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Economics Explained
The Bitter Economics of MLM
Jun 7, 2023
Exploring the economics and flaws of multi-level marketing companies, highlighting the risks and unlikelihood of success. Examining the income sources of a top earner in Amway and the questionable financial impacts.
14:12
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Quick takeaways
- MLM companies continue to operate and generate billions in profit despite criticism and being labeled as legal pyramid schemes.
- Joining MLM involves purchasing products to sell and recruiting others, but most people lack sales skills and desire for building a sales team.
Deep dives
The Expansion of Multi-Level Marketing Companies
Multi-level marketing companies operate globally, attracting criticism for their questionable business practices. Often referred to as legal pyramid schemes, these companies continue to thrive, generating billions of dollars in profit. Their business model is based on referral programs, but they take this concept to the extreme, offering incentives for members to recruit others, resulting in an expansive network of sellers. However, the fundamental flaw lies in the fact that most people lack the sales skills and desire to build their own sales team.
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