MLM a Big Business

Pyramid Scheme or MLM

A pyramid scheme is when people are buying a product to get into the "deal" and there is no intention of making a market for it. Pyramid schemes usually advertise as "get rich schemes" and other statements such as "earn easy money, no investment, etc.

From my experience with pyramid schemes, this is how I would describe the process. An example of a pyramid scheme would be: I buy a product and sell it to you for $5, you in turn resell the product to someone for $10 and down the line the product goes. Each additional person continues to raise the price. In the end, let us say that Number 10 bought the product for $100 and is not satisfied, he complains to Number 8 and up the ladder all the way to Number 1. Number 1 then tells Number 10 that the product wasn't meant for use but for selling! Here lies the pyramid scheme.

The distributor sells and the purchaser buys just to get into the deal. There is no intention to continually market the product. The distributor sells it one time.

A pyramid scheme is a not a direct selling plan. MLM (multi-level marketing) is direct selling which involves a product. True multi-level marketing involves selling a product that is worthwhile both to the distributor and to the purchaser. In addition, MLM involves a network of people (distributors) working in your group (also referred to as down line). The more people in your down line the more profit you make. You make a certain percentage of your down line distributor's sales.

MLM success is not a get rich quick scheme as so many advertisements claim. The success of your MLM business depends on your patience, persistence, and the real world market demand. However, with due diligence and belief in your product you can be successful in a MLM business.

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Dr. Forrest C. Shaklee founded Shaklee in 1956 at age 61 and lived to see it transformed into a Fortune 500 company during his 80s. A man of many talents, Dr. Shaklee's diverse career path included chiropractor, inventor, author, pastor and radio personality. Each experience helped shape his vision. Today, Shaklee's "Better You. Better World.%u2122" philosophy directly reflects Dr. Shaklee's initial vision.

A Life of Passions
The young Dr. Shaklee's interest in health started because of a childhood illness: tuberculosis. Instead of hospitals or medicines, his treatment was rest, nutritious food and spending hours outdoors in the Iowa countryside. Living in Harmony with Nature® became a way of life in his formative years.

Dr. Shaklee's interest in good health led him from the fields to the lab and the exam room. He firmly believed that good nutrition was the foundation for overall health and wellness. Always experimenting, Dr. Shaklee developed techniques to extract nutrients from food. His "vitalized minerals" were introduced in 1915, before the concept of vitamins was fully understood. He went on to build successful chiropractic practices and clinics, where he learned from treating patients that good health required nurturing wellness, not just treating illness.

Dr. Shaklee was also an early adopter of self-help practices. He wrote several books on the importance of positive thinking, which he copyrighted as "Thoughtsmanship". He also taught the concepts of harmony, health and the secrets of a successful life on his own weekly radio program.

Form Follows Philosophy
Nutrition, prevention and the concept of positive living converged in 1956, when Dr. Shaklee and his two sons, Forrest, Jr. and Lee (Raleigh), founded Shaklee Corporation. At that time exercise was a walk to the store, processed foods were a sign of progress, and few even thought about food as nutrition-not entirely unlike today.

The Shaklee family founded their company not just to earn healthy profits but also to help people live healthier lives. This simple but profound difference drove the decisions that set the company apart then and now.

First, Dr. Shaklee demanded that every product should be the best of its kind and fill a real need, not just a shelf.

Second, his experience working one-on-one with patients led to the company's direct sales model. He knew personal conversations were the best way to explain the benefits of preventive health. Dr. Shaklee said, "We'll teach some and they'll teach others to teach others to teach others." So the Shaklee men did, talking to people up and down California, using a Plymouth station wagon as their distribution center. They talked, people listened and told others. Even without formal "salespeople" the message spread. The father-and-sons team created a grassroots movement hundreds of thousands strong and a company that today is worth $500 million.

Dr. Shaklee's innovations didn't end with nutrition. He practiced "Living in Harmony with Nature®" in home care, inventing a biodegradable cleaner decades before environmental safety was a concern. He pioneered new discoveries in nutrition that went mainstream years later. He wouldn't have thought much about contemporary labels like eco-chic, organic or self-actualization, but he was a pioneer in all of them. Fifty years later, his company has led hundreds of thousands to better, healthier lives-and helped all of us live in a better world.

Join a company that has been a leader in promoting better health and a better world. Visit Shaklee

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Although this article is a few years old, the scams are still around. Be careful when selecting a MLM business and watch carefully for pyramid schemes.

Press Release
June 7, 1999
Pyramid Victims Nailed ---
According to the Los Angeles Times, three victims who lost money in a major pyramid scheme that was busted in Hollywood last month, have been charged with operating their own scam in Ventura County. Their pyramid program, "Go-4-Success", required investors to put up $2000 with the chance of making thousands of dollars on a weekly or monthly basis if enough other investors participated.

After receiving a tip, detectives posed as potential investors and arrested the trio. They have been charged with operating an "endless chain" which is a felony. The suspects claim theirs was a legal business because investors received a camera, travel vouchers, and a telephone calling card. Sheriff's deputies explain that the scheme is illegal because it requires an endless stream of investors.

The Times article says that the three men allegedly contrived their plan after they had invested $6,000 in the Family and Friends Social Club, a huge pyramid scheme that ended in a police raid. See related article from April 27, 1999.
Original Source: Los Angeles Times, June 7, 1999

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