Multi-level marketers look to prey on desperate consumers
Everyone's talking the "R" word - Recession in the U.S. There is one headed our way, or depending on who you talk to, there's one already here. Most people fear recession, but one group that doesn't fear it is a handful of successful network marketers. In fact, some of them embrace recession.
It's widely-known that tough economic times are a boon to the recruitment numbers for multi-level marketing companies. But as I discussed last month, this doesn't make sense, assuming that network marketing is a bona fide means of distributing goods.
Here's why: With few exceptions, the products sold by multi-level marketing companies are very expensive compared with similar products distributed through traditional retailers. Network marketing and pyramid scheme expert Jon Taylor compared MLM-distributed products with other comparable products and found that products distributed through MLM are about 5 times more expensive, on average.
Here's my question for Mr. Ross: Why on earth would a recession lead to a new found appetite for premium-priced nutritional supplements and other products commonly distributed through MLMs? As I wrote before, the counter-cyclical nature of the industry would seem to indicate that network marketing success is not about selling products on their merits; it's about getting desperate people to buy products they can't afford in the hope of recruiting others to do the same so they can earn commissions. That's why it follows a completely different economic cycle than conventional product sales.