Have I Got a Business Opportunity for You!
Hedge fund manager Bill Ackman has put billions on the line to expose Herbalife as an illegal pyramid scheme.
According to the Federal Trade Commission “pyramid schemes now come in so many forms that they may be difficult to recognize immediately. However, they all share one overriding characteristic. They promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public.” MLMs actually have products to sell, however, you will probably make little to no money unless you recruit others who then recruit others.
According to the documentary, over 90% of the distributors within MLMs will make no profit. Many of the Herbalife participants featured were left thousands of dollars in debt, with products that they could not sell or use, and relationships destroyed. What shocked me the most was that, after watching the documentary, I looked at the Federal Trade Commission’s website. They suggest not joining multi-level marketing businesses as a way to make a profit. Now, Betting on Zero does not mention that many join for the discounts. To get the maximum number of discounts, every member must recruit others. This was not addressed, because many MLMs rarely call their members “member.” They are called producers, consultants, and distributors, who are then expected to recruit other people who recruit other people. This implies the people joining are workers. The FTC has had to get on several MLMs, including Herbalife, for this very fact.
After watching the film and learning more about multi-marketing businesses, I wondered why some of them do not turn their companies into box subscriptions. Many promote healthy lifestyles, and with the advent of social media, their boxes would sell like hotcakes. Plus, I would not have to mute, block, and delete “old friends” who try to finesse me into joining schemes which promise me the ability to make all the money. I cannot not say whether the FTC’s involvement leads Bill Ackman to the financial windfall he is looking for, but Betting of Zero was fascinating to watch.