This submission does an excellent job of looking past the smoke and mirrors of MLM, and shows how it really works:
http://www.quatloos.com/Winston_Wu_T...About_MLMs.pdf
The section titled "Smoke and Mirrors, Selective Revelation and Mind Control" really hit home, since this account was alarmingly consistent with my own experience with MLM.
The section titled "The Mathematical Certainty of the Failure of the Majority Involved in MLM's" revealed some simple mathematical truths that never occurred to me, but make perfect sense.
"It is a MATHEMATICAL CERTAINTY that more than 50 percent of those involved in
MLM's MUST ultimately fail."
I'll display this section. Discuss!
The Mathematical Certainty of the Failure of the Majority Involved In MLM's
Now we've come to the most important part of this article that lies at the heart of why
MLM's are inherently flawed and must fail. If you've seen the movie "Titanic" you might
remember that the ship's engineer told Kate Winslet that "The ship will sink. It's a
mathematical certainty." Well the same applies to this case as well. It is a
MATHEMATICAL CERTAINTY that more than 50 percent of those involved in
MLM's MUST ultimately fail.This fact alone makes the system a scam no matter how
much money you make from it. Once you realize this, you'll understand why this whole
business system that makes great promises is really an inherently flawed and unstable
economic structure that will cause a lot of frustration, disappointment, and lost money for
the majority of those gullible enough to bank their dreams and future on it. All it takes to
understand this is basic arithmetic. Allow me to demonstrate.
As we discussed above, in our example of the layout of the basic MLM system you
recruit two downline partners to sell a certain product volume and recruit two partners of
their own as well, doubling the distributors at each downline level. However, since there
is not an infinite number of people in this world, the levels cannot continue geometrically
doubling forever, and at some point there won't be enough people in the world to double
to the next level. If we assign numbers to the downline levels, then in this case at level
31, there wouldn't be enough left in the world to double to level 32 without re-recruiting
the people above. If you did that, then the population of level 32 (not including the
population of the levels above it) will be 4,294,967,296. That's about 4.3 billion people
not counting the levels above, with some recruited twice! Since there are approximately
6 billion people in this world, there aren't enough people left on Earth for the 8.6 billion
needed to double to level 33!
There aren't enough people left on Earth! This is whatthe structure would look like.
Levels
1 (one person)
2 2 (doubles to two people)
3 3 3 3 (doubles to four people)
4 4 4 4 4 4 4 4 (doubles to eight people)
(and continued so on)
..................................
..................................
Level 32 * (population at 4.3 billion)
* Level 32 includes double recruitment of those above. No further expansion to Level 33
is possible. There are not enough people in the world for the 8.6 billion people required.
Now, since level 32 cannot double to level 33, the distributors in that level, which
outnumber all the distributors in levels 1-31, MUST fail the business! Even if level 32
re-recruited the people in the levels above and combine them with the population of the
rest of the world, that still wouldn't be enough to make 8.6 billion! In fact, level 31
would not even be able to double to level 32 in the first place without re-recruiting some
of the people above level 31 again! (since the total population of the downline up to level
31 at 3+ billion does not leave enough people left in the world for the 4.3 billion required
for level 32) Even if you were to continue re-recruiting the same people over and over
again, it still doesn't solve the saturation of the geometric expansion. And this represents
the base case scenario too! What this means is that even in the BEST CASE SCENARIO, the majority are still guaranteed to fail! Think about that.What does ittell you about a system where even in the best case scenario, the majority are doomed
to fail?That more than anything is the most revealing flaw of this system. It's veryapparent and revealed by simple arithmetic.
Now here's the key. Realistically we know that MLM's don't take over the world and they stop somewhere between level 1 and 32 with each downline branch stopping at different levels. But it doesn't matter, because at ANYWHERE the downline levels stop at between level 1 and 32, the population of the lowest level without a downline will
ALWAYS be more than half of the sum total of the population of all the levels above it
(including level 32). This is why the majority of those involved MUST always fail,
regardless of how they perform. Of course, in reality different branches of the downline
will stop at different levels depending on various factors such as performance and the
saturation point of each geographic location of the downline branches. But this is
inconsequential, because no matter which level each branch stops at, the sum total of all
the people on the level with no downline beneath them will ALWAYS equal more than
the combined total of people in the levels above them! ALWAYS! You can test this out
yourself and do the math by drawing out the downline levels as in the example above,
along with the population at each level. Then stop the branches at various points (it
doesn't matter where) along the levels, and add up those at the levels with no downline
beneath them, and those in all the levels above them. You will get the same results every
time! No one, not even the richest and most eloquent MLM speaker, can dispute the
mathematical certainty of this. The
bottom line
here is that
THE MAJORITY MUST
FAIL in ANY scenario!
That alone makes this system a scam no matter how much
money you make from it. How would you feel knowing this and getting involved in it?
How would you feel knowing that more than half the downline you are trying to motivate
will fail?
One argument that MLMers frequently make is that if MLM's were doomed to be
saturated, then they wouldn't still be around. This is a gross misunderstanding of what
we're talking about here. When critics of MLM's refer to saturation, what we mean is
that the number of people who will succeed at it will reach a saturation point. Since
MLMers constitute a minority in society, they will always be able to find new recruits
among the rest of the population. After all, people are born everyday. Contrary to what
they tell you though, long-standing MLM's do not grow steadily without drop. They are
in a forever state of expansion and contraction cycles, as a result of their high turnover
and high recruitment rate. They will continue to exist as long as they are able to maintain
their high recruitment rate, which they constantly struggle to do using methods like those
described above such as smoke and mirrors, shifting self-described terminologies, and
mind control in a group setting. (With so many disappointed people accumulated, why
else do you think they have earned such a bad reputation so much by now that they have
to hide their association with "multi-level marketing"?) And those at the high upline
levels can maintain a stable position and steady income as long as replacements for the
high turnover rate continue at the bottom. All
of this is inconsequential to the fact that
the majority must still fail.
Really, think about it, new downlines can't infinitely progress to achieve the status that their distant uplines currently hold. They'll always need more downlines to join up. At some point, the well runs dry. Amway realized this, and tapped into many foreign markets. They too, will dry up. The UK and India have both seen major problems with saturation, which is defined as the number of people who succeed at the business. As it stands, if you consider Q12 Platinums to be the lowest standard of success in the business, the success rate is in Amway is 0.32% of the distributorship at large.
A consistent success rate of less than 1% of the distributorship, for any reason, should tell you that this isn't a worthwhile opportunity!Really think about it, Amway has been in business since the 1950's, and there are less than 10,000 Q12 Platinums (based on total Amway membership of three million IBO's) outstanding, and their average income is only $52k/yr! Amway Platinum membership totals less than the number of employees in the FDNY. IIRC, the number of Amway reps earning an average $135,000/yr, before expenses and taxes, total a mere 3,000 IBO's! That's a mere 3,000 people in the entire Amway organization earning a liveable income. Just three thousand. Out of three million. Does that sound like a good business opportunity? The rich IBO's the ones that average $500k/yr total a whopping 900 in number. Good luck duplicating that!
That is Amway. Amway is one of the largest, if not the largest MLM in existence. The number of successful distributors in the lesser known MLM's are much smaller.