Recently the famous MLM company Vemma was knocked out of the industry by the FTC, but why?
It was deemed as illegal pyramid scheme, but many people get confused by this, aren’t all MLM companies in some way shape or form a pyramid scheme?
What makes MLM companies like Vemma any different than say AdvoCare?
you see what makes a MLM company a MLM and not pyramid scheme which is illegal is that at the end of the day if the company is generating revenue by providing true value to the end user than it is considered a legal distribution channel.
For example a company like AdvoCare actually sells their supplements to people even when people invest $3000 up front to become an Advisor so they can get paid 5 ways, they are purchasing $3000 worth of products so there is an actual exchange of products.
When the company takes a turn to the dark side is when they sell the business opportunity only and no real tangible product or service is exchanged to the end user, rather it is false promise of a business opportunity in which most people fail.
So the company reaps revenue from duping people, with a model that counts on people duping more people, therefore the company is not providing any value to customers ever.
This is why AdvoCare stresses the importance of the fact that they are product oriented company and they are big on supporting and promoting their products through paid endorsers like Drew Brees and Rich Froning who is a recent addition to their already impressive line of famous athletes that endorse AdvoCare, my personal favorite is Carly Lloyd who scored the hat-trick in this years women’s world cup.
Shame on Vemma and countless other MLM where they got too greedy for their own good, instead of focusing on product development like they should such as Tesla’s Elon Musk stresses in his speeches, people should focus more on the end product rather than 100% about marketing and turning dollars.
I think all things naturally fall into place when you actually have a sound product or service that you offer. There will always be monetary value in return for that kind of service that offer true value to people.
We will never know if Vemma really had the intentions of duping people to begin, but one thing is for certain it has stirred a small uproar in the MLM community where people are questioning the legitimacy of their own MLM companies.
Its a fine line, does the company actually turn revenue and profits by actually providing products to people or does it make its true profits by recruiting people in the business opportunity in which 95% of the people that join fail.
And then the question looms, is that failure rate actually the responsibility of the company or is just that most people are too lazy and the blame should really be placed on the individuals not the company?
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