Your Job is a Pyramid Too! – No It’s Not
When an MLM participant tries to sell you on the idea of joining the organization, they are normally quick to defend the organization. If you ask if the company they are representing operates as a pyramid scheme, they will likely answer the question in a couple ways:
We are not a pyramid scheme, pyramid schemes are illegal.
The sad truth is, that very few companies have been prosecuted for being Pyramid schemes. But just because a company has not been prosecuted and found to be a pyramid scheme, does not mean that they aren’t checking all the boxes.
- Rewarding participants for recruiting others as opposed to focusing on selling products.
- Promises that you can get rich through your participation.
- They encourage or require you to purchase products. While they may not explicitly require that members but products, many members are forced to buy their own product to remain active.
- They claim you can quit your job and get rich.
All jobs are pyramid schemes. They will ask you what your company’s organization chart looks like.
- Likely Differences:
Your job does not require that you pay fees or buy their product to get paid. - Your job does not have 75% annual turnover
- If you go to your job everyday, you will get a paycheck.
- Your job may offer health insurance, life insurance, and retirement benefits. If you are in an MLM, you are not receiving any such benefits.
- You are not likely to go into debt as a result of your job
I created this chart – feel free to copy it and use it when someone tells you that your job is a pyramid scheme.
- AdvoCare: An Example
The FTC filed suit against AdvoCare, alleging that they were a Pyramid Scheme. The case was settled, with the result being that AdvoCare could no longer operate as an MLM.
Some of the key points that the FTC says show that AdvoCare was an Illegal Pyramid Scheme can be applied to nearly all MLMs in operation today. Those companies can not be called Pyramid Schemes because they have not had to defend themselves against those accusations.
The FTC is clear in their opinion that AdvoCare operated as an illegal Pyramid Scheme. Their key callouts in making this determination were:
- 72 % of AdvoCare distributors lost money or earned nothing
- Promises of Unlimited Income
- AdvoCare rewarded distributors for recruiting others. The push to recruit is a classic sign of a pyramid scheme.
If you are being pushed to participate in an MLM, pay attention to how much they emphasize downlines and recruiting. Most MLMs won’t explicitly require you to buy product, but they will likely require a minimum amount of PV (Personal Volume) which most will only be able to obtain through personal purchases.
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About MLM Investigation
I decided to start MLM Investigation to help shine a critical light on the industry. There are many others that are doing a fantastic job telling their stories and speaking out against MLMs. I will feature others’ work as well and point readers to their content.
I plan to use this space to further the cause and to educate people about the true nature and the true numbers behind The MLM Industry.
I am collecting updated Income disclosures, commission structures, and recruiting materials, and will have these available on the site.
I plan to create single page executive summaries of all major MLMs to serve as a guide to share with those considering joining an MLM organization.
