Multi-level-marketing, scam or worth it?

[Fhloston]

For anyone not familiar with MLM: http://en.wikipedia.org/wiki/Multi-level_marketing

After moving in to my apartment, they recommended us to an associate of Stream/Ignite Energy for a good rate. Signed up, and was given the choice to become an associate, or just a customer. Went with customer, but sat and heard about the business. My first impression was that it sounded like a pyramid scheme, but, energy is also something everyone needs. Not like you're selling overpriced, useless merchandise. So it seems somewhat legit. Price to start was high, $299, plus $25/mo if you want a website for energy customers... another reason I declined.

Anyway, anyone have any experience with this company, or MLM in general? I did a bit of research online, but can't seem to find anything solid that makes Ignite seem like a scam... Also, a former co-worker of mine was a salesman with Amway. The goods they sell have high prices though, and in this economy, it didn't seem like a good idea to me. I'll leave a link with a list of MLM companies in case anyone is familiar with any of 'em...

http://en.wikipedia.org/wiki/List_of...ting_companies

[Xanthe]

Multi-level Marketing is a scam. Don't fall for it.

[Hosom]

See above.

If this business model actually worked for anything other than "get rich quick" you would see it more often in larger businesses.

http://www.newsweek.com/2008/08/01/a...ple-reign.html

There are dozens more articles about why Multi-Level stuff doesn't work out if you want them.

EDIT:

If that weren't enough, here is why this business model doesn't work. The math.
1 person recruits 6 people. Tier 2: 6 People.
Each of those people recruit 6 people. Tier 3: 36 People.
216 People....
1,296 People....

What happens when you run out of people willing to join? You lose the income from 'subscription' fees. Then the bottom level is stuck being screwed, because they never reach where the top is like they were promised....The business will eventually fall apart if it doesn't get investigated by the authorities first for not being able to fulfill the promises in its advertisements.

Picture:

http://upload.wikimedia.org/wikipedi...scheme.svg.png

[Cadsuane]

This is the definition of a pyramid scheme.

[Effluo]

As stated.. Scam. I got sucked in once. Never again.

[archibaldcrane]

It works if you have the hustle to con a bunch of suckers into joining under you. You have to be pretty heartless though, knowing that almost every single one of them is going to lose money in order for you to gain it.

If you're really good at being a dickhead vulture, go for it.

[Shakki]

Depressing, but pretty much sums it up.

[Elesirdur]

Avoid it like the plague. Don't fall for those 'FX' or Foreign Exchange programs/courses either. They're just a pyramid scheme too. FX trading is very, very volatile and unless you're already an investment banker, currency trader, or have a MA or PhD in Economics or Finance you shouldn't be doing it.

[Correction]

After moving in to my apartment, they recommended us to an associate of Stream/Ignite Energy for a good rate.

Wait what the fuck. Your LANDLORD made your energy bills conditional on whether or not you got suckered into an MLM scheme? Shit is shady, I'd start looking for another apartment before your landlord either goes bankrupt or dangles your monthly living expenses in front of you again.

[Kerberoz]

Penn & Teller

This.

Generally, if you have to ask "Is this a scam?", then you should already know the answer.

[Restrat]

to quote king of the hill, "It's not a scam, it's an opportunity! And it's not a pyramid, it's a triangle."

[Odesseiron]

Before I even clicked this thread, I thought immediately of the P&T episode. I wasn't exactly shocked, but man some of the shit on their show really opens your eyes to how big of a scam all this shit is. Of course, if you're dumb enoough to fall for most of it... Such as magnets and breathing classes and things like this, I dunno what that says about the person.

[takethistoyourgrave]

Run away. Now.

[Khamsin]

To be fair, though MLM is a scam, there are times when joining one could be beneficial.

If you are asked to join an MLM startup, say yes, rake in some cash at the top levels of the pyramid, then bail before it becomes too well-established. If you are asked to join an already well-established MLM, say no.

It's only worth it to join if you're near the top, not if you're one of millions near the bottom. And that's only if you bail in time not to get caught in any investigations, in case they make you pay some of your profits back in some lawsuit.

[Fhloston]

Figured it was one of those "sounds too good to be true" things.. Thanks for the replies.

Wait what the fuck. Your LANDLORD made your energy bills conditional on whether or not you got suckered into an MLM scheme? Shit is shady, I'd start looking for another apartment before your landlord either goes bankrupt or dangles your monthly living expenses in front of you again.

It was actually just an option they showed us, we had our choice of any energy company. From a customer standpoint, you'll save some money on your bill. Their real agenda though is word of mouth and signing you up as an associate, and you getting friends/family in on it. In the end though, I got a good rate, so I'm happy.

[Correction]

It is almost impossible to know how high up the food chain you really are in an MLM; Nobody in the organization has any incentive to let you know that, or how saturated the market is with their garbage product. 99.99999% of the time, by the time someone tells you about it, it's too late.

[Kerberoz]

Even if you're near the top, there's a good chance you won't be able to recruit anyone, or you'll only get a couple and then they won't recruit anyone.

[Fhloston]

Just saw the Penn and Teller episode, very good watch. Pretty much outlines what the Ignite business does. The only main difference I see, and what they use as part of their strategy to get people, is that you're selling energy, which everyone uses. Still, same shit in the end it seems... Gonna go watch more Penn and Teller now....

[aurik]

Still a scam.

[Correction]

The only main difference I see, and what they use as part of their strategy to get people, is that you're selling energy, which everyone uses.

I think you still don't fully understand, the people who own this company still make the overwhelming majority of their money from the salespeople compelled to pay for the product up front and all the 'sales kits' that cost $500-$3k. No matter what they tell you about the product hor how to recruit people, they make money by first putting you into debt.