Are MLMs Legit? (And Is the “Free” Luxury Car a Scam?)
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- เผยแพร่เมื่อ 12 เม.ย. 2023
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Whether you love MLMs or just love to hate ’em, none of us are immune to getting a “Hey, hun!” in our DMs. But have all the boss babes really been conned? Join Rachel and George as they take a closer look to find out if MLMs are an entrepreneur’s paradise . . . or just another scam.
In This Episode:
• The fine line between a pyramid scheme and an MLM
• George’s and Rachel’s personal experiences with MLM products
• Solved: the mystery of the free luxury car
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I’m surprised by how sympathetic y’all are to MLMs. These things are just like credit cards… exploiting the poor. 😅
It's because Dave and other Ramsey personalities get speaking gigs at MLM conferences. Plus they always mention that they have "friends" in MLM's that have made it big, to which I say, the mandatory income disclosures don't lie! 99% fail and literally only the 1% are rich.
Right!? Every dollar spent on recruiting is unethical money… so weird
Really? I thought they were pretty harsh on them.
In my college Management course, my group company project was Avon. My mom used to sell while raising kids. Didn't even present it as an MLM back then, and never considered it as a company exploiting the poor 😁 Best not to generalize. 😉
For real. There is a lot of remote cooperation with evil in investing. These companies are almost all run by quite liberal people who actively work to destroy their own nations, and a lot of this evil stuff just written into law, but MLMs are just direct cooperation with evil.
The basis of MLM is monetizing your relationships. Tread with caution. If you use friends, you lose friends.
You two were SO nice about this topic…..a little TOO nice
Exactly what I was thinking.
Dave's got a friend who manages distributors
Yup. Too nice. Mlm pyramid scheme same thing.
Rachel they DO tell people that if they have fam and friends that don’t “support their business” to cut them out
I was told I should leave my husband if he didn't support me
@@sarahmadden3636 was it amway?
It’s a legal pyramid scam
I worked in the accounting department for an MLM. 100% scam.
Can you elaborate?
Which one?
@@richeyrich2203 all of them, the "legit" don't have a single pyramid instead they have millions of tiny ones.
@@richeyrich2203 Amway. Dave was good friends with Terry Felber, who was a great Diamond and leader of Amway and WorldWide Group. Terry Felber wrote The Legend of the Monk and the Merchant, which Dave wrote the forward for.
They’re not a scam unless you have to pay to join and pay a monthly fee to them for energy drinks or just to access your businesses metrics. i you pay them $0 then its cool.
If you are selling products to normal everyday people and you’re selling name brand products that are recognizable then it’s just a business opportunity. But if have to sell to friends and family to survive then it’s a scam.
MLM's are so predatory. Also, if you are part of the small percent that makes a livable income, don't expect work life balance.
And, if you are part of the 1% making a profit, it is because you're profiting off of the people you recruited who are almost definitely part of the 99% of participants losing money. MLM is a predatory business model.
There’s no such thing as a “legit MLM”. Ramsey hates whole life insurance, timeshares, car leases, credit cards, etc… but they go pretty soft on MLMs? Sad.
It's because Dave gets speaking gigs at MLM conferences.
Three words: Conflict of Interest
There are legit MLM's where you make more money from the products you sell, NOT from how many people you recruit. If its from recruitment, its a pyramid scheme.
@@EddySan25that and his pals high up in the MLMs. I’m sure he’s chummy with the DeVos clan.
I find it ironic that in the same podcast you can say “a mlm is not legit if they focus more on recruiting than sales” and later on say “you need to recruit in an mlm to make the big bucks” that’s the whole problems with mlms is recruiting is always the main factor with how successful you are
Yeah they gave the MLMs way too much credit in my opinion.
Also I didn’t catch this till now when Rachel CLEARLY knows it’s all about recruiting but catches herself at 33:50. She seems so disingenuous
MLM..."Most Lose Money".
Even if it is a great product, you are emotionally trapped. When you buy from a friend doing a MLM, you feel obligated to continue the product. That is the worst part - the obligation.
We've heard Dave make this point a thousand times, so I'll use it here:
"We've done the largest study of millionaires, over 10,000 of them. And the number of those 10,000 millionaires who got there by working in an MLM was precisely ... zero."
Read the fine print. The overwhelming majority of reps with these companies make little to nothing, probably not even enough to recoup what they put into it.
When did he say that..? I always hear him speak positively about MLMs, but he does say they aren't for everyone.
to be fair…they kinda cherry picked their millionaires that they studied, and just like any study, you can use the numbers to prove just about anything you want.
I can't tell you HOW MANY TIMES I've been sent a friend/follow request from someone who I met one time and think they legit want to be friends- I accept the request, but then immediately get pitches for parties, DMs about being a seller, etc. If I don't go to the party, join her MLM, then I'm immediately de-friended - it's BANANAS!
My issue with MLMs is that they scam people into thinking they can make a living selling this stuff. in actuality the distributors are the actual customers, they make up the majority of the purchases, so it's a losing proposition, solely to line the pockets of the people at the top of the pyramid. If any friend or family member is thinking of doing it, I advise them to run in the other direction as fast as possible.
It’s the sneaky tactics that turned me off of MLMs and also the refusal to accept “no thank you”.
Yes. I don’t like manipulation and control.
Just to clear things up, a MLM company operating as a pyramid scheme CAN also have a product. BUT if you make more money in bonuses from recruiting than your commission on the product or you must recruit to rank up in a company it IS ALSO a pyramid scheme. ALSO if you must hit a purchase requirement to even earn a paycheck, that’s a pyramid scheme. Essentially the majority of product sales comes from within the company instead of organic outside customers.
A friend of mine invited me to lunch once , only to find out he joined a MLM and brought the couple that signed him up trying to convince me to sign up and buy all these products. That was the last time I spoke with him. I always feel a bit guilty for not returning any of his calls until George said he would block any friend that did that to him.
It makes me feel like any connections you are building with people who are in an MLM are fake because maybe they are just being nice to later sell you something. I know this isn't always the case but often times, it is.
For sure. The ultimate goal seems to be to build a relationship so you can make the sale.
I hate hearing from people who don’t hang out in real life to spend my money on their “for sale” stuff.
Pretending to be friends.
100%% most won’t talk to you again if you don’t join
This also applies to friends of friends who sell solar 🤢 "hey i only have 2 more friends and family discounts allotted to me to give out this year"
When Dave talked that one time about his friend who manages MLM distributors, the guy literally only makes his money from signing people up and taking a cut of their sales.
I did MK for several years, unsuccessfully. My former director is very successful (pink car, etc.). Every time she goes into a public restroom, she hands out business cards under the stalls. NOPE!!!!! NO WAY was I going to do that!
OMG!
Your former director was almost definitely being pressured to go into debt to have a flashy lifestyle to draw naive downlines in. That is literally how they work.
Doing an MLM "classy" or "really well" doesn't change the fact that they still prey on vulnerable people for monetary gain. I LOVE this show, but it's gross how you praise the 1% who make money.
You don't like credit card cash back bonuses because they make money on irresponsible people, yet you praise the 1% high earning MLM manipulators?? Huge contradiction.
I was approached at a park for an MLM "e-commerce." I was there with my 2-year-old and 4-month-old. Of course, she didn't disclose it was MLM. She approached as a friendly mom, and she started talking about how grateful she was for another couple taking her under their wing and helping her to work towards financial independence. At first, since I am an avid Ramsey follower, I thought she was going to bring that up- that was not the case. She spoke of having a different "mindset" and how she was able to stay at home with her kids full time (a sales pitch) just making passive income. She mentioned that they were working on transitioning her husband from his full-time job to not having to work as well. So, at first, I felt that we were actually connecting on something we had in common (working the Ramsey plan), but then I realized where she was taking this, and a wall went up. It is awkward seeing her at the park now lol.
This sounds like Amway. I received the same sales pitch and sat through a zoom meeting. My husband and I were kicking each other under the table bc after the first slide it was obvious this was an MLM lol we ghosted them really fast!
MLM..."Moms Lying to Moms".
2 things. 1. Aviation is one of my favorite drinks. 2. I'm 31 and since i can remember, my mom, dad, aunts, uncles, cousins, etc have all been involved in MLMs. Avon, amway, doterra, Tupperware, and organogold. Always with the idea that they will be their own bosses and get rich. They were from the projects in NY and now as an adult, it hurts to see these companies make so much money off people who didnt have the money with the promise of financial freedom.
George is right, they do make you feel like others are ignorant and you don't need them anyway. Also they make you pay for conferences every quarter, and your upline makes you feel like you are not 100% committed to the business if you don't attend. Those conferences are EXPENSIVE!
There’s a product involved with timeshares too, it doesn’t mean they aren’t predatory and horrible for everyone who gets victimized by them. They also prey on the weak minded, immigrants, mothers.
No, thank you!! I don't want to sell my friends junk. I am not a salesman!! I would be bottom of the pile and I would never make as much as the people at the top!!
This is very true. You have to get in early and be good at recruiting people who can sell under you.
Commenting because I love hating on MLMs and more people need to run from them.
The rapport between you too is very natural. George is a good Ramsey personality.
Glad a Ramsey personality finally has a reasonable stance on MLM
Go George!
31:45 Straight up agree with George!! Wouldn’t touch and MLM with a 20ft pole!!
Went to a few meetings for one of these. I was on board until they told me not to do my own research. They insisted I ignore anything I read about them on the internet and only listened to the info on their own website. Nope I was done
Scams. And one of the most nefarious of scams because it targets young women and moms. Totally sick. The people doing them are basically victims. I’m surprised I haven’t watched a ramsey episode about more people being stuck in these.
And military families
At 12:29 I choked and spit my drink all over the kitchen when George said there was nothing savory going on. 😂
At my former job, a few coworkers convinced me to go to girls’ lunch. My former boss was a member of this group and approved it going over the 30 minute limit. I inadvertently joined a “lunch meeting” about ItWorks green drinks. I couldn’t have been more disinterested in the demonstration and the b.s. I sat there and shook my head and ate my lunch, but never paid a dime for the product.
have you noticed these "nutrition" shake shops that pop in towns are really just herbalife shakes and products. theyre becoming very popular in small town iowa...we have atleast 3-4 in our region with different names "inspire nutrition" and i went in and they make fancy herbalife shakes & sell you their crap. they were good shakes, but very expensive.
Best sales party I ever went to:
A friend from church held a jewelry party. It was just a bunch of church ladies and their daughters and we hung out, chatted, and played games for jewelry prizes. No sales pitch, no recruiting, no pressure. She just passed out catalogs and the jewelry was laid out on the dining room table if we wanted to meander over and look at anything. It was great!
@@JoeK-vz6ke do you eat at shopping malls? It’s the same concept.
As long there’s not a strong arm sales pitch, there’s absolutely nothing wrong with it.
Lots of people do this is hopes that their MLM will take off and end up loosing SO MUCH MONEY
Let’s be honest here, the 99% of people who don’t make money in MLM’s are not all lazy. They worked their tails off, and got no money to show for it. Because if you don’t recruit you make no money. Yes some people make millions, but only by recruiting people who make no money. Most people are on the bottom, and they make no money. So the one’s who do make money are doing something immoral, even if they don’t realize it.
And once the market is saturated, you haven't got a snowball's chance of making those millions.
Exactly- and since recruits are told from the beginning that success is basically guaranteed if you're willing to work hard enough, the 99% who fail feel like it was their fault. It wasn't- they got scammed into joining a predatory business model that basically guarantees failure. John Oliver has a great segment on MLMs and why they are almost always a losing proposition. MLMs have destroyed finances, families, and friendships. So sad.
I love how they started off comparing and contrasting pyramid schemes and legitimate MLMs. Very on point!
I also appreciate how they didn’t bash MLMs as a whole, but focused on how the main issue issue is not the business but how individual people have handled it poorly and left a bad taste in people’s mouths.
When I was 18, I went to a sort of open house job fair to become a cutco knives sales rep. They wanted all the reps to buy knife sets and I couldn't even afford the basic $400 set. Being forced to pay $400 to start a job was when I realized it was a scam.
31:23 I was a former MLM rep and what George said is accurate. “Cut them off if they don’t want to support you. You don’t need that negativity in the way of making your money. “ Or “Use your credit card to make the purchases for the big package then sign up your kids with a different credit card for the big package. Once you pay those off then sign up another family member with a credit card for the big package. This will help grow your down line and you will see profit. “ All I Can say is SCAM SCAM SCAM DEBT DEBT DEBT.
Don't forget the money they spend on parties, websites, advertising, booths at fairs, inventory they buy to be able to have samples and items to buy immediately that never actually sell, etc. Taking that into account, even fewer people are a net positive
I always listen to the podcast, so this was my first time watching the TH-cam version and I love it!! Congrats on your new channel, George! I already subscribed.
Loved this episode! Rumor is that a particular MLM has a “mortgage” program (similar to the car program) in the works. Yikes!
I will never forget when I walked into a BBQ joint and the *owner* was going around table to table trying to sell his customers on an MLM. I noped right the heck out!
That's crazy that a business owner would promot a different business by annoying his own customers.
@@sprint7412 Yeah, it was wild! I never went back there, that's for sure. Most awkward moment I have ever had at a restaurant.
First
Just getting that out of the way 😂
Lol
Greatest comment ever!!😂
You were zeroth actually.
I have a family member who has worked for the factories that produce several MLM health products. He said he will NEVER drink any of these health drinks that MLMs are so famous for pushing. They are 100% chemicals!
If you have to recruit friends and family that are basically guaranteed to loose money, this is not an ethical business model and it will destroy relationships.
If the products were so great, we would be willing to go to a store or online vendor to buy them. The distributors are the actual customers. Total scam.
George is great at one liners😂
Rachel is no slouch either. Loved the valley girl impersonation. 😂
😂👏🏻lol George is funny! When he said don’t say hubby, if you do you need counselling ‘hun’😂😂
I was an Avon Representative and Sales Leader for 19 years here in Australia before it sadly closed in 2018. When I recruited I was always up front saying I'm with Avon and I'm looking for people to become Representatives, I can offer you full support , training, no starter kit to purchase and up to 35% off your products. I never approached family and friends they would always approach me I just did my thing and because I was an honest and ethical person I was very successful and have a lot of skills to take into the future. I miss Avon because also for a lot of my customers I was one of the only visitors that they got every 3 weeks and I feel that it was a community service too. If people didn't want to buy anything from one book I said ok see you next time I was never pushy and loved what I did.
I loved Avon. Fun product
I love Avon! And reps don't carry inventory. Yay!
I love Avon’s calendar!!
I’m an Avon lady, my mom used to sell it when I was younger and I missed the products. Signed up for the discount and then started sharing the books here and there. 1 lady would order from me all the time until she passed, I helped her son return part of her last order (family wanted to keep some of it) and we talked for over an hour about how much she looked forward to my visits 😭. The few customers I have are more than customers, some need more time from me and some just want their products and I’ve never met face to face. I’ll never push them to order if they don’t want/need anything because I wouldn’t want someone treating me that way either.
I hate the sneaky, too. Ugh. Like when it's posted on social media, but they never reveal the company name. You have to reach out to find out.
Hahahaha Rachel sounded like she was holding back tears when she said, “…but after the third one, just be done.”
I have wanted that Pampered Chef meat grinder thing for years….a few months ago I found the same product at Dollar Tree!!!!! 🎉 It works great!
Love this show!!
I was in one years ago, I was spending hundreds monthly to meet the sales quota but if you're not good at selling it's not a good business, it may be a great company but you have to do whats good for you.
I’m an older woman and I so enjoy watching the younger set!🙂
The only reason those with a huge down line are making money is because the majority of those under them are losing money! How is this any different than the reasons we choose not to use credit cards for rewards? The rewards come from the single mom that can’t pay her bills….. MLMs are doing the same thing to the majority of participants. The consultants at the top know exactly what they are doing and they know their down line is losing money every single month. In fact these people at the top target the single moms, new moms and moms with disabled kids in Facebook groups who are extremely vulnerable. Very unethical. Very predatory!
I LOVE the Ramsey network but I do think some of the research of this episode missed the mark on what could have been said and compared.
GEORGE I AM 100% WITH YOU! Thank you for bringing up the points that others may be too scared to bring up. I do think Rachel may be biased on this one because she does have friends that are in MLMs ….MLMs have all of the elements of the B.I.T.E model. (Cults)
Loved how you both brought different perspectives! Loving this show.
I love that you guys are recommending to do your research. Never just jump in.
A friend of mine had someone offer to give her and her bridesmaids a free makeover prior to her wedding. She was so excited and had all the bridesmaids come thinking it was a free party for them and it turned out to be a huge sales pitch for some makeup crap. Bride was so embarrassed to make her bridesmaids go through that.
I had a friend who was a Mary Kay Consultant due my makeup and my Bridesmaids' makeup before my wedding as her gift to me and to get "faces" for her business. She didn't do a sales pitch though, just did everyone's makeup. I learned several years later that she could have gotten in a ton of trouble from Mary Kay for that.
I’m a little slow but what is an MLM? I love these two ! Time to watch to understand and laugh.
I got one...anytime someone says they have a business opportunity but can't tell you the name of the company. It's an mlm and a bad one at that
Most of my friends who are in an MLM really only sell because they want to be able to get a discount on the product. They know they only make a few hundred dollars a year off it, but they don’t care because they know they are saving money on products they already planned to buy.
I've been in a MLM for 2 years. I've been doing uber eats for 3 months and I've made more money doing uber eats than the MLM.
I love that you covered this!
Really wild these guys take on these two things. They ARE the same thing. MLMS and pyramid schemes are the same thing by principle snd function
31:15 "That's a cult". You are SO CLOSE to getting it
a common refrain is how supporting a mlm is supporting a person you know as opposed to some giant corporation. not taking into consideration people you know likely work for that corporation and MLM leadership are raking in billions of dollars off the backs of the downline. EXACTLY the same thing.
I think one of the worst things about MLM is everyone who participates them also buys from them. It's often just a bunch of friends passing a money around. 😂
Thank you guys for doing this. I appreciate the facts and the kindness of opinions.
"Mine is like projectile vomit" 😂 I'm dead
I am with an MLM company I much love and the products are amazing. I really appreciated the take on MLM's and the truth about how I can feel if people don't buy. I have decided if I make a sale great but decided to no longer be pushy and just keep on using the products I love and promote where necessary. I do work a full time and part time job currently.
Oh my goodness this is my favorite podcast. If you can ask Ken and daloni to do one of these with you and do those questions you do at the end this would be so funny to watch even Jade..
John did the Thanksgiving episode with them that you can check out (Although you can tell that he did NOT wanna be there lol). I believe Ken hasn't done one though but, that sounds hilarious!
Mlm primary goal is to recruit. Please look at the income statements and look how your move up the level you have to recruit. Also there products would be cheaper if you didn’t have a mlm.
Powerful and eye opening episode. Thanks for tackling this.
My #1 golden rule in life is "Good things don't chase you" so like any cult like situation you are being tricked
So glad I’m not the only one that hates the “hubby” and “wifey”.
I appreciate this episode, I feel like it was good to discuss it in a not just bashing them way but also pointing out facts that show how MLM's are questionable.
I don't sell any MLMs but have found some products I like that are sold by MLMs. For me, if it meets a need better than a non-MLM product I will buy it. Some people I've met refuse a good product because of the MLM origin. I just buy what works while trying to be reasonable when it comes to expense.
I used to do Tupperware and I loved it. I made no money lol. But I got a lot of free Tupperware (which as a newlywed I needed), and made lifelong friendships. But I saw very few people do well at it. You have to be charismatic (meaning you can be pushy, but people love you for it - very rare trait). I have also joined a few others purely for the discount. That’s what mostly skews the figures I suspect. I was a DoTerra member for a long time but never to make money. Purely to buy discounted product for myself, family and friends.
Great episode. It’s important people know the reality before they join these companies. They can be fun and you can earn money, but it’s hard work and not a guarantee. It’s also good to learn not to push your friends away in the process.
Forty years ago my "hubby" (LOL) and I got involved with Amway in the small town we currently live. There was none of the "clandestine tactics" 😊 you describe and we were familiar with and loved the products (especially their laundry products). This group had great leadership and momentum! They were well on their way to becoming "Diamond",(which is the goal in Amway), until one day the leadership took a surprising turn when the husband of one leadership couple ran off with the wife of another. Momentum lost and group eventually dissolved. This can happen with MLM businesses in the best of circumstances of which you have no control.
I had several friends who stuck with their MLM for over 5 years, but they only did a few parties a year to qualify for discounted pricing on the products because they were all in on using Stampin Up and Pampered Chef products. I gave in and did a party for each of them but felt obligated to buy more than I wanted or needed. Now that I'm older I'm more comfortable saying no thank you.
Must say, I have three Pampered Chef products that I’ve had since marriage 40 years ago, two I use daily and one annual. Great products.
20:40 they do not "earn" it, they are literally scamming it from all the 99% that don't make money
appreciate the balance of opinion and being fair. a lot of MLMs out there are structured poorly and not a wise investment, but if you do your research there are a few that do it right and can be great. and a lot of them do have great products, just maybe not the best if you want the income.
Wow, the part about upfront inventory being required for purchase would indicate a pyramid scheme. I never thought of that. If that’s the case then the 2 “mlm’s” that I was buying from would fall under the category of pyramid scheme. That’s sad because I truly think they have some great products: not all of them but some. 😊
The only MLM I pay money to is, "Beachbody," I have a friend who is a coach. I pay like $100 a year and have access to these workouts I can do from home. I don't get roped into buying all the other stuff, shakes, bars, clothes, etc. But being a working mom, business owner, etc. It's so much easier to work out at home. :)
Rachel and George are great 😂
Starting the episode and excited/curious to hear the good of MLMs. Not interested in becoming involved in any but can't think of any possible good of them so interested to hear.
I actually loved Lularoe leggings! I must have gotten earlier ones because I had some for 3-4 years wearing them regularly. Also love pampered chef products! I’ve thrifted several and they clearly last!
Very scammy, also if your plan is to sell mostly to friends and family that is already suspect, any company that tells you to market to friends and family is trying to not have you sell their product, but sell you. If you have to sell to friends and family exclusively or mostly then it’s a scam, they’re not buying because they want the product they want to support you.
Anything less than "it's a complete scam" is either super ignorant or a blatant lie.
They are acting like its ok to play in the highway as long as there are no cars.
Pampered Chef is crazy that it needs an MLM. Their cooking stuff is some of the best on the market.
Also Usborne books are great. We got stuck in that MLM because we love their books.. We just don't want to sell it, haha.
I bought a few books for my son from Usborne. The rep helped me pick them out and he loves them (he’s 11, we got “the odyssey” and “Jason and the argonauts” because he’s super into Greek mythology).
They should totally do an episode on spousal nicknames. Should discuss the couples that call each other mother and father. That is the weirdest nickname I have encountered
I tried a few and the hustle wasn't for me. However, I know one person who has rocked it at 2 different companies and it's amazing.
The bonus I found from "joining" was the intro bundle at a discount and the discount for being a consultant. Especially when there isn't a minimum monthly requirement, then it's just a discount.
MLM over price their products. It’s ridiculous.
I really love pampered chef! That's the only MLM product I love.
I feel george was willing to be the realist in this case and I appreciate him for that.
Great episode!
Keep up the good work!