allmlmfacts

all MLM busters

  • MLM
    •  
    • 1. Lost Money

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    • 2. Lost reputation

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    • 3. Lost time

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    • 4. Lost selfesteem

DSA Tries To Pull the Vemma/Herbalife/Advocare Trick

Consistent and generally slowly rising statistics for a several year period from 2007-2014: https://www.dsa.org/docs/default-source/research/researchfactsheet2007-2014.pdf?sfvrsn=9e7ecea5_0 (researchfactsheet2007-2014) Note the use of the term “U.S. Direct Sellers,” which presumably includes the 2017 categories listed below of “became inactive, part-time business builders, discount buyers, and fulltime business builders.” Over the past 10+ years more MLMs have added the option of discount buyers. My opinion, based on logic and experience, is there are very few discount buyers, as the products are still expensive even at a discount. Keep in mind that Herbalife unsuccessfully argued that many of their distributors were distributors only because they wanted a discount, whereas the FTC determined most of them were simply failed distributors. The DSA keeps changing the definitions of the people involved, but the overall volume/retail sales remains the consistent thread to see through the fog.

2014: 18.2 million U.S. sellers from the above DSA source and $34.47 billion volume https://www.directsellingnews.com/2015-dsa-annual-meeting/ (2015 DSA Annual Meeting _ Direct Selling News) Note this is prior to the 2015-2016 Vemma and Herbalife dustups and the controversy over failed claims that unsuccessful distributors were merely discount customers who happened to sign the distributor contract in order to get the discount. The FTC subsequently insisted a better boundary be drawn between these categories of participants.

2015: 20.2 million “involved” $36.12 billion https://www.dsa.org/docs/default-source/research/dsa_2015factsheetfinal.pdf?sfvrsn=6 (dsa_2015factsheetfinal)

2016: 20.2 million “involved” $35.54 billion https://www.dsa.org/docs/default-source/research/growth-outlook/dsa_2016gandofactsheet.pdf?sfvrsn=6 (dsa_2016gandofactsheet) In 2016, there are suddenly only 5.3 million direct sellers and 15.2 million getting a discount and miraculously NOT distributors.

2017: 18.6 million $34.9 billion https://www.dsa.org/docs/default-source/research/dsa_2017_factsanddata_2018.pdf (DSA_2017_FactsAndData_6.19.2018_v2) Of the 18.6 million, 9 million listed as “became inactive,” 4.7 million as “part-time business builders,” 4.1 million as “discount buyers,” and 0.9 million as “full-time business builders.”

2018:

Keep in mind that over half the people drop out (“became inactive” category) of any given MLM every year, so the individuals being counted just 4-5 years later are almost all different from those who were present at the beginning of that period of time. The “discount buyers” are generally known as “preferred customers.” This is supposed to mean they are not distributors and do not behave like distributors, meaning they are not able to recruit others because they haven’t signed a distributor contract, nor do they show the marketing plan or join only after their upline distributors place someone under them in the line of sponsorship, or other sneaky technique to conceal what is occurring behind the scene. This “customer conversion” statistic should be tracked and reported to the FTC or determined by the FTC when investigating an MLM, along with retail sales to customers.

Also note the term “retail sales,” aren’t. This is the total “sales” volume sold by the MLM companies to anybody, whether they were distributors or customers. In the context of MLM, retail sales are sales ONLY to customers, not the distributors. In most MLMs, most of the “sales” are to the distributors, which is also called internal consumption, versus external consumption, or retail sales, to customers. The DSA and MLMs like to hijack word meaning to make themselves look legitimate.

 

 

 

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