MLM Ignorance

By Len Clements © 2002

Ignorant does not mean dumb or stupid. Ignore – ant. That is, to ignore readily available facts, thus resulting in a lack of knowledge, not a lack of intelligence. Let’s be clear on that right away lest I offend anyone who finds themselves guilty of the acts and practices described in this article. For this article is going to delve into what is surely one of the most common factors resulting in not only failure, but in many cases utter devastation, both financially and emotionally. I’m going to attempt to defy human nature (a result of millions of years of evolution – I’m not saying it’s going to be easy) and cause you to reevaluate your MLM choices from a logical, rational, educated perspective.

The now cliche’ definition of insanity is doing the same thing over and over and expecting different results. It astounds me as to how many folks I see fail at building an MLM business, then go right on to do the exact same things in their next business. Or, worse yet, join a quasi-MLM opportunity with more red flags sticking out of it than the Russian Consulate (out of ignorance as to what defines and illegal pyramid), then when it crashes and burns – they jump to another deal that is almost identical!

Why? Well, here’s where the human nature part comes in. We are, as a species, drawn towards the opportunity to get something for nothing. We don’t want to go to the gym and work out, or eat less fatty (thus delicious) foods, we want to take a pill to lose the weight. We don’t want to work for our money, we want to win the lottery. We, not all, but millions of us, believe in psychic healers, fortune tellers, and yes, pyramid schemes. All in spite of the Everest size mountain of evidence that they don’t really work. Yet, we still believe. Because we want to believe, so badly. The idea of ridding someone of all known disease by a touch on the forehead, or of someone telling you what your future holds (for $3.95 per minute), or – that you can be a millionaire in 90 days by buying some tapes for $1,000, is just so compelling, so awesome. Don’t confuse me with the facts because I have to believe this!

You would think that a little common sense, logic, and rational thinking would make the evidence pile unnecessary. Yet both appear to be powerless against that allure of “something for nothing.” If a pill or potion really cured literally everything (as some marketers will attest, and no, I’m not exaggerating), then wouldn’t this product be front page news all over the world? Wouldn’t the inventor of the product be at the head of a ticker tape parade on his/her way to receiving their Noble Prize? Wouldn’t this mean that the average lifespan of a human would now double, with all that that entails? Yet, what would appear to be the single greatest scientific breakthrough in human history is not only not being marketed by the pharmaceutical company that won the multi-billion dollar bidding war for the rights to it, it’s being marketed, with little fan fair, via only medium to small multilevel marketing companies. And thousands of what appear to be intelligent, rational people are buying these products. Or, more specifically, buying into the pitch.

Same goes for money games. If you could really get rich by buying $1,000 worth of, whatever, why aren’t we all rich? If it was really that easy, that simple, that quick, why aren’t we all doing it?

What we can and can’t say about our products, and what defines an illegal pyramid scheme, is knowledge that every network marketer should have, yet few possess – in spite of the the numerous, easily accessible, totally free sources of this information. A company with over 50,000 reps was recently shut down for alleged illegal pyramid activities (among other things). Yet, over the months or years that these good folks were putting their heart and sole into this business, the information that would have revealed the legal vulnerability of this company was less than 5 minutes away the entire time. A few clicks of a mouse is all it would have taken to avoid possible financial and emotional ruin.

But they had to believe.

Where is this information? All around you. Want to know what limitations the FDA and FTC place on our product claims? Why not ask the FTC and FDA? It’s that simple. Always has been. The FTC will tell you at The FDA will tell you what they’ve told others at Read, then reconsider your company’s product presentation. Are they (you) vulnerable? Now you will absolutely know. No more questions. Ever.

Want to know what defines a pyramid scheme? You don’t need to be an MLM expert, or lawyer, or Attorney General to figure it out. The qualification is so utterly simple. Just ask the same question that the FTC asked of Amway in 1979. Can the last person still make money? Not only is it that simple, I’m not even paraphrasing legalese. That’s literally the question the court asked (obviously, in the case of Amway, they said Yes). The ignorant position holds that you can’t be a pyramid scheme as long as you have a legitimate product. Yet, every single company that has been attacked by a state of federal regulator for pyramid violations has had some kind of product. Some, like Equinox and Jewelway, had great products. The trick is, it’s not the presence of a product that matters, it’s the motivation for buying them that regulators look at. In other words, if only distributors are buying the products and few, if any, can realistically mark up the products and retail them to non-distributors, then the last person in can’t make money. If recruits are the only one’s buying the product, then you have to keep recruiting to make money. If the distributors are buying the products because they actually want the products, that’s fine too. Ask yourself, would most (not just a few, but the vast majority) of these people still buy these products if there were no income opportunity involved? If the answer is NO, don’t touch. And just because a company pays on legitimate, retailable products, doesn’t mean they can pay on distributor training or enrollment fees as well. Just because all the commissionable products are retailable doesn’t mean you can buy $5,000 worth just to qualify for the Platinum-With-Diamonds-In-It Presidential Executive position in the compensation plan, or that the primary motive for joining might still be the hype attached to their compensation plan or recruiting system. And just because other companies have been getting away with it doesn’t mean yours will.

Sure, there is the occasional shade of gray which requires a little research and studying to interpret. But like I said, the resources are everywhere, and they are easy to understand. Check out or for everything you ever wanted, or could know about what defines an illegal pyramid. My own site at has an abundance of such information.

There is also an abundance of good, qualify, legally sound network marketing opportunities to choose from. They’re not hard to find either. They’re the one’s that don’t make ridiculous claims about their products, which people are actually buying because they like them. They have merit based compensation plans, and they’re training and support systems involve, God forbid, doing some of the work yourself. That has been the formula for long lasting financial success in this industry for over 65 years. Nothing will ever change it.

If every network marketing distributor were to spend no more than two hours, total, doing nothing more than perusing the five web sites listing in this article, pyramid schemes could be wiped off the face of the Earth forever, and not one person would ever again see their family’s livelihood crumble into a pile of regulatory rubble. But, alas, at least half would read it all, then ignore it. It wouldn’t support what they want to believe.

It’s just human nature.

About Len Clements

Based in Las Vegas and Founder and CEO of MarketWave, Inc., Len Clements provides consulting, training & expert witness services for the network marketing industry. Since 1989, he has been a top producer, trainer, and consultant for multiple network marketing companies. As a well-respected icon in the MLM industry today, Len conducts Inside Network Marketing seminars throughout the world and is the author of several best-selling books and audio tapes including Inside Network Marketing (Random House), Case Closed, The Whole Truth About Network Marketing and The Coming Network Marketing Boom.