requiring MLM
Kategori: Allmänt
In summary, the attribute needs to be placed on infinite chain sales strategies which are inherently fraudulent methods, which enrich a few in the very top at the cost of a multitude of downline participants, who find yourself being victimized by the plot. The best thing regulators can perform is to limit injury by emphasizing MLM compensation plans. At the lowest, they could warn users against these types of programs -- preferably against ALL MLM's, since the consumer cannot be expected to recognize the extremely infrequent program that may be valid.
Conclusions If an MLM application is found to possess all five (or even four) of the above mentioned characteristics, it is really a recruiting MLM, or product-based pyramid scheme in concept, architecture, and impacts -- regardless of caliber of services and products offered, form of compensation plan (binary, breakaway, matrix, unilevel, etc.), company policy regarding recruiting, establishment of "rules," or other efforts by company officials to create its schedule seem to be legitimate. The principal emphasis will probably be on deriving income from recruitment, because the bonus to retail products will probably be relatively slight.
The leverage within an MLM compensation plan, leading from the foregoing things, is an two-edged 28 29 sword. As a rule of thumb, the better it's to your very best "suppliers," the worse it's for those beneath them. This is very true when the payment program is focused not only on sale to non-participating clients, but rather mainly on recruiting participants who buy large quantities of products to "do the business" -- which is the case with the majority of of the MLM compensation plans I have studied. Each of their posturing about being lead selling programs is belied with their own reward system.
While none of the five traits alone constitutes a pyramid scheme, a combination of these five together suggests a harmful (and probably illegal) pyramid scheme, if properly known. Conversely, if a company displayed only three of the characteristics, it is probably benign. Four is suspicious.
The effects of highly leveraged reimbursement plans can be quantified by requiring MLM organizations to produce data in company payout to all participants (not simply "busy" ones) from percentiles after subtracting average purchases for gross income. Where MLM organizations using such compensation plans have released honest data on income distribution, the results have been shocking. After all statistical manipulations of published data have been removed (which must be done by unbiased and qualified analysts because MLM accounts are typically full of deceptions), the outcomes have shown that payout by the firm has shrunk inordinately to high "distributors." This leaves people at the bottom -- approximately 99.9% or very near 100 percent -- in a loss position (after subtracting purchases and expenses). Of course, you'll find philosophical exceptions -- which are organized as examples of prospective recruits.
http://www.malaysiamlmsystem.com
The loss rate for recruiting MLM's (about 99.9%) far surpasses that for no-product pyramid strategies (87.5-93.3 percent). By comparison, recruitment MLM's make no-product pyramid approaches appear excessively profitable.8 Hence the premise that MLM's aren't as bad as vintage no-product pyramid schemes is patently false -- the inverse is accurate.
