Fast forward to 2017. LuLaRoe is the biggest MLM for women. “More than 80,000 women have paid around $5,000 for several boxes of low-cost clothing and worked as much as 80-hour weeks to outfit hundreds of thousands of suburban women in multicolored polyester. But according to a report that studied the business models of 350 MLMs, published on the Federal Trade Commission’s website, 99% of people who join multilevel-marketing companies lose money. Depending on how you look at it, it’s either a brilliant business model or a predatory practice — or a little bit of both.” (FTC)
MLMs are designed to make profit for the owners/shareholders of the company, and a few individual participants at the top levels of the MLM pyramid of participants. According to the U.S. Federal Trade Commission (FTC), some MLM companies already constitute illegal pyramid schemes even by the narrower existing legislation, exploiting members of the organization. There have been calls in various countries to broaden existing anti-pyramid scheme legislation to include MLMs, or to enact specific anti-MLM legislation to make all MLMs illegal in parallel to pyramid schemes, as has already been done in some jurisdictions.
When it comes to CBD oil, cheaper is most certainly not always better because the production of quality CBD oil just isn’t cheap. CO2 extraction utilizes complex equipment and a high level of expertise as opposed to the cheaper and easier chemical extraction processes that can leave residue from toxic solvents like butane, propane, and ethanol in the CBD oil. While the CO2 extraction will generally lead to a higher price tag, it does insure quality, purity, and potency – especially when used to extract CBD oil from hemp that has been organically grown in the United States.
Whether they realize it or not, consultant leaders often use time-honored cult tactics of denial and blame to keep women within their sorority. A famous series of experiments from the 1950s conducted by Soloman Asch in England showed that three out of four people will deny evidence right in front of them if the majority says it’s not true. In the study, individuals were placed in groups where they were constantly contradicted by other members. When this happened over a length of time, they would start to agree with the majority—even though it was clear that the opposite was true. In MLMs, “you’re trained to avoid people who question whether this is a viable business or not,” Brooks says. “Which is exactly the same technique that cults use—they try to isolate you from people who question your belief system. I’ve been contacted by a number of people who deal with cult survivors, and some of their clients are former MLM people.”
"Let me tell you about an incredible ground-level business opportunity," and you are invited to a house or to lunch for "a discussion." Funny enough, you feel sick in your gut that there is some hidden agenda or deception. "Probably a multi-level marketing (MLM) organization," you think. Suppose it is? Should you trust your instincts? Is there anything wrong with MLM?
Thus, a parallel or "shadow" pyramid of motivational tapes, seminars, and videos emerges. These are a "must for success," and recruits are strong-armed into attending, buying, buying, and buying all the more. This motivational "shadow pyramid" further exploits the flagging recruits as they spiral inexorably into oversaturation and failure. The more they fail, the more "help" they need from those who are "successful" above them.
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Then there’s Congress, where critics also fear the passage of legislative efforts they say would virtually legitimize many pyramid schemes. One such bill, introduced last summer by a bipartisan caucus organized by the industry lobbying group, the Direct Selling Association, was opposed by Ramirez because it contradicts the terms of the Herbalife settlement. Days after she announced her resignation, Ramirez wrote a letter to the DSA chastising it for its opposition to the FTC view, which the DSA had laid out in a press release shortly before Trump’s inauguration. The question is whether there is retail demand for the products of MLMs or whether the purchases are just a camouflage for recruitment. The DSA, and the bill, argues that purchases by participants in the scheme, called “internal consumption,” can represent true demand, which means they would count when determining commissions paid to salespeople. Ramirez and the FTC disagree. Even if MLM participants do want to buy products for their own use, they shouldn’t be compensated for doing so, Ramirez said. To ensure compensation is driven by retail sales, she noted, companies should keep track of all customer sales outside the network (as Herbalife is being forced to do).
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