks louder than words

There are also some clues from the management that revenue generated amidst pandemics might be sticky.

Management increased its dividend per share from $0.20 to $0.32. A dividend increase should be seen as a signal that a business is in solid financial shape and management is confident about its future.

Management increased capital expenditures to $4.15 million from $0.64 in 2020. This expenditure was primarily associated with equipment purchases to increase daily shipping capacity. These are some early signs that management is expecting positive growth going ahead. Additionally, this also improves their margins as amidst Covid they paid a premium for extra shifts.

EDUC has increased its inventory; the inventory build-up is approximately 60% of its total assets. This has been in anticipation of an increase in the sales, as it takes a four to six-month lead-time to have a title printed and delivered to them.

Source: Koyfin

Value Investing Approach: Asset Value

To calculate the actual asset value of the company, we tried to replicate the business from scratch. Therefore, below you will find the last reported balance sheet, where we have made some adjustments.

The value of the land recorded on books was $4.1 million. They own a 40-acre complex at 5402 South 122nd East Ave, Tulsa, with 400,000 square feet of office and warehouse space. They also own a facility located at 10302 East 55th Place, Tulsa, that has 105,000 square feet of usable space. According to our channel checks with realtors, the average price per square foot of their land lies between the range of $100 to $115. To remain conservative, we took the average price square feet to be $85. Therefore, we estimate the value of its land to be $42.9 million.

They also have a network of around 55,000 active consultants. To construct such a network from scratch is both costly and time-consuming. We estimate the replication cost of this network to be around $27.5 million ($500 per consultant). This is also roughly five months of sales commission cost incurred by EDUC in the fiscal year 2021.

The rest of the items are taken on book value.

Based on the above adjustment, we arrive at the total asset value of 106.7, and the fair value per share to be $12.4

Source: Moat Investing

Value Investing Approach: Earnings Power Value

This approach allows us to value EDUC without incorporating any growth. Here, we consider the business's historical figures (last five years) to get the normalized earnings and operating margin. To calculate the sustainable earnings, we smoothed out the company revenues for the previous five years to $131 million and then calculated the firm's average operating margin (6.5%) to arrive at the sustainable Operating Income of $8.5 million.

We add back the expenses typically spent on growth, and we estimate around 4.5% of sales is spent on growth marketing, i.e., promotion, advertisement, and discounts. Hence, we add this back as this expense is not required if the firm was not aiming to achieve growth.

We assume the normalized tax rate to be 26% and the estimated cost of equity at 9%. Therefore, we estimate Earning Power Value of the operating business to be $134 million. To that, we add the non-operational cash ($1.8 million), and we subtract long-term debt (10.8); we arrive at an implied market cap of $125.6 million or $14.6 price per share, with 12.3% upside potential, without incorporating any growth or expansion in operating margins.

Source: Moat Investing

Risks to Our Investment Case

  • Stringent regulation regarding MLM companies. For instance, the requirement to treat consultants as employees. This could have implication when it comes to taxation, wages paid and welfare concerns for workers. This could, in turn, shrink the bottom line or, worse, business model tatters.
  • The most straightforward risk is consultants quitting or switching to find other employment as the US economy improves. However, within our valuation model, we have smoothed the growth of revenue in the last five years, which is a function of l consultants recruited. Even if there is some mean reversion in terms of consultants working with EDUC due to the COVID base effect, our thesis would be less impacted.
  • As highlighted earlier EDUC’s inventory level is a significant portion of its asset. Whatever reason they become unsalable (i.e., change in taste or controversy in terms of published content) could impact our valuation.
  • Oil prices have increased significantly since last year (see below). Shipping costs are amongst the most significant component of its COGS; further rise in oil prices (consequently increasing shipping cost) could make it difficult for EDUC to remain profitable.

Source: Trading Economics

Conclusion

EDUC has an attractive value proposition, strong financials, and optionality of significant growth ahead due to structural changes caused by COVID. On top of that, the valuation is reasonable, management has skin in the game (owns 23% of shares outstanding), and investors are not even paying for any future growth at current prices. For these reasons, we remain bullish.

This article was written by

1.46K Followers
We are a group of experienced investors that like to dig deeper into stocks to find growth stories at a reasonable price with strong economic moats. We also aim to conduct high-quality analysis by deep diving into valuations, key business drivers, risk/reward, and different future scenarios.
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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 (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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The government modified Consumer Protection Rules in 2021 to distinguish legitimate MLM players from ponzi schemes.

Many MLM companies have been criticized for deceptive practices that can lead to worker financial losses.

Title:

Content: Usually, speaking about the financial pyramid, it is understood the involvement of people in business, where the basis of income is the attraction of new participants with a financial contribution, said Roman Sidorchuk, Professor of the Department of Marketing at Plekhanov Russian University of Economics, to the correspondent of IA REGNUM.
Pyramid
“For this kind of participation, mainly“ recruited ” people with a “disturbing ” psyche, who are dominated by an irrational type of thinking.
Given the fact that in these circumstances, behind the proposals of the organizers there is always a deception in the involvement of the participant, it is impossible to talk about marketing, which is usually guided by certain ethical standards (for example, the ethical code ESOMAR, the European Community of market researchers and public opinion).
Here we should talk about the methods of social engineering, when the goal is not to meet the needs of the consumer, as in marketing, but the psychological manipulation of people in order to commit certain actions.
In this regard, the methods of this kind of manipulation will constantly change, adapting to the interests of the potential audience.
The use of computer games is a convenient format for manipulation.
Moreover, people who are often fixated on computer games experience depressive and restless states, and become more malleable to the external influence of the gaming community, ” the expert believes.
As reported IA REGNUM, in Russia there is a new type of financial pyramids, said the head of the Department of combating unfair practices of the Central Bank of the Russian Federation Valery Lyakh.
See also: Bank of Russia warned about the emergence of gaming financial pyramids

90-99% of MLM participants typically lose money.

The promise of wealth and financial freedom attracts people to MLM companies.

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
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Low initial costs and no need for a physical store or staff attract potential workers to MLM companies.

Title:

Content: Network marketing: build a business without risks!
Moderators: more, bot, translate
Network marketing: build a business without risks!
by sonnick84 » 12 Mar 2022, 12: 35
Network business is a great opportunity to leave an unloved job and organize your own business without significant cash investments.
But is this true in reality and what nuances should be aware of those who just decided to participate in some project?
In this article, we will discuss the main points, as well as write some important recommendations!
Own business is first of all freedom and network marketing, the shortest and easiest way to it.
Think for yourself, in order to sell services or goods, you do not have to open a physical store, hire workers.
Basically, there is no need to go anywhere and absolutely all workflows are made directly from the PC.
The initial costs are small, if we are talking about goods, you will have to buy the initial batch.
However, after a few sales, this is no longer a problem.
But there are also such MLM projects where investments are not needed at all.
We recommend you to read: on this site MLM reviews and not only.
Absolutely all routine business is handled by the company itself, and you should only sell the product!
Which is usually of high quality and at an attractive cost.
It is difficult to implement only at the first stage, after the buyers themselves call and make new orders.
It is no longer necessary to go to apartments, there are many sales channels on the network, for example, social networks.
Income is unlimited, the more effective you act, the higher the profit will be, everything is simple!
In words it looks beautiful, but not everyone will suit the MLM business.
In any case, you need to try, besides the risks are minimal.
The worst thing that can happen is that you will have the goods purchased for sale.
Of the shortcomings, we can distinguish the fact that sales directly, this is the ability to qualitatively submit goods and cause the desire to buy from the person who was not going to spend money on it.
Many people have a negative attitude to the network business, in this regard, you need to be stress-resistant.
Income is floating and it will depend on many factors.
In some cases, you will need to get an IP, and this is already taxes and some responsibility.
But again, you do not need to do this immediately only after you know that you are ready to make money!
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Many people are drawn to MLM companies for the sense of community and teamwork they offer, as well as the desire for economic freedom, autonomy, and flexibility.

Title:

Content: OmegaPro Super Training – Why Choose Network Marketing  With Eric Thomas

By Team Business For Home

According to an Omega Pro press release:

One of the pivotal reasons why OmegaPro has reached the heights that it has is in its core belief –

‘The best must only be trained by the best’.

OmegaPro understands the challenges of its community and the hardships one may face as a brand new entrant in the market or a veteran looking for the implementation of a more effective tool or strategy to expand the business to newer levels.

Educating yourself in multi-level marketing is hardly limited to extending the virtues of your knowledge. This business is unlike any other – you need the right amount of motivation, the right words of inspiration and the right tools to hit a home run.

The OmegaPro Super Training Series intends to do exactly that. Bringing in the best of the best to teach you, to challenge you, to understand your targets and your challenges to offer you the best dose of solution that is brewed from decades of experience in the broadest sense of the industry.

On 15th of April, 2022 – OmegaPro invited none other than The Eric Thomas to deliver the ‘Speech + Preach’ Super Training through a zoom webinar.

Eric Thomas, an OmegaPro frequent, is a critically acclaimed author, World-renowned speaker, educator and pastor.

ET, as he is better known, has taken the world by storm, with his creative, common-sense approach to living a successful, satisfying professional and personal life.

Through a significant social media presence and regular domestic and international tours, ‘ET, The Hip Hop Preacher’ has become a global phenomenon.

Beginning this training, ET fondly recalled the Rise Event – The OmegaPro Global Convention hosted in the magnificent Coca-Cola Arena back in January, 2022. He cherished his memories of being in a stadium jam packed with thousands and thousands members of the proud OmegaPro Community, being on the stage to preach his fundamentals.

You can watch, listen to and get inspired too here: The webinar is available in 4 Languages : English, Spanish, French, Korean, Japanese, Hindi, Portuguese and Burmese.

ET reiterated to his audience as he proceeded towards his presentation that,

“This is the opportunity to liberate yourself. This is the opportunity to be free.”

This is the zenith of network marketing as a choice of career. A large chunk of the crowd associate this business with nothing but economic freedom but perhaps, forget the most important facet of it all.

Being a Network Marketer sets you free from your mundane schedule, your recurring 9 to 5, your lifestyle being solely dependent from one pay-check to another. This business brings you the Economy of Freedom, as ET echoes.

MLM is more than just this. If you just exist but not live, you need to consider this leap of faith. This is one of the only opportunities in life that comes with the ability to design your everyday life according to no one else’s but your own will. This is maybe the only profession that allows you to spend as much of your time with your loved ones without being penalized for it in some way or the other.

Network Marketing puts you in the position of the highest bidder and allows you to do your own bidding. Only you get to decide what you can and can not have. No one but you tell yourself what to do, what needs to be done. You set your own targets, your own deadlines and when you are a part of a community this diverse, you succeed.

The bottom line of any business is discipline. MLM sets you free but to be good at what you do, you follow a discipline. But, to be great at what you do, you must chalk out your very own brand of discipline.

ET touches upon almost every aspect of The Basics of Multi Level Marketing. He discusses the reasons why families choose this as a full time career, he explains the autonomy of the ‘Perfect Network’ for teamwork is the heart of this business.

Leaving the technicalities of Network Marketing behind, there is one thing that may be the one difference between the successful entrepreneur and the one who wonders why he is not just like the former individual. It’s all in the mindset.

The only mantra to a successful business is a successful, a champion, a never-say-never, a can-do mindset that in term blossoms the winning mindset and voila! That is the recipe to exceeding expectations in this industry.

Eric ‘ET’ Thomas ensured that with his Speech + Preach, he inspired thousands that tuned in and thousands that will watch him in his element, later.

About OmegaPro

With over 1.8 Million members joining the OmegaPro family since its recent inception in 2019 – this revolution of bridging the gap between the traditional and the digital is just getting started!

Driven by the virtue of innovation and an ambition towards unparalleled idiosyncrasy – OmegaPro is ‘Building wealth without border for people without borders’. For more information please visit: www.omegapro.world

The post OmegaPro Super Training – Why Choose Network Marketing With Eric Thomas appeared first on Direct Selling Facts, Figures and News.

Source:: https://www.businessforhome.org/2022/04/omegapro-super-training-why-choose-network-marketing-with-eric-thomas/

Australians aged 25 to 44, particularly young people, are most susceptible to recruitment scams, while women aged 30-39 with a master's degree are susceptible to MLM recruitment tactics through dating apps and emotional manipulation.

Title:

Content: The Latest
Job seekers are targeted by recruitment scams as "Australians aged 25 to 44 lose the most"
The Australian consumer affairs watchdog has urged job seekers to be vigilant about recruitment scams, with new data from Scamwatch showing Australians lost more than $8.7 million to recruitment scams in 2022.
File Source: AAP
The Australian Competition and Consumer Commission ’ s (ACCC) scamwatch has specifically warned young people to protect their personal information when seeking employment and to be wary of job offers made through social media platforms or instant messaging apps.
"Thousands of young Australians have completed their studies and graduated from university, and they are looking forward to their future careers and looking to find work in the new year."
These job seekers have been targeted by scammers, ” said Delia Rickard, vice-chair of the Australian Competition and Consumer Commission.
"We have learned that young people are particularly vulnerable, with Australians aged 25 to 44 losing the most in recruitment scams," it said.
Miss.
Delia Rickard, ACCC Source: AAP
“If you ’ re looking for a job and someone offers you a job that doesn ’ t take much effort to get paid well, then beware, it ’ s probably a scam. ”
Such scams may involve repeatedly clicking on a button on a website or app to buy a product or submit a review.
Over the past year, Scamwatch has received more than 3,194 reports of job scams, with many victims lured by promises of quick money.
Scammers often demand payment from job seekers in exchange for guaranteed income, posing as representatives of well-known companies, online shopping platforms, or recruitment agencies.
Some scammers will impersonate large Australian companies, send text messages, offer the opportunity to work from home using a phone or computer, and promise high incomes.
For example, some scam text messages mention the provision of flexible working hours, seekers do not need work experience, only in the home mobile phone online promotion or orders can earn high salaries and so on.
Scamwatch also refers to a job opportunity scam that requires people to use their bank accounts to collect and transfer money for a foreign company, promising that for every amount of money received, the person will receive a percentage of the commission. Scamwatch cautions that this is likely a form of money laundering and is a criminal offence.
Scammers who gain access to people ’ s accounts may use them to steal money from accounts or engage in other fraudulent activities.
"In the final months of 2022, we have seen a significant increase in reports and losses related to recruitment scams, and we are concerned that these scammers will increase the intensity of scams as people look for work in the new year," Ricard said.
"Today's job market is fierce, and many Australians want to be able to get the job they want.
We urge job seekers to be wary of opportunities that look too good to be true.
Never pay or invest in advance to get a job.
If you think you ’ ve been scammed, contact a bank or financial institution immediately, ” she said.
The Australian Competition and Consumer Commission has a number of recommendations on how to identify recruitment scams and protect yourself, including:
• Never send money to people you don ’ t know or provide your personal information, credit card, online banking or cryptocurrency account details;
• Avoid any arrangements that require pre-payment via bank transfer, PayID or cryptocurrencies such as Bitcoin, where past money sent in this way is rarely recovered;
• Be vigilant if the position has not been interviewed and there is no discussion about your experience, suitability, and recommendation letter;
• Be wary of recruiters who contact you through some encrypted messaging platforms.
Scammers usually take advantage of these platforms;
• Find out who you are dealing with and contact the recruitment agency via a phone number that is independently searched on the internet;
• Do not act quickly under pressure.
A reasonable job offer does not require you to make an immediate decision.
If the job offer sounds unbelievably good, it is likely to be false;
• Don ’ t believe in the legitimacy of a job ad just because it appears on a trusted platform or website.
Download the app SBS Radio and follow Mandarin. You can also listen to and download SBS Mandarin audio stories anytime via Apple Podcast, Google Podcast, Spotify and other podcast platforms.
Please follow SBS Chinese for more Australian news.
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Published 4 January 2023 at 12: 35pm, updated 21 minutes ago at 12: 46pm
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Title:

Content: Spread the word, scammers use the Internet to find food, lure the poor man to borrow 400,000, and falsely claim that he committed suicide.
August 17, 2021 14: 19
Eastern Network Television
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Yuen Hay-man (middle) received a complaint that a member of the public was involved in a marketing scam. (Courtesy of Lai)
There are also people who are suspected of cheating.
Sham Shui Po District Councillor Yuen Hay-man received help from the public, alleging that a marketing company in Ho Man Tin sold products with people close to the victim, paid a HK $5,210 franchise fee, and then asked the victim to borrow money or invest in savings. Many people bought HK $400,000 worth of goods.
Since June this year, Yuan has received help from the victims. The independent distributors of the company “Francine Holding Limited ” began to promote Francine ’ s“ health care business ” to the students and colleagues around the victim.
They sell essential oils, milk powder, red wine and skincare products.
The victim will be asked to join the company at HK $5,210 first, and then use different excuses to emphasize the "short time, high return" for the helpers to borrow money or buy large bills with savings.
The victim, Miss B, is between 30 and 39 years old and has a master ’ s degree.
She met Mr. S from the dating software in 2018, Mr. S often shouts cold and warm to her, cares about her work situation, worries about the pressure of her work, and often implies that she has a car and a house, creating a rich image, so that Miss B thinks that two people are developing a relationship.
S often stressed her hard work, wanted her to transfer to its company "clap on", once asked her to eat, but took her to the company in Ho Man Tin, lobbying Miss B to pay the joining fee, but B did not. Miss B admitted to the company's methods of disgusted, but S began to emotional blackmail.
S refers to her disappointment, but also said that if she can't make money, "there will be no happy future", "too busy to take care of the future children."
Miss B thought that she had cut off contact with Mr. S, but S in March last year borrowed her to the company, B was soft to pay the franchise fee, S in the middle of the year to bury her, successfully persuaded her to pay and borrow from the finance company, involving more than 400 thousand Hong Kong dollars, became the company's "challenger".
As S failed to convince B to make enough HK $1 million in performance within three months, S kicked her out of the relevant chat group, S himself even played missing, and even called B through his own family, saying that S had committed suicide, and B learned from other bitter masters that S was not dead.
Since then, B has obtained 6 “buy ” receipts, but all of them are not her name, and the names involved are not known to her, so it is more difficult to recover them. B now pays about HK $15,000 a month and is divided into 60 installments. A letter was also sent to the Commissioner of Police early last month and no reply has yet been received.

MLM companies often target low-income individuals, stay-at-home parents, and those seeking flexible job opportunities, as well as people with limited resources, capacity, or experiencing depression.

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."

Loss aversion drives individuals to join and remain in MLM companies to avoid losses despite potential gains.

Title:

Content: Indeed, it is always difficult and nervous to put an end to the relationship, even if you have wanted it in your head for a long time.
According to clinical psychologist Denis Dolgov, the basis of such human behavior is the effect of loss aversion - an evolutionarily conditioned mechanism due to which people prefer to avoid losses, even if in return they expect a significant gain.
This effect was first described in 1979 by well-known psychologists Amos Tversky and Daniel Kahneman, and later their theory was confirmed by colleagues.
Psychology
Clinical psychologist, hypnologist, candidate of medical sciences
t.me / DoktorDolgov
"Losses reduce activity in the brain structures associated with dopamine - the prefrontal cortex and striatum.
The gain increases activity in these structures, but is much weaker.
Thus, the negative reaction to losses is much brighter than the positive reaction to acquisitions.
In evolution, this probably contributed to being more cautious, deterring reckless risky behavior.
No wonder animals have similar mechanisms, ” Denis Dolgov described how it works in his telegram channel.
In people, this mechanism often leads to the fact that they begin to cling to outdated relationships as the very “suitcase without a handle ”, which is both hard to carry and a pity to throw away.
You lose happiness every day.
— Given that it is “sewn ” into our neurophysiology, loss aversion can be extinguished only by a greater loss aversion.
That is, you need to create a loss aversion in case of inaction, the psychologist advises.
How to do it?
It is necessary to displace the rejection of the loss of relationships by the rejection of the loss of happiness in the event
To do this, try to imagine in paint that because of such toxic relationships, you lose every day happiness, psychological well-being, a healthy psyche, and with them, health.
5 Signs That Your Partner Is Going to Break Up
Even if a person has already decided to part, he can drag on a serious conversation for a long time - it is scary, what will be the reaction, and difficult explanations, scandals are unlikely to be avoided.
But the body and behavior can betray his intentions with the head - these signals are difficult not to notice.
Psychologists told how the person who finally decided to disperse behaves.
1.
Obsessive movements.
Leg twitching or rhythmic tapping of fingers in the presence of a partner is a non-verbal sign that a person wants to tell you something, feels uncomfortable, has stress.
2.
Smile less and less.
You suddenly began to notice that the usual jokes no longer cause those emotions in him, he only nods detachably or squeezes out a pathetic semblance of a smile.
And in general, he will carefully avoid unnecessary eye contact.
3.
Avoiding tactile contact.
For example, he constantly moves away from you in bed when you go to bed, or he no longer presses against you while watching a movie together.
4.
Increased distance.
It's not just about avoiding tactile contact.
For example, such a person sits on the other end of the sofa, as if there should be another person between you.
Or he wants to get away from you to sleep on the couch, “because he is very tired and needs to sleep alone. ”
5.
A look past you.
This suggests that the person is no longer interested in you: he does not look at you when you speak, may even respond as if out of step.

Some MLM companies are closing or switching to a direct sales model due to changing market conditions and regulatory scrutiny.

Title:

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
Leave a comment and read the comments of the readers.
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.