who is doing the scamming in MLM scams

The guy trying to get you to sign on to the particular MLM is probably not part of any scam. He, or she, is not the one scamming you. This person really believes that the company is good, the product is good, he and you both have a great opportunity to make great money with this direct marketing approach, etc.

The truth is that he is as much of a victim of the scam as you are (or, I should say, as you would be if you would sign up). He just doesn't know it yet.

Of course, this is not to say that nobody ever makes any money in these MLM scams. That is not true. Some people do - just the chances are stacked extremely well against you. More on that later.

The MLM scam is based on them getting lots of people to sign in to the program, each spending at least the minimum monthly purchase, plus whatever training expenses they throw in along the way. That money gets divided among the people along the chain going up. The problem is the people who sign up more often than not stop being involved int he company very quickly, as they exhaust their network of friends and relatives trying to sign them all up.

After that, they have spent a decent amount of money on minimum monthly purchases plus fees, and now see no prospect in sight for future income. They generally drop out of the program, having lost the money that was put into it.

why you won't make any money with MLMs

MLMs and Pyramids are based generally on signing people up to sign other people up to sign other people up, etc.

There will also usually be a minimum amount of product you have to purchase each month, and sometimes other packages you have to spend money on. More often than not, these products are not things you would normally be spending your money on, if not for being involved in this business.

The way they make money is by any money you spend, or sell, is divided among the people in the chain higher up than you - the person who signed you up, the person who signed him up, etc. at different percentages. Of course, if you sign other people up, you will be making money off of them.

At th end of the day, you are only making money because someone is buying a product they usually don't want. They are only spending money on it because they have to to be part of the program. At a certain point most people stop, as they see they are not successful at signing people up and not making any money. They will realize this is a product they don't really like or need, and will stop buying it.

Your future success in the MLM is dependent on signing up people who will be seriously motivated to use the product and to sign up others people who are also motivated. This is why most people make no money, or worse - many people lose money - in MLMs.

you know you are dealing with a pyramid scheme

You know you are dealing with a pyramid scheme, or the version called MLM, when they refuse to tell you anything about it.

The guy is trying to convince me to sign up. He is being very vague, talking about product development, business development, international or even global marketing. Yet he won't say a single word about what the company or product is.

Why is that?

I think the reason is that they need to get you into the room with the presentation. If you hear something that sounds like MLM on the phone, 99.9% of the people will drop it like a hot potato. If they actually get you to sit in front of the presentation, and be impressed by all their bells and whistles, their chances of nailing you increase slightly.

So even though I figure out what he is talking about because I have heard this exact pitch before, and I let him know by saying "Oh, this sounds like Agel" or "Hey - is this NuSkin?", he still refuses to answer any of my questions. His only chance is to get me in the chair in front of the presentation. Anything less than the full presentation means he has absolutely no chance. And he knows it.

MLM "opportunities"

phone rings. Hello? "Hi. This is so and so. Remember me? Yeah, it has been a while since we spoke and saw each other last. Anyway, I have decided to take my financial future back into my own hands. I am working towards being able to quit my job and work for myself making decent money. I thought of you as someone who also might wan to take your financial future back into your own hands."

This is how the conversation almost always starts. The name of the company, or even what they do or what type of business it is, never comes up in the first or usually even second conversation.

Welcome to the world of Multi-Level Marketing, or MLM, businesses.