From: fritz@fc.sde.hp.com (Gary Fritz)
Newsgroups: misc.entrepreneurs,alt.business.multi-level
Subject: Re: Diff between MLM, Netwk Mkting and Pyramid
Date: 26 Jan 93 16:40:57 GMT
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(Followups directed to alt.business.multi-level -- please continue
the discussion there, and avoid a flamefest in misc.entrepreneurs.)

Hi Michelle,

In article <1993Jan26.044751.1718@cbnewsk.cb.att.com> you wrote:
: What's the difference between MLMs, Network Marketing
: and Pyramids?  I undrstand Pyramids are illegal - why?

Pyramids are illegal for several reasons, primarily that it's a
"get-rich-quick" scheme that burns 99.9% of the people who get into it.
The classic example of a pyramid is a chain letter.  The only way that
money flows into the pyramid (and thereby to the participants) is by
finding new suckers to send their money to the guy at the top of the list.

The key distinction between a pyramid and a legitimate MLM company
is product.  A company must have a viable, useful product that people
would purchase EVEN IF THEY WEREN'T IN THE PROGRAM.  Sham products
like those offered by many chain letters (e.g. "A valuable guide on how to
start your own mail-order business!" -- actually it's a 1-page xeroxed
sheet that tells you to mail out lots of chain letters to people) are
not enough to make a pyramid legal.

Even "real" products aren't enough to guarantee legitimacy.  Take 
for example <company N>, a company that has sold water & air filters 
for years.  Those are valid products (althouth Consumer Reports says
they're overpriced and ineffective), but <company N> has still had
injunctions filed against it in dozens of states and Canada.  Why?
People got burned because a popular way to make money in <company N>
was to dump $5000 in inventory on someone, who was then expected to
sell it.  Since most people couldn't, you ended up with thousands of
garages full of filters, and the Attorneys General started getting
screamed at.

: What the the top network sales products out there?

There are oodles of companies.  Amway is the best-known, and most
overexposed -- that is, a large percentage of people have already heard
of Amway and have formed negative (and often incorrect) perceptions about it.
Other large and successful ones include Nu Skin, Melaleuca, Shaklee, 
and lots of others.

"Top"?  Depends on how you measure it.  Amway is the biggest, by far.
I think Shaklee is the oldest one still operating -- about 35 years old.
Melaleuca is listed as the 39th-fastest growing privately-held company
of ANY kind in the country.

For myself and my wife, we decided to work with a smaller "start-up"
company called Espial.  It's on a steep growth curve, which means we
can grow our business that much faster, and has a strong emphasis on 
personal growth and development that we are very proud of.  We're doing 
so well, and believe in the company so much, that we've both quit our jobs 
at HP and are concentrating on Espial.  (My old division asked me to come 
back for a while on a contract basis, which is why I have an HP address.)  
It's not necessary nor recommended to do that -- *sensible* people start out 
part-time until their Espial income matches or exceeds their current 
job income.  But we never claimed to be sensible. :-)

: How much do people selling these products make?

Depends on a lot of things, especially your drive and determination,
and the way your company is designed.  I've spoken to people in Nu Skin 
who were earning $250k per MONTH, which seems sort of obscene to me.  :-)
Especially since Nu Skin's plan, in my opinion, is set up so that 99.99% 
of the people can't succeed big -- only the hard-core heavy-hitters can 
get up there.  I think Espial's plan is very fair and achievable, and 
also doesn't require selling -- it's all based on personal use of the 
products and sharing the program with others.  The company handles all
the sales, delivery, paperwork, etc.

One of our sponsor's recent checks was just under $20,000.  I expect that
to go up dramatically as the company continues growing.  The company
president told me last week that he expects Kent and Sue (our sponsors)
to earn $250,000 this year.  We're not too far from breaking $5000 per month.
I fully expect to be making $20-50k/mo within 2-3 years, and expect 2 or 3 
of our people (who have just started within the past 4 months) to be making 
at least $5-10k/mo in that same timeframe.

Hope that answers your questions!  
Gary
Newsgroups: misc.entrepreneurs