multi level-marketing
TRANSCRIPT
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PYRAMID-SCHEMES
&
MULTI-LEVELMARKETING
AN OVERVIEW
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PROFIT AT DIFFERENT LEVELS
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In a product-based pyramid scheme, 99.88 per cent of participants never make any money. In any pyramid scheme, it's a mathematical fact that 88 per cent of participants will be on the bottom level.
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What differentiates an MLM from a fraudulent pyramid scheme?
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RecruitmentThe Marketed GoodPriceInventory loadingInventory Repurchase
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In The Beginning
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Carl Rehnborg, Lee Mytinger and William Casselberry of Nutrilite Vitamin company created the
MLM or Network Marketing concept in 1945.
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Rehnborg acted as “scientific advisor” telling distributors Nutrilite supplements contained a “secret base of unusual therapeutic value.”
Nutrilite Products
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Nutrilite Products
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A “how to get well and stay well” booklet was the primary sales piece representing Nutrilite as effective against almost every
disease known to man.
Nutrilite Products
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The FDA executed many product seizures and
ultimately issued a consent decree dated April 6,1951 against Nutrilite and the
booklet was banned.
Nutrilite Products
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1953Top Nutrilite distributors began
selling for Numanna Labs resulting in Nutrilite filing suit
citing the 2-year non-compete as part of their distributor
agreement.
Nutrilite Products
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The FTC later ruled Nutrilite’s 2-year non-compete in
violation of Fair Trade Acts.
Nutrilite Products
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1950 Rich De Vos and Jay Van Andel
began a Nutrilite distributorship that peaked at over 2,000 distributors.
Nutrilite Products
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1959Rich and Jay form
American Way Association
(Amway) selling household cleaning
products while continuing their
Nutrilite distributorship.
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1972
Amway purchases Nutrilite from Carl Rehnborg’s estate.
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SOME MLM COMPANIES
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