The MLM business model has undergone significant changes in recent years.

The global direct selling market is expected to reach $1,125.52 billion by 2027, growing at 11% annually.

Market growth is driven by demand for additional income, led by key players like Herbalife, Amway, and Mary Kay.

The COVID-19 pandemic has accelerated online business expansion and boosted the MLM industry due to increased demand for online shopping and remote work.

MLM companies use psychological manipulation techniques, including "brainwashing" conferences, to recruit and retain workers.

These companies target vulnerable individuals, including those with financial difficulties, using secretive tactics.

MLM companies often use cult-like persuasion and deception to recruit participants.

MLM companies like Mannatech attract entrepreneurs with low startup costs, flexibility, and no inventory requirements.

Many MLM companies are closing or switching to direct sales, with 450,000 merchants quitting in 2020, mostly due to non-renewed contracts.

The commission accounts for 44% of turnover, a cost passed to products, and lacks proof of investment, raising concerns for potential workers.

The Asia-Pacific region led the direct selling market in 2022, followed by North America.

India's direct selling industry grew 12% in 2022-23, reaching Rs 21,000 crore, with wellness products accounting for 73.5%.

Avon and Tupperware are often cited as legitimate examples of the multi-level marketing business model, but have seen a decline in sales.

Most MLM commissions go to the top 1% of distributors, causing high dropout rates and financial losses.

Regulatory changes, like the Multilevel Marketing Management Law, impact the MLM industry's growth and profitability.

Checking a company's register and consulting a lawyer are crucial before investing in an MLM.

The MLM business model has undergone significant changes in recent years.

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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The global direct selling market is expected to reach $1,125.52 billion by 2027, growing at 11% annually.

Title:

Content:
Global Direct Selling Establishments Market On Trajectory Of Substantial Growth, Projected To Reach $1,125.52 Bn By 2027

(MENAFN- EIN Presswire)

Direct Selling Establishments Global Market Report 2023 : Market Size, Trends, And Global Forecast 2023-2032

The Business Research Company's Direct Selling Establishments Global Market Report 2023 – Market Size, Trends, And Global Forecast 2023-2032

The Global Market Report for Direct Selling Establishments by The Business Research Company, detailing market size, trends, and providing a global forecast for the years 2023 to 2032.” - The Business Research Company

LONDON, GREATER LONDON, UK, December 12, 2023 /EINPresswire / -- The global direct selling establishments market is positioned for remarkable expansion, characterized by a segmentation based on type, products, and price range.

Market Size and Growth Projection: The market size for global direct selling establishments is set to burgeon from $688.45 billion in 2022 to $763.85 billion in 2023, exhibiting a robust compound annual growth rate (CAGR) of 11%. Looking ahead, the market is anticipated to soar to $1,125.52 billion in 2027, sustaining a CAGR of 10.2%.

Driving Factors: The escalating demand for additional income avenues, particularly in developing and underdeveloped countries, stands out as a primary driver for the direct selling establishments market. The Associated Chambers of Commerce and Industry of India (Assocham) forecasts the Indian direct selling industry to reach $2,169 million by 2021, underscoring the growing significance of direct selling as a viable part-time income source. Promoting self-employment and financial independence, direct selling addresses the need for supplementary income opportunities, a trend expected to propel market growth.

Explore comprehensive insights into the global direct selling establishments market with a detailed sample report:

Major Players : Key players in the direct selling establishments market include Herbalife, Amway, Mary Kay Inc., Infinitus, Tupperware, Vorwerk, Natura, JoyMain, DXN, and Belcorp. These industry leaders play a pivotal role in shaping market dynamics through innovative approaches and product offerings.

Market Restraints: The surge in demand for online shopping poses a challenge to direct-selling establishments, as e-commerce platforms often entice consumers with discounts. To adapt, some direct selling platforms have shifted their business models to incorporate e-commerce channels, addressing the evolving market landscape. The competition from online portals and changing consumer preferences is influencing strategic shifts within the direct-selling industry.

Emerging Trend : Artificial Intelligence (AI): Artificial Intelligence (AI) is emerging as a transformative trend in the direct selling establishment market. AI applications are revolutionizing customer interactions, enabling personalized marketing strategies, and optimizing inventory management. Technologies like chatbots and AI-powered software, such as Ventaforce, are enhancing operational efficiency and customer service in the direct selling industry.

Regional Insights: In 2022, Asia-Pacific led the direct selling establishments market, with North America securing the second-largest position. The geographical coverage of the direct selling establishments analysis encompasses Asia-Pacific, Western Europe, Eastern Europe, North America, South America, the Middle East, and Africa.

Access the complete report for an in-depth analysis of the global direct selling establishments market:

Direct Selling Establishments Global Market Report 2023 from TBRC covers the following information:
.Market size date for the forecast period: Historical and Future
.Market analysis by region: Asia-Pacific, China, Western Europe, Eastern Europe, North America, USA, South America, Middle East and Africa.
.Market analysis by countries: Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA.

Trends, opportunities, strategies and so much more.
The Direct Selling Establishments Global Market Report 2023 by The Business Research Company is the most comprehensive report that provides insights on direct selling establishments market size, direct selling establishments market drivers and direct selling establishments market trends, direct selling establishments market major players, direct selling establishments market competitors' revenues, market positioning, and market growth across geographies. The direct selling establishments market report helps you gain in-depth insights on opportunities and strategies. Companies can leverage the data in the report and tap into segments with the highest growth potential.

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Elevate Your Lifestyle: Luxury Furniture Market Insights, Growth Drivers and Sustainable Elegance

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Market growth is driven by demand for additional income, led by key players like Herbalife, Amway, and Mary Kay.

The COVID-19 pandemic has accelerated online business expansion and boosted the MLM industry due to increased demand for online shopping and remote work.

Title:

Content: 'How can we adapt': Local businesses moving online amid rising challenges

Tiber River, known for its natural body care products, is dropping its ambassador program due to numerous business challenges.

The company said the program, where people sell products based on commission, is no longer sustainable.

"Our economy is heading into a recession, supply chain issues are numerous, interest rates are at an all-time high and people have to make choices between necessities and desires when making purchasing decisions," read a joint statement from Adriana De Luca and Michelle Lalonde, Tiber River's owners.

"Costs are going up, but the ability people have to pay for consumer goods and services is going down."

The company will now focus on direct-to-consumer online sales but will still have a Winnipeg store.

The Winnipeg Chamber of Commerce said many of the hardships Tiber River is experiencing are being felt by the wider business community.

"Part of that ongoing experience of being a business owner, you're always looking at your model and how you operate, saying, 'how can we adapt to an ever-changing environment,'" said Loren Remillard, the chamber's president and CEO.

In a recent survey of chamber members, two thirds say they are optimistic about 2023, but the majority are expecting slower growth and a much smaller profit margin.

Remillard said many businesses were already expanding their online presence prior to the pandemic, but COVID-19 and subsequent challenges accelerated the process.

"You're now able to sell your wares all around the world, but you're also competing on the internet with every business around the world," explained Remillard. "How do you differentiate? How do you make sure you're connecting to potential audiences?"

Even with more businesses moving online, Remillard doesn't see physical stores going away.

THRIVING ONLINE

Radiance Gifts decided to give up its brick-and-mortar location last year after 27 years on Corydon Avenue.

Lisa Tjaden, the store's owner, said she made the move due to increased overhead costs and ongoing safety challenges.

"The significant cost that sort of drove us to this was actually shrinkage, the shoplifting, so that made the decision more palatable."

Now operating out of a warehouse, Tjaden said the change in business model was a success, being able to offer more items at a reduced price.

She noted the transition was still bittersweet for loyal customers.

"It was sad for them and does take a bit of adjusting. To realize it is still us and it's still the same business," said Tjaden.

She said she offers same or next-day delivery, and customers can still use the chat feature if they want to communicate with staff.

"We are still a local business. That's the perspective that is sometimes difficult for people to understand," Tjaden said. "We're still contributing to our community."

MLM companies use psychological manipulation techniques, including "brainwashing" conferences, to recruit and retain workers.

These companies target vulnerable individuals, including those with financial difficulties, using secretive tactics.

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QNet victims: "We ate the beatings...
Watch what happens to us! ”
30.
NOVEMBER
2023.
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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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MLM companies often use cult-like persuasion and deception to recruit participants.

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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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MLM companies like Mannatech attract entrepreneurs with low startup costs, flexibility, and no inventory requirements.

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Content: There were 636 press releases posted in the last 24 hours and 185,738 in the last 365 days.

Mannatech offers opportunities for everyone to earn income while improving health and wellness.

Entrepreneurs Thrive in Sharing Health Supplements With Reputable Publicly Traded Company

/EIN News/ -- Las Vegas, NV, Nov. 24, 2021 (GLOBE NEWSWIRE) -- Mannatech, the world leader in Glyconutrient technology, offers opportunities for everyone to earn income while improving health and wellness.

Entrepreneurs Thrive in Sharing Health Supplements With Reputable Publicly Traded Company

Low startup costs, work from anywhere, no inventory to purchase or store, and all products come with a no-risk 180-day Money Back Satisfaction Guarantee. These are just some of the opportunities Mannatech offers to help anyone start their business and earn extra income while promoting health supplements manufactured by an internationally recognized and trusted brand.

Mannatech is calling the attention of everyone searching for a “side hustle” or those planning to get a new career to improve their financial situation to join them and become a part of a community whose members are committed to wellness and personal growth.

“You can begin with very low start-up costs and the time flexibility to work the hours you want, without requiring prior experience in business or sales,” Mannatech wrote on their website.

Aside from the already mentioned benefits, people who join the Mannatech Business can also get personal and professional development training from industry veterans.

“You’ll have access to tools, training, and a network to support you along the way,” Mannatech further wrote.

Mannatech guarantees that their wide variety of scientifically proven products have stood the test of time. And, unlike other health and wellness companies, they are publicly traded (NASDAQ: MTEX).

“We are a publicly-traded company (NASDAQ: MTEX) and are currently celebrating our 26th anniversary, earning more than $5 billion in total sales and millions of customers in 26 countries through the years!”

With all these milestones and a solid track record, Mannatech is confident that its turn-key global business platform can empower anyone to monetize its influence and improve physical and financial well-being.

About Mannatech

Mannatech is a multinational publicly traded multi-level marketing firm that sells dietary supplements and personal care products. As a company, they have invested tens of millions of dollars into scientific research, secured more than 145 patents since their inception, currently hold 93 patents in major markets, and have validated their products through human clinical studies.

Their Global Scientific Advisory Board is composed of top-tier, independent scientists who guide their science-backed products.

Official Website: https://us.mannatech.com/

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There is no offer to sell, no solicitation of an offer to buy, and no recommendation of any security or any other product or service in this article. Moreover, nothing contained in this PR should be construed as a recommendation to buy, sell, or hold any investment or security, or to engage in any investment strategy or transaction. It is your responsibility to determine whether any investment, investment strategy, security, or related transaction is appropriate for you based on your investment objectives, financial circumstances, and risk tolerance. Consult your business advisor, attorney, or tax advisor regarding your specific business, legal, or tax situation.

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Mannatech is a publicly traded, multinational multi-level marketing firm that sells dietary supplements and personal care products.

Entrepreneurs Thrive in Sharing Health Supplements With Reputable Publicly Traded Company

Many MLM companies are closing or switching to direct sales, with 450,000 merchants quitting in 2020, mostly due to non-renewed contracts.

The commission accounts for 44% of turnover, a cost passed to products, and lacks proof of investment, raising concerns for potential workers.

The Asia-Pacific region led the direct selling market in 2022, followed by North America.

India's direct selling industry grew 12% in 2022-23, reaching Rs 21,000 crore, with wellness products accounting for 73.5%.

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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Content: The Magic of Pyramids
People annually lose billions of rubles in financial pyramids - these are the data of the Bank of Russia and law enforcement agencies.
Losers are not only those who strive for “easy ” money, or desperate for lack of money, but also those who are afraid to miss out on benefits, or overconfident people.
Who else can “fascinate ” the magic of the financial pyramid?
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From year to year, the number of financial pyramids changes, but they do not disappear at all.
The case of Mavrodi - the founding father of the famous pyramid "MMM" - lives and thrives, including on the land of Leningrad.
Despite the loud revelations, financial pyramids were not just tenacious, they again attract a huge number of gullible investors who want to quickly and easily increase income.
The scheme is the same, but the methods of psychological processing are becoming more sophisticated and diverse.
In 2021-2022, the “leaders ” of the pyramid, which was kept by depositors from more than 100 countries, were arrested.
Moreover, the lady director was detained in the Vsevolozhsky district.
The number of statements of victims attached to the materials of the criminal case is about ten thousand.
According to the investigation, from August 2019 to December 2020, one of the co-founders with other participants organized work in Russia to attract funds from individuals “under the pretext of their highly effective use by investing in stock markets, cryptocurrency and other trading platforms. ”
Clients were guaranteed an income of up to 25% per month.
Thus, the dealers attracted at least 80 million rubles.
The money was distributed among depositors on the principle of a financial pyramid.
In our region, modern pyramid builders are increasingly choosing to scatter networks in the field of construction and investment.
That, for example, the construction of the century is promised in Gatchina, and attract the money of ordinary citizens who believe that you can receive income at 38%, and then admit that there is no more money for payments.
They offer to throw on the apart-hotel near the metro station in St. Petersburg.
And on this, their flow of brilliant ideas does not dry up.
This year there was information about the machinations of the Leningrad Financial Center.
The businessmen of this office also promised fabulous profits from deposits.
And people believed.
They say that the word “Leningrad ” is very good – honest, correct, reliable.
But with the money invested, the owners of the company bought luxury real estate and cars.
And their customers after a while realized that they had lost all the money, and some still had to remain.
A tragedy for each of them: someone invested the money accumulated over a lifetime, someone borrowed from relatives.
Different Pyramid Masks
A financial pyramid is a fraudulent project that imitates profitable investments.
The funds are received through the constant attraction of new participants.
They deposit money, then attract new people - the pyramid grows.
At the same time, the top of the pyramid can really earn.
And the lowlands get nothing - they naively donated their money to those who stand a step higher.
This classic scheme was relevant about 25 years ago.
If someone says that in the 1990s he managed to hit a jackpot in the pyramid, maybe it was.
But now such schemes do not work.
The rules have changed: you can not earn more on financial pyramids.
Even if they claim that thanks to the virtual space, this business has become even more successful.
Modern pyramids act rapidly: aggressive advertising, raising money from those who believe in a miracle – and that ’ s all.
Organizers hide with the money of deceived investors in order to open another “investment project ” in a new place.
Until they go to jail.
The pyramids are hidden under different masks.
Their creators can position themselves as an investment enterprise, scatter investment terms without deciphering them to people.
They come up with loud epithets: promising, high-tech.
Offer to buy stocks and bonds, cryptocurrency and real estate.
Agitate to invest in super-efficient production.
I really don't know which one.
There's a lot of options.
Fraudsters disguise themselves as other forms of organizations: management companies, consumer cooperatives, bookmakers.
They can offer not money, but, for example, go around the world for half the price, get bonuses for the purchase of jewelry or even repay a loan for you if you bring other debtors to them.
There are more pyramids in the form of Internet projects.
And some combine active promotion in the network and personal communication with potential investors.
Pyramid builders can lure bright advertising, throw dust in the eyes in beautiful offices, lure to thematic groups in social networks.
Each person is persuaded in exactly the way that can have an impact on him.
But the result is one – taking money from the population.
How to calculate the builders of financial pyramids?
- The organization is actively advertised and publicly promises a sky-high income, much higher than the market level.
Such statements are prohibited in the financial market.
At the same time, the income accrual scheme is often very complex and indistinct.
For the calculation offer a huge formula with a lot of unknowns - to confuse you.
- Guarantee a high income without any risk.
But this is not the case: any investment can result in losses.
- Ask to actively involve friends in the project.
For each attracted depositor, they promise to charge a percentage of their contribution.
So fraudsters are trying to quickly involve as many people as possible in their scam, collect money from them and escape.
- No proof of investment.
Fraudsters show only beautiful presentations and do not give a look at financial documents.
The money is offered to send not according to the details that are specified in the contract with the company, but to the account of another legal entity.
make a transfer to a bank card or by phone number of some person, replenish someone else 's electronic or crypto wallet.
Or they offer to pay in cash, while not issuing any checks or incoming orders.
As a result, you will not be able to prove that you have made any investments at all.
- There are no contact details on the company 's website.
You can only order a call back, chat with the operator in a chat or messenger.
Only fraudsters hide their contact details.
In case of problems, neither you nor the police will be able to find the deceivers.
Check it first, then trust it.
When making the decision to invest your money, do not rush, turn away emotions.
Consult a lawyer if necessary.
In order not to get into the financial pyramid, you need to carefully check the company.
If a financial institution is not in the register of the Bank of Russia, it works illegally.
You also need to check whether the company is on the list of dubious organizations.
The Bank of Russia identifies companies and Internet projects with signs of pyramids and publishes information about them on its website.
If the interested company was on the list, investing in it is an unjustified risk.
It is not superfluous to check the data in the state register of legal entities (EGRUL).
Learn about the company on the website of the Federal Tax Service (FTS).
Perhaps the company was registered recently - almost on the eve of the fundraising, it has a minimum authorized capital and a single founder.
Then it's a big risk to trust her with your savings.
There is another important point: if the company is registered as a cheese factory, and offers investments in cryptocurrency, the investor will definitely lose his money.
You should always carefully study the documents that are offered to sign.
First of all, check the full name and details of the company - what is specified in the contract, on the organization's website, in the registries of the Bank of Russia and the Federal Tax Service.
Pay attention to what obligations the company undertakes and what will happen if it does not fulfill them.
Perhaps at this stage it will become clear that it is not worth dealing with.
Tatyana Mozhaeva