Granted, there have been a few fairly successful Multi-Level Marketing companies over the years but for the most part MLM companies succeed only at making the founders rich while filling participants’ garages with boxes of unsellable and sometimes unuseable products. For this reason I despise MLM companies and have done quite a bit of research into them as well as other fraud-related business schemes.
Two days ago I received a call from a woman who I had helped out with some web design services asking me if I would be able to help her friend, who was also looking for some web design help. Never one to pass up an opportunity for a few extra bucks I told her I was interested. “Oh,” she said. “I also wanted to tell you about a side business I have that’s really taken off and that I think I could use your web skills for.” She proceeded to use very vague descriptions of this “side business” but after about 10 seconds I knew I was being invited to a MLM recruiting meeting. These types of businesses aren’t very hard to spot especially if the person telling you about them is
- Very vague about details
- Can’t really explain the business fully over the phone
- Has “someone else” who can give you more details in a presentation
- Fairly new to the business themself
I really didn’t want to go to the “presentation” but since the new potential client was going to be at this meeting I decided I would go – for part of it. Boy am I glad I did! Not because I was convinced to throw away my hard-earned money for some magic pills (literally) but because I realized what a great blog entry that presentation would make!
The office of this new MLM company, Team Everest, was located in an office building suite on the outskirts of town that felt like they had moved in 10 minutes before I got there – no furniture, empty cubicles, etc. The only room that had anything in it was the “presentation room” that was filled with 35 other
suckers people who had been asked to come by their “friends”. As I walked in I was introduced to a number of people including the founder of the company who looked more like the founder of the hair club for men. You can probably picture the type of person I’m talking about – the type that looks more comfortable in a leisure suit than a business suit. Throughout the night each presenter commented on this man’s “genius” in coming up with Team Everest’s unique business model. However, I had a tough time believing that the same man who had graduated in philosophy and had “traveled extensively sharing his ideas on such topics as truth, goodness and beauty; friendship, love and marriage; as well as such practical topics as family budgeting, self-reliance and the morality of helping others” could start a one-of-a-kind MLM company. (quote via their website)
The presentation quickly began by introducing the new CEO that had been brought in as a “firecracker” to jump-start the company into success. The woman, easily in her late 50’s, had apparently made several MLM companies successful in the south (she was from South Carolina herself). And apparently only after a short time in this state she already knew everyone at every newspaper and TV station and had thousands of ideas to get the company’s name out. Her goal, she told us, was that by the end of July team Everest would have 5,000 members. Based upon the fact that only 35 people were in the room with me I kind of chuckled to myself, but the room was filled with applause and cheering after her announcement. But I laughed even harder when she announced that she firmly believed that by the end of August the company would have 10,000 members – and that by Christmas the company would have 50,000 members! Now this would be a lofty goal by any measure, but when she asked how many people were bringing 5 friends to the meeting on Saturday… not one person raised their hand. At that rate it’ll be Christmas 2017 before 50,000 join.
The Recruitment Guilt Trip
Now any “good” MLM company depends upon new recruits for steady cash flow. Why? Because after a month or so each team member realizes his mistake and bails – leaving the company constantly desperate for new blood. Team Everest was no different. The CEO proceeded plead with everyone to invite everyone they knew (which according to her statistics was 500 people) to join Team Everest – including your gardener, your mailman, and that guy that came to fix your plumbing once. It was then that it hit me: I was that guy that “came to fix the plumbing once!” The enticement of a design job was just a ploy to get me there. Sure I was hurt, who wouldn’t be? Being played like that… it’s just not nice. But I stayed because the best part was just beginning…
The meat of the presentation was given by a younger and much more engaging woman who began by asking everyone to raise their hands if they had participated in a MLM company before – everyone except me raised their hands. She then asked how many had made money from their MLM company – not one hand was raised. It was at this point that I began to look around the room and the people seated with me. I just had to know what type of person, after having failed at three previous MLM companies, suddenly believed that the 4th time was the charm. What type of person tries again and again to make money from home without doing any work? The answer, suprisingly enough, was everyone! There were retired couples there, stay-at-home moms, and even legitimate businessmen that were trying to earn some money on the side. I slowly realized that the MLM companies had infiltrated every group of people available – and I soon learned that the key was finding the people within each group that really loved money and were easily convinced.
The presentation continued into an explanation as to why previous MLM companies had failed. Apparently, previous MLM companies had failed because they had:
- Expensive products that couldn’t be retailed for any higher
- High priced autoships (this is where the company sends you product automatically each month whether or not you want it or can sell it)
- Tough and complicated recruiting policies
But “Team Everest is different,” they claimed. Their “innovative” business model doesn’t only sell products in one booming industry but incorporates 3 “phenomenal industries.”
- Internet & Online Retail Industry (a little late to be entering this arena if you ask me)
- Personal Growth & Development Industry (i.e. self help books)
- Lucrative Network Marketing Industry (i.e. this is a Mutli-Level Marketing Company!)
At first, the fact that the company is trying to shy away from other MLMs that have stuck to one product (personal care, tupperware, kitchen tools, etc) sounds like an interesting concept. But in reality, their online store is nothing but a hodge-podge (yes, I said hodge-podge) of random products – similar to a drop-shipping site. So point #1 turns out to be not too interesting or unique.
Even the woman giving the presentation admitted that the products in #2 “weren’t as popular” as the others – meaning that when you take the MLM spin off her statement it translates to “nobody buys this crap!” And #3 isn’t really an industry that they’re leveraging – it’s simply a statement of what they are.
The best part of this presentation though was the explanation of what made Team Everest different. Instead of explaining each point, however, I think I can sum it up for you like this:
Team Everest is different from other MLMs because they renamed everything.
Yup, that’s it. You know those “autoships” that everyone supposedly hates so much? Well at Team Everest they’ve eliminated autoships – but included something called MBAs which are exactly the same thing with a new name and a $99/mo price tag.
Now at this point you’re probably thinking to yourself, “how did this guy stand to sit through all of this?” Well, it took a lot of self-restraint on my part not to walk out – but only because I was waiting for the next section of the presentation.
This is why everyone joins a MLM company, right? To get rich quick without hardly working? This is the part of the presentation that I really wanted to see – how much were these 35 people going to pay to get ripped off? Well, in keeping with the “Mt. Everest” theme the different levels of members included:
- Mountaineer – for only $199 (plus $99/mo autoships)
- Tour Guide – for only $599 (plus $99/mo autoships)
- Mountain Guide – for only $1200 (I can’t remember the exact price for this but it was at least $1200)
The only real difference between the different levels was the discount you could get from the wholesale price of the products. For example, by signing up for the $599 program you could save 5% off the wholesale price – but in order to justify that from the $199 price you’d have to at least sell $8,000 of product!
After hearing about the outrageous price the members were going to have to pay for the benefit of having a “genius” take their money, I couldn’t take it anymore and left. But I hope that through my experiences you might become more aware of MLM schemes, tactics, and methods.
Most of all, I hope that you at least walk away with some sort of MLM radar in your mind so that when you friend or neighbor comes up to you with a “great and profitable business opportunity” that you will politely turn around and run away as fast as you can. If you’d like to learn more about MLMs including news and court rulings please visit http://www.mlmwatch.org/ which has some great MLM educational content.
** Update: An update to this post has been posted here **