Monday 16 January 2023

Robert FitzPatrick again explains why 'MLM/Direct Selling' is a Big Lie.


International Association to Expose, Study and Prevent Pyramid Schemes
Website    Donate   News   About   Pyramid Schemes   Resources 
January, 2023
From: Robert L. FitzPatrick

Dear PONZINOMICS Readers, Colleagues and Friends,

The First Question Answered

With Ponzinomics published in all formats, 2022 was a year for me to stop and reflect on all my work in MLM and pyramid schemes, 25 years from when False Profits was published.

I made a discovery that leads me now to publish a "companion" book to Ponzinomics and False Profits. It's entitled, DIRECT SELLING, a Non-Fiction Fable.
DIRECT SELLING is smaller in size but no less relevant and important. It is focussed on the question I neglected, almost forgot, over the years. It's the first and the most basic question for consumers, regulators and journalists to ask -- but they almost never do.

Here is the question: Is MLM what it says it is: "direct selling"?

If it's not direct selling, there's no need to go further. It's using a false identity as bait. It's a con, a counterfeit, right from the start and everything that follows is based on a Big Lie. Also, there's no need to examine MLMs one at a time. They all use the same "direct selling" disguise.

Almost everyone skips over the "direct selling" question. If they question MLM at all, they go to, "Is it a pyramid scheme?" I was asked that "pyramid scheme" question in one of my very first media interviews by Mike Wallace on CBS 60 Minutes, and then a thousand times after that by journalists all over the world. Almost never am I asked, Is MLM "direct selling?" or, "What is direct selling?" That line of question would enable the journalists or a regulator or any consumer to see that MLM is something completely different, and then, maybe, to go see for themselves what it actually is. But, diverted by the revered "direct selling" identity, they never make a common-sense investigation.

Everybody's against Pyramid Schemes,
but who could oppose "Direct Selling?"

Even those who oppose MLMs, the anti-MLM movement, dive directly into the pyramid scheme question or fake income promises or false product claims, and seldom examine "direct selling." They allow MLM to remain safe within its disguise. It is implicitly granted, even by critics, "legitimacy" status of "direct selling," which no one opposes even if they know nothing about it.

Still, in the era of Costco and Amazon, you would think some journalists might ask, "How could millions of people find enough customers and sell them MLM products month after month to make a sustainable profit? Or, why would any direct sellers recruit their own competitors? Or, didn't "direct selling" go away 40 years ago? Or who needs a direct seller any more? But, they don't ask. Why?

Most – and this is especially true for regulators and journalists – don’t know what real direct selling is. They've never done it.

Most – and this is especially true for regulators and journalists – don't ask because don’t know what real direct selling is. They can't ask about something they know nothing about. They would not know how to evaluate an answer. It's not taught in law or journalism schools. Almost none have personally sold anything on a face-to-face, commission-only basis. They never spent lonely days searching for “prospects", never had to make a sale or face not being able to pay next month's rent. So, they rely on old myths about the "Yankee Peddler" and even repeat MLM's preposterous misrepresentations of, recruit your friends, high income, "anyone can do it," and products that "sell themselves."

If they had some knowledge or experience with real direct selling, they would ask obvious business questions like, how many retail customers does each "direct seller" have? How many sellers can an area support? What's the average retail profit margin? With higher priced commodity products, how can MLM-sellers compete with online sales or stores? When, these questions are not answered, they'd smell a rat. But they don't ask.

If people understood the realities of direct selling, they’d never be fooled by an MLM pitch.

DIRECT SELLING, a Non-Fiction Fable uses story and illustration to show the hard realities of direct selling. If people understood the realities of direct selling, they’d never be fooled by an MLM pitch. Anyone who has done it would fall down laughing to hear it described by MLM recruiters as fun and fulfilling or a pathway to the American Dream.

DIRECT SELLING is told as a fable to address timeless and universal issues. It is, at times, funny but always factual. It pulls back the curtain on the dark arts of true direct selling. It shows how MLM is not direct selling at all but uses some of direct selling's props and the worst of its old methods to disguise pyramid recruiting, a pathway to delusion and loss.