Multi-level marketing companies behave like cults. Does that make MLMs cults?
Multi-level marketing companies have many similarities to cults:
- They tend to have strong authoritarian leaders
- They expect you to believe their philosophy
- They separate you from your loved ones and people who question the MLM
- They make utopian promises
Why don’t we think of them as cults? Well, we don’t like to think of businesses as being cults. MLM companies and organizations have connections in high places like the White House and the Chamber of Commerce.
Robert FitzPatrick joins us once more to discuss his research. He’s the founder of www.pyramidschemealert.org and the author of the book Ponzinomics: The Untold Story of Multi-Level Marketing.
People as diverse as Kamala Harris and Donald Trump support multi-level marketing
Multi-level marketing companies have very powerful friends. Here is a list of some of the well-connected people tied to MLMs:
- Vice President Kamala Harris
- Former President Donald Trump
- Mitt Romney
- Madeleine Albright
- Former President Bill Clinton
- The former head of the Chamber of Commerce
- and many more
How is it that a business model where over 99% of the people involved will lose money is still legal? The answer is in the list.
My guest today is Robert FitzPatrick from Pyramidschemealert.org. His excellent book is Ponzinomics: The Untold Story of Multi-Level Marketing.
- A New York Times article about Kamala Harris and Doug Emhoff’s involvement with Herbalife
- A second NYT article about Harris and Emhoff
- A Washington Post article about President Trump’s “Trump Network” MLM
- A fascinating piece by Time about Herbalife
- The Washinton Post about Mitt Romney’s involvement with NuSkin
- Interesting Last Week Tonight episode about MLMs (contains strong language)
The story of how pyramid schemes came to effect 1 in 6 American households
Multi-level marketing (MLM) is a relatively new invention. It was created when a failed vitamin salesman named Carl Rehnborg was out of options. So his wife suggested that he attend a rally by Dale Carnegie, author of “How to Win Friends and Influence People”. Once there, he formed a bond that created one of the most profitable predatory financial traps in modern history: multi-level marketing. One that found its legs… in the world of cemetery plots.
Our guest in this episode is Robert FitzPatrick. He’s the founder of PyramidSchemeAlert.org, a non-profit that tells the truth about pyramid schemes. He’s also the author of the excellent book Ponzinomics: The Untold Story of Multi-Level Marketing.
- Do you know someone who sells for an MLM?
- Have you ever sold for an MLM?
- Do you think they should be legal?
- What is market saturation and how does it impact salespeople?
- Have you ever bought an item that you didn’t need just because the salesperson was so good?
- What can you do to show MLMs for what they are?
- Has anyone at your church ever tried to sell you on an MLM?
- How can tying a bad business practice impact how people see Jesus?
How do pyramid schemes work and what is multi-level marketing?
What is multi-level marketing? It is a very popular business model that targets Christians and other people of faith. But… it is almost guaranteed to fail. Because MLM’s and direct sales companies are not designed to sell a product but to sell the business itself. Joining us for this episode is Robert Fitzpatrick. He’s the president of Pyramid Scheme Alert and the author of the new book “Ponzinomics: The Untold Story of Multi-Level Marketing“.
Also mentioned in the episode is the podcast The Dream. Season one talks in great detail about pyramid schemes. Please be aware that some of the episodes use strong language.
Topics covered in this episode:
- What is multi-level marketing?
- What is a pyramid scheme?
- What is a Ponzi scheme?
- Who are Ponzi schemes named after?
- Who was Charles Ponzi?
- Is multi-level marketing the same thing as a pyramid scheme?
- What is the difference between a pyramid scheme and multi-level marketing and a Ponzi scheme?
- What is a good book about pyramid schemes?
- Will I lose money with multi-level marketing?
- Is Amway considered multi-level marketing?
- Is Herbalife multi-level marketing?
- Do pyramid schemes target Christians?
- Should I join an MLM?
- Which MLM should I join?
Looking for the Amway stats we mentioned? You can find them here: https://pyramidschemealert.org/half-of-amways-products-are-retailed-really-plus-other-wacky-numbers-3/
Did you know that Presidents George H.W. Bush, Bill Clinton, George W. Bush, and Donald Trump have all stumped for the multi-level marketing industry? MLMs, direct sales, and network marketing have powerful friends. But what about Christian “celebrities”?
On this, our fourth and final episode on MLMs, we’re going to demonstrate how the gospel is used to sell an illegitimate business model. People like Josh McDowell have spoken for Amway. But does that make his actions wrong? He is, after all, there to preach the gospel to a captive audience. Who can blame him?
Ideas explored in this episode:
- What was the Trump Network?
- Did Bill Clinton speak at Amway events?
- How was George Bush involved with MLMs?
- Who is Terri Savelle Foy?
- Can we mix the gospel and business?
- Why do Christians and people of faith sell for pyramid schemes?
- How do pyramid schemes target Christians?
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