Episode #98 – Sometimes I Wish You Would Accidentally Die

3 Comments

1. 

   Rachel B on December 19, 2011 at 2:33 pm

   Multi-level marketing is EVIL!

   Reply
2. 

   Melissa on December 20, 2011 at 10:54 am

   Hi Guys and Their Fans! (Thanks again for having us on the show a while back.)

   MLMs – let's discuss. Multiple issues here to tease apart. #1 Is it priestcraft? If getting money for exercising priesthood powers is priestcraft, what is using church membership to get money? Maybe on that spectrum, in some cases. Aren't membership directories marked "not for commercial use" in any case?

   #2 How are you defining MLMs? You mentioned ponzi schemes and Nu Skin, which seem like different categories. My understanding of where the law draws the line is where the money is made. Main source of revenue comes from people joining the organization= illegal and is also known as a "pyramid scheme." I'll state the obvious: illegal things are against church policy. Revenue comes from the sale of a product = legal.

   Technically speaking, MLM is part of main stream business – real estate for instance. If an agent has more clients than time they often bring on other agents to show property to people and give them a cut of the sale. BAM. MLM. Same with hair stylists, insurance agents, Avon, etc.

   And let's say I start a funny tee shirt company and get my friends to wear them/sell them for a cut. Then one of my friends gets his little brother to sell them to his friends for a cut of his cut. BAM. MLM.

   However, let's say a drug cartel king successfully smuggles cocaine across the border in the bellies of stuffed animals where his drug lords receive it in their respective metropolises and distribute it to the dirty drug serfs on the streets. That's probably also MLM. BAM.

   To conclude, I think it's what you do with MLM that makes it good or bad, not the business structure itself. But pyramid schemes are illegal, immoral, and may be akin to priestcraft.

   Also, you guys rock.

   Reply
3. 

   Christy McFarland on December 28, 2011 at 2:19 am

   Regarding MLMs:

   Before launching into my take on MLMs, I am not in any multi-level marketing groups or businesses and probably won’t be, but not because I feel they are inherently immoral or unethical, but because, after having participated in a couple, they are simply not my cup of tea. (more on this shortly)

   There is no inherent conflict between MLMs and Church doctrine. If there is a problem with MLMs, it’s only in that, as a business model, it’s overly prone to abuse, especially thanks to far too few people in this country ever having to actually managed a business.

   At it’s core, the “multi-level marketing” plan is just that, a marketing plan. It’s no different than (say) a podcast embarking on a campaign to raise their listener base or seek sponsors or audience contribution to achieve or maintain solvency as a business. Like any marketing plan to build a successful business, MLMs have the same basic techniques and goals as any other marketing plan; spread the word about a product or service, generate interest in said product or service, create a sales “surface” between the distribution system and the customer that is as permeable as possible for easy and efficient money and product/service transfer, and a means of creating profit from the income.

   I’ve participated on some level with MLMs in nearly every capacity. I’ve been an “Independent Business Owner” in Amway, was a client for Pre-Paid Legal, functioned briefly as a Consultant for Tupperware, and was on-staff for Juvio (a call center tech support company). One thing I have learned is that my personality type doesn’t work well in any of these aspects, but I recognize all the aspects of a successful business in all of them. (And having worked for Apple, I know how a successful business operates from first hand experience)

   Of these, the one real example of where the “sleaze level” edged into uncomfortable territory was Juvio, due to the “upline” of the MLM group encouraging their members to spam lists of email addresses that could be bought from services that compile such information. No matter how many times the tech support group (the arm of the company I worked for) would talk to the MLM group about how this was a bad business practice that was on its way to becoming illegal (this was before it was made flat out illegal) it was a short term success that brought fast money, so they couldn’t be dissuaded.

   In all other cases, the problems have all boiled down to “bad faith actors” in the various MLM groups that each company used to promote their product. This happens in every industry, unfortunately, and these bad faith actors are the primary reason most people are scared off from doing investing.

   A note on pyramid/ponzi schemes and MLMs: There are two chief differences between illegal schemes and MLM plans, growth-ability and product.

   In a pyramid or ponzi scheme it has a very rigid structure that, by it’s design, will eventually fail because there is no way for the system to grow or allow individuals to grow beyond their “slot” or “block.” All money flows up no matter what the level you’re on, and there’s no separation of the structure and the money flow. There’s also no actual product/service exchanged for the money that changes hands, so the ONLY return you could possibly get for your investment is to dupe others into joining and repeating the cycle.

   MLMs by definition have a product/service that is sold. The money flow is separated BY DESIGN from the marketing structure. (The money is paid to the company that produces the product, the product is delivered to the customer, a share of the money goes to the marketing team. Again, note the similarity to a more “traditional” business model.) Individuals can break out of their current marketing structure simply by hitting more of the success metrics than those “above” them in the structure. Those success metrics are different based on whatever organization you’re in (Amway was based on a point system, Tupperware was based purely on product volume, etc.) but in all cases if your friend gets you signed up for the business but doesn’t hit as many success metrics as you, you can easily earn much more money than your friend.

   On the Church’s stance on MLMs: The Church generally leaves people to the dealings of their own business, save where such dealings are obviously illegal. A pyramid/ponzi scheme would definitely violate Church standards, where a MLM would not. This is no different than, say, being a successful local bank manager is legal, but using a bank to launder money would be illegal. One thing I have noticed is the Church is very, very, VERY hesitant to involve themselves in the day-to-day dealings of member’s lives, and in the end your business dealings are not the pervue of any member of the church hierarchy save Heavenly Father himself.

   The best stance to take on any of these types of businesses is this:

   1.) Is what they are promoting legal, moral, and ethical?
   2.) If I were to join the business today and go in for a Temple Recommend interview tomorrow, would I be able to go into the temple with a clean conscience the day after?
   3.) Can I explain what the business is about in three minutes or less?
   4.) Does it feel “right” to me? (a.k.a. – Does it feel OK by the Spirit?)

   If you can’t say “yes” to all four of these questions, then run (don’t walk) away from the offer.

   (Note that this is the same way you can tell if any job, franchise, business, or investment is a good idea)

   OK, so this was way longer than I’d planned, but I hope that is the kind of response you were looking for.

   (Oops! Posted this on the wrong board! Correctly posting it here…)

   Reply