Archive for December, 2011

MLM Myth: Global Expansion Makes an MLM Legit

Many MLM (not to be confused with Network Marketing or Direct Selling) distributors are very happy about expansion to foreign countries claiming that it is a sign of a legit company.

It seems logical, but the truth is that the exact opposite is true.

A study of more than 14,000 tax returns found that:

"Most recruiting for Utah MLMs is done outside Utah, presumably because heavy market saturation in Utah has stiffened resistance to buying into the MLMs. So MLM promoters go to other states, and then from one foreign country to another to keep the scheme going.

It makes sense when you realize that these businesses rely on recruiting others. The reality is that the local market is saturated and that by moving to a new country, they can "start over" by auctioning off the rights to the "ground-floor" opportunity in that country. Usually this goes for hundreds of thousands of dollars, because the winner can essentially put themselves at the top of the pyramid in that country.

Bottom Line: If the MLM company isn't a common brand and used in television (i.e. Google, Ford, etc.) it is likely that their "international expansion" is a moving the scam to another country to continue growing the scam.

This post involves:

MLM Scam

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