The $1,000,000 Multi-level Marketing Lie

what's going on everybody today I want to talk about multi-level marketing over the next few minutes I'm gonna share with a way for you to make money from home to a passionate purpose filled set your family free financially I would pay hundreds of dollars to join a business like this we have a million dollar opportunity ooh a million dollar opportunities sounds kind of nice especially if you get to do it while working from home with everything going on right now and I imagine if you've looked at your social media feed over the past couple of years you've seen some videos similar to this you've typically got a young woman maybe a stay-at-home mom type figure holding like sixteen kids in their arms they use nice cute text and say things like empowerment or be your own boss or this will change your life because forever changed my life they boast of these powerful business movements that are going to transform the entire world if you get in on the ground floor and if you've seen any of my videos in the past you would know that I spend a lot of time investigating weird things that I see on the Internet primarily scams and today I don't want to talk about one particular company I don't really even want to talk about the products that they sell this is more about the spirit of what these companies and organizations do it's it's more about the truth behind the million dollar opportunity there are hundreds of multi-level marketing or MLM companies here's a couple of them that you might recognize unfortunately though a lot of what I see about this stuff online is just post about how great it is how there's these opportunities knocking around every corner and at the surface it might seem like just a great sales position it's just a distributor selling products with the Commission except I get to go to a party Facebook you've seen this right you all get together you get to try out some products maybe try out some clothes or sip a few smoothies and if you buy something then your friend gets a couple dollars you get something you like and everyone wins right but that's not really the whole story and don't get me wrong guys you might enjoy some of the stretchy pants or the smoothies or the pseudoscience that they're throwing out there and all these parties but if you're actually considering joining this as a business opportunity and you really dig into how they operate I think you would find that they're actually selling a lie so it is all about mindset it is all about believing in yourself and knowing that you are worthy of the success God was able to provide them on a silver platter an opportunity that changed their life forever so I just want to take that moment to congratulate all of you guys I'm starting your own business and taking your freedom and your finances and your health into your own hands when you look at it you start to see that they seem to throw everything that you can possibly learn about how a functioning corporation would actually make money on the free market and they just throw it out the window like they ignore the laws of supply and demand and when they were in their business 101 class learning about illegal practices and stuff you shouldn't do they saw the pyramid scheme page at the pyramid really caught their eye from what I see you really don't need a fancy degree to understand the concepts either simply put a business makes money when consumers want to buy their goods or services I'm sorry but I actually really like the products that they sell and you comparing it to a pyramid scheme is super toxic all right hold on I didn't necessarily call it a pyramid scheme I just said the companies seem to be organized like that and let me explain in a classic pyramid scheme you're given promise of payment for enrolling other people into the business under you since it costs money to join each time a new member enrolls everybody above them it gets a cut so everyone below you is paying a little bit of money to get the opportunity to sign other people up and really nothing exists there is no product there isn't really even a company it's just lots of people paying money to be a part of nothing and in the 90s the FTC distinguished MLMs from a true pyramid scheme by saying if the members are being paid on products sales to retail customers and they don't have to recruit new people under them then it's probably not a pyramid scheme unfortunately I think some people who are interested in joining an MLM or skeptical about what they do read something like that and they stop they think of themselves oh it's not illegal it's not a pyramid scheme but just because they're selling products and they don't force you to indoctrinate your friends and family doesn't mean it's actually a sustainable or legitimate business opportunity and that they haven't borrowed anything from how a pyramid scheme operates that's what was so shocking to me and why I wanted to make this video because the MLM promise seems to be centered around living your best life and this million dollar opportunity that's perfect for everyone but it's not okay but you said businesses make money when consumers want what they sell and I love smoothies and these leggings look really good on you don't get me wrong I love blended fruit just as much as the next guy but with MLMs that's not where the money is actually made I think at times it all seems so innocent at face value it's just your friend at a party talking about how much they love the smoothies but if you spend a few minutes searching on YouTube or looking anywhere on the internet for how to grow your multi-level marketing business you would start to see a really ugly truth behind what's actually happening let's talk about how to go 5k okay this is you everyone that you personally enroll is going to help you hit 5k how many people have you enrolled for that's it you just got paid $500 we're gonna go to these four affiliates and say hey I just made $500 how would you like to make $500 they're gonna say yeah I want to make 500 bucks cool here's what we need to do who do you know now you help these four people do the same so this person gets their four this person gets their four you are now a 5k affiliate and network marketing it's all about your downline you just saw the guy explaining and it's really hard for me not to laugh when I watch it because it is literally a pyramid I know just because it looks like a pyramid doesn't mean it's actually true and that's fine that's that's not the point but seriously you would be hard-pressed to find top earners or Emaline gurus or whatever you'd want to call them who spend their time talking about how to sell the product remember that's the only thing separating them from a pyramid scheme by the way you will find thousands of videos and blog articles and Facebook groups focused on one thing recruitment so not only did you get to join this business for 4950 but you get to take advantage of the opportunity to now talk to your friends and your family and get people in as well so barb please tell me how did you go diamond in nine days inquiring minds want to know so I just basically called everyone I knew and I said you know I'm not sure if this is going to be for you you're interested but if you can give me 15 minutes of your time I'd really love to ask you just tell you a little bit more about the company there's this crazy ten thousand dollar bonus that they're offering to help people get out of debt and I don't know if you'd be interested or not but you know you really should check this out so do you have five minutes we can chat or 15 minutes I can come over and sit with you and I just basically booked back-to-back appointments so for those nine days I think I probably did like 30 mini launches or you know one-on-one appointments and had a party almost every single one of these videos I find are talking about how to get more people in your group how to sign up ex people in 30 days and why do you think they're talking so much about tricking convincing whatever getting your friends to join underneath you smoothies money money it is all money you hoping three people do this once that's an average monthly income of $2,000 and there's a ten thousand dollar bonus right now for doing that wait 10 grand to convince three people that this is a legit business opportunity I don't even have to sell products I started looking at a handful of the popular MLM as I saw commonly posted on the internet and if you look at their public documents you can see pretty much across the board that a network marketing your pay is significantly affected by how many people are selling underneath you now while this video was not about these particular companies I want to give you a couple examples if you've liked where this is going or at the end of the video you feel like you want me to break down to some more companies in further detail give it a like let me know in the comments but here we go let's take the company it works for example the it works compensation plan has been carefully crafted to make sure that if you join their organization you know precisely how you are going to be paid and it is not that easy to figure out it's twenty two pages long five of those pages are kind of fluff you know the things that no one ever reads like the table of contents of the 17 remaining pages two and a half of them are focused on selling product loyal customers and honestly that's a stretch it doesn't really tell you how it's just giving you examples of how you could make some money off of it the remaining 85% is focused entirely on how much money you make when you recruit people underneath you to sell there are all kinds of terms and diagrams and dollar signs and this is not abnormal you can find dozens of other companies structured just like this it's the MLM way now if you're skeptical or you want to play devil's advocate maybe you would just say kit it's really complicated stuff they had to take up 85% of the pages because there are so many diagrams and stuff and like it's not that big of a deal you you still make money when you sell product and that's true but remember the basic concept of a profitable business is having your customers want to buy your product or service and in this scheme I don't think the customers really matter I mean why would I bother selling the products to end users when I get bonuses for signing people up underneath me and I'm gonna get paid for everything that they do and I'll give you another example okay Young Living another popular MLM they do Essential Oils has all of their new members purchase a starter kit it's about $100 a month to be a part of that opportunity you have to keep buying product depending on how far up the pyramid you go or the plan whatever you want to call it if you look at the bonuses that are factored in you'll see that more than half of the money that's spent by this new member goes right to all of the people above them all those business owners and in some cases they're paid eight levels deep like a friend of a friend of a friend of a friend you get it and let's face it you've only got so many friends that you can try to sell this stuff to before they're blocking you on facebook or not showing up to your parties anymore and no matter how many cute little Pinterest appetizers ideas you cook up at some point you'll hit a dead end but what if you could have your friends sell the products for you or better yet selling the idea of working from home and making money of this business and maybe you're thinking KITT that's fine you're just building a business of people selling product below you and if you're successful theoretically that could be pretty lucrative the problem I have and maybe this is the fundamental issue it is always and your friends best interest to tell you that you would be perfect for the opportunity really just thinks that you could do so well at this is I wanted to make sure that you know that you absolutely can be successful in this business even if you can't sell ice to an Eskimo and you will never turn a profit everybody else above you is still making money when you sign up to be a part of the opportunity and every month when you buy another hundred dollars worth of products everybody above you wins in this video I'm not going to make any statements about the product that some of these companies sell but for the sake of explanation let's just assume it is straight trash I mean seriously at this point it does not matter if you are literally selling garbage as long as people keep signing up underneath you and paying $100 a month to sell the trash theoretically to their friends and it can just keep going and going and going supply and demand doesn't matter even if no one actually wants trash as long as you keep selling the idea that selling trash is really lucrative you can keep going for a while and this actually happens there are tons of examples of people going to massive debt in order to keep buying the product so they can be a part of the opportunity I'm not making this stuff up you'll see team leaders all over the internet encouraging their team to just keep working hard and even if they can sign up one more person this week you'll be able to grow you can do it there were reports of people taking that second mortgages being encouraged to sell their breast milk literally do whatever it takes to become a part of the opportunity and stay a part of the opportunity also the upline can make money I mean their success their paycheck their everything depends on you and your friends continuing to buy the idea that selling trash is someday gonna become lucrative and remember it doesn't matter the product I'm saying trash as an example it can be smoothies it can be pants but if the primary way people are making money in the business is by signing up new people to sell products underneath them it doesn't matter if they're hoarding all of the smoothie mixes in their garage because everyone else above them is just continuing to make money and in some cases a lot of money we now represent our team at the top rank of the company it's called royal crown diamond and it's a huge huge honor I encourage you to jump over to Young living.com slash IDs if it stands for income disclosure statement to check out the like monthly and annual paychecks that people are getting at different ranks within the company and then once you pick your jaw up off the floor come on back here and let's keep talking it was kind of shocking to me when I first looked at it I almost thought it was fake or I was doing my calculations wrong so I had to do this like three or four times most people are actually losing money in this business I mean look at this right off the bat you can see 88.8% of people involved in this made an average of four dollars annually that's four dollars a year the first two ranks of all active distributors represent 96.7 percent of the company averaging just twenty-five dollars a year what was perhaps most shocking to me is when I averaged most of the ranks I mean we're talking a hundred percent of the company 99.9 percent of the company they made a weighted average of a hundred and eighty four dollars a year now you might be saying kit one hundred and eighty four dollars is better than zero dollars but what we haven't taken into account yet is what it actually costs to run a business these income disclosure statements specifically state that this does not include product purchase advertising or the cost of running a business when they throw these Raja's that means the person that made an average of four dollars actually lost money first you have to sign up for the company and almost every MLM I've looked at requires you to purchase some kind of starter kit or distributor pack Young Living seems to really push the hundred and sixty five dollar starter kit but if you click around you can find a $35 option so for argument's sake we'll use that after your thirty five dollar investment you're now annual average is a hundred and forty nine dollars and while I think it's important to consider your time valuable I'm not going to count the time that you would spend spamming your family members on Facebook we're gonna take the simple example of throwing a party which every MLM suggests you do let's say you throw one party a month and to stay conservative you only spend ten bucks on party food which is a better way to let your friends know that you don't value their time at all than flooding their social media feed in the first place anyway that's a hundred and twenty dollars a year bringing this to 29:54 your average you really income but that doesn't include gas to get to the parties or even something as simple as business cards if losing thirty dollars doesn't sound great remember with Young Living according to their compensation plan in order to get a commission you have to have a personal volume of at least 100 which basically means you have to buy at least $100 worth of products every month just to have the ability to have a commission when you sell them I'm not including that in the negative thirty dollars so if you can't sell the product you're buying it's entirely possible that you're going hundreds or thousands of dollars into debt although I think this is silly if you're actually considering this as a business endeavor take out that 88.8% that made four dollars skip the top one percent or show and if somehow you managed to spend zero dollars running your business which is impossible you make about eight hundred dollars of course now you have to pay self-employment tax this is nowhere near a million dollars and don't buy into the lie that it just takes time to grow a business because this is not a business this is a glorified sales position or one of the top wins I took those percentages and made a little chart flipped it sideways and oh man one particularly terrifying company I came across when I was doing research was it works this highlighted region represents 97% of the company they make a weighted average of $100 a month or about $1,200 a year in order to even make a commission you need an ad BV Auto shipment B V stands for bonus volume and if you look at their signup page you'll see it's actually a hundred and twelve dollars a month and again you don't need a fancy degree to understand that paying a hundred and twelve dollars a month is more than the hundred dollars you would make which in theory means that 97% of the people involved actually lost a hundred and forty-four dollars and you can say well kid I'm just gonna drink that coffee but it's still considered a cost of business and that was just the first requirement to be qualified to run a commission we're not even considering the 400 BV that you have to either personally sell or buy the 99 dollar startup fee and remember these numbers do not include expenses and this is their own public data I didn't hack anything I'm not making any of this stuff up the link is literally in the description below go check it out now I could breakdown company after company for you and frankly I would probably really enjoy it so if you want me to Lily no but for the sake of time let me tell you that the FTC already did this in their findings they reported that 99% of people lose money or make nothing you're actually more likely to make money in a pyramid scheme 99% of people and they realize my problem with the whole thing I'm not necessarily saying that the products are a scam I'm not even necessarily saying that when your friend invites you to a party and says that you might be really good for this that they don't believe it I just think they were sold a lie I think the people at the top know exactly what they're doing and should be held accountable for it because if their whole goal is to transform your life and empower you to be the best you can be they are certainly not meeting that goal I'm not a lawyer or anything but the FTC gives some pretty straightforward warning signs of a pyramid scheme and unfortunately most of the companies that I've been looking at seemed to hit almost all of these points the first one promoters make extravagant promises about your earnings potential that's easy to define and should sound kind of familiar we have a million dollar opportunity promoters emphasize recruiting new distributors for your sales network as the real way to make money again this seems very common across a lot of that MLM as I looked into to help these four people do the same so this person gets their four this person gets their four you are now a 5k promoters play on your emotions huh can't afford to get started that's exactly why you should encouraging you to act now without taking time to study the company you just have to start your own business you guys like no other like we've looked into like opening up a coffee shop it was gonna be like thousands of ridiculous amounts of dollar if you basically want a business handed to you with all of the resources all of the training it doesn't matter what personality you are because there is a place for every single person every person can do this if they want to do this like don't give yourself an excuse out and think well I'm just not this you are God made you for greater purposes you can do hard things okay this is overcoming fear it's overcoming insecurities it's realizing that you're a boss babe whether you realize it or not that God made you for purpose and intention and design and has something to blow your mind with and sometimes you have to do weird things I'm pretty sure that's somewhere in the ten commandments right don't use your brain and just do weird stuff hashtag boss babe the last bullet point about distributors buying more products and they can use or resale to stay active in the company also sounds quite familiar remember the auto shipments and bonus payments they might tell you it's not a pyramid scheme or maybe there's some sort of a loophole because of the products but when Karin says to you it's a million dollar opportunity she is lying you are statistically going to fail and what's worse is that if you do somehow find your way and you become a part of that 1 to 3 percent that has some form of success in this business you're not doing it because you're selling really really good products that people actually won you're recruiting the 97% of people who are gonna lose money your friends your family and that's not what's talked about it's all these posts about building your own business and a hashtag boss babe so please before you go spend a bunch of money and sign up for one of these opportunities consider what you're actually getting yourself into and hey if you want like a 2 or 3 percent chance to make 5 dollars a year spending hours a week harassing your friends on the Internet then maybe this is a great opportunity for you really quick I do wanna say I haven't looked into every single multi-level marketing company that exists some obviously will be worse than others but I wanted to at least start a conversation about it and I hope it challenges you to think about what you're getting yourself into and second guess some of the stuff that you see on the internet because there are all kinds of weird claims out there if you enjoyed the video consider giving it a like I'm thinking about giving some more multi-level marketing videos in the future we'll see happy painting god bless you

Channel: Kitboga

Views: 672,221

Keywords: fraud, improv, multi-level marketing, mlm, pyramid scheme, pyramid selling, network marketing, sales, lularoe, itworks, sales consultant, herbalife, young living, arbonne, scam

Id: HJ4eA0-2krw

Length: 24min 37sec (1477 seconds)

Published: Tue Apr 21 2020

Reddit Comments

[u/coolaaron88]

The people at /r/AntiMLM would love this video

[u/redroverster]

I thought it was hard to sell ice to an Eskimo.

[u/secondbase17]

Yeah but what about the reverse funnel system I just bought into?

[u/wooztheweb]

Great video. Love seeing these informative ones about scams... really concise and interesting

[u/oonabee]

Fantastic Kit...please do more. I worry that in the coming months, with so many out of work, there may be a whole new pool of suckers...I mean people looking for opportunities.

[u/[deleted]]

that pyramid scheme board looks like the one from the office

[u/TheTrekkieGirl]

Really enjoyed this video! And I've seen a lot of commentary videos on mlms.