Here is how multi-level marketing works in the direct selling industry. Almost all businesses operate off of some variation of the Amway system. Regardless of the hype recruitment people try to make recruits believe about their opportunities; these supposed opportunities almost always work out the same way for people foolish enough to believe the claims which are complete Du Du.
What follows is a description of how direct selling schemes really work out for people foolish or desperate enough to believe in them. The money that is supposed to come your way after striving and struggling in a MLM pursuit is always at the end of the rainbow where the little green suited Leprechaun plays a shell game with the MLM Pot O' Gold and even if you were lucky to locate the end of the rainbow you are only left so much further behind the eight ball.
Recruitment made during periods of recession, where many people have lost traditional jobs, seek to attract desperate people into their direct selling schemes like Amway, MonaVie, Usana, Herbalife and many others. Recruits will be asked to squander what resources they do have buying what most people would consider unnecessary overpriced products or services. You will be encouraged to do three things with an emphasis being placed on the first two:
(1) buy products
(2) buy training (to include attendance at meetings, rallies, and seminars)
(3) sell products
All three require you to send your money to the company with the third hopefully allowing you to retain a margin between your price and the retail price.
Buying MLM overpriced services or crap when you are operating on emergency unemployment funds makes little sense. Providing a company with overhead expenses to promote their profits makes no sense at any time. Even if you manage to recruit or sell a few bottles of "Dr Du Du", you still do not come out on top after figuring in your overhead costs which you must provide out of pocket.
Expenses, considered overhead include the following:
(b) use of your facilities, phone
(e) applicable taxes
One of the biggest scams in almost every MLM proposal is that you are convinced that you own their business. Please, don't swallow that camel! They own the business contractually speaking. You send them money for (1) and (2) and then you may also send them the majority of the money you receive selling a few bottles of Dr. Du Du (or whatever product or services your company offers) while you get to retain the marginal difference between your price and the retail price: the gross profit. I've noticed many distributors sell the product at their cost and make zero margin which makes the pursuit a sham business.
You become the “mark” that is supposed to sell the company's products, which, by design, are so priced as to make this very difficult, if nearly impossible. Even if you are persistent and succeed to sell a few bottles of the Dr. Du Du, then the margin between your price and the retail price will provide you with what your company attempts to make you believe is your profit, which in reality isn't unless you manage to sell enough to overcome your own costs; the overhead I described above.
It shouldn't be any surprise that your real profits from selling a few bottles of Dr. Du Du will most likely only offset a substantial loss in the end, especially if your time is factored in correctly as a monetary amount; after all your time is worth something isn't it? And even if you do not use “universally accepted accounting principles” and provide your time as "gratis", most likely the bottom line will still result in a significant loss. Most distributors will never actually be able to sell enough Du Du to realize a profit even where their time is considered free, which really is an impossibility.
You therefore find yourself flushing number (1) and (2) down your MLM loo which is what these sham MLM businesses are designed for you to do! You end up with the crap and they end up with your cash!