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Hope this is the right spot: Multi-Level-Marketing, tell me your story.

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#1
Does this qualify as an "Investment Idea"?

When I got home from serving an LDS mission I didn't have a job and it was 2011. The job market was pretty weak at the time. I had been home for less than a week and was in the process of looking for employment. There was this guy (Gavin) at my church that said he had a job for my brother and I. We went to do lunch with him and he launched into this sermon (not sure what else to call it) about how we could make thousands of dollars a month in residual income by doing a Xango MLM. All I had to do was become this great person and recruit others into greatness. Something like that.

Up to this point I'd only heard bad things about MLMs so I told him that I would think about it. I pulled my brother aside and being mathy guys we decided to pick apart the 'job' offer.

In case anyone doesn't know what an MLM is it works like this. In the MLM you have to purchase the product to be a distributor but your goal isn't to sell the product, it is to sell people on buying the product as distributors like yourself. The deal here is that you get a cut of what the new recruit is required to purchase. You also get a cut of your new recruit's recruits down to the 7th generation. If you can train.... oh say... five people each and then they each get just three and each of those people gets two then you have 50 people's payments getting at least partially directed at yourself for this overpriced Xango product.

So all you have to do is motivate your recruits. If you recruit wonder boy then you get to retire young! Gavin didn't really talk much about the Xango product. It isn't about that. It is about motivating everyone in your pyramid to do as well as possible so you get wealthy.

My brother and I ran the numbers on the math presented to us by Gavin and here is what we found:

At any given moment, mathematically speaking, 95% of people in Gavin's MLM were losing money or breaking even in a given month. That is 19/20 people buying an overpriced niche product that they do not need or want. Out of the remaining 5% that were making money 90% were making under $1,000 a month. Gavin was making about $600 per month. That left the top 0.5% that were making over $1,000 per month. Some of those guys were making $10,000+ a month but those guys represented under 0.05% of total participants.

Rather than just not return Gavin's text messages about my promising new career I decided to confront him with the hard math. Maybe I missed something. He looked at it with me and didn't dispute my findings. What he said was.... "Well yeah,.... but what if you made it to be in the top 0.05%???"

I think communists deep down often have a similar mentality. It isn't about having a good system where everyone wins. It is about being the winner that lords over the rest in a parasitic system. If your system requires 95% of people to break even or lose then it isn't a healthy system and all that effort is a giant waste of human capital. It isn't even ethical to recruit someone into that kind of a game.

Gavin never talked to me about it again.

Okay, have any of you guys had an interesting experience with an MLM? I live in Utah so I encounter them more often than I would like to.
 

EO 11110

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#2
my story

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Goldhedge

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#3
I got happily involved with Equinox about 20 yrs ago. Water filters and vitamin supplements.

As soon as I bought in they disappeared leaving me with inventory and no way to market. Total scam.

No MLM for me.
 

Buck

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#4
I attended one of those 'training' seminars and that speaker could have had me selling vacuums to dead people, just to 'clean out their casket a bit'

motivational speakers are great but the product has got to be above sub-par and priced to reflect that...


besides:
i'm not a salesman...so, I'm Out
 

Someone_else

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#6
"Burn your friends and family... FOR CASH!"