Summary of Common MLM Myths

Below is a list of common MLM Myths and the Truths behind them. It is a work in progress and not complete by any means.

  1. Myth: “You only think MLM is a scam because you failed at it.”
    Truth: I hear this quite often, yet I’ve never been in an MLM. This is nothing but a pre-programmed response from an MLM scammer to try to discredit the viewpoint without actually addressing the points that are being brought up about MLM being a scam (such as being required to buy overpriced product to be part of the scam, market saturation, that many (or all) are pyramid schemes, that over 99% of people lose money, etc.)
  2. Myth: “You have no experience in MLM, thus your opinion is not valid.”
    Truth: Many people have no experience being drunk drivers, they need to be drunk drivers to know it is a bad idea. I don’t have to jump off the Brooklyn Bridge to know that is a bad idea. I don’t have to give the Nigerian Prince who emailed me my bank account information to know it is a bad idea.

    One can observe the piles of data from the income disclosure statements and look at how many people must be recruited to break even. It turns out that those people who are in MLM have invalid opinions because they are financially biased. This is covered in depth here: MLM Mind Game: Real Life Experience vs. External Perspective.

  3. Myth: “Other businesses fail too!”
    Truth: It is true that other businesses fail. However, I can’t think of a traditional business that fails more than 99% of the time (see also: 99.54% of people lose money in MonaVie). Traditional businesses succeed or fail on the strength of the product or the ability to sell the product.

    Anyone who has makes any significant money in MLM does so by selling this failing business “opportunity” to others called building a downline or a “team.” People don’t make money in MLM selling product. If someone makes more money from their downline than they do selling product it is a time tested sign of a pyramid scheme according to the FTC

  4. Myth: “You’re being negative or a dream stealer. You don’t want me to be successful.”
    Truth: MLM organizations brainwash distributors with this erroneous logic. When some 99.5% of people lose money in a business “opportunity”, any sane, unbiased person would tell someone to avoid it. MLMs plant this message in distributors head, because they know that friends of the distributors are going to try to use logic and reason to help their friend. With this conditioning in place, the distributor will often see the MLM organization as correct which validates the MLM organization.
  5. Myth: “I know someone who is successful in the business.”
    Truth: Mathematically for every 5 of people who make ANY money (which certainly shouldn’t be confused with success) there are some 995 who lost or are losing money. It’s easy to overlook the numbers. People do it all the time when they play the lottery. You may say that you don’t know anyone who won the lottery, but that’s because the lottery doesn’t parade those people around at lottery conventions for you to meet.
  6. Myth: “MLM isn’t Illegal. It isn’t a pyramid scheme.”
    Truth: See: MLMs Vs. Pyramid Schemes
  7. Myth: “MLM companies donate money to charity!”
    Truth: Indeed some, maybe most, donate a small portion of their profits to charity just so that distributors can defend their MLM with this very line. The average MonaVie distributor spends $1600 in juice for themselves and over $5000 for their family a year. MonaVie’s MORE Project is run mainly off of donations by distributors, not from the corporation. Imagine how much money could be put towards charity if people weren’t paying $5000 a year for juice. It would be billions and billions.
  8. Myth: “I’m only trying to help people (lose weight, have financial freedom, get healthy, etc…)”
    Truth: If that were true, you’d introduce them to lower-cost services that do the same thing. The business opportunity in MLM is bad, so there’s case to be built for helping people with financial freedom. Typically the best health products such as fresh fruit are not offered by MLMs. Instead they put together juices (which lack the natural fiber and benefits of fruit) and shakes (which are much more expensive than alternatives like Carnation Instant Breakfast or Slim Fast).
  9. Myth: “You are uneducated and don’t know what you are talking about.”
    Truth: Does this website seem uneducated or uninformed in any way? In fact, it turns out that the MLM distributor typically lacks information about MLMs being pyramid schemes because MLMs don’t inform of the FTC guidelines and instead recycle the myths that you read on this site.
  10. Myth: Every job is a pyramid scheme! There’s the CEO, who manages a few Vice Presidents who manages several employees, etc.
    Truth: Corporate America is Not a Pyramid Scheme
  11. Myth: “MLMs can’t be pyramid schemes because a product is involved”
    Truth: MLMs with products can be illegal pyramid schemes
  12. Myth: It’s giving me confidence and personal development!
    Truth: You get confidence and personal development spreading a poor business opportunity to others? I think you need to re-examine what personal development is. If you want to learn some business skills go to the library and get the books at the well maintained list here: Personal MBA
  13. Myth: “Millions of people are in MLM! ‘X’ number of people joined the company in the last month!”
    Truth: Millions of people bought Internet stocks in 2000. It doesn’t mean it was a wise move. Also, there are billions of people who are NOT in MLM.
  14. Myth: This company has explosive growth! It is the fastest company to reach (insert whatever milestone that sounds impressive, seen “reached a billion dollars in sales!”).
    Truth: These statements are never audited by any reputable third party accounting agency for accuracy. Remember the business model of MLM is based on convincing others that company is growing, so every one of them is going to say it, even if it isn’t the truth.
  15. Myth: “Lots of people join to get a discount on products and aren’t trying to build a business! That’s why it looks like over 99% of people are losing money”
    Truth: A reputable MLM company would not allow these people to sign up as distributors. Plus such a system would signal a pyramid scheme, because this wouldn’t focus on sales to outside participants. The people who signed up to get a discount would be inside participants.
  16. Myth: “Selling isn’t for everyone!” or “MLM isn’t for everyone!”
    Truth: Jumping off a bridge isn’t for everyone either. The question is, “Is it for anyone given what we know about the failure of the business model?” The answer is clearly no.
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