Friday, January 27, 2017

MLM and Charity?

Today's blog post is about the trickery used to validate MLM by suggesting they are charitable. There are a few main issues with this logic, such as, not being able to verify the accuracy of their philanthropy, not knowing whether they are doing it because they are noble or getting a benefit (most likely the latter), sometimes not being able to verify the legitimacy of the charity, and finally there is no actual correlation between businesses being legitimate and giving to charity. With all of these reasons to ignore the idea of an MLM being legitimate because they are charitable, it still doesn't stop MLMers from espousing this as some sort of irrefutable fact. This should be regarded as a red flag instead of a means of proof to secure credibility, especially if this logic is not supported by other better forms of evidence, or worse yet a stand alone form of credibility.

I was recently watching television when an odd commercial came on the air. I remembered seeing it before, and not putting much thought into it, but this time it was different. As the commercial played I started to feel my blood boil, especially after John Oliver ripped it to shreds on one of his segments. Without further ado, here is the commercial.



On first glance the commercial seems innocent, but after further inspection it becomes clear something very shady is happening. Not only is it a bizarre premise to have "Kars 4 Kids" that are clearly not able to drive, but they don't explicitly say what the money for the donated cars will be contributed toward. After watching this commercial you are left with a bad jingle that will not leave your head for the next million years, and the idea that some weird charity is trying to get free cars to give to children.

The Wikipedia entry for 1877Kars4Kids is particularly scathing. The organization is run by an orthodox Jew and their mission statement is to utilize the funds for bringing education to secular Jews. Basically, they are taking your money and putting it toward an unverifiable purpose of re-educating bad Jews to try and turn them into good Jews. They have never been able to verify how much of the proceeds have actually gone to this endeavor, and the other causes they have helped with are pennies in the bucket compared to how much they have raised. They have even been fined by two states for showing this commercial without explicitly saying what the charity is about. https://en.wikipedia.org/wiki/Kars4Kids

Here is the brief moment John Oliver decided to go on a tangent and vilify 1877Kars4Kids.



While this is only one example of a bad charity, it is far from unique. Charities are one of the least regulated types of organizations and they are able to file tax exempt on account of them being non-profit organizations. They are one of the best vehicles for running a scam and they are one of the worst vehicles for verifying authenticity of another organization. It is far from surprising that MLMs would be involved in charities, and the insidious nature of MLMs suggest that they aren't using charities because they want to give to their respective communities.

Tuesday, January 17, 2017

MLM and Rebates

Today's blog post is focused on the psychology of turning a commissioned sales person into a customer. MLMers are taught it is necessary to purchase the products monthly to qualify for commissions and they are also supposed to purchase for their own consumption. This is an extraordinary type of logic as it forces an MLMer to continue to purchase monthly regardless of their sales, and it confuses them by giving a rebate check for their own purchases rather than an actual pay check for the sale of the goods or services. There are different types of monthly subscriptions provided by MLMs, but they all come back to the same fundamental agenda of getting the distributors to spend their hard earned dollars on the MLM rather than the MLM paying the distributors to help move their product or service.

Amway, the founder of the MLM business model, was the first to utilize this psychological manipulation in order to generate a loyal customer base. They found sales were stronger and more consistent when the members of their work force were continuously buying products instead of retail customers. Amway continues to teach distributors to buy from "Their store" instead of a big box store, because it will help them generate revenue and they need the products regardless. Amway then offers compensation in the form of a rebate at the end of the month based on the amount of product purchased by the distributor. MLMers are then confused by the concept of "Their store", because it is actually Amway they are purchasing products from and generating Amway more revenue. The concept gets more confusing once the levels are implemented, hence the name multi-level marketing. Instead of selling goods or services, they are taught to increase their revenue by signing up friends, family, acquaintances, and eventually strangers to also purchase monthly goods and repeat the process. Once they have secured a solid foundation of people purchasing monthly goods, then they will start to see a rise in their paycheck and believe they are becoming more successful. This is how the pyramid is formed.

The MLM rebate is one of the key methods to lure unsuspecting consumers into the trap. They are extremely vague about how much money you will receive monthly based on the amount of goods purchased, and they do not explain that the rebate can only grow as long as more dollars are spent on MLM products. Naturally, if an MLMer doesn't have a downline then they will notice they are spending more money than they are making, but when they see that other downline members are helping to grow their rebate checks, they begin to ignore the obvious paradox. There must be more dollars spent in order to get a larger rebate, but the dollars spent don't have to come from their pockets. This in turn leads to exponential losses for the levels of MLMers that develop underneath the original tier.

MLM, in theory, could work if the MLMers were taught to focus on the sale of  goods or services before signing up new members, but that would defeat the purpose of the multiple levels of commissions. The multiple levels are used as a ruse to lure people into the MLM as a means to purchase more goods instead of selling goods, and then teach others to repeat the process. MLMers have found it is much easier to convince people to spend their own money on a business opportunity than it is to sell the goods or services they provide.

Wednesday, January 11, 2017

MLM and George Orwell's, 1984

Today's blog post is about a book I recently read by George Orwell, 1984. The story is about a man, Winston Smith, working for the government formally known as, The Party. The Party is the government of Oceania, one of the three main super powers, and is continuously at war with either Eurasia or Eastasia, or at least that is what they tell their people, in an effort to secure power. The Party has a figure head named "Big Brother", and he is a symbol of vigilance and power as his poster is hung everywhere throughout civilization along with "telescreens" and microphones used for monitoring every citizen twenty-four hours a day. There are three castes within the society, the inner party, the outer party, and the proles. The inner party is the group of people who control the government and dictate what the people of the outer party and the proles are allowed to do. The outer party helps with mundane tasks designed to increase the inner party's influence on the other two groups. The proles (proletariat) are the working-class, and they are the slaves of society that go through the motions of life (wake up, work, have children, die) without realizing they are being controlled.

The story is an important read, because it shows the development of a totalitarian regime and it also shows how people are manipulated and conned into giving up their ability to rationally think as well as have rights. The Party is a group that learned the mistakes of previous oppressive groups, the Christians with the Crusades, and the Nazi's with the National Socialist German Workers' Party, to become the ultimate power over its people. They learned how to manipulate and destroy the past so as to control the present, and they also manipulated and destroyed language to alter the way people thought. They created a society based on faith, loyalty, and surrender under the key assumptions of "War is Peace, Freedom is Slavery, and Ignorance is Strength".

MLMs have utilized similar techniques to create undying faith and loyalty. They have designed their business opportunity as an us versus them mentality by suggesting if you don't pursue MLM then you will be forever burdened with a 9-5 job and a life of constant struggle for the next pay check. MLMers are constantly at war with the outside world and the internet, and this war will continue as long as both exist. This technique of an ever lasting war outside of the MLM creates an odd sense of peace within as people falsely believe the leaders have their best interest at heart and somehow people within the MLM are more wholesome. It also brings a sense of unity and camaraderie as the people within the MLM band together and fight against the oppressive outside world.

MLMers preach freedom as long as they choose to follow the systems they have implemented. In fact, Amway has a special event called FED which stands for Freedom Enterprise Days in which they utilize the term Freedom as much as possible in regards to the MLM and success. Unfortunately, this is all a ruse as they utilize this "doublespeak" (saying one thing while believing another, also known as cognitive dissonance), to transform the idea of freedom into a meaning of slavery. What I mean by this is, in order to get financial freedom and live a life of luxury, you must commit yourself to the MLM entirely with both your money and time. You must show the business plans regularly, you must attend all functions, you must pay for monthly supplies, you must subordinate to your uplines. Only then, can you achieve freedom.

MLMers deliberately avoid the issues of facts and statistics. They prey on the ignorance of their followers and utilize the faith they impose as a business strength. They shun research and outside influence in an effort to keep MLMers devoted and unquestioning. If an opposing view is mentioned, then it is quickly attacked in a succinct and aggressive manner as to contain the problem as fast as possible. Similarly to an oil leak in the ocean, MLMers understand that dissenting positions can spread quickly and can be difficult, if not impossible, to remove. They are quick to attack the source of the opposing view, come up with a fallacious analogy, or simply pretend it doesn't exist, because they cannot specifically respond to the facts. MLMers understand the need for ignorance to generate strength within their organizations.

Even though George Orwell's 1984 was designed to combat a potential totalitarian government, it is easy to make connections to MLMs and their cult-like syndromes. If you are being pressured to join a MLM, please make sure to do research and examine red flags. Do not be afraid to have a dissenting opinion, and do not allow them to dictate where you get your information!

Tuesday, January 3, 2017

MLM and Religulous (Bill Maher Documentary)

Today's blog post is about a recent documentary I watched again over my holiday vacation. The documentary explores different religions that stem from the bible, and some of the interesting people involved with these different denominations of Judaism, Islam, Christianity, Mormonism, and Catholicism. While Bill Maher is not my favorite documentary host, he does a good job of plainly exposing simple "truths" upheld by religious fanatics. If you can get past his implicit bias and sensationalism, then I believe there is a lot to be learned from this documentary and there can be a lot of connections made to MLM.

The three main points I would like to focus on from this documentary are:

1. He focuses on questioning, "truths" that can't be explained by anything other than taking a leap of faith.

Throughout the documentary he confronts both followers and leaders about the supposed evidence to support claims of  miracles and teachings. He asks people to delve into their critical thinking abilities and try to describe a similar scenario to someone that is not a believer or insider without sounding crazy. An example of this is the story of Joseph Jonah, and how he survived for 3 days inside of a giant fish. There seemed to be a massive amount of cognitive dissonance around this story and the idea that maybe this wasn't factual or couldn't be proven.

MLMs have a notorious failure rate, and yet people see evidence of success within their companies. As they attend functions and seminars, they are consistently reminded that the highest ranks are achievable and they are living fabulous lives. MLMers are taught to focus on their dreams in an effort to escape the horrific reality of the scheme. Their blind faith in the evidence is only supported by the companies themselves and publications sponsored by the companies (such as the DSA, Inc Magazine) while the rest is made up hogwash from the sponsors passed down through the "leaders".

2. He focuses on the "leaders" of organized religion and how they choose to "interpret" the meanings of the bible.

The leaders in the documentary are fascinating because they embrace the writings to best conform to their ideals. One of the leaders tries to twist Jesus into a wealthy messiah that came from not-so-humble beginnings, while another actually suggested he was the second coming, but was also a descendant? There was a catholic priest that suggested science discredits the teachings of the bible and another catholic priest that basically said, they are nice stories but most of it isn't true. Finally, you have a rabbi helping Turkey fight against Israel, and you have a group of Muslims stating they preach peace while reciting scriptures that suggest imperialism and death to infidels.

MLMers have an interesting way of twisting words to better suit their needs as well, and rarely are able to come to terms with inconsistencies. At an FED I attended, I listened as MLM leaders came out on stage, after an introduction video which reflected MTV Cribs on steroids, and acted as though they were part of the common people. Meanwhile, they sat in isolation behind the scenes, and walked through the audience as celebrities, while the majority of MLMers were suffering tremendous losses for those "leaders" to have a comfortable lifestyle.

3. He focuses on the violence of religion and the us vs. them mentality.

Maher captures the violence of religion by three mediums, news footage, a death scene of Jesus Christ at an amusement park, and the language involved in the writings. There is an overlying theme between all of the Jewish denominations which is, one of them is right, and the rest are sworn enemies. The other overlying theme is the day of reckoning, known as Armageddon, which suggests everyone will perish and only the people of their chosen religion will be saved.

MLMers have a very similar view of the world, and it doesn't come as a surprise that they use religion to help fuel their objectives. While they may not be solely interested in the destruction of everyone else, they do not hesitate to impose their views while suggesting everyone else is doomed to fail. They preach their work is noble and everyone else is a slave to a time clock and a pay check, and they also preach any defectors from the group are evil (quitters, failures, deniers). They introduce only one path to salvation (retirement), and that involves endless obedience over an indiscreet timeline (your entire life to the business).