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Originally Posted by WateryBoil
lmao you have to buy in for $5-10k in merch to SELL these sheit products? holy **** no wonder the couple founding members on the top of the pyramid actually make millions.
MLMs come in a few different flavors, from least to most scammy:
a) MLMs where there's no lock-in and money is mostly made by selling products to customers. These are the only MLMs which are legit businesses. Generally what you want for these is products which are overpriced (because you need big margins for the business model) but are actually good products that you can show to people and get them excited about. Successful examples include Tupperware and Thermomix.
b) MLMs where there's an immediate buyin, most of the money in the system comes from that, and you recruit new suckers to make money. One example is
ACN, where you have to pay $500 to be a rep. While these are outright scams (really just classic pyramid schemes), they're not so dangerous because you just stand to lose your initial $500.
c) MLMs which force reps by some mechanism or other to buy product, where product sales to representatives - rather than consumers - are the main source of revenue. Typically there are volume quotas and you don't get any payouts if you don't hit the quota. People both buy and stockpile product themselves, convinced they will eventually sell it, and convince their downline to do the same. These are the really dangerous MLMs because the commitment is ongoing and your entire upline will put huge pressure on you to continue to stockpile product. One prominent example is Herbalife. Hey, let's check with Herbalife how much product is sold to consumers outside the company, rather than to reps!
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In a response on its website and in an SEC filing, Herbalife said: “We don’t track this number and do not believe it is relevant to the business or investors.”