Multi-Level Marketing (MLM)

Multi-Level MarketingMulti-level marketing (MLM) also known as Network Marketing, is a business distribution model that allows a parent multi-level marketing company to market their products directly to consumers by means of relationship referral and direct selling.  For most MLMs, the product is really a mere diversion from the real profit-making dynamic: the recruiting of distributors.  The product is not the incentive to join an MLM. Otherwise people might have shown an interest in selling this particular product or service before in the real world. The product is the excuse to attempt to legitimate the real money-making engine. It's "the cover." Intuitively, we all know what is really going on with MLMs. Just don't use the word "pyramid"!

 

MLMs work by geometric expansion, where you get ten to sponsor ten to sponsor ten, and so on. This is usually shown as an expanding matrix (just don't say "pyramid"!) with corresponding kick-backs at various levels.

 

Why, you might wonder would you recruit people to compete with you?  For, isn't that what you are doing when you recruit people to sell the same products you are selling?  MLM magic will convince you that it is reasonable to recruit competitors because they won't really be competitors since you will get a cut of their profits.

 

Multi-Level Marketing is a business model requiring you to recruit people, not only to buy and sell your product, but who will also recruit people who will not only buy and sell your product but also recruit people... ad infinitum. 

 

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. So, MLMs profit by conning recruits up-front with a "distributorship fee," and then make further illicit money by "confidencing" these hapless victims as they fail via the "sale" of collateral material.

 

People join an MLM with high hopes of selling their product and recruiting others so they can live off the income they get solely from their MLM endeavor.  Their excitement about joining pushes them to purchase the startup kit for their specific MLM (anywhere from $200 upwards of thousands of dollars) and then once the actual selling/recruiting comes into place, they lose steam.  The individuals on the ”upward line” of the MLM benefit from the recruit purchasing the startup kit.  In essence, selling a startup kit to recruits or a yearly fee turns an multi-level marketing operation into Ponzi scheme.  The fee, whatever from the startup kit or the yearly subscription, is paid to the upline the same way as a pyramid scheme pays its participants.  A non-ponzi MLM would have multiple levels of compensation, however without any upfront fees.  In a pure multi-level marketing, the more you sell, the more you receive as compensation however you never have to pay anything to earn the right to receive a commission for your sales .  Unfortunately, very few MLM schemes are "pure MLM" - the majority are Ponzi.  Have you ever asked why would you have to pay a yearly fee to earn money?  When you work for an employer, does your boss asks you for an upfront payment to start "earning a salary?"  MLM promoters will tell you that you need to invest money to make money.  This is true, however in a real business, you invest in capital (factors of production to produce goods and services).  When you purchase a startup kit or pay a yearly fee, you give away your money to your upline so they can earn a living from your money.  If a business opportunity was real, your recruiter would train you at no cost and provide you a free kit to get started promoting their products.  The truth is 99% of recruits never earn a penny, so without the upfront payment, the MLM pyramid would collapse.  Also, by paying an upfront free, they have their recruit on the hook.  If the recruit is not successful, they will sell them seminars and motivational audio material to get started.  The more an unsuccessful recruits invest, the more he/she is likely to try harder before abandoning the MLM organisation.

 

There will always be some distributors who will make money in an MLM scheme. The majority, however, must fail due to the intrinsic nature of all pyramid schemes.  MLM is no different than a lottery, except promising financial freedom to recruits.  The testimonials you read about MLM are no different than reading testimonials of lottery winners:  each week new millionaires are made from lottery winners, however each week, the rest of the population got impoverished by greater amounts.  The irony is those testimonials are from online marketing gurus without websites and without any contact information.  If you are new to MLM, would you like to be recruited by an Internet Guru? The question is why those gurus have no websites and do not provide any contact information in their testimonials?  Humm... maybe those testimonials are not so genuine.... go figure!

 

iGolder prohibits multi-level marketing programs because they are pyramidal and a close cousin of HYIP.  We consider any business having payouts at multiple levels as MLM.

 

"So – to be successful in a recruiting MLM, one must first be deceived, then maintain a high level of self-deception, and finally go about deceiving others. They must also remain in denial about the multitude of victims left behind. Some would label this "theft by deception" except that few of those doing the deceiving are aware that they are deceiving and defrauding those they are recruiting.  They may even put on a display of being "successful," by buying expensive cars and homes and inviting others to be like them."

Attributed to Robert Fitzpatrick of PSA

MLM Heavy-Hitters

A variation of "Fake It 'Til You Make It" is the "Heavy-Hitter" who bounces on the scene and seems very rich, and then acts as a "closer" of new recruits. Whether or not the "Heavy-Hitter" will actually have any money is subject to serious doubt: He may be one of the people living out of his leased BMW!  More likely, he has been hired on a pure salary basis by the Promoters to act as a cheerleader and "closer" for prospective Distributors.

 

The "Heavy-Hitters" usually circulate from program to program, and are often the "Heavy-Hitter" in several MLM programs at the same time. A good way to identify these scam artists is to inquire as to what other programs they are in now, and have been in the past. If they have been in several other programs, you know that you are facing a "Heavy-Hitter", which when you get down to it is just a professional MLM scam artist (and, again, probably on a flat salary no matter what BS they tell you).

 

At seminars, you will frequently hear the Heavy-Hitter buildup: "Maybe Mr. Such-And-Such" will be here today!" The excitement is such that when Mr. Such-And-Such finally appears, you'd think Moses just came down from the mountain. It is all hype: The Promoters know exactly who will be at these seminars, and they plant people in the audience to make statement such as these, so that Mr. Such-And-Such finally does make his appearance, people attribute to him the credibility of the Messiah. Don't fall for this ruse.

 

For reference, the "Heavy-Hitter" is not unique to MLM. Casinos have for many years employed "Shills", being people who are hired by the casinos on salary and given a bunch of chips, and sent into the casino to mingle with the other gamblers and spin a few stories of the casino's big payoffs (which may or may not have occurred) -- and of course to gamble the (casino's own) chips and thus encourage others to gamble with the same enthusiasm and similar better levels.

 

The "Heavy-Hitters" perform the same function with MLM, often coming in to tell false stories about themselves hitting it big with the program. You can admire their gold pinkie rings, and their expensive leather shoes. But avoid these people, and just chuckle at the stories they sell. And be sure to ask them about the lease program on that BMW they are driving!

 

Refunds

The worst programs will promise you some sort of refund if it all doesn't work out. These are the worst programs because the refund programs are usually contingent on this-or-that, require long forms and long waits, often the refund is only 30% or so of what you spent, and usually the refunds are illusory (meaning that they company will never pay out the refund to you). The MLM programs which offer refunds do this to create the illusion that there is "no risk" to you -- and this is a 100% fraud because as discussed, you odds of actually getting your money back is infinitesimally small.

At least the companies which don't offer refunds tell you this up front so that you are not suckered into believing this nonsense.

 

Distributors are taught "If the dream is big enough, the facts don't count".

 

 

Since August 1st, 2013 iGolder is no longer accepting new accounts and balances can only be redeemed. During the past years, we have been recommending Bitcoin more than our own payment system. We believe in physical gold ownership, and developed iGolder as a mechanism for people to acquire physical gold by trading with one another.

Since iGolder has a central point of failure (our server may be raided by thugs wearing some kind of uniform), we feet it is safer for us to cease operations. The iGolder experiment has been personally rewarding as we met many gold enthusiasts and also learned about Bitcoin in the process. For those who have no idea what Bitcoin is, we recommend doing your own research. Bitcoin is far superior to iGolder in every way, both in privacy and security as our server is always vulnerable to confiscation. Bitcoin is a communication protocol with a built-in "escrow service" capable of protecting both the buyer and the seller, rendering our Safetransit completely redundant. To learn more about the Bitcoin protocol and its feature, please watch "http://www.youtube.com/watch?v=mD4L7xDNCmA (Bitcoin 2012 London: Mike Hearn).

For those having gold in their iGolder account, we will ship the physical metal to anyone having more than 1 ounce of gold, assuming the owner is willing to assume the shipping costs. For smaller quantities, we offer to settle in Bitcoin, however we will also settle with any other reasonable payment system. We will give everyone at least two full years (until 2016) to contact us to claim their gold. After that period, any unclaimed gold will go to fund an economic development project in Honduras helping local people to become entrepreneurs.

We sincerely wish you the best in life and hope to keep in contact with you.

Yours in liberty,
The iGolder Team.


Update 2014: Since we announced we no longer accept gold transfers, we have received countless emails asking to keep the free gold charts and the PGP encryption tools. We plan to keep running the domain iGolder.com for both the gold charts and the encryption tools. Better, we are developing state of the art open-source software for a secure decentralized social network with a built-in wallet. We will announce when we have a product ready for use. Stay tuned!