Seems like, when the economy is good, you don’t hear too much about alternative incomes. When unemployment is low most of us are content to just go to our wage-slave jobs. People even seem eager to work overtime.
But when the economy gets tough people start looking for just about any legal way to feed their family. Note the popularity of TV shows like Auction Hunter. A manager of a storage facility in Mesa told me last week that attendance at rental storage auctions is triple what it was a year ago. And some folks look to franchises (like Subway) if they have the money (or any equity left in their homes.) And those who don’t might look to MLMs.
MLM – multi-level-marketing, also known as direct marketing or network marketing – can be a legitimate way to start your own small business on a small budget. So why do they have such a reputation of being pyramid schemes?
Thanks to Bernie Madoff, most of us are now familiar with pyramid schemes. The Federal Trade Commission considers an MLM a pyramid scheme in disguise if more than 51% of the profit comes, not from product sales, but from membership and transaction fees.
An MLM couldbe a pyramid scheme in disguise if:
There is more emphasis on, or more commissions paid for, recruiting new members than selling product.
The incentive program encourages ‘inventory loading,’ buying more than you can reasonably use yourself or reasonably expect to sell quickly.
An MLM may tell you to recruit just 6 people, and get each of them to recruit 6 people, and so on; and they will pay you a commission on sales going down 10 or 15 generations. If you really succeeded at what they were telling you to do, at 11 generations your down-line of distributors would be greater than the entire population of the United States! So who would be left to be retail customers? However, an unrealistic marketing plan isn’t illegal. Just take a good look before you leap.
We do not live in a world where people are motivated by the milk of human kindness. If someone claims they are in business because they are concerned about your health, well, let’s be honest, they are in business to make money.
There is money in health, and many MLMs are health-related. Most of us have some ailment or other. People love to talk about their health, and many love to believe that the medical community is involved in a vast conspiracy to keep us all unhealthy. This creates fertile ground for MLMs selling everything from water to magnets, making all kinds of ridiculous claims of what their products will do for you. There are wholewebsites dedicated to listing MLM scams and the attendant lawsuits.
So how do you pick a legitimate company? Well, for starters, remember my rules from part one about MLMs?
The product needs to be consumable, so you get reorders.
I can’t sell someone else’s success story, I need my own.
It needs to be a product people will enjoy hearing about and talking about. Not soap – coffee, chocolate or ice cream, something easy to talk to your friends about.
We could add to those that you need to think about market saturation (sorry, Amway), research any medical claims, and, ultimately, decide whether you are really willing to spend a significant amount of your time and effort to push this product.Nothing, despite claims to the contrary, ‘sells itself.’
Okay. That said, after I mentioned MLMs in the first column in this series, I was contacted by my friend Larry. Last November, at 52, Larry had a heart attack. He had already been taking several meds for blood pressure, diabetes, and high cholesterol. Now with a new stent in his chest, they put him on even more meds. Even with all the meds:
His good cholesterol was 33 (It needs to be above 40.)
His bad cholesterol was 127 (Doctors considered that a victory, but he still had a heart attack...)
Diabetic medication kept his daily blood glucose tests around 110 (diabetes is considered to be anything above 126) but his A1c blood sugar was 7.4% (The goal is to keep diabetics below 7%.)
Lying in the hospital bed, he had a visit from the hospital nutritionist. ‘How can I keep this from happening again?’ was his question. ‘Antioxidants,’ was her answer, the more the better. Larry’s next question was, how do I get the most antioxidants in me? And he wasn’t satisfied with the nutritionist’s vague answer of ‘lots of fruits and vegetables.’ When he got home, he educated himself about antioxidants, and came across a weird word – Xocai.
Xocai (pronounced ‘show – sigh’) is a health product – sold via MLM – based on organic chocolate. (Remember, I said an MLM that sold chocolate would be easy to talk about? Larry had no trouble getting me to try a sample!) Chocolate contains some of the highest levels of antioxidants, but before you run out to buy a Snickers… The average chocolate bar has very little real chocolate in it, and what there is of it has had most of the antioxidants cooked out of it. Xocai claims it cold-presses organic cacao beans to preserve the antioxidants. Then they add Acai berries, blueberries, and other antioxidant-rich foods to make it healthier and tastier. And, unlike most other antioxidant foods, Xocai’s products are periodically tested by an independent lab and the antioxidant score from the lab is printed in large letters right on the wrapper.
Larry started taking Xocai in November, 2010, right after his heart attack. Since then:
He has lost 58 pounds. More importantly,
His good cholesterol is now 74.
His bad cholesterol is now 53.
His daily blood glucose test is now in the 98 to 108 range, and his A1c is 6.2%.
He has – with his doctor’s okay – stopped takingall of the meds he was on, except the one he still needs due to the stent.
I was struck by the fact that he doesn’t simply look slimmer, he looks … younger. His skin is tight, he seems to have less gray in his hair, and he seems to be bouncing on the balls of his feet even when he's standing still. He tells me he has the energy of a 20-year-old.
Larry wants me to start taking Xocai. I’m a good candidate: I’m overweight, diabetic, and plagued by headaches. But at my age, I’m realistic about my ability (read ‘inability’) to stay on a health regimen.
My life is pretty simple. I eat oatmeal with blueberries, cinnamon, walnuts, and coconut milk nearly every morning. Dinner consists of either vegetables and rice and chicken, or rice and beans and chicken (and sometimes no chicken) nearly every day. I never eat red meat at home. Snacks/dessert is typically popcorn or peanuts. I don’t buy sweets because I have a sweet tooth and don’t need the temptation. Whenever I give in to the temptation and bring home ice cream or cookies, I always end up with a headache, and probably elevate my blood sugar.
Where I fall down most is lunch. Lunch is typically fast food, burger and fries.
So, here’s what I propose:
I’m going to use Xocai products for a month. I am NOT going to change anything else about how I live, what I eat, how much I exercise (virtually none). I’m going to eat these Xocai chocolates whenever and as much as I want. If I get a headache from it, I’ll quit. I’m going to replace my nasty fast food lunch with a Xocai chocolate shake meal replacement drink, BUT, if I’m hungry an hour later I’m going to eat something – probably a burger and fries.
I’ll check my weight and blood sugar every morning and post the results on Facebook. If you aren’t currently following me on Facebook, you can find me here.
And I’ll post updates here once a week or so. We’ll see what happens. If this is a scam, you’ll be the first to know.
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