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I Hate Indian Network Marketers So Much

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I’m pissed off.

See, I live by a shopping center that has a Safeway, Trader Joe’s, and Wal-Mart. The last two times I’ve gone shopping there, I’ve been approached by Indian men who were seemingly very nice and struck up a conversation with me. (Some background: For a long time, there weren’t many Indians in the U.S. — especially certain kinds like Sikhs — so if you saw another one, you’d greet each other, invite them over to have chai, etc. This tradition persists today, although less so, especially in Silicon Valley where we’re very common. But still.) As a result, I’m always especially happy to introduce myself to any Indian person I see. Here’s how the conversations went:

Seemingly nice man: “Excuse me. Hi! Did you go to Stanford? You look very familiar.”
Me: (Wondering if I have a Stanford walk or something.) “Hi–yeah, I did. Did you also?”
Seemingly nice man: (Ignores my question.) “Ah, great, great! (Smile.) What did you study there?”
Me: “Technology and psychology…what about you?”
Seemingly nice man: “So where are you from?”
(…We have a nice conversation in which he seems genuinely interested to meet me and hear about what I’m up to…and then…)
Seemingly nice man: “Are you interested in a new business venture?”

Ohh man. Because this happened FIVE times in two weekends, plus once at a shopping mall in San Jose, I can tell you exactly what was behind their approach. I know because I gave these guys my phone number (until I wised up), and when they called, I got frustrated and asked them what was going on. Here’s what I figured out.

Step 1: Go to a public place with a lot of people
Step 2: Approach people who look like suckers (me?) or people you have some affiliation with (in this case, five separate Indian guys approached me). Play up the cultural angle.
Step 3: Deceptively try to ingratiate yourself with them. Three of the five guessed Stanford because I look young and I wear glasses. The fourth asked if I went to Berkeley. Wrong side of the Bay, buddy.
Step 4: Get my business card and follow up with an “exciting business opportunity.” Sound disappointed when I decline. Follow up by asking, “So do I understand it right that you’re not interested in making money for almost no effort?” When faced with my flat response of “that’s right,” ask me meekly if I have any friends who would be interested in this business “opportunity.”

I hate when people try to scam me–but at least I have some experience in spotting scams. I hate it even more when defenseless people get scammed. And I just feel sad when people are wasting their time and relationships by engaging in network marketing.

Network marketing (aka multi-level marketing, or MLM), Ponzi schemes, or pyramid schemes — yes, there are differences, but I’m disgusted by them all.

My angry encounters with these guys come at a prescient time. Yesterday, The New York Times wrote a damning article on multi-level marketing companies and the new rules proposed by the Federal Trade Commission. “If companies have to tell recruits that the average income is only $1,400 instead of the $50,000 advertised on their site, or that the average salesman only lasts two months, a lot fewer people are going to sign up,” said one analyst.

These programs are a scam on your time and your relationships. Yes, there are exceptions and a few people make lots of money. But dig into the data and you’ll discover that most people — and I mean that statistically — most people make less than $100/month. Most people don’t last very long, either. “But Ramit,” you might say, naively, “how can it hurt? If I can make $50/month, what’s wrong with that? PS I think I can actually make $50,000/month!!!” There are four things wrong with that: First, you won’t make that much. Second, you’re not creating any lasting value or building a skill set for you. Third, have you seen how friends treat you if you try to turn your friendship into a sales relationship? And forth, engaging in these stupid “opportunities” distracts you from real entrepreneurship and your goals.

Let me explain.

An overview of network marketing, Ponzi schemes, and pyramid schemes

Network marketing/MLM
Network marketing (i.e., MLM) is the most legitimate cousin in a family of questionable characters. They’re like the Beagle Boys from Duck Tales: an unfortunate family of degenerates. Anyway, multi-level marketing programs let you earn money based off the products you sell, and sometimes a percentage of the products sold by people you refer. That’s a key distinction: In MLM programs, you earn money from the actual sale of products, not just from endless recruiting of other people.

Unfortunately, the rosiness ends there. As our own Federal Trade Commission (FTC) notes:

Some multilevel marketing plans are legitimate. However, others are illegal pyramid schemes. In pyramids, commissions are based on the number of distributors recruited. Most of the product sales are made to these distributors – not to consumers in general. The underlying goods and services, which vary from vitamins to car leases, serve only to make the schemes look legitimate.

Furthermore, they write, “Avoid any plan that includes commissions for recruiting additional distributors. It may be an illegal pyramid.”

I knew a guy back in college who made me wish I were actually in an ivory tower so I could jump off into a pit of alligators, thereby evoking eerie similarities to Indiana Jones and the Temple of Doom. He was bragging about a new “venture” he had started. I was curious, so I asked him about it, and he had a very nice sales pitch — until I asked him a couple questions that he apparently didn’t have scripted answers to.

What was he selling? “Oh, tons of assorted products like energy drinks and really good cleaning supplies.” (Which he had of course bought first, thus incurring inventory costs, and now had to sell. A few months of your closet being full of EnergyAde makes pennies on the dollars sound attractive.)

And how much was he making? I wasn’t going to ask, but he kept bragging about how “profitable the opportunity is,” so I just asked. His openness vanished rather quickly, especially when someone else chimed in and said, “It must be more than $100/week, right?” That was a typical amount students could earn by working part-time on campus. “Well,” he replied, “it’s all about pounding the pavement and getting to that tipping point.” He’d been doing this for a year.

Another example of an MLM company is Amway. Now, as part of a $6.4 billion organization, something undeniably powerful is happening here. And who am I to criticize? I don’t run a $6 billion company. But the data behind Amway is illuminating if you’re thinking about MLM programs:

Typically, IBOs (Independent Business Owners, i.e., members) spend money on tapes, books, and seminars which are promoted to IBOs as the preferred way to learn the “business skills of the IBOs” and to maintain their desire to build their business…However, investigations like one done by Dateline NBC in April 2003…suggested that most of the money being earned by these successful individuals was coming from the hidden “tools” business rather than through selling the company products. Critics also claim that the materials are specifically geared towards encouraging IBOs to continue working for a non-economic return, rather than improving their actual business skills.

[…]

Amway was ordered to accompany any such statements with the actual averages per distributor, pointing out that more than half of the distributors do not make any money, with the average distributor making less than $100 per month.

Pyramid schemes
It gets worse. While multi-level marketing programs can theoretically be legitimate — even though few people profit, and many take a long time to realize they’re not — pyramid schemes are simply fraudulent.

In a pyramid scheme, you usually make money recruiting others and hoping that people down the line will pay it upwards. The products you’re selling (if there are any) are overpriced and likely only purchased by members in the pyramid scheme. As a point of reference, the first sentence of the Wikipedia entry on pyramid schemes describes them as having a “non-sustainable business model.” That’s because, mathematically, pyramid schemes soon become impossible to sustain; exponential growth means that, soon, there aren’t enough people in the world to participate. Sort of like the amount of girls that can resist my charm.

In other words, pyramid schemes will typically promise a great return based on a small investment. The hucksters have developed a number of variations to obfuscate the real process (older readers may remember the “captain and passengers” model), but the result is always the same: bad.

Ponzi schemes
The final and most fraudulent example is the Ponzi scheme, which involves promises of unusually large investment returns by aggressively recruiting more and more new members to pay earlier members. In fact, the earliest investors often get incredible returns for a short while, thus spurring them to invest more and tell their friends. The scheme’s demise comes shortly thereafter, usually with the mastermind(s) taking all the money.

Ponzi schemes are different than pyramid schemes: the Ponzi scammer is the puppet master, whereas recruiting is distributed in a pyramid scheme. Ponzi schemes can also persist by getting more investment from existing members, while pyramid schemes can grow (and thus collapse) faster. There are lots of details about Ponzi schemes, but the main takeaways are they’re very fraudulent and very bad.

Why I have a dim opinion of people who participate in these programs — plus a case study

First, they’re deceptive. They used a simple heuristic — “Hey, we’re both Indian!” — to get attention. While that may work in the short-term, how would a real businessman feel once he realizes he was deceived? And what kind of people would shrug it off and stay with the organization? This is a great example of Cialdini’s “click, whirr” strategy to take advantage of these rules. Although I thought they were sincerely interested in me, they actually wanted to sell me on something. Bad, bad, bad.

Second, they’re not particularly innovative. They accosted me at grocery stores, for god’s sake.

Third, they’re often persistent to the point of being irritating. Here’s a little case study on something called Pre-Paid Legal. Last year, I gave a talk at MIT. About six months later, one of the students emailed me with an “interesting opportunity” for something called Pre-Paid Legal Services. This is basically a service where you pay $25/month in exchange for legal services; it’s like insurance for legal services. They have a fancy magazine (which she helpfully mailed to me) and very, very pushy people who try to recruit you. There are only a few catches to the service: Pre-Paid Legal has been found guilty of fraud, leading to this amusing quote by money manager Frederic E. Russell: “I think Pre-Paid was lucky,” he said. “But a finding of fraud is not exactly the greatest news as far as goodwill and reputation are concerned.” The article ends by noting the following tidbit: “Pre-Paid has set aside $3 million to cover any major damages that may result from the lawsuits. The company — which markets its product as essential — carries no legal insurance itself.” As you can imagine, by this point I was enjoying myself so much that I was eating popcorn while reading these articles.

Would legal insurance have even mattered? As one of their board members actually said, “All you have to know is the word: Yes. Does our product cover everything? Yes. So if somebody asks does it cover this or does it cover that, we’re going to say, ‘Yes.'”

That same article, from BusinessWeek, points out what’s not covered by Pre-Paid Legal:

A review of sample Pre-Paid contracts shows many limitations. Cases involving bankruptcy, alcohol, drugs, pre-existing conditions, wage garnishment, divorce, annulment, child custody, class actions, hit and runs, driving without a license, civil or criminal charges associated with a business, and commercial vehicles over two axles aren’t covered. Nor are any “claim, defense, or legal position which, in the opinion of the Provider Attorney, will not prevail in court.” Pre-Paid provides for 60 hours of trial time per year, but pretrial work — the bulk of most cases — is limited to 2.5 hours per year in a basic policy.

And yesterday’s New York Times article notes that an astonishing 45% of Pre-Paid Legal’s public shares are currently shorted, meaning sophisticated investors think this company is going to tank. It also suggests the consequences of the newly proposed FTC rules: ” …Pre-Paid Legal would have to tell prospects that fewer than a quarter of its sales representatives sold more than one insurance plan in 2005.” How would the sales reps take it? Well, the reporter writes, “Pre-Paid Legal suffers from high turnover. In 2005, the company replaced at least 50% of its active salesforce…Industrywide, multilevel marketing companies typically replace all of their sales representatives every year.”

With most of this knowledge, that MIT student kept badgering me. Finally, exasperated, I had to tell her rather pointedly that we could go back and forth forever, but I wasn’t interested at all. (These MLM types bring out the most unsavory reactions.) A year later, a friend told me that he got another contact from her — this time endorsing another product.

Fourth, these programs disproportionately target the wrong people. “Make money in your spare time!” they say. Do you think people with a busy career have lots of free time to try “opportunities” they hear about while shopping for tonight’s rump roast? Of course not. Professor Ken Wong, who runs the MBA program at Queen’s University, points out the obvious:

“The more educated they were, probably the less likely they would be to buy into the whole concept in the first instance. So you’re really targeting a specific kind of individual who life has treated in a very certain way, and you’re now saying you don’t have to have that way anymore.”

So we have programs that disproportionately target people who don’t know any better and remain “working” in these programs without being properly compensated—all because of big promises to come and clever marketing. You can see why I’m pissed. In fact, try to dig up research on “network marketing.” It’s hard to find anything substantive among the THOUSANDS OF PAGES OF AFFILIATE OFFERS THAT SCREAM OUT SCAM TO ME. Interestingly, many people have compared these programs (and especially their training programs) to cults. Not just hand-wavy cults, but the strict definition of cults, including isolation, increasing levels of commitment, etc. I agree, there are lots of similarities; for more on this, read Eliot Aronson’s excellent book, Age of Propaganda: The Everyday Use and Abuse of Persuasion.

Fifth, and perhaps most unfortunate of all, these programs are giving their members neither equitable compensation nor the core skills for future growth. If you’ve read this blog before, you know that I hate get-rich-quick schemes (see On Greed and Speed for details). If these so-called opportunities didn’t provide much cash, but gave participants the skills and contacts to run successful businesses, I would say great! Unfortunately, they don’t. Yes, that’s a broad generalization, but I’ve seen far more regret and bitterness over a long period of time than excitement—of course, with the exception of my grocery-store friends. They’d all been doing it for less than 6 months.

Why would you do these programs?
Is it to make more money? Then let me be very clear: You could make more by taking $100/week, putting it in an index fund inside a Roth IRA, and letting it sit there. You can even set this up to happen automatically. In fact, you could arguably make more by investing just $100/month.

Or maybe it’s to maintain your lifestyle and do something entrepreneurial. Great! I admire that more than anyone. But why would you pick an industry riddled by fraudulent opportunists and unsophisticated people whom you can’t learn much from? That smacks of a stupid frat-boy business idea.

Is it to make a difference in the world? Probably not, but just in case, there are many better ways to do it that don’t involve you calling up your friends and family and polluting your relationships by introducing a sales element into them. “Mom, I love what you and Dad have done with the window treatments here! Also, did you know you’re currently vulnerable to numerous legal liabilities? Fortunately you can protect yourself using an exciting service called Pre-Paid Legal Services®!”

Is it because you’re new to the area and looking for something entrepreneurial to ease your way into the community? I have to admit that the title of this post is a little sensationalistic. Also, most of the people who approached me were recently from India. Maybe they didn’t know any better. But you know what? That only reinforces my point of the kind of predatory organization this is. Plus, there’s almost no better way to actively push people away from you in a community than by trying to actively sell them something fraudulent.

Finally, is it because “it couldn’t hurt?” After all, how could it hurt to try it out? The truth, of course, is that it can hurt. You’ll probably alienate your friends, family, and acquaintances, just like that MIT student did to me. Moreover, following that logic of “it couldn’t hurt,” you might as well open a lemonade stand and sell drinks for $0.05 each. “How could it hurt? I made $0.75 today!” The point is that we need to optimize our choices, and $0.75/day (or $100/month) isn’t worth it compared to what you could make. If you read three articles on this site (e.g., about stocks, mutual funds, and retirement accounts), you’d easily make more. Or another site! Or a book! I don’t care. Just recognize the flimsiness of the “it couldn’t hurt rationale.”

I’m bound to get a ton of heat for this post because there are lots of bloggers who write about network marketing. They genuinely believe in what they do. Unfortunately, try doing a blog search for “network marketing”. The results are deplorable, which leads me to my final points.

Ramit’s 5 Maxims of Network Marketing

1. If you have to badger someone into even thinking about maybe considering allowing you to perhaps talk to them for 60 seconds, you may have signed up for a bad “opportunity.” Also, if your marketing plan involves you accosting customers in the cereal aisle, consider that I may be right.

2. If you spend more time recruiting people to do your job than you do selling products—and you’re supposedly in a “sales organization,” you may be in a scam.

3. If the organization you’re working for has repeatedly been sued for fraud–and often convicted–that may set off some warning signs. Also, if you’re participating in a business model that almost universarlly evokes disgust or, at the minimum, discomfort, that may be another sign. If a lot of people don’t like something, there’s usually a reason.

4. If you’re spending your days doing something that’s frustrating and only marginally useful–and your customers, if you have any, feel abused rather than thankful–step outside the bubble for a minute to acknowledge that you’re not creating any new value. I don’t know one entrepreneur who made it big doing something like this. Now, I fully understand the psychological difficulty in doing this. Maybe one good way to start is by asking people you’ve pitched what they honestly think about your recent activity.

5. Finally, it’s easy to be wishy-washy about MLM (“The real problem with MLM is not MLM itself, but some of the people it attracts”), but I’m going to go out on a limb here. If you do your research and discover an industry filled with fraud and broken promises—one in which you can reasonably expect to not only be swindled, but to then swindle others — you may want to reconsider your choice.

Thanks for reading. And please, tell your friends.

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MyNameIsMatt
MyNameIsMatt
9 years 9 months ago
Great story, and perfect timing for me. I recently had an encounter with a sales scam that ticked me off a bit. A girl came to my door, probably late highschool or early college, and in 5 seconds rambled off something I couldn’t understand. She was VERY cheery, and even after asking her to repeat what she said I couldn’t figure out what she was on my doorstep for, but supposedly she was going to school and she wanted to meet 135 nonviolent people for some program she was in. She’d give me high fives after affirmative statements like “Are… Read more »
Kira
9 years 9 months ago

Yeah, I have a lot of MLM type offers on my site (cashduck.com) and I hope to God that people are smart enough to just take the money they earn for signing up, and not actually use any of these materials. I got an email from one person who had ordered some kind of grant-writing package, and she asked how much I thought she could make with it, and I honestly had to say that the eleven dollars she got for buying it was probably more than she could make if she actually used the materials.

shadyrudy
9 years 9 months ago
Long time reader, first time poster. I must have been around 4 years old (I’m 29 now), but I remember my parents going to a meeting about a business venture. It was the classic Pilot-Crew scheme. My dad, being good at math, didn’t buy in, but one of his friends did and paid dearly. 🙁 And just this year, I was approached by an Indian gentleman while looking at SQL Reporting Services books at my Local B&N. And it’s the same story, too. I was wearing a Baylor shirt and he proceeded to ask me about my major, etc. Then… Read more »
Derek
Derek
9 years 9 months ago

Your comment about people saying, “It doesn’t hurt to try” — or the more desperate, “I have to try” — is all too familiar. My parents justify entering into “money-making opportunities” this way all the time. They don’t measure, compare, research the pros and cons. No, they focus on “But *what if* it works?!” It never does, though.

Kimber
9 years 9 months ago

I’ve been scammed more often than you’d care to hear about. From envelope stuffing for cash to tax sheltors (scams for big girls). I don’t doubt that I’ll be scammed again.

The ones that irk me the most are the charity scams. The people asking for gas money to get themselves home (and its the same people asking day after day). The ones that make me feel like crud for saying no.

In those cases, I weigh the money against the guilt. Often its worth it (to me) to merely give the money.

Vince
Vince
9 years 9 months ago
Thanks for this post. I’ve lost a couple friends who tried to turn our friendship into a business relationship (PPL was one of the companies), and I wish others could be warned ahead of time of the consequences. It’s an ongoing joke with my friends that I’m always the one to get targeted with pyramid schemes. They say I must look like a chump or something too. To make matters worse, the last time a friend tried recruiting me, I told her she should learn to invest instead and she can be a millionaire in 20 years. She said 20… Read more »
Roger
9 years 9 months ago

What a great post. When I hit 18, one of my first jobs was when I became recruited for one of these MLM scam companies. I only ended up losing a total of $50 in a period of 2 months but I learned a lot about sales. Overall it wasn’t too much of a horrible experience but I’m glad I got out and didn’t waste any more time than I did.

Vikrant
Vikrant
9 years 9 months ago

Being Indian myself, I know exactly what you mean, Ramit. It has happened to me 3 times in the last 2 months, and of all places, in WALMART. Bloody hell, I can’t even shop in peace without these buggers coming up to me with that sly smile and a “Hey! You Indian?”

I’ve become very curt with folks like this – they’re only wasting my time, and theirs.

Will
Will
6 years 3 months ago

You think it’s bad being Indian in the west? Try being a westerner in India, my friend! You met three guys at walmart? I get ten at the train station.

ian
ian
9 years 9 months ago
I have been accosted by these guys at the bookstore multiple times. First, they feign interest in the subject of the book you are currently looking at, and when you start talking about yourself their eyes glaze over. I was looking at a programming book and this MLM guy started talking to me. Luckily I immediately knew what he was doing. Here are some of the highlights: Him: I am into programming too. I do some stuff with Flash (wow!) Him: I do e-commerce consultancy. Have you heard of e-commerce. Me: Yes. Him: yea…. it’s getting really big. Me: NO… Read more »
Jonathan
9 years 9 months ago
Great post, seriously. My mom got caught up in the Amway stuff for two decades, and never made any worthwhile amount of money. Sure, there are a few rare exceptions, but like you say, for MOST people it is a waste of time. I even started getting stars in my eyes with Automaticbuilder.com, but alas, after a couple weeks I realized it’s basically the same old thing. I don’t know if “scam” is the right word, but it’s certainly not as good as they make it out to be. I love your advice at the end. It would be better… Read more »
Max
Max
9 years 9 months ago
This is the absolute best post I’ve read in a LONG time (on any blog). That’s probably because it came at a time when I needed it most. You see, I’ve been an opportunity junkie for far too long and, despite knowing I have this issue, I keep letting myself get sucked into more and more biz-ops. I guess it’s the lure of making money online and someday quitting my regular job that drives me. Unfortunately, I’ve been approaching it all wrong for too many years. Just recently (like two days ago), I joined GlobalNetVantage, paid for their membership and… Read more »
Krish
9 years 9 months ago

I agree. I am frustrated with them too. I just give them a middle finger and move out. I am pissed of with these Amway guys of Indian origin. Unless the guy is a resident/citizen, he/she is not legally allowed to pursue this. I usually tell them that and ask them to get lost.

Red
Red
2 months 17 days ago

Krish, When Redhat sells systems to MLM companies, do you show your bosses the middle finger or you bend over?

paula
paula
9 years 9 months ago
your observation that these scams often target the poor and uneducated and desperate is right on. unfortunately these people have the most to lose, but the shiny dream presented is irresistible. my brother was in a state of dire poverty when somebody suggested that he take classes from University of Phoenix online. the tuition at this school is about 10 times the going rate at local community colleges, but somehow people get convinced that it is worth it. the quality of the education is inferior, and students get trapped by complicated contracts that often result in huge debts if they… Read more »
racketboy
9 years 9 months ago

Wow this happened to me in Walmart last month — but he wasn’t Indian.

I thought it was kinda strange, but I didn’t know this was a common tactic.

He started by asking me where the organic section was….

Dimes
9 years 9 months ago

This is a great post. A lot of military wives and stay at home moms are such suckers for scams like these.

J
J
9 years 9 months ago

Hey Ramit,

Steve Pavlina recently wrote about ‘saving’ timeshare sales people from a life of twarted purpose. It would be funny if the two of you could think of an intervention for these network marketors.

… especially since they appeal to people who care about them first.

ideasenator
9 years 9 months ago

Most people who get into this don’t realise they are making a fool of themselves. I had good friends who almost threatened friendship with me if I don’t get involved like they did, and almost always the passion that started them off dies down in just weeks. They I like to go to them and say “I told you so!”. And their response….”Well I was too busy so I don’t think I can invest the time for it”. Yeah right….!

Transcendental Success
9 years 9 months ago
Timely. I just got my time wasted by someone who was into “Online Franchising”. That’s the new trigger term for Amway by the way. Nice guy who was looking at the business section of the bookstore and struck up a conversation. I mentioned my wife wanted to develop a product and the way he talked about “Online Franchising” sounded like he had the wherewithall to help her develop and move product, or at least to make contacts. Nope: Out came the “Do you want to be rich” pamphlets and pictures of double-diamonds from the 70s. Amway is a good idea… Read more »
Nimit
Nimit
9 years 9 months ago

This has happened to me more times than I can count. Id like to have little cut outs (that say I’m not interested, go to this site ____ to find out why you should also find another business) to print out that I could take along with me when I go shopping and just politely hand it to these people when they ask me these questions.

zmann
zmann
9 years 9 months ago

I’d like to hear your opinion about Primerica… a member of Citigroup. What’s wrong w/ helping people do EXACTLY what you PREACH about Rammit?

toolbelt
toolbelt
6 months 2 hours ago

Since 2009 alone, over 1.5 Million people have joined, then left Primerica. Review their annual reports online. The only opportunity they offer is for their upper 5% to get rich.

Krishna
Krishna
9 years 9 months ago
Hah, man have I been approached by these guys or have I been approached? made me always wonder “if your business is expanding so big, why the hell are you trying to recruit me?” of course this could just be the resident cynic in me. I am an Indian and most of the times I have been approached by Indian guys, once it was a Sri Lankan couple. The funny thing is some of the people I got approached by seemed to be well educated and when I try to engage them in “why they are doing it?”, there is… Read more »
Jonathan
Jonathan
9 years 9 months ago
Wow, I’m glad you took the time to post this! I can’t believe how deceptive these MLM companies are. I was sucked into one for about 6 months–even going to two of their rallies–before I realized what was going on. Happily, I hedged my bet (e.g., keeping my real personal contacts OFF LIMITS to these people) and didn’t lose too much. It was quite an interesting experience nonetheless to see all of these people sucked into one of these things. It was TRULY like a CULT environment at those rallies. I tell you, there is nothing more hilarious and saddening… Read more »
Vinay
Vinay
9 years 9 months ago

Great post…being a Indian myself I have had this experience N number of times with some guy desperately trying to be “very friendly” with you in a Mall or some public place…..but this seems more prominent in the Bay area..not so much in South Cali or even other part of the states….

And the worst part is that these guys tend to bug you by calling you on your cell ( if you happened to be tricked into giving them your cell no)

I am really glad that this issue was brought up…thanks Ramit!

Krish
9 years 9 months ago

Here is the full video to that Dateline NBC episode

http://video.google.com/videoplay?docid=-215989802739458876

Ruben
Ruben
9 years 9 months ago

I was also approached by an Indian couple who asked me if I was Indian (I’m not…) and told me about an exciting business opportunity with Quixtar. I decided to meet up with them to hear the whole story. They made it seem so awesome and great when presenting the business, but in the end it just didn’t make sense. Glad I didn’t fall for it.

sri
9 years 9 months ago

Yup, i have been hit 2 times within 2 weeks..Happened in a busy shopping area and a walmart type store (Mejiers).

They dress up real nice and are smooth talkers! But honestly, this is how they chose to earn a living……so let them be

Petey
Petey
9 years 9 months ago
I’ve been accosted a total of 6 times in my life in various public places: borders, best buy, b&n, etc. To that effect, I am so wary when someone tries to approach me regardless of his/her intentions. I’m just waiting to hear that phrase “…but what I’m really interested in now is my e-commerce business”. Anyway, first time it happened to me, I decided to go along with their game. After thoroughly researching their operation, I found out that not only do they ask you to pay for their membership, you also have to pay for tapes, books, seminars, etc… Read more »
Paulo
9 years 9 months ago

Thanks for this entry. A loooong time ago, I was a part-time “associate” recruited into the “Forever Living Products” MLM for a couple of years before I read Dean Van Druff’s “What’s Wrong With Multi-Level Marketing?” and realized the whole tiered-pricing scheme was something very like a scam. Additionally, products were severely misrepresented to me in snake-oil fashion by sellers who really knew no better. Note: aloe activator in the eyes hurts.

structurepolo
structurepolo
9 years 9 months ago
Within the past year I have been very annoyingly approached 3 times by people while browsing for books at Barnes and Noble, I spend my time in the finance and business section of the store and always seem to get “picked” by these people. None of them were Indian though, they were nicely dressed, they came across as sharp even wealthy individuals but after looking into their products (energy drinks) I found it was another BS bug everyone you know scam job. By the time the 3rd person had approched me with a very annoying “read any good books lately”… Read more »
Dave
Dave
9 years 9 months ago
I don’t have the attention span to read that much of a blog…I wonder how many people really made it through the length of your post. That would have made a better series of posts and perhaps would have attracted more readers as they would come back again to see what you have updated. You could break it down into multiple exciting facets of your story with the conclusion being your take on how everything works. If you like writing long articles like this perhaps you should stick them in your news letter and leave the blog to the shorter… Read more »
satish
satish
9 years 9 months ago

This happened to me in LA on my first visit to US this year! I was in the B&N store browsing for books and I got hit by an Indian. First I thought, what a friendly guy, but then when he hit me with a business proposal, maan did I boil.

Luckily for me, all I ended up was giving him my email ID and nothing more. But what really got my goat was the way they try to manipulate you (for e.g. “Hey you are missing on a lifetime”, “Which fool doesn’t want to make some easy money”, etc …

Cap
9 years 9 months ago

I reckon most people read it all the way through. And seeing as how the many past long post attracted more and more readers.. I also reckon these long, informative, and useful articles are working.

Arthi
Arthi
9 years 9 months ago
Just last year I was accosted by this guy who went to college with me (that was 3 years back) and apparently wanted to meet up since he happened to be in the same city (Mumbai) as I was working then. He happened to be a close buddy of my best friend and in trying not to be rude I agreed. He invited me for a presentation he was making and thought we could go out for coffee after that. Just before the presentation a young lady asked everyone present to sign a register with our contact details and I… Read more »
Jonathan
9 years 9 months ago

Hmm, my original post wasn’t made. Anyway, I’ll make a shorter version.

99.9% of MLM companies are never as good as they seem. They make it sound so easy to make a lot of money in your part time. It’s true that a few rare people will make good money in network marketing, but the majority of us would be better off investing $100/month like Ramit suggested.

Tim
9 years 9 months ago

http://www.quatloos.com It’s not my website, but at least one good resource for scams. I can copy some other scams for you like high yield note scams.

Enrique
Enrique
9 years 9 months ago

Google founders did not become billionaries by working and investing as Rami believes. They became billionaries by offering google stock to the market. As for the Indians in the Silicon Valley, those are the top 1% of their country’s opulation while more than half of the population lives in poverty. Work by itself has nothing to do with making money.

zmann
zmann
9 years 9 months ago

I dont think people are staying awake at nights wondering which long distance they are using, or which soap/grocery products they should use. They ARE losing sleep over their financial problems though.

Amar Rama
9 years 9 months ago

Nice write up. I need to send this to my mom :). I am an Indian living in the US also and for a while there I ended up walking through B&N or the grocery store picking aisles so I could stave of the unpleasant encounters.

My mom who is recently retired and I were talking on the phone, when she mentioned this business opportunity “her friend” introduced her to. I think my violent negative reaction threw her off 🙂 I am hoping this article will present her with a more lucid view of why I reacted so violently.

John
John
9 years 9 months ago

Enrique in 35, I don’t mean to be negative, but that just doesn’t make any sense.
Those guys didn’t become billionaires because they sold some stock. They worked hard and invested their time and money into their company to build value into it. They are billionaires because the value of the company they created is worth billions of dollars. The act of selling stock simply transforms some of their illiquid wealth into liquid wealth-i.e. giving up a percentage of their company for some cash in hand.

Ranjan
9 years 9 months ago

great and thought provoking post as always.

Matt Estrada
Matt Estrada
9 years 9 months ago
Exact same thing happened to me in Wal-Mart there. Indian guy, seemingly nice. Called me out on Stanford, exchanged businesscard (his title was “Business Owner” if memory serves), etc. “We are already profitable, and we have only been operating for 4 months.” Give me a break! But I studied social psych at Stanford, so I thought I’d humor him and let him give me the spiel. It was great. You could teach a class schemes like that. He pulled out all the tricks in the book. Cialdini himself would have been impressed… but anyway, great post. I think we met… Read more »
emptyspacesinc
9 years 9 months ago

having met atleast 20 people like this in the past 8 years i’ve wisened up to their ways.

i tell them that i have a better way to make money and they can make 100k in 1 year & there’s no cost, but they need to sign a loan on a house for me. they never call me back!

Sam Rosen
9 years 9 months ago
Fantastic post, Ramit. When I was working for AmeriCorps as an idealistic young person taking time off from college, I needed to make some extra money, so I went into Google and typed in “make money.” Knowing absolutely zilch about entrepreneurship and marketing — I was previously a jazz pianist and brain & cognitive science major — I jumped on the first business opportunity I could find. I had no idea what “network marketing” was, but it sounded legitimate (given my dearth of experience) and I bit. I tried two more MLMs over the years, and neither of them panned… Read more »
Deepak Sharma
Deepak Sharma
9 years 9 months ago

On the east coast, such “seemingly nice men” roam the aisles of IKEA waiting for their next prey. I had seen my roommate in college suffer at their hands, so whenever I encounter such “nice men”, I have my act ready, and I start running down their “opportunity” before they have a chance to throw their bait. I always give these persistent “nice men” my incorrect phone number and incorrect name…afterall, they should be rewarded for their persistence. 😉

rehan
9 years 9 months ago
great article dude. i’m up here in toronto, and these ‘IBOs’ lurk around Chapters (bookstore) a lot. i’ve been approached so many times i think i have an idea of the profile of a typical recruiter. they stare at you for a good 3 seconds, and then make their way towards you ready to ask you that ice-breaking question. once someone started following me around the bookstore for a good minute and when he finally caught up he said ‘vat a wast array of books hein?’… i responded with ‘um, no kidding, its a book store?’… great blog!
Max The IT pro
9 years 9 months ago
Ahmit, great blog entry dude! I’m gonna blog about this and some of your other posts over at the LifeSizeMag blog (http://blogs.ayoafrica.com/lifesizemag) for our East African audience. When I was living in Toronto, a cute skirt I was interested tried to get me into Melaleuca but that sort of stuff just ain’t my thingy. Suffice to say, I skipped out on their meeting, which did nothing for my “chances.” 🙂 Nica gal though. Then my neighbour’s “associates” tried to get me into Quixtar, which is just Amway reincarnated for the web. Like, can’t people find legit business opportunities that TRULY… Read more »
Liz
Liz
9 years 9 months ago
Sorry to hear about your experiences. Like Ramit said there are legitimate Network Marketing Companies out there. I am not sure if this book has been reviewed in this site. But I had been considering Network Marketing as a way to start my own business because I did not have a lot of the money saved generally required to start one and I wanted to jump start now and not wait ten years from now because I did not have money. Once I build this small business I could use the money from it start another one that is an… Read more »
Not Fooled
Not Fooled
9 years 9 months ago
Great blog entry. I’m glad to see the growing awareness of the shady MLM industry. I recommend readers check out the free ebook “Merchants of Deception”, written by a former Amway Emerald level associate. I just finished reading it. It is both insightful and shocking. Download the ebook here: http://www.merchantsofdeception.com/ Liz, your endorsement of the over-rated and substanceless “Rich Dad, Poor Dad” book is not surprising. Kiyosaki is MLM-friendly, and it’s easy to understand why. His book only started selling well after some MLM companies started selling and promoting it to their associates as part of their training and manipulation… Read more »
Liz
Liz
9 years 9 months ago
Hi thanks for pointing me to the ebook. I just finished reading it. This is a very sad account for that man and his family. I hope they have been able to get back to a normal life doing what they love. That was a very difficult story and I think it does help anyone looking to research the network marketing business model. However, I don’t endorse any book, I encourage research as much as possible. And these books from these authors helped me get started in that research. I never got the two authors of these books I mentioned… Read more »
Vivek
Vivek
9 years 9 months ago

this is classic. it sued to happen to make so often last year. any place I go, Costco, Vons, Gap. these people were everywhere. I guess this is coming back now.

George
George
9 years 9 months ago
Wow. I can’t believe some MLM people are still pulling the same tactics. I moved to Charleston, SC about 10 years ago. I swear, the first 2 years I was here, every time I went to Books-A-Million, someone approached me with Amway. It usually went like this: Them: Hey, do I know you? Me: No, I don’t think so… Them: Did you go to Charleston Southern or College of Charleston? Me: No, I went to South Carolina State. Them: Oh. Well did you play football? (I’m bout 6’1, 260 and black) Me: Nope, not even little league. Them: I see….well… Read more »
JOn Taylor
9 years 9 months ago

“Nimit” expressed his wish for a card to say “no” to MLM recruiters and then refer them to a web site with information on the scams. Here it is. Go to http://www.mlm-thetruth.com
Click on “Actions you can take” and click in the left column for convenient “answer cards” to hand out to MLM recruiters.

zmann
zmann
9 years 9 months ago

All I know is that the wall of wealth is coming…and if you don’t know what that is, sorry you’ll miss out. The IRS says 1.6 TRILLION dollars is going to be trading hands PER YEAR for the next 20-30 years. Guess you gotta have a securities liscense to take advantage of that…. now where’d my series 63 book go. 🙂

Dipesh Khkakhkhar
9 years 9 months ago
Hi Ramit, Nice article and bringing it to public about this dirty scheme of making money. I hate the people who gets trapped into this and then to recover their money or to make more money they try very hard to involve more people. I pity on these people for adopting these ways to make money. I have heard stories from my friends that the scene is really very bad in bay area. One of my friend has recently moved to bay area and has been caught by 10 people either in mall, walmart, safeway et all. To avoid from… Read more »
Enrique
Enrique
9 years 9 months ago

Wow, Let’s all agree with Ramit just because he has a bad opinion about Indians approaching him about Network Marketing.

If Ramit would dig deeper, he will find that $30 billions in services and products are exchange through Network Marketing in the world.

If He would do more research, he will find that in the top 200 fastest growing(forbes) companies are companies that distributed product through direct selling.

efipo.com
9 years 9 months ago

Ha. Both my roommates get asked when they go to the gas station, but when i go up there i get nothing! I want someone to come up to me damn it…

zmann
zmann
9 years 9 months ago

Enrique, you make a good point. Citigroup, which is #1 for the 5th year in a row in the forbes global 2000….uses direct selling. David Bach loves the idea of direct selling…. specifically in the financial services market. It’s no wonder that Citigroups marketing arm has produced the most 6 figure incomes in the world, out of ANY company.

Ted
Ted
9 years 9 months ago

This has got to be the best website on the net. I can’t wait to buy your book to show my gratitude.

bala
9 years 9 months ago

the title is kind of harsh…i hate all these pyramid schemes…but this is not specific to indian community…i have asian friends who tell the same..so you are approached by indian because you are indian…since your blog is global…do not use “hate indian” word on your title…it really makes me feel sick if people use those words!!

GSH
GSH
9 years 9 months ago
My God, do I hate Indians who try to approach me with business opportunities. I’m an Indian myself, so I understand your aggression, Ramit. These people are so damn friendly, and they act like they truly want to get to know you, but the reality is completely different. Here’s a conversation my parents had with a decent couple: Them: Hey, are you Indian? (Like you can’t tell that from their name and other giveaway signs…shows how much of a genius you are.) Them: Could you tell us which flowers to get (they met at a floral shop in a grocery… Read more »
Amiya
9 years 9 months ago

I hope they turn out to be alien worshipers that get onto a spaceship one day and never come back.

Anil
Anil
9 years 9 months ago
Great blog! I’m in New York City and the Indian Network Marketers are spreading like a plague. I’ve been approached while shopping in the pharmacy by someone claiming to know me from a party or school etc. I made the mistake the first time by exchanging contact information and he has been pestering me like a flea. I’ve been warning my friends about these “business opportunities” for years but they never listen. A few months later they are trying to pitch a new get rich quick scheme. Everyone needs to be aware that getting rich not only takes hard work… Read more »
bill perry
9 years 9 months ago

For George (from post #50″:

There is no buy-in at different tiers in PPL. All new associates start out at the lowest level there is.

Bill

Not Fooled
Not Fooled
9 years 9 months ago
Enrique (post 55) Your comment was an attempt to mislead the readers in promoting the MLM industry without addressing any of the points Ramit has made. “Wow, Let’s all agree with Ramit just because he has a bad opinion about Indians approaching him about Network Marketing.” No, the overwhelming majoirty of comments are by people that agree with Ramit because they ALSO have experienced the same thing and have formed an educated opinion – unlike those still involved with MLM’s. “If Ramit would dig deeper, he will find that $30 billions in services and products are exchange through Network Marketing… Read more »
Enrique
Enrique
9 years 9 months ago
To Not fooled: Let’s take your arguments one a time> First Ramit mentioned only two companies and from there it extrapolated to the whole industry. Selling drugs is illegal. Distributing products trough direct selling is not. I agree with you that most compensations plans are not equitable. Ramit confused pyramids schemes which are illegal with distributions of products through direct selling and the formations of networks. I will give you two more websites which are third party verification that networking marketing is viable business:www.mlminsider.com, and http://www.brilliantexchange.com By far, the major part of the MLM industry is filled with scams and… Read more »
IBOFightback
9 years 9 months ago
One of the issues with MLM is that if thousands of people are operating their businesses professional and in a non-offensive manner – then you probably aren’t even aware of them. But if a handful of people are obnoxious and do things like you experienced – well, you remember it and do as you have done here – branded an entire industry because of the actions of a few. Quixtar for example has something like a million people involved in the US. FTC received only a handful of complaints a year about their reps behaviour. Better Business Bureau the same.… Read more »
George
George
9 years 9 months ago

Bill,

I wasn’t talking about associate plans. I was referring to the service. The cost of the PPL service I signed up for was about $20-25 per month. There is a lower tier around $12-15 per month. I was never told about that. The ONLY reason I found out was because I had another friend that had the cheaper service. I had to really dig into my paperwork to find out about a lower tier. Even then, I don’t think a price was mentioned.

dontwannasayit
dontwannasayit
9 years 9 months ago
Great article. I will give you a great blog entry too! So here is a lil about my background that might matter in my opinion. I have a BS in computer science, masters in software engineering, investor in Real estate and sales agent for a mortgage and real estate broker. I trade stocks. I have three companies that do business (software dev, property management). I am 29. I was approached by this number of Indians, whites and blacks and as usual pitched their business venture to me. As open mind as i am, i wanted to see if i am… Read more »
Rick T
9 years 9 months ago
I would like to add my vote to the good directions Mr. Sethi has guided the discussion about MLMs My credentials… Fast 50 winner, 2005 winner of the New Product of the Year for the US from the foremost engineering society in the country, founder and owner of a 25 year old sustainable biz, long before that description existed. I urge young entrepreneurs to follow Mr. Sethi’s advice and pursue your own entrepreneurial dreams. He’s got it right. It takes hard work and diligence, not scams. Self enterprise is not only possible, it’s never been easier. Don’t complicate your lives… Read more »
SCapitalist
9 years 9 months ago

There was a time in my life where I was perpetually searching for the newest “Get Rich Quick” idea. I was always trying to be “ahead of the horde” . None of it really worked. It wasn’t until I came to my senses about achieving success. In reality there is NO get rich quick schemes. Success, the real long-lasting kind, can only be achieved through hard work and stubborn dedication. MLM’s mostly fail to realize this.

paul
paul
9 years 9 months ago
whats the deal with the e-commerce stuff? It sounded exactly like you guys have described above. Does anyone know which company is behind this? I had a guy who delivered my rental appliance the other day try to sell me on this garbage and it sounded like BS, but when I asked can I look at the website and got a negative reply, I knew it was a MLM / pyramid scheme. Does anyone know which company is behind this? And what IS their website? I would love to warn the guy who did not know what he was talking… Read more »
finance ninja
9 years 9 months ago
hahaha. I fine this funny because I use to be a huge network marketer. No they aren’t all pyramid scams. Some actually teach you really great business ideas, marketing, and how to sell believe it or not. I did it for 3 years and it didn’t last because the people at the top who start it are the only ones that have a long term big income over the newbies that keep enrolling with their big dreams like myself. Thank god it finally hit me that I was really good at saving money and investing so that is where I… Read more »
Gerard
Gerard
9 years 8 months ago

I hate ALL network marketeers.

TheJudge
9 years 8 months ago
Ramit, I have a feeling that you honestly understand very little about what is going on around you. I have read a few of your blogs and while I risk having missed some actual good points by limiting my exposure to your “writting” I just could not bring myself to injest any more of your bay area college, liberal flavored text (leaves a bad taste in my mouth). To you and all your readers… the world is a nasty place where the strongest and smartest people are the minority and they rule the majority. This is the way that the… Read more »
Richard Bliss Brooke
Richard Bliss Brooke
9 years 8 months ago
I agree with most of what you said and …… I have been a full time MLMer since 1977. My father was a Stanford grad and my mother Mills. I didn’t go. Not because I was not smart but just didn’t enjoy academics. I made my first million as a MLMer by the age of 28 and created maybe a dozen more of people with whom I worked or “recruited”. For the last 20 years I have been the CEO of Oxyfresh.com. We are privately held and sell about 60 personal care products mostly in the dental care and pet… Read more »
Jillian
9 years 8 months ago

Great blog. Do you mind if I post this on my MySpace group called Control Your Own Mind? Since these scams are really like cults I think it would be a great addition to my little group. Thank you for posting this.

candice
candice
9 years 8 months ago
After the riots happened in LA, many Koreans that had lost their businesses got tricked into MLM schemes. Since many of them had lost big and lacked start up money for new businesses, the MLMs seemed like a life raft. My mother sold long distance telephone service and herbal supplements (Herbalife and some others). There’s also the age old ponzi, which must exist in India, because I believe there are variations in every country. I forget what it is called in Korean but basically, it’s when neighbors or housewives that know each other put cash in a communal pot that… Read more »
zman
zman
9 years 8 months ago

Did you know social security is, or should I say WAS a large ponzi scheme?

Tiffany
Tiffany
5 months 29 days ago

👍🏼👍🏼

Jon
9 years 8 months ago
Like anything in life there are some good companies and some bad ones. There are also people who are professional and those that are not. I have to say Kudos to those people who approached you at Wal-mart though… they obviously want to build their business and are working it. The problem with most network marketers is they don’t ever try to work the business. And like anything else in life MLM’s require you to work. How much you work is up to you, but they do require work. Network marketing is not a scam, scheme or ponzi industry however.… Read more »
Tiffany
Tiffany
5 months 29 days ago

Right on!!

Khoa
Khoa
9 years 8 months ago

Damn man, I agree. These scams are just a waste of time. And yes, I live in Silicon Valley as well.

Imaginativeone
Imaginativeone
9 years 7 months ago

Primerica!

I was scammed out of $15,000+ from those thieves. Thanks for your insightful and informative essay.

Mohit
Mohit
9 years 7 months ago

Nice article,I must say and very true as well.I was scammed by skybiz people in 2000.What I felt bad about was your usage of Indians as propagators of the scam.In my opinion,all the scams generate from the developed countries first and we gullible as well as greedy Indians fall into the trap.So we Indians should be considered as not the ones propagating it,but the ones who are suffering from it.

shree
shree
9 years 6 months ago

Wow, I got hit by this in Austin in 2004.

A phd kid, indian ofcourse, asking ” are you interested in a business opportunity – referral and so on”.

How do smart kids get conned into joining this? Makes you wonder how they got into a school/doctorate/any program in the first place!

Great blog!

Victor Escobar
9 years 6 months ago
I was in a Sheetz going to the bathroom and this dude walks up behind me at the urinal and starts asking me if I’d like to get rich with minimal effort. Guess what — he was selling Amway. I started to fuck with him by asking him what he did for a living (he was a laid-off machine operator at a factory) and whether he’d made any money — ‘Not yet, but I’m in on the ground floor of a great opportunity and want to spread the world so we can all get rich!’ Ground floor? Amway has been… Read more »
richardo
richardo
9 years 6 months ago
Good Day Ramit Sethi, you seem to paint a very bad picture about mlm. I can tell you have no experience in network marketing, you have a diagram of a pyramid which you say is mlm if that is then our entire gov is mlm your job is mlm, what is mlm? The new way a company takes it product to the market. Eliminating the old way of distribution, Robert kyosaki calls it the greatest business in the world. Ben Johnson calls it the greatest business in the world; Paul Zane pilzer calls it the greatest business in the world.… Read more »
Lin Wei
Lin Wei
9 years 6 months ago
Thanks for this article. I just found out about your site from my brother 1 week ago and I have already read 1/3 of the archives. Halfway through reading this post I was reminded of a good friend who I went to HS with who got into, of all things, Pre-Paid Legal in college and would not stop pestering me to join. After a few weeks I had to screen my calls, block his screen name from my AIM and basically avoid him on campus. I still hate to think how he was brainwashed from being a really great and… Read more »
Charles Onuoha
9 years 6 months ago
There’s a right way and wrong way to do Network Marketing and you were harassed by the wrong. I’ve been in a MLM coaching program for about a year now and needless to say that approach is old. I and others in the program view ourselves as consultants. We only share our business with people who have prequalified themselves for interest and aptitude. 97% of people in MLM fail. Dealing with the wrong people is very likely a large factor in that failure rate. Multi-Level Marketing should be treated like any other business. Get educated, be mentored by successful people… Read more »
Robyn
9 years 5 months ago
I certainly enjoyed your comments however i agee with Charles Onuoha. I too have just become involved with a network marketing company which i believe is the most honest company of its type in the world. there is no such thing as pyramid or the man at the top creaming the top while you slave at the bottom. In fact their system is the best i have seen yet. Also they DO NOT SELL PRODUCTS BUT A SERVICE which we all have in our homes. So thee is not Inventory or product but a service. I am grateful to the… Read more »
jitendra
jitendra
9 years 5 months ago

this was one of the great things i ever read in my life!!
i am happy that there is an option of learning from other people’s experience….and thank GOD that India has still not been engulfed with these MLM’s
great going dear!

thanks

sachin
sachin
9 years 5 months ago

I suggest the best way to check whether a business is authentic or not is to check the federal government websites like http://www.bbb.org and http://www.ftc.gov
Its far better than we discuss here.

ian brij
ian brij
9 years 4 months ago

We own a primerica biz worth over a million dollars. Was hard work but not a bad result after 7 yrs.Don’t be so negative, you have a lot to learn,noob.

Michael
Michael
9 years 17 days ago

I was scammed by a GPT called SWATCASH.COM.

I filed a lengthy report with FBI.GOV, BBB.ORG and other scam reporting sites. Swatcash accused me of fraud and threatened me if I filed any sort of report. They kept my check. In addition they had an offer (which I completed)that they were not authorized (according to that company) to use.

Mrs. Micah
8 years 11 months ago

Take a look into “Mary Kay” sometime. That’s a similar setup (not precisely MLM, I think, but a close close cousin). My mom’s friend used to do it when I was a kid, but it didn’t work out for her. Fortunately, she got a part-time job and did a lot better.

rackgen
rackgen
8 years 11 months ago
I read the Merchants of Deception.. was a horrifying experience as well as true to the age old Golden rule – one who has the gold makes the rule..! 🙂 I have been approached by countless # of people for such MLM schemes, from Amway, Britstar, Quest International etc., who promise to become rich.. sorry folks, you can never become rich quick. Hard work, determination & careful planning will take you there. Also, YOUR requirement & progress are COMPLETELY different from others so don’t take instructions from others blindly. THINK clearly, consider if it will suit you & then take… Read more »
freeadlists
8 years 10 months ago

One of my sisters was involved with PrePaid Legal opportunity. Her and her husband were all gung-ho about it, and they were even written up in the local paper. Today, they can’t stand the concept of MLM and hate being asked about their MLM experience. 🙂 I agree you should be careful talking to your close friends about “opportunities.” It’ll just change their projection of you…probably for the worse.

Meghna
Meghna
8 years 10 months ago
I have been experiencing this for the last 5 years (I’ve been in the States about 7 yrs now) and it has come to the point now that I distrust any desi who wants to talk to me! Kinda sad really, but it’s either distrust them all or suffer through their rather inane ice-breaking conversation! But the worst happened last week (at Walmart, of course!). I and my fiance have recently moved to St. Louis and are looking to make some friends. So we were quite happy when we bumped into an Indian couple and found out that the guy… Read more »
RedStickGuy
RedStickGuy
8 years 10 months ago
Hey Ramit, I have some more insight into this article from an insider’s point of view. I had worked with one MLM for 4 years and quit after making meager amounts of $ and seeing that poor people were being lured into this and were giving up a meal or two in a week to be able to “buy tools”. Thats right. Thats where the profits come from when the people climb the ladder of people they sponsor into the scheme. For example, they sell CDs with “motivational” rants about how rich they are and how grateful they are etc… Read more »
sara
sara
8 years 10 months ago
mr ramit, what a post…? dumb post for a person like you who does not understand the business principles of the business.. –why people(mostly indians) do the amway business is they are on h1b visa on which they are not suppsed to do any traditional business. –mosto of them are software people who keep moving on the projects and whenever they are on bench, they dont get paid, so the money tht they make from this business will help them… i am sure you cannot pay them… —go and mee the people…the principles and values that they live their life…you… Read more »
Myriad
Myriad
8 years 10 months ago

Good comments. What they don’t tell you is the costs associated with the promotional material, shipping+handling for products, and other various fees.

They even make you pay to attend product promotions. With regard to the products, the price is more expensive for a non-brand name products. For the health products, the companies/marketers promote the product as helping relieve many medical symptoms.

Better to stay away and figure out a “real” business that doesn’t require promoting to everyone you know.

James
James
8 years 10 months ago
I must say that Ramit does have some very good points. Unlike most, however, I can appreciate MLM businesses a bit more. Just be known… I am not writing this response in argument to Ramit or anyone else that has commented, but am merely trying to put my two cents on the MLM topic as a whole. Furthermore, I am not part of any MLM, but intend on joining one for the sake of trying. My rant… Just like investing and budgeting, there is no one size fits all for people in the work force. There are “some” people who… Read more »
Josh
8 years 10 months ago
I think perhaps people find it easy to deride these business models without really examining what they are about. My parents have been involved with Amway for over 20 years and I have grown up with succesful distributors as my parents friend. I agree with much of what you say but feel perhaps you pan the upside. Granted you are speaking about a generality of sprurious organisations however the fact is you are opening up a networking business model to people who do not need specialised skills or years of study to be competent. The company takes care of product… Read more »
kannan viswagandhi
8 years 10 months ago
Hi Ramit, This is Kannan. I think,you got it all wrong about MLM or Network marketing. It is unfortunate that smart people like you spreading wrong information. MLM is a unique business model where you can reduce your overhead and need not to invest much on advertising and running a factory. MLM is a place where with a small amount of capital,you can start your own business. If the product is not good,that MLM company won’t stand even for three months just by word of mouth sale. MLM is a business in which there are 14 million distributors involved(approx) worldwide… Read more »
Kumar
Kumar
8 years 10 months ago
Ramit, Excellent post on MLMs. Even if only a few people learn the truth from your post, it has served its purpose. A business needs to sell either a product or a service at a competitive price. Quixtar has neither. Their products are way overpriced. No wonder the only consumers are the IBOs themselves. That is exactly what a pyramid scheme is. People who compare a pyramid scheme to a corporate pyramid – Dont confuse an organizational hierarchy pyramid with a pyramid scheme. A corporation that is a genuine business, say like Microsoft, sells products mainly to outside customers. It… Read more »
saket
saket
8 years 9 months ago

Hi Meghna,
I too had a similiar experience like yours in St.Louis. Was the guy introduced you as Jay or JK or something. Did he say he recently moved from Chicago. Just curious to know it is the same guy.

Thanks

Saket

Brijal
Brijal
8 years 9 months ago
Hi Ramit, Checked out your article in the chronicle.. you’re an inspiration.. I totally understand the frustration as my husband and I had the similar experience. We’re very outgoing and approach people of indian origin or any for that matter with a smile.. I know when I first moved to US from India, I found it awful for indians to not even smile and say hello as you passed by them, and that’s when I decided to always greet people with a smile and a hello.. But lately, it’s been nothing but asking for trouble when you smile at an… Read more »
Joseph
Joseph
8 years 7 months ago

There are bad and good MLMs. When I started with one I have to buy a lot of products and I did not made any money. But when I started with the second opportunity I never knew it was MLM. I did a lot of personal production and after 18 months I build a big team and still making good business. To me, this second business is like a big franchise company. I make personal sales and I buid a team and they make personal sales. No scam. All with regulated genuine business.

Diogo Thiesen
7 months 17 days ago

Hello, it’s always good to hear from new people when it comes to MML.
I am representing the Revolutyon, multilevel company here in Brazil.
We have a differentiated product, learn about our business. Be a leader in your area. It is a serious company.

Link: http://www.meurecrutador.com/thiesen

Thank you.

Jennie
Jennie
8 years 6 months ago
I agree with Joseph and Kannan. Those who have not been involved or are successful in MLM (Direct selling I like to call it) should not give bad opinions and make judgments on it. My MLM business has given me a lot of free time, financial freedom, self development and fun. I have gained many new friends and have not lost any just because I have an MLM business. In fact friends love my products and some are my business partners. I have never talked to anyone at a shopping center about “a wonderful opportunity” that I can provide for… Read more »
Diogo Thiesen
7 months 17 days ago

know this technology launched in Brazil.
is a representative in your area.
http://www.meurecrutador.com/thiesen

Jim R
Jim R
8 years 6 months ago

Your comments and warings are for the most part correct on MLM but I would disagree with you regarding Prepaid Legal as it has been a lifesaver for me as a retail business owner with 15 employees for over 10 years. I now sell Prepaid Legal because of my own positive personal experience and the value is real.

Tank
Tank
8 years 6 months ago
Whomever writes positive things about MLMs are either the noobs who are ignorant to the fact that they have been duped, or the brass at the top who are either 1)ignorant to the fact that they are scamming people(these people can be very stupid) or 2)know it, but also know by doing that they are paid hundreds of thousands of dollars. So F*** MLMs and Network Marketing! I used to be into these things (Primerica) and found out how they really work. Great post Ramit, and let all these MLM heads make a fool out of themselves in the comments… Read more »
Alwyn
Alwyn
8 years 6 months ago

Very Interesting read. After seeing the pros & cons and filtering it through 53 years of ripened bheja, I have come to the conclusion that if you are selling less products and buying more motivational tapes and books and spending hours getting from meeting to meeting evry weekend ( keeping tab of costs of course) to make you better salesman then you better quit.

Rohan
8 years 2 months ago

MLM fever is rising in India too. I am from Mumbai and I have had many people present me a ‘new exciting business opportunity’. Amway is a pyramid scheme but they do have some products to sell. There is another such Ponzi scheme which collects money from gullible youngsters to join their organization and then pay them ‘commission’ to get ‘their’ friends join the chain.

Kaushik
Kaushik
8 years 2 months ago

Good Job publishing this article on the web. I hope it helps someone realize what a waste of life this is. Amway and Quixtar are more than a scam. They are devious cults that suck the joy out of your life. I never got involved in this myself, but have seen some close relatives throw years and years of their lives away in fruitless pursuit. People should check out dateline NBC’s take on Quixtar. Just youtube..

Dilip Vamanan
7 years 11 months ago

Yeah, There are so many people who don’t know what they are talking about. I suggest you to read a Book by the famous economist Mr. Robert T Kawasaki on Eight Hidden Values of Network Marketing other than Making Money.

Luis
Luis
7 years 11 months ago

I recently joined something called “YOR” which indeed seemed to be a scam before, selling VoIP and now health products, well I’ve had my doubts but ultimately your post made my mind clear about the subject. I knew I would regreat signing up and losing 170$. I sold 120$ of it, though. But now, time to change. Thanks!

Susan
Susan
7 years 11 months ago
Hi Ramit, This reminds me of when I was in high school and my (Chinese) mom (who is a research scientist!) did a brief stint as a Mary Kay lady. Introduced through a friend of a friend, she started going to meetings, sampling cosmetics products, and purchasing them to sell to others. My mom has never been sales-y, however, so 6 months later, we still had the boxes of lower-quality, higher-price cosmetics by a company whose icon was an 80 yr old scary lady with a face full of bad makeup!! Yikes. Interesting how these schemes target people with either… Read more »
Jutika
Jutika
7 years 11 months ago
Hi, I thought I would also share my comments on this blog, because this sort of practise of striking up a conversation with anyone in public is really misleading, I am from Malaysia but honestly I am so afriad of meeting Indian people in public, they seem so nice and then after asking all about your private information and inviting one over to your home, it starts with the business proposal…. I am not sure if those who do this know how extremlely rude it is to strike up a conversation with anyone with a profit motive behind the talk….… Read more »
cobe
cobe
7 years 11 months ago
I am of indian origin and I have had this occur to me about 6 times mainly in the SF Bay Area and Seattle at Walmart, B&N, Grocery Stores. The thing that really disgusts me is that these Indian men will come up and act like your friend. This insincere approach is what ticks me off the most. Sometimes they even do “tag-team” with their wife to talk with mine , while the guy sells his business idea to me. Here are my strategies for dealing with this problem 1. If an Indian man approaches me and asks where I… Read more »
MeisterX
MeisterX
7 years 9 months ago
Last week I have been in the Target store and this young Indian guy semi formally dressed started to approach me and recommend me on a product. He started asking questions about my origin and what I do. Than he mentioned about him involved in e-commerce biz affiliated with K-Mart, Target and all that big shots. Then the conversation went to like number exchange for maybe a friendly chat. After I get home he started calling me to want to setup a meeting next day. I kinda agreed but was feeling like the MLM sales precognition creeping in. Sure enough… Read more »
N.Christian
N.Christian
6 years 3 months ago

How do you feel about Mary Kay Cosmetics?

Cambio Efectivo
10 months 25 days ago

This is the endless story. Unfortunately people do not apply marketing strategies to offer this opportunity to others. That’s why the MLM business is so frowned upon because it shows at a glance that there is no duplicable strategy success for all. Only a few ones have success not everyone.

Fraud Steal
Fraud Steal
9 months 28 days ago
I am amazed to find that this is so common. I have met one Mukesh Chopra (4258026591) in WalMart in the Marketplace at Factoria. “I have seen you somewhere”, is the typical way to start a conversation. He chats about vague memories which on afterthought seem bullshit. At the first instance I even gave him my number. He wanted to come to my place to have a “meeting” about some great “parttime” offer. I insisted on a public place. Later I Googled his number, and found his number scattered around in Indian chat forums, posted since 2011. I called him… Read more »
Samuel
Samuel
9 months 18 days ago

NO CALLS PLEASE! JUST EMAILS AS SOON AS YOU UNDERSTAND THIS MESSAGE. THERE’S A DISCONNECTED PHONE NUMBER 860-955-9148 THAT JUST RANDOMLY CALLED MY CELL PHONE AND DIDN’T LEAVE A MESSAGE. WHENEVER I TRY TO CALL THEM BACK, I’M GETTING NOTHING BUT DEAD AIR AS THE REASON WHY I WANT SOME FEDERAL LAW TO SUE THIS CALLER WHO OWNS A DISCONNECTED PHONE NUMBER 860-955-9148!

shruti nayar
9 months 4 days ago

Great article! Lot of Important information giving in this article for Network users.Thank you.
India Networking Company

Nidhi Sharma
8 months 26 days ago

Great blog post………………….!!!

IT infrastructure management India

Gautham Jasthi
Gautham Jasthi
8 months 13 days ago

I was approached couple of times by indian guys at the malls, told me they are looking for smart people who are intersted to earn extra money outside of work 🙂 They always play the culture card to initiate small talk before they try to sell you thier shit. One of the guys i talked to had a bunch of keys a couple of them was bmw car keys, a prominent display implying how rich you might get if you venture into this business 🙂 LOL

Diogo Thiesen
7 months 17 days ago

Hello everyone.
In the world we live in have many cheaters people.
When it comes to MML, the vast majority understand how something false, such as financial pyramids.
In Brazil it happens frequently, as the Brazilian justice system is too rigid.
Today I work with a serious company of MML, legalized in Brazil.
If someone is interested, visit the link below.
It is guaranteed to have extra income legalized way.
http://www.meurecrutador.com/thiesen

John Sheff
John Sheff
7 months 12 days ago
Your article, sir, is an AWESOME piece to read. You really put a LOT of good information in it and I for one wish that anyone and everyone who is being “recruited” or has an interview with with this type of FRAUDULENT company would read this and the many other legitimate sources out there before allowing themselves to be taken in by the bullshit that the people who work for these types of companies regurgitate. If even one person is saved from the pain that I have been going through ( started about 8 years ago ) and am still… Read more »
RK
RK
6 months 20 days ago

It was until today when I came across similar situation 2nd time in Walmart (1st time in few months back) I realized something fishy. Well, at both times i didn’t share contact numbers. I search in google for similar experiences and here I am at this site. These marketing people are disgustingly black spot on the Indian community staying in US. I wish I would have visited this site earlier and today that guy would have regretted once he started with his filthy ‘business ideas’.

Tiffany
Tiffany
5 months 29 days ago
Wow. You are obviously an intelligent guy Ramit, but I am extremely shocked and disappointed with your off the cuff criticisms and misunderstanding of the network marketing industry! Network marketing is exactly the opposite of a “pyramid scheme”, unlike a corporation where the little guy has less of a chance of making it to the top than someone who puts in the time to develop skills necessary to grow a large community of product users with MLM. Everyone in network marketing has the opportunity to make as much or more than the people above them, so that makes any claim… Read more »
Tiffany
Tiffany
5 months 29 days ago
I would also like to add that the people who are super successful in real network marketing companies (making multiple 6 & 7 figures), don’t make it there unless they have worked hard to help others be successful as well. It is a personal development business with incredible, often times life changing products attached to it. I am more than happy to educate people on what a solid company looks like without even discussing my own (which btw, reached $1 billion in sales for 2015 in its 6th year of business). This is not a “get rich quick” industry (although… Read more »
iwc meble
5 months 7 days ago

Stylowe meble kuchenne można znaleźć we wszystkich
popularnych sklepach meblowych oraz można je zamówić bezpośrednio u producentów.

Segundo
4 months 10 days ago

Check your advertising buyers, just got a popup on here that read, “Interested in 30 online business building models?” Options: Yes, I want the PDF or No, I don’t need it.

Seriously, right after reading this?

Anyway, I’ve joined these things more than once and I’ve noticed a pattern, excitement then disappointment.

Going to humor a guy next week with a meet, but just going to enjoy my coffee while I express my disappointment in not having actually made a new friend at the bookstore.

Durga Warrier
4 months 5 days ago
In fact I used to wonder why do people get in to this scam. And I did a detailed study on the industry of network marketing. What I found is that it is a solid and ethical way to start business with small capital. But yes it requires immense hard work to make serious money out of it. The truth is that no business is easy. To breakeven, you have to go through the challenges and keep working till you achieve it. The same applies to network marketing too. The sad thing is that people mistake it as a easy-to-make-money-scheme.… Read more »
493928
493928
3 months 2 days ago

I personally believe that in mlm business, the only dark side is the possibility of froud from the company end.
But if the system revers it self by the generation of pay outs by the downlines, instead the company then the dellema over the joining gets appriciably deduced.
With these thoughts we have a plan that is “matrix” plan.
So if any one interestead feel free to call or whatapp

Hermes Birkin
2 months 23 days ago
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Demetrio
Demetrio
2 months 17 days ago
I don’t know Ramit. Yeah there are some scammy MLM companies out there no doubt about it. But my mom and my dad did work on the side with MLM. They both sold products, cooking products and Mary Kay esk beauty products and they did very well. In fact my mom was the top in sales in Mary Kay and some other beauty company. They both knew how to sell and network. After my dad passed my mom told me the reason they both got into MLM was because there was one year that they did not have enough money… Read more »
frank
2 months 17 days ago
This is the most rediculous post ever, ALL Businesses have risk and as matter of Fact MLM is low Risk, compare with the traditional Business, it is a great way to get your foot on the door, I started with MLM. they actually have a platform, if you think MLM is hard I cant wait too see your real ” business” I am looking for that FREE risk Business, where there is minimun investment in time and money, anybody has that business maybe a restaurant, or retail store where 97 % fail within the first 5 years after 100’s thousand… Read more »
Paul Lidberg
Paul Lidberg
2 months 17 days ago
I will just comment that you appear to have been caught short on your research, as the company was rebranded in 2011 into LegalShield. Your link that talks about “fraud” goes nowhere. And all the accusations and such appear to have all occurred prior to 2010. While they aren’t perfect, PPL/LS dealt with all the situations and paid their fines. A certain amount of what happened was likely not due to malice, rather lack of competence on the part of some people in the company. As to the limitations of the plans, realize that you are complaining about the very… Read more »
Pascal
Pascal
2 months 17 days ago
I’ve been looking into MLM for a while, specifically the ones based around Online Marketing. And to be honest, I think it really is true that MLM isn’t the problem, it’s the people who do it (although I wouldn’t say it’s “some” of the people who do it, it really is nearly all of them). See, at its core, MLM is just an affiliate system paying commissions on more than one level. It’s not much different from some guy launching an online course and offering people x% of commissions for everyone they refer, leveraging other people’s lists. And just like… Read more »
Rajesh
Rajesh
2 months 17 days ago
Well its ironic, Romit, that I got exposed to you, when a gentleman who is super successful in MLM, promoted your book in his organization. So I think you just shoot yourself in the foot here. And to be fair, your company sends me email every single day, paddling your products and services. How different it is than the MLM guys paddling their business to you at the store. Most of these guys don’t have access to an expensive email marketing system like you do. Now I totally agree with some of the techniques used by MLM are horrible. But… Read more »
sam
sam
2 months 16 days ago

I think everything is right with network marketing as a business model but something is wrong with most network marketers. it’s not the business, it’s the people in the business that got it all wrong.

Mohit Tater
2 months 16 days ago

Long-time reader, first-time poster. I have been in similar situation wherein I was approached by an Indian guy at a Walmart. I saw through it and chose not to give my number.

But for their ideal target audience, it’s hard to turn down a lucrative “business opportunity.”

I hate these Indian Network Marketers.

Mikas
Mikas
2 months 16 days ago

Cool

Rick
Rick
2 months 16 days ago
Please don’t listen to this crap article, The industry of network marketing has created more first time millionaires than any other industry, real estate included. Did you know that most people who hold a real estate license in America don’t earn enough to pay their mortgage. There are many failures in Network Marketing which is expected. How many people enroll in college, and quit. What about marriages? We live in a society of quitters, so it’s no different when it comes to business. That’s why 9 out of 10 start ups fail. If you just happen to stumble on this… Read more »
Ed Hanson
Ed Hanson
2 months 15 days ago

I use to get hit up alot for MLM in the 90s and what I did to scare them away. Ask to see their tax returns. If its such a profitable venture then they should be proud to show me how much they made, Also, if its such a good deal, why involve me and not just your friends and family?

John
John
1 day 6 hours ago

Haha, brilliant. Demand truth using logic. The charlatans probably trembled in their socks, right in front of you. Take that sneaky cheater.

Miguel
Miguel
2 months 13 days ago

Is this the case of Primerica?

radhika
radhika
2 months 7 days ago

Hi.. Nice article.

I am an Indian too. Me and my husband are new in USA. Many people(around 6) approached us. we thought its for friendship but after 2-3 phone call they start talking about this kind of business.
Thanks now I got to know reason behind it.

Thanks

Evelyn condo
2 months 1 day ago
Hello everyone i’m Evelyn condo from Miami,USA I was a victim of numerous scams and I made several complains to the Authorities and even online for help and nothing was forth coming,I must tell you I took the bravest step in my life by going the extra Mile to Consult a Telepathic Expert who is specialised in recovery and restoration of what ever issues troubling you,At First I never believed in Such but when I contacted Master Tallion Bode,he asked me a few questions,Gave me an instruction which I followed and barely seven days after the encountered I got several… Read more »
Tanya
Tanya
1 month 4 days ago

Congratulations on the many opinions being posted here! Clearly you’re all employees and don’t follow richard branson

funnyvault
funnyvault
20 days 12 hours ago

you should be careful when to buy some products this article will help you in buying . enjoy by visiting
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