Friends don’t let Friends do MLM!

by Larry Watford on May 18, 2009

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One day last week a client (and friend) of mine called, with details I had been waiting on for a new Website. The conversation ended with, “Oh by the way, I have something very exciting to show you – and I’m not selling anything.  I’ll be right over!”

The phone line went dead before I could say – sure come on over!

I knew right away something was up.  The web site stuff could easily be sent by email or IM – no need to make a 15 mi drive across town to my offices.  And the “I’m not selling anything” was a dead give away that she was selling something – wanted my opinion – and if I was really interested I could buy it today!

Been there – done that!   That’s why they call me “consultant”!

Within just a few minutes, I saw the SUV swing in the parking lot and Penny (not her real name) jumped out and sprang into the building.  Almost out of breath, she shoved a handwritten list of photos she wanted included on the web site.  I would spend the next sunny day playing  photographer to produce useful pix for the web pages.

Then came the pitch.

A man a their church had shown them this marvelous new program that would make them independently wealthy, producing a steady income stream for the rest of their lives, one that could even be passed down to the children when they move on to the after life.  She rumbled thru her valise and came out with some recently copied CD’s – no labels – just a hand written name.  In her haste, she had left her laptop, so I left the conference room to retrieve mine and grabbed the overhead projector for good measure.

Although my suspicions were aroused, I was determined to show her the courtesy  of hearing her out  before passing any kind of judgment on the program.

The DVD opened up with a finger snapping Texan extolling how the program was focused on selling the things your friends and family already buy, just switch them to the web site provided as part of the program. The web site was loaded with readily available affiliate programs.  The discussion very quickly moved to the development of your “down line” by recruiting others to do the same and how by recruiting only a few additional associates you could earn a new Lexus.

The pitch was very attractive … a new Lexus … really!  An income for life … one that I can pass on to my kids … wow, how cool is that?   All this for a fee of just $400 down a $50 a month fee for the web site.  What a DEAL … really?

She left all excited about how easy making all this money was going to be, headed to Charlotte for another meeting with the regional manager.

Of course my little voice was screaming – “to good to be true, to good to be true – caution caution”! I spent the afternoon digging thru the web about the company and the program.  Clearly it was Multi Level Marketing scheme with less than 2% of gross sales derived from the sale of goods and services. The balance of more than $45 million in sales coming from fees paid by the expanding “down line” sales base.  I forwarded my findings to my friend and strongly suggest she talk with her accountant about the program.

I did what I could to shine the light of reason and logic on what was likely a barely legal (?) MLM scheme.  Unfortunately my friends had already taken the bait and shelled out considerable moneys to be a part of it.  Another case of someone using the church, faith, and greed, to fleece the flock. Too bad.

Great Grand Mother Jones warned about mixing religion and business … and playing professional baseball.  The former warning … dead on …. not sure I’ve ever understood the latter!

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