Shellie Gold Davidson of ViSalus Doesn’t Understand Pyramid Schemes

I don't like to call out individuals for scamming people, but since Shellie Gold Davidson decided to go with "Educate Yourself! Know the Difference!" in the following photo, I thought I'd break down the chart of false information she's spreading.

Shellie Gold Davidson of ViSalus Doesn't Understand Pyramid Schemes

Shellie Gold Davidson of ViSalus Doesn't Understand Pyramid Schemes

Let's start off with the first row and the columns. Yes pyramid schemes are illegal. Thanks for letting us know that. Putting 100% Legal under the column of "Legal Multi-Level Marketing" is a little redundant, no? Well let's move on...

Row #2: Main Income Sources - Notice the use of "solely" in recruiting others for illegal pyramids and MLM is legal if "ONLY" by product sales. So it's black and white, but what if income is earned both ways as in MLM where the Income comes from sales of those who were recruited? The FTC says the following about MLMs and Pyramid Schemes: "If the money you make is based on your sales to the public, it may be a legitimate multilevel marketing plan. If the money you make is based on the number of people you recruit and your sales to them, it’s not. It’s a pyramid scheme. Pyramid schemes are illegal, and the vast majority of participants lose money." and "Avoid any plan where the reward for recruiting new distributors is more than it is for selling products to the public. That’s a time-tested and traditional tip-off to a pyramid scheme."

Clearly the FTC has a different definition than Shellie Gold Davidson of Pyramid Schemes. We'll be referring back to this document a few more times more than likely.

Row #3: Primary Purpose for Recruitment - I don't see either of these as a differentiating factor in the FTC guidelines. In MLM, why would you need to recruit people for product sales and distribution? For ViSalus (Davidson's MLM), distribution is done by the ViSalus via mail to an individual... the same way it is done from Amazon.com, which isn't an MLM. Come to think of it, they also do product sales. There's no need for a network for sales or distribution except to incentivize distributors to buy product to get involved in a fabricated "business opportunity."

Row #4: Plan - While a get rich scheme is certainly a red flag, claiming that MLM requires "true and personal effort" doesn't absolve it from being a pyramid scheme. I challenge you to figure out how to run a pyramiding business that doesn't require "true and personal effort." You can't, because you need to trick people into the scheme.

Row #5: Business Entry & Barriers - According to the FTC guidelines MLMs that are pyramid schemes can have low cash-out, low or no front-loading, and a buy back guarantee. So these aren't relevant. Furthermore Davidson's ViSalus coerces front-loading and high-cash out by requiring distributors put up $499 of product to be eligible for the BMW bonus of the "business opportunity." It's front-loading a bunch of product, though you could argue that high-cash out is a relative term.

Row #6: Value for Money - This is going to come up in the Pricing section below, but since ViSalus is overpriced, it fits the "product value far less than cash out" section of illegal pyramiding.

Row #7: Income Stability - This is just a boldface lie and the FTC guidelines make it clear. There's nothing defining about whether the income stops if the recruitment stops.

Row #8: Training - Training is not a differentiator of whether something is a pyramid scheme or a legal MLM. This chart is making up features of pyramiding just so that MLM can look good without actually addressing the FTC guidelines.

Row #9: Regular Product Movement - This is again another non-factor. Consumable products can and are often part of illegal pyramid schemes, because most of the sales are made to other distributors within the scheme. It is noteworthy that this mentions few retail sales (high cost doesn't matter). A look at ViSalus' co-founder Sarnicola shows he is making most of his money from recruiting... there's no reporting on how many retail sales he makes a month.

Row #10: Pricing - Using this test Davidson is pitching a pyramid scheme because ViSalus is clearly overpriced.

Row #11: Marketing - Refer back to Row #2 about how the money is being earned. If you are making most of your money selling product to people outside the scheme then its good. If you are recruiting others into a downline and making money from sales to them and their sales, it's an illegal pyramid scheme. Sounds like ViSalus'... and most MLMs... compensation plans are set up this way.

I've done all the hard work for you by creating a page that makes it quite clear: MLMs Vs. Pyramid Schemes. It has all the citations by the FTC and is much more reputable than Shellie Gold Davidson's biased disinformation.

This post involves:

MLM Scammers

... and focuses on:


3 Responses to “Shellie Gold Davidson of ViSalus Doesn’t Understand Pyramid Schemes”
  1. Shellie Davidson Says:

    Just want to let you know that I DID NOT make the chart regarding mlm vs. pyramid schemes….it was simply “shared” from a mentor’s facebook post and was not originated from me.

    Perhaps you should do your investigation into the people you decide to write about before you go smashing their reputation on the internet.

    I am looking into legal action as this seems like an invasion of privacy on my NOT PUBLIC facebook profile. Emphasizing that I DO NOT have a “public” profile on facebook.

  2. mlmmyth Says:

    I don’t know if I suggested that you did make the chart. If I did then I apologize, it wasn’t my intention.

    You should be careful what you are “sharing” because when you do that, it says that you endorse it, especially when you add to it, “Educate Yourself! Know the difference!” Why did you not educate yourself to know the difference before hitting the share button?

    I didn’t really feel the need to investigate you any more than the information that was shared with me.

    As for your privacy, I would like to emphasize that I didn’t hack your account or anything like that. You shared the information with people and one person, who presumably got upset by the lies being spread, shared a screenshot from his/her cellphone with me. I didn’t invade your privacy in any way. In addition, you mentioned that this wasn’t even your content.

    I encourage you to look into legal action. I would be interested in talking with a court about why you are spreading this false information and how you stand to profit from the spread of the false information.

    My goal here isn’t to attack you, but to get MLM distributors thinking about what they are doing and making sure that they spreading accurate information and not trusting their mentors who have a financial interest in spreading inaccurate information.

  3. PamelaB Says:

    You get paid by recruiting Promoters and Customers. You receive more money for recruiting Promoters than customers at the Director Level. Check out the compensation plan that I’ve attached!

    http://visalus.com/docs/corporate/D1047US_CompPlanBook.pdf

    Check it out! Based on the information above and the Compensation Plan Book it appears to be a Pyramid Scheme and Not An MLM!

    Hoping the FTC can shut Visalus Sciences business down!

 

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