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I can't remember the first time I was told that multi-level marketing would replace at least half of all retail sales within the coming two years, but it was many years ago. Yet here I am, still buying my groceries from Coles, Woolworths, IGA and Aldi, still buying cars from dealers, still paying a real telephone company for my phone and Internet connections, still buying clothes from shops with racks and change rooms, ... It appears that none of the promises have come true, but they never really were going to do that anyway. Nobody's shown me the plan for a couple of years so I don't know if the predictions have changed. I do know that in 2005 the combined sales of all the US pyramid scheme members of the DSA was only a little above the sales of a single Australian supermarket chain, so I think they need encouragement to lift their game. Go Diamond and get that 50% of the market.
I was introduced to a board member of the DSA once. It took hours to wash off the slimy feeling left behind after I shook its hand.
Multi-level marketers deceive again (1/10/2005)
When I started running Google advertisements on this site I mentioned that advertisements might occasionally appear which contradicted the philosophy of the site. The advertisements are generated by matching words on the surrounding page and those words are often about things that I don't like. Google allows me to list up to 200 domain names that will be blocked from advertising on the site, but other than that blacklist I have no way of predicting what will be displayed and no way of knowing what has been displayed unless people tell me about it. One disgusting advertisement which was blocked as soon as I knew about it was for an organisation called Generation Rescue. If these people get their way all autistic children will be denied effective treatment and education, their parents will be denied access to counselling and other advice about how to best cope with and bring up their children, and all research into the causes, treatment and management of autism will cease. It is hard to imagine that anyone could hate children so much, but I have been observing anti-vaccination liars for long enough to know that no evil they perpetrate should come as a surprise.
The following advertisement was brought to my attention because the right hand side led to an organisation which actively promoted pyramid scams and their close relations, multi-level marketing schemes. I blocked the domain immediately.
The left hand side appeared to be an advertisement for Robert Fitzpatrick's excellent Pyramid Scheme Alert site. While I was prepared to block the scam promoter's advertisements, I was quite encouraged to see that their nonsense was apparently being balanced by Fitzpatrick's good advice. I say "apparently" because the advertisement was not for his site but instead led to the Direct Selling Association of the USA. This is the industry body for multi-level marketing organisations, and its board of directors reads like a Who's Who of scammery. And why would such a prestigious industry association resort to the deceptive use of someone else's name (even to the extent of registering a deceptive domain name) to divert people to their own site? Because deception is what they do and why they exist.
There is some interesting information on the DSA web site, however. In one place they boast that the industry has annual sales in the USA of $28.7 billion, sold by 13 million distributors. The marketing of all multi-level and pyramid schemes relies on prospects being unable to do simple mathematics, and I suspect that they think that nobody is going to be other than impressed by these huge numbers. They think wrong. Ignoring the fact that the total sales is a fictional number based on what the sales would be if all product ended up in the hands of people who are not participants in the system and pretending that no distributor ever buys anything for themself, if you divide 28.7 billion by 13 million you get average annual sales per participant of $2208. Remember that this the gross sales income for a year. The average commission rate is about 2% (most people actually receive a lower rate of commission payments) so this gives an annual net income before taxes and expenses of $44.15. Net income. For an entire year's work. Out of that $44.15 the participants have to pay for training materials, conference and seminar fees, normal business costs like telephone and transport, make-up, dry cleaning and nice clothes to look prosperous at functions, child minding while they are out showing the plan, … . And people try to pretend that these scams are legitimate business opportunities. Of course, there are people making money out of these schemes, but it certainly isn't by direct selling of anything.
Now let's look at the $28.7 billion in perspective. $28.7 billion sounds like a lot of money, and it is to you and me. If I were to be getting paid that each year I would have to put on extra staff just to help me spend it. Anyone who has ever been shown the plan will have been told how multi-level marketing is about to replace conventional retail trade, so how does $28.7 billion compare to retail sales? I chose one company which operates in Australia, a country with about 7% of the population of the USA. The company is Coles Myer Limited, and in 2004 Coles did $A32.3 billion of sales. Adjusting using today's exchange rate, this is about $US24.4 billion. So we have a single company in a country with 20 million people doing 85% of the total business that is being done by a group of 164 companies in a country with 300 million people and an economy to match. And these companies are about to dominate the retail sales universe? Is it any wonder that they have to lie in and with their advertisements? They must be terrified of prospects getting even a hint of the truth.
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