8. If MLMs are merely endless chain recruitment schemes, how do some MLMs survive for decades without collapsing?
Some MLM proponents argue that if it were a pyramid scheme, the programs would be destined to collapse. While this may be true for classic, no-product schemes, MLM promoters have found ways to survive and even grow. They do so by constant recruitment of new recruits to replace those dropping out, a process called
churning. They move to new areas to start the process all over again - a technique that I call "
re-pyramiding." So they don't collapse, but are in a state of
continuous collapse - or churning through a revolving door of new recruits.
The more resourceful MLMs survive for years and even decades by doing the following:
- hugely rewarding top recruiters for constant recruitment of purchasing participants to replace those who dropped out,
- duping law enforcement, media, and consumers about the MLM's legitimacy,
- requiring ongoing (subscription) investments by participants to qualify for commissions and advancement in the pay plan,
- recycling through new markets or countries and then with new product offerings,
- feigning compliance with “retail rules” and by staying below the radar of law enforcement ,
- convincing victims that failure is their “fault,”
- and by a host of other deceptive and creative measures.
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MLM (FAQs and Straight Answers)
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