Sunday 2 July 2023

'MLM Direct Selling' has been the front for a racket - Robert FitzPatrick presents the often-ignored truth about the real direct selling industry .

Today in the USA and elsewhere, due to many competitive commercial factors (supermarkets, discount stores, Online shopping, etc.) hardly anyone buys consumer goods on his/her door-step. 

Historically, door-to-door direct selling (or what used to be known as peddling) was a very common way of doing business in the USA, but at the start of the 20th century its image was blighted by fly-by-night quacks and charlatans. In an age when most women did not go to work, and even the middle-class had servants to cook, clean and receive visitors, door-step products were invariably cheap and cheerful, and aimed at ordinary housewives. From just before WWI until the 1970s, the 'Direct Selling Association' was a national trade association in the USA that represented (and was only financed by) a number of generally-reputable commercial companies of various sizes. These businesses used to generate profits by regularly selling everyday goods (perfumes, cosmetics, costume jewellery, household products, books, etc.) directly to the general public through salaried, and/or non-salaried, commission agents. Although unethical high-pressure sales tactics were increasingly used by new, and less-reputable, DSA members, in their traditional format, direct retail transactions were authentic and lawful, because they were based on value and demand. Furthermore, the DSA members originally tried to keep fly-by-night quacks and charlatans at bay, and, at one time they agreed that the number of commission agencies for any particular company, should be limited in given geographical/population areas. This common-sense measure was intended to prevent counter-productive internal disputes amongst the sales-force and to enable individual sellers to have a fair chance of finding sufficient loyal customers to make a decent living. 

Today, when examined in splendid isolation by casual observers, the self-proclaimed activities of the corporate structures forming 'Direct Selling Associations' internationally, can appear to be the same as above. However, when the wider-evidence is examined, during the second half of the 20th century (as door-to-door selling died out in the USA and elsewhere) the membership of 'DSAs' came largely to comprise an ever-growing number of so-called 'Multi-Level Marketing/income opportunity' companies ('Amway', 'Herbalife', 'Nu Skin', 'Forever Living Products', etc.) which have been used to dissimulate rigged-market swindles or pyramid schemes. The racketeers behind these counterfeit direct selling companies, have acquired their wealth by steadfastly pretending moral and intellectual authority, whilst deceiving an endless-chain of victims (now comprising countless millions of individuals around the globe) into making regular losing-investments in exchange for effectively-unsaleable commodities (i.e. banal, but grossly-overpriced products, often of a dubious pseudo-scientific nature with highly-exaggerated, and/or miraculous, claimed benefits which cannot be quantified). These transactions, already totalling many billions of stolen dollars, have actually been based on the false-expectation of future reward. However, they have been laundered as lawful retail sales based on value and demand. 

The outrageous 'MLM direct selling'  lie, has been hiding in plain sight for so long: that many people now not only accept it as the truth, but they have laughed out loud at rational persons suggesting that, in reality, so-called 'MLM recruiters' are adherents of the crackpot pseudo-economic theory that  endless chain recruitment +  endless payments by the recruits = endless profits for the recruits. However, it is important for readers to distinguish between short-term participants and chronic, core-believers in the 'MLM income opportunity' fairy story. The overwhelming majority of people who have been taken-in by 'MLM,' have quit within a short time, usually because they find it impossible to convert, and/or maintain, other contributing recruits, and/or they have no cash, or credit, to continue contributing themselves. Since they were invariably recruited by a friend or relative, they have little reason to complain, and they wouldn't know exactly what to say, or where to complain, anyway. 

The accepted annual drop-out rate in groups like 'Amway', 'Herbalife', etc., has always been well in excess of 50%. Those who have persisted for more than 3 years, has been no more than 5%. However, if you ignore the insignificant number of shills at the top of the recruitment pyramids, the overall hidden net-loss/churn rate for paticipation in so-called  'MLM income opportunities,' has always been effectively 100% (by design). Thus, the constant public-proclamations by the boses of the largest, long-established groups like 'Amway'  that their sales-force has always been expanding for decades and lately comprises 'millions of Independent Business Owners conducting billions of dollars of sales annually,' is a grotesque distortion of ever-shifting reality.  

There has been a significant minority of chronic 'MLM' proselytizers, with access to cash or credit, who continue as de facto slave recruiters, sometimes for decades. In many cases, these dangerously-deluded, self-righteous persons will do, or say, anything to sign-up, and/or maintain, recruits - convinced that they will only achieve total financial freedom by helping others to achieve it .They have been indoctrinated to ignore their mounting losses/debts and to commit everything they can get their hands on. Some even steal from their friends and families, and/or deprive themselves, and/or their families, of food, heating, etc. In the very worst cases, gung-ho 'MLM' adherents known as 'Road Warriors' have been indoctrinated to go without sleep and have ended up dead at the wheels of their cars - crashing whilst en route to late-night recruitment meetings.

David Brear (copyright 2023)


International Association to Expose, Study and Prevent Pyramid Schemes
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July, 2023
From: Robert L. FitzPatrick

Dear Readers, Colleagues and Friends,

A Fable, not Fiction

DIRECT SELLING, a Nonfiction Fable, is now published and available on in paperback and Kindle versions.

DIRECT SELLING is a companion book to PONZINOMICS and FALSE PROFITS, but it takes a very different approach.

Just over 100 pages with illustrations, it presents its truths through a timeless story. It is set in a bygone era, when real direct selling still existed, but its lessons are more relevant now than ever.
DIRECT SELLING, a Non-Fiction Fable is about what real direct selling is, in contrast to the false history and claims made by "multi-level marketing" (MLM) recruiters. Real direct selling hardly exists today. Effectively, it went extinct nearly 40 years ago. Who sees door-to-door salespeople anymore? Who would need or want a salesperson coming into their home (or online) to sell commodities?
So how is it possible that more than 20 million are recruited as "direct sellers" into MLMs each year in America? And, why do some who learned from experience or analysis that MLM is pyramid fraud still refer to it as "direct selling"?

Unaware or Intimidated

Most of those recruited today into MLM – believing it to be direct selling – have never seen real direct selling. Many were not even born before it largely disappeared. They never had to make a sale, face-to-face, knowing that if they fail, they can’t pay next month’s bills. They’ve never spent lonely days searching for “prospects” or had doors slammed in their faces. Without that experience or knowledge, they can be cruelly misled by false claims and misrepresentations of direct selling as "opportunity of a lifetime", "no selling required," and the Big Lie that MLM is direct selling. Real direct sellers don't recruit new – and competing – direct sellers.

By dramatically showing what real direct selling was and is, DIRECT SELLING pierces the myth that protects "MLM" from being seen and called out for what it is, a pyramid recruiting scam.

There are some who call MLM "direct selling" even though they realize it is a scam or have directly experienced loss. Why? They have been told, over and over again, that direct selling is the descendant of the revered Yankee Peddler, the purest form of free enterprise. Questioning MLM's "direct selling" identity, they are lectured, impugns "business opportunity", and the entrepreneurial spirit. It is "negative thinking." It also contradicts the Federal Trade Commission (FTC) and the Chamber of Commerce, authorities that declare that MLM is "legitimate." Questioning MLM, they are told, is almost… un-American!

The invented myth of direct selling overwhelms the truth and negates direct experience, confirming the adage that if a lie is told often enough it replaces the truth.
As DIRECT SELLING reveals, real direct selling was never "pure" or patriotic, but brutally hard on the soul, and it could be ruthless and unethical in methods. It was never glamorous, but laborious, routine, and stressful. No one who did it ever believed it was a path to "unlimited" wealth. Few people could withstand the rejections and disrespect, and of those who did so, few wanted to.

Besides stealing direct selling's old identity, multi-level marketing carried forward some of its worst methods of deception used by sales companies to recruit salespeople and by direct sellers trained to pressure customers. These methods – vividly presented in the story – are deviously employed by MLM to manipulate millions into pyramid schemes.

Detour from Livelihood

Beyond a real-life and often darkly humorous depiction of door-to-door sales, DIRECT SELLING confronts the deeper question of vocation and livelihood – the opportunity and the freedom to pursue work in accord with our personal values and talents. This is the true meaning of the American Dream.

The book addresses how that dream can be highjacked by lures of "unlimited" income, "self-employment" and degrading assertions that self-worth is measured in dollars.

DIRECT SELLING is about every person’s quest for meaningful work and personal freedom with integrity, and the forces that would abuse and manipulate that quest, the real "dream stealers."

1 comment:

  1. "Hardly anyone buys consumer goods on his/her door-step."

    "Real direct selling hardly exists today. Effectively, it went extinct nearly 40 years ago. Who sees door-to-door salespeople anymore? Who would need or want a salesperson coming into their home (or online) to sell commodities?"

    I couldn't agree more. MLM is obviously a scam.