From: barrypa@wam.umd.edu (Barry E. Henderson)
Subject: Jilted/Cheating in an MLM
Originator: barrypa@ds09avw.wam.umd.edu
Organization: University of Maryland at College Park
Date: Thu, 9 Apr 1992 16:19:39 GMT

I think its about time to get this newsgroup going.


	When I'm out training my downline, there is one question that sometimes
comes up as a fear about any company.  "What is the one thing to hurt this
company in the future?".

	The one thing to hurt any litigiment MLM is a distributor.  Each 
company prints out its marketing plan and how to reach higher goals in
the business through product movement.  

	A while ago on a particular news/tabloid show a well known MLM
was put up for scrutiny.  On this show, hidden cameras were placed in
meetings where sponsors were making money claims.  They interviewed
some distributors who stated that they went into bankruptcy, and they
were jilted by the company.  Some "experts?" were also being interviewed
showing the company's marketing plan showing that it's a pyramid scheme.

	How did these people become bankrupt? Why were they so angry about
the company?  Why did they have a garage full of product?  Well I investigated
this company a while ago, and have a copy of their marketing plan to show
that it is possible to go bankrupt ONLY WITH the help of your sponsor.  
They put themselves into trouble ONLY by cheating with the plan.

	To achieve the executive level, a group must produce a certain amount
of product each month, and a person must sell/consume a certain amount as
well.  It should be known that in this company, to achieve the executive
level, you really do need to sell product yourself.  I have found that
many people don't like to sell, so this could be a motivation to do what the
sponsor did.  The executive qualification period is a 4 month process, in
which these production levels must be sustained.  The normal way to achieve
the executive level is to allow your group to gradually grow.  As people join
your group, they do the business and in however long it takes, you will 
reach the executive level. This is how it is presented in the marketing 
plan.

	Now, enter the greedy/sucessfull sponsor who can give the marketing
plan a new meaning.  What I am supposing happened, by what the 
jilted sponsors said in the interview, was that to cheat/bypass the market
plan, they just charged all the products on their credit card for 4 full
months to reach the executive level, in hopes that in the next few months
they will get their return back.  Well guess what happened, they didn't,
and somehow this show heard about their experience and reported that
the company was a fault.  A distributor can also figure this out on their
own and cheat without the help of their sponsor, but it is they who are
risking misfortune, not the company.

	I feel that this situation can probably occur in any MLM, there
most likely can be found loop-holes to achieve high levels by cheating
through the marketing plan.  It is very important that in this decade, 
all distributors practice sound & safe business practices in their program.

	I'm am not a member of this particular MLM, but when I saw them
being portrayed on tv like this, I began to think that this could happen
to any MLM.  MLMs most likely won't have this happen to them, so if you
are looking into MLMs, don't give this too much thought, but if this 
issue does come up from another MLM, look into who was the REAL cause
of the problem.

I won't give the name of this MLM, but the show was "Inside Edition".
Any comments?


Barry Henderson
barrypa@wam.umd.edu

Newsgroups: alt.business.multi-level