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Monday, February 19, 2007

Disease Alert - Multi Level Marketing Scams

Women tennis players to get approved supplements
Last Updated: 2006-08-23 14:13:10 -0400 (Reuters Health)
By Pritha Sarkar
LONDON (Reuters) - "Players on the women's tour have been given the green light to take certain vitamins and health supplements without the fear of failing a drugs test, the WTA Tour said on Wednesday.
Tennis professionals have been wary of taking nutritional supplements ever since the men's tour was rocked over two years ago by a series of failed dope tests that were eventually blamed on contaminated supplies.
In order to ensure players on the women's circuit do not suffer a similar fate, the governing body WTA signed an agreement that will provide competitors with products that are guaranteed to be free of any substances prohibited by the World Anti-Doping Agency (WADA).
Products from USANA Health Sciences Inc., a leading globalvitamin and health supplement manufacturer, will help ensure that players who wish to take vitamins and supplements are able to maintain fitness required to compete at the professional level, without fear of violating the rigorous WADA standards."
Gary Moller comments:
I wrote this article several months ago; but have held off publishing because it might cause a hostile backlash and get me offside with some influential sporting types. Well, here goes....

The tennis article above also appeared in a NZ Academy of Sport Newsletter which is unfortunate. It is unfortunate that a Multi Level Marketing (MLM) company had burrowed its way into professional tennis. Those in charge should know better. Worse, still is that this is being publicised by a NZ Government agency - the NZ Academy of Sport.

Because of my work, health website etc, hardly a week goes by that I am not subject to some kind of MLM proposition. It usually starts with a carefully pitched email with a slick video presentation, an invitation to attend a meeting at a friend's house or an invitation for an initimate coffee. Despite all the promises of wealth, lifestyle and independence, I seldom take up the invitation to attend and have steadfastly refused all approaches to join. Let me explain why:

Who gets the flash car?
It is reported in Australia that there are an astonishing 500,000 MLM participants selling $1.2 billion worth of goods and services each year. Interesting: This works out to $2,400 gross sales per year per participant. If the comission rate is a generaous 10% (It is actually works out to more like 2%, but let's be very generous) then the average real income is about $240 - hardly a living wage. My impression is that 99% of those who sign up for these schemes lose more money than they ever get out. I also suspect that much of those claimed millions of dollars of product sold through these schemes is gathering dust in the back of garages and basements or consigned to landfill.

MLM schemes are a disease:
They infect participants with MLM Blindness and they eventually suffer a fatal loss of family, community and friendships. MLM blindness means they can not see how they look from the outside. They are oblivious as friendships unravel, social and communuty groups are poisoned. They are unable to see that MLM is the reason why friends, family and work mates avoid them. Neighbourhoods are turned into market places that are open season for exploitation.

The Televangelism connection:
A common "Ra, Ra! Happer Clapper" theme runs common to most, if not all MLM schemes: It starts with the Founder, a self-awarded brilliant scientist who discovers the Elixir of Youth who then develops his own unique range of products. Articulate, jet black hair, brilliant white ivories, complete with brow-lift and Italian tailored suit make up the package. Unlike most scientists I know, he has the gift of the gab to make up the perfect promotional package. The pitch, the promises and the blind fervour all remind me of the exact same model that is modern religious fundamental evangelism marketing.

By writing about MLM in this way I know that I am going to be subjected to criticism on a par with what one would expect from religious extremists. Actually, there is little difference, nor is the brain-washing methods involved in building the MLM armies of disciples, most of whom end up working for nothing other than to increase the profits of those at the top of the scheme.

Overcoming the guilt factor of exploitation by doing good works:
The slick marketers who devise these schemes have every base covered. Selling over-priced products that probably don't work to your family, workmates and neighbours site better on one's conscience if the seller knows some of the profits go to homeless orphans in a 3rd world country that has had its indigenous agricultural base and rain forests destroyed to make way for the foreign owned plantations that produce these so-called health products. Some even go a step further and urge participants to donate to their charity!
MLM friends are of the shallow kind:
They are your friend for as long as you are a tempting prospect. The friendship is fleeting. Glad-handing and vacuous smiles do not endure.

MLM schemes are callous business models:
MLM schemes are based upon the ultimate failures of others. This is a callous business model that has no controls on expansion or any care if it exceeds market saturation. The only ones to profit are those at the top of the pyramid (Did I mention the unmentionable "P" word?) These schemes are doomed by design; to profit you must be in early. Those in late, will lose their money to those above. Its all about profiting off the failures of others.

Where does the money come from?
Sure, money can be made from these schemes, but where is the money coming from? Is it coming from the product sales or from the recruitment of others below? We all know that the real attraction of MLM is the pyramid. The product, be it vitamins, cleaning agents or telephone calling cards, is merely an over-priced technicality, there to only avoid being labeled an illegal scheme.

Here's the maths:
MLMs work by geometric expansion, the same way that one female mouse can produce a thousand offspring within a year. You sponsor ten who sponsor ten and so on and so it goes. However, there is a problem and that is rapid and inevitable market saturation. At just three levels deep this would be 1,000 people. At six levels deep, that would be 1,000,000 people believing they can make money selling a product that is over priced and not really needed. A small country like New Zealand is quickly saturated and there are inevitably many losers. These schemes are doomed by design. Go onto some internet sports nutrition forums and you will discover that many correspondents are selling a scheme. At the time of writing, USANA was King of the MLM nutrition schemes here in NZ. It will soon be replaced by the next scheme such as this one: This is an outrageously over-priced fruit juice with some very slick marketing. Be wary of it.

MLM and professional ethics:
What about the ethics of health professionals like doctors being involved in MLM schemes? Being part of a MLM health supplements scheme compromises professional judgement to pick and choose which supplements to recommend a client, if any, and to supply them at the best price and quality.

There are no magic elixirs of youth, supplements that cure cancer or turbo charge sporting performance (Legal ones anyway!). Supplementation should be carefully considered as part of a number of measures to improve or maintain health, including a careful analysis of lifestyle, diet and training methods, if an athlete.

Furthermore, the Dr-patient relationship threatens to become most unhealthy the moment she or he enters a MLM scheme - parasitic in fact. The way the MLM supplements are priced, the patient can only afford them if he or she becomes an agent and brings friends, family and workmates into the scheme.

As much as possible, the health professional should remain above commercial influences, able to provide impartial advice that is based on evidence - and the best prices.

Who do you get your health and nutrition advice from?
Would you have your neck manipulated by a person who learned by attending a weekend course in a luxury resort, or would you go to somebody who trained for 6 years in a university under the watchful eye of a learned professor of chiropractic medicine? The choice is easy. On matters of health, including nutrition, consult a qualified health professional, rather than a self-appointed expert who had no assignments to hand in for marking and no exams to pass. Their only requirement to ply their products is to hand over $200 for the MLM marketing kit and buy a crate of product samples.

MLM schemes are all the same
Same breed of wolf - different disguises. The only difference between them is the name on the building, stationery and the dubious products they ply to gain a facade of technical legality.

They leave behind them a trail of disapointed people who are out of pocket, feeling lonely, angry and cheated.

Omega Trend, Amway, Nu Skin, USANA etc, etc and now we have Monavie


Wayne said...

it is no beter than religeous evangelism. one of my clients is near the Destiny Church, theres usually a late model big Exotic Luxury car parked outside a very flash and large building paid for by church members who often struggle to make ends meet themselves, people are hooked into the whole hype of it and the promise of the everafter. if you want to believe in the ever after you dont have to spend all your spare money for someone else to pocket it.

Wayne said...

a work mate is on a metagenics programme, i read hte instructions on a mul vitamin bottle, which was touting taking among other things 400mg of B3 a day. 20 times the recommended daiy allowance, B3 is one B vitamin you have to watch you intake of and this amount is potentially hazardous to the liver and has been attributed to liver failure with long term consumption of amounts in this rnge. it seems the company are more interested in pedalling as much of their product as possible, advising to take 8 multi vitamin horse pills a day when one or two would be more than adequate expecially on a prolonged regime.

Anonymous said...

interesting that you lump usana's business model in with such 'pyramid scams'.. usana's business operates according to a well established marketing structure known as network marketing, in which harvard university teach a masters degree.. it is a genuine, legal, and ethical business model that channels profits otherwise lost to distributors and advertisers back into development of their superior product. your ignorance can only damage the reputation of a company which is operating and succeeding in changing millions of people's lives for the better.

Anonymous said...

Hi Garry,

You may wish to the read the comparitive guide to nutritional suppliments, comissioned by the Canadian Government. A more recent studie of nutritional suppliments has been carried out on those available in New Zealand and Australia. Maybe you should check out where the companies your affilated with stack up with those products that are in the top 4. An interesting note is that the top 4 ranking supliments available are only found through network marketing companies. Hmmm makes you think.

little lime said...

Youre comments amaze me you seriously need to re educate yourself. Please do yourself a favour and go to and read. Please get a copy of the Comparative guide nutritional supplinents, and look at the junk you are promoting.

Gary Moller said...

Thanks for the link which is most informative . It changes nothing about what I have said.

You are confusing the USA company Nutralife with the NZ company Nutra-Life which is NZ owned and has no association at all with the other.

Unlike your hyped-up MLM schemes I am not locked into any particular brand. I give preference for NZ manufactured products and NZ owned companies. All of these products comply with strict New Zealand and Australian quality standards.

Unlike vitamins that are manufactured from petroleum and of dubious benefit, almost every item I sell is from natural sources. While these are more expensive than your petroleum products to make, I would much rather be taking these than the cheap and nasty synthetics.

Despite their cheapness, the MLM sourced products are almost without exception more expensive. Please explain how that can be.