Tuesday, 19 April 2011

'MLM business opportunity' fraud was spawned in the USA, not in India

As you and your free-thinking readers are aware, I usually try to put my ego and origins to one side when writing, because the human ego and our origins are perhaps the greatest barriers to deconstructed thinking. However, on this rare occasion, before I continue, I would like to say that I was personally insulted by the recent thoughtless comments posted, and repeated, on your Blog by Kasey Chang. Amazingly, this perplexing American fellow now assumes that we have no contact with, or knowledge of, Robert FitzPatrick and Pyramid Scheme Alert.
On a lighter note, these recent, unwelcome and unhelpful contributions have led one of my less-calm correspondents ( a former adherent of another copy-cat 'Amway' scam) to offer some free-advice to pass on to Mr. Chang. This advice takes the form of a painful suggestion as to where Mr. Chang should stick his recent comments. Another correspondent has enquired if 'Charlie Chang' (her cruel description not mine) realizes that the 'Fortune Hi-Tech Marketing distributors' have lots of real products, but no real customers and, consequently, no profits? 
To return to a more serious vein - after first saying that he knows virtually nothing about  'Amway' or any other 'MLM business opportunity' scam (other than his bête noire, 'TVI Express' ), Mr. Chang has ignored a veritable mountain of damning evidence and offered us his own unsubstantiated, egocentric and ethnocentric opinion of 'Amway' in the form of a question. He had the affrontary to ask you, Shyam, why your own Indian authorities have 'pounced on a comparatively-benign' US-based scam 'Amway' that 'offers real products', but they have 'ignored an inherently-evil' Indian-registered scam 'Travel Ventures International Express' that 'offers no products.' By this, I presume that Mr. Chang means that the sanctimonious bosses of the 'TVI Express' racket actually peddle a fictitious Utopia as fact (as well as travel products which have no tangible specificity).
I have to say, that the external 'travel industry' presentation of the 'TVI Express' scam is remarkably similar to that of Alan Neil Kipax' 'Business In Motion' racket. That said, even the briefest examination of the allegedly Indian 'TVI Express' scam reveals that it is remarkably similar to the 'American Way' original, right down to the ritualistic, reality-inverting words and images which are constantly repeated to control the thoughts and behaviour of core-adherents. Indeed, if your free-thinking readers click on  http://www.tviexpress.com/opportunity.php , beneath a deeply-disturbing 'Amway'-style colour photo of an attractive, prosperous, healthy and deliriously happy heterosexual couple (+ perfect children) enjoying a beach paradise, we find the following familiar 'Amway' bullshit: 
'Live Your Dream'
'Build a Multi-Million Dollar Business in a Few Extra Hours'
'Financial Freedom'
'Proven Easy to Follow System'
'Direct Selling Industry', etc. 
Not only that, but the bosses of the 'TVI Express' mob also say: 
'We offer a wide range of products and services to match almost every lifestyle....' 
Despite what Mr. Chang has claimed, in the adult world of quantifiable reality , the financially-suicidal 'TVI Express Plan for Financial Freedom' is identical to that which has been surreptitiously peddled by the sanctimonious bosses of the 'Amway' mob via their criminal associates and Mafia-style labyrinth of corporate structures. 
In brief, these unoriginal, cultic thieves have all steadfastly pretended that progressive initiation into their own superior knowledge (coupled with total belief in its authenticity and unconditional deference to the authority of its higher initiates) will defeat a negative force of evil and lead to future, exclusive redemption in a secure Utopian existence. By making total belief a prerequisite of redemption, core-'MLM' adherents can be drawn into a closed-logic trap (i.e. failure to achieve redemption is solely the fault of the individual who didn't believe totally). 
In this way, for decades the bosses of all-manner of essentially-identical, pernicious 'MLM business opportunity' cults ( 'Nutrilite', 'Amway', 'Noni Juice', 'Nu Skin', 'Nature’s Sunshine Products', 'Herbalife', 'Nutra-Smart', 'Living Scriptures', 'Quixtar', 'USANA Health Sciences Inc.', 'Fortune Hitech Marketing', 'Business In Motion' , 'TVI Express' etc.) have persuaded a never-ending stream of vulnerable and ill-informed individuals not only to enter into de facto servitude, but also to give them regular cash payments (in return for so-called exclusive, good-value, world-class products and services), on the pretext that by Exactly Duplicating and getting all your friends and relations to Duplicate Exactly a Proven Plan of recruitment and self-consumption, one day in the future all your Dreams will come true.
The fact that 'MLM business opportunity' scams (which are all blatant examples of the same age-old, self-perpetuating, esoteric ritual belief system, but perverted for the clandestine purpose of human exploitation), have been closely-linked to the Religious Right in the USA, has made it impossible for many proud Americans to face reality. 
David Brear (copyright 2011)


GuyReviews said...

FHTM is a convicted pyramid scheme in the US, and previously highlighted on my blog and compared to TVI Express.


Why the hostility? We are on the same side, albeit I'm a bit more toward the center than you are. I do agree that when promoted badly (i.e. emphasizing the multi-level aspect instead of marketing aspect) MLM has almost nothing to separate it from a pyramid scheme. However, it is my opinion that the problem is as much a problem of the LEADER as the system. You think it's all the system's fault, and to that I disagree.

I've stated my position before so I won't say it again, except to point out that Amway's operation IS legal in the US... for now. When that situation changes, I'll modify my position accordingly.

Have a nice day.

GuyReviews said...

Mr. Brear, despite what you may be thinking, I am against cult behavior of any sort, and I agree with you that Amway or ANY MLM, even the "legitimate" ones, can be abused and turned into a cult (what you call "utopian"). I've even identified some of the tactics here (mainly used by TVI Express, but applicable to others as well)


What you've identified is a systemic weakness, but that in itself does NOT make the entire marketing method a fraud at least in my view.

We are on the same side, albeit different angles.

Thus, please drop that "you're with me or against me" attitude. It makes you sound like a fanatic, esp. with your grandiose prose style.

Shyam Sundar said...

Mr Chang,
I beg do differ. There is nothing like legitimate MLM. Multilevel marketing means infinite chain and there is nothing like infinite chain. That is why it is called mathematical impossibility.

GuyReviews said...

Mr. Sundar,

I am NOT talking about "mathematical infinity" or such. That's a specific compensation plan DETAIL. Let me just describe how I THINK MLM is supposed to work.

In ANY business, you have ONE manufacturer/provider, let's just call it... "Source", and consumers of whatever this source provides. So the business has two needs: 1) to make consumers aware of their need (or to suggest the need), and 2) to actually get the products into the hands of consumers at a price that will mean a profit to the source.

1) is usually called "marketing", and 2) is called distribution, or retailing.

The traditional retail model has the source employ a "marketing" group (either internal or external), to conduct marketing campaigns (TV ads, print ads, etc.) and retailing is done by sending stuff from factory to distributor, and from distributor to retailer, usually in a store.

The "direct sales" model replaced large scale retailers and distributors AND marketing department with individual sales people (often selling door to door). However, this has a flaw in that the sales teams often still need close supervision and training, as not all salespeople who join are actually suitable.

Then came multi-level marketing. By offloading the supervisory functions (of the sales people) onto distributors, who will manage the salespeople they themselves recruited, the company can cut overhead. In return, company is supposed to reward the "upline" with a portion of the sales (i.e. commission or profit sharing) even those from the downline.

But the FUNDAMENTAL tenet of a business has NOT changed: buy low (from the source), and sell high (to the consumer). Only the marketing and distribution channel has changed.

As Amway compensation plan does NOT pay on recruiting, but pay upon sales achieved by the new downline, it does not fit the definition of a pyramid scheme. One can make a living by only selling things, and not recruit ANYONE.

Also, from what I can find of their compensation plan, the commission / profit-sharing only goes down to maybe 4-6 levels. That is NOT infinity.

I think (based on my understanding of MLM law in the US) that most MLMs, esp. Amway, was marketed the wrong way.

People hear MLM, and they automatically hear "recruit people and make money". They forgot that there must be SALES OF PRODUCTS to make money (for a legitimate MLM), as I have explained above. it is somewhat understandable, that people tend to gravitate toward the explanation: recruit a sales team and MAKE THEM sell things so you can make money. Sooner or later, that got corrupted into "recruit and make money", and Amway compensation plan, at least in the US, does NOT encourage recruiting at all, as there really isn't much sales to be generated from people who don't buy/sell. There may be some sales like periodic auto-ship of consumables like detergents or vitamins but that won't add up to much.

It sure doesn't help that a sales promo often presents a mixed message... A member is supposed to push the product, but often ended up pushing the "opportunity" instead (since s/he also wants to "sit back and let someone else make you money") But at least there are products to push.

So as I've explained to Mr. Braer, I believe MLM is NOT beyond redemption. A MLM can be operated legitimately and legally. As for whether Amway is such a thing, that's up to the law enforcement agencies.

Any way, thank you for your time and attention.

Shyam Sundar said...

The advocates of Amway India tried their best to convince the justices of Andhra Pradesh High Court with the same argument. But they could not cut ice. The justices were convinced that the business model of Amway India, with or without recruitment,is illegal and that Amway India has been making easy/quick money which attracted the provisions of Prize Chits and Money Circulation Schemes (Banning) Act, 1978.

GuyReviews said...

Then Amway of India have to change its business practices, as it had changed when FTC went after Amway 30 years ago.

Shyam Sundar said...

A criminal case is filed against Amway India after the Andhra Pradesh High Court held its business model is illegal and attracts the provisions of PCMC Act, 1978. Still, it is continuing its business model. In fact that is the business model of Amway world wide. You refuse to see the reality and say Amway is legal. Without recruitment there is no Amway and that is why that is mother of all scams.

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