After the most extensive research ever done on MLM as a business model, Dr. Taylor has identified four (and in most cases five) causative and defining characteristics, or “red flags,” in MLM compensation systems that lie at the root of the deceptions and horrendous loss rates suffered by MLM participants. Where data is available, approximately 99% of all participants are found to lose money, after subtracting incentivized purchases and minimum operating expenses.
But before we share our list of approximately 500 MLM programs we have evaluated, in addition to some shut down by law enforcement. it is important that you do your own5-step Do-it-yourself Evaluation.We will not be responsible for the consequences of a decision about participation that is ultimately yours to make. (See Disclaimer to the right.) But we are confident that here you will receive the best advice available on how to make that decision.
To begin, obtain the compensation plan of the MLM program you are considering. Then answer the questions for each of the five steps and follow the links to its conclusion. You might also want to review some of the feedback we have received.
Listed below are MLMs we have found to use recruitment-driven and top-weighted pay plans, which is the case with virtually all MLMs. For a thorough discussion of problems associated with such programs, download and read the ebook Multi-level Marketing Unmasked, (especially Chapter 2) which can be downloaded in whole or in sections from this website.   MLMs listed with an arrow () have released average earnings data, which Dr. Taylor has analyzed (See Chapter 7).
 (MLM’s come and go, so a few may now be defunct.)
MLMs Evaluated A – D (below)
MLMs Evaluated E – G
MLMs Evaluated H – M
MLMs Evaluated N – R
MLMs Evaluated S – Z

See a sample evaluation
See a list of MLMs law enforcement has shut down or issued sanctions against
MLMs that begin with a number
1Cellnet
4 Corners Alliance Group
10 Level Riches
124 Online
3000 BC
4Life International
4 the Good Life
5LinxA
A
A. L. Williams (now Primerica)
Acai Plus
Achievers Unlimited
ACN
Adcalls
Advantage Marketing Systems
Advantage Neutraceuticals
►Advocare
Affordable Energy
Agel
AIM
Alivemax
All-star Entrepreneur
AlpineV
Altairia
Amazon Herb
Ambit Energy
Amega Global
American Longevity
American Marketing Systems (AMS)
Ameriplan USA
Amway
APP – American Petroleum Prom’s
►Ameriplan USA
Amerisciences
Amigo Health
Amkey
Amsoil
►Amway (was Quixtar in USA for a
few years)
Annasa
Apeus
Approval Warehouse
►Arbonne
Ardyss International
Ariix
Ascend Technologies
Ascential Bioscience
Asea
At Home America
Ava Anderson Non-toxic
Avalla – distributes Nutrimetrics
Aviance
Avon – now an MLM
Awareness Life
B
Baby Crazy
Bamboo Park
►Beach Body
BeautiControl Cosmetics
Bel’Air
Bellamore
Better Universe
Beyond Freedom Evolution
bHIPGlobal
Big Planet (Nu Skin division)
Boceutical
Biogen
Biometrics
Bioperformance
BioPro
BioSolace (India)
BodHD
Bodywise
Bookwise Books
Boresha Int’l
Brain Abundance
Brain Garden
Business in Motion
Business Toolbox
C
Cabi
Cajun Country Candies
CCM – Consumer Choice Marketing
Celebrating Home
Cell Tech
Cell Wireless
Ceres Living
Champion Communications
Cie Aura
Citizenre
Cleur
Coastal Vacations
Cognigen
Common Sense Communications (Telex Free)
Conklin
Consumer Choice Marketing
Cookie Lee Jewelry
cPRIME
CR Health & Beauty Systems
Creative Memories
Customer Advantage
►Cyberwize
D
Daisy Blue
DBN- Downline Builders Network
DCHL – Digital Crown Holdings Ltd.
De Marle at Home
Destiny 2000
Direct from Vatican City
Discount Home Shoppers Club
(now Global Income Partners)
Do Terra Earth Essence
Dove Chocolate Discoveries
Drink ACT
DS Domination
DSX
Dubli
DXN
Dynapharm
Dynasty of Diamonds
NOTE: This list (A to D) includes only those MLM’s for which we have been able to obtain and evaluate compensation plans. Most of the MLMs were listed following requests for information from visitors to our website.
MLMs, or product-based pyramid schemes, use compensation systems that reward recruitment more than actual sales of products to persons outside the network of participants. So significant income is unlikely without recruitment of a large downline, which requires deceiving recruits into believing it is a legitimate “business opportunity – and persuading them to invest in inventory (front-loading) and/or to subscribe to ongoing monthly product purchases or payments to “do the business,” to “be a product of the products,” etc. For purposes of analysis, any MLM could also be considered a “product-based pyramid schemes;” i.e., a pyramid scheme that requires purchases of products (by the participant and/or his/her downline) to participate in commissions or advancement in the scheme, rather than a cash investment such as those required for no-product pyramid schemes. Product-based pyramid schemes do far more damage than classic, no-product  pyramid schemes, by any measure – loss rates, aggregate losses, and number of victims.

10 Comments on “MLMs with 4 red flags of a product-based pyramid scheme (A to D)”

  1. Tracey

    Dear MLM. Dr Taylor. I sat today drinking my coffee, sitting at a table, listening to a person tell me how this new skin care product/s work wonders, whilst they were testing it on my hand. So I asked how much is this?
    Oh nothing was the answer, only you need to join as an, ‘affiliate,’ customer, (eh what? I thought), to who would I be ‘affiliated to?’ to this lady, who is my ‘affiliate team member,’ who I coach, and you get to have these products, for US, $295, or better still, buy the bargan package, for US $500, and receive, 12 bottles,
    of which you give away a certain amount to friends, blah blah blah. Anyhow, I asked, is this a legal sale business? i.e. not pyramid? Absolutely not, was the answer, then how come it smells like one? So she opened the laptop, and bingo, here were all the diagrams, looking awfully similar to a ‘triangle,’ shape, what do I think she asked, and then told me, how she has just bought a million dollar house, a brand new top of the range Mercedes, just got back from a sales conference, in Houston Tx, and prior to that a working holiday in Fiji, took a happy snap of the manager of the resort, and bingo now a working holiday. And she got her initial outlay back in 28 days, as the company, sends the product to you, every 28days, just direct debt, easy nothing to do. And what do I think of the product? I asked why can’t I just, buy, the product? and not sign on,in, or to, a company, and by the way, what is you trading, name, you know like ABN, etc, the answer, ‘oh no, I use their business name, as a next level affiliate, (can’t remember what she called it, so much info, my brain was full). Yeah marvellous I said, but I’ll stick to the fine lines, pigmentation and wrinkles, you told me I have, and the boring, mundane job, and I don’t like flying away. I’m simple that way, like I told you in the beginning. She packed up and left with her two high flyer (wanna be’s) with her. So I went looking for info on the company she was talking about, and found your site. Of which I found very interesting informative, and helpful. Thank you.

    1. JonMTaylor

      Thank you for the vivid description of what often happens in MLM. Needless to say, you were wise to walk away.

  2. Skeptic

    I’ve been approached about Amway by a friend a few days ago. I did some research and it looks like a pyramid scheme. I’m gonna tell my friend no thanks, but how does a pyramid scheme like Amway manage to stay in business for 50+ years and operate in 100 countries? And the FTC found them not guilty of a pyramid scheme. Is the FTC reliable?

    1. JonMTaylor

      Dear Skeptic,
      Last week you wrote and asked about Amway and the FTC. This is all spelled out in Chapters 10 and 11 of my ebook Multi-level Marketing Unmasked, which can be downloaded free from my web site. Another ebook titled Regulatory Capture explains how the FTC, which should be regulating MLM, has been “captured” by the very kind of business they should be regulating. The FTC’s finding that Amway was not a pyramid scheme was what I call “the great FTC blunder.” My book explains why all MLMs should be illegal as unfair and deceptive acts or practices (UDAP) per Section 5 of the FTC Act.

  3. Frustrated

    Dear Dr. Taylor . I have a family member that is getting heavily recruited by Nu skin people as I speak. I Have passed on all your research and much more to no avail. I cannot persuade them not to do it !!!!They keep talking about some type of scanner that tells them how Healthy they are ? I think its ridiculous. The nu skin people are telling them that its Approved by the FDA ? if so , what does it do ? and lastly what is the best thing I can do or say to convince them not to sign up ?

    1. JonMTaylor

      “A person convinced against his will is of the same opinion still”. Once they’ve drunk deeply of the Kool-aid, about all you can do is pray for them.

  4. Anonymous

    Hey man, just want to late you know your website saved my life back in 2014. My experience in USANA left my emotionally/socially/financially scarred for 6 months+. I feel like I just got my life and sanity back by late 2015 early 2016. It was the information on your site that enlightened and gave me the confidence to walk away. Without that I would probably be still abusing myself within the cult.

    Can’t thank you enough, information is power. If only more people knew about the work you do. Keep up the great work.

    1. JonMTaylor

      Thank your for your kind words. It is comments like yours that keep me going, since I receive no pay for all this research.

  5. Erica

    This blog is incredible. An acquaintance of mine recruited me into ACN this week and I was struggling to find solid evidence to support staying or leaving. (There’s a 10 day cancellation period so I knew I needed to act fast.) This blog paints the clearest picture. I liked Ethan Vanderbuilt’s video on ACN, but I still had doubts in my mind as to whether I could make money without doing anything, simply by having the person who recruited me sign up other people underneath me. That didn’t seem like an ethical or fair thing, but I was excited enough at the prospect of hundreds of people signing under me and making money for me that I went ahead and signed up. I thought, what the heck, I can probably sell some phone lines too. Especially because both of the sales reps assured me people would save money if they switched their phone plans to ACN. The sales pitch included, “Help people save money on their phone and gas bills and get paid to do it.”

    I attended a sales training with ACN last night. The sales reps who recruited me at my friend’s house the day before said I would learn all about ACN and have my questions answered at the sales training. The sales training basically regurgitated the misleading and vague info from the sales pitch and congratulated a bunch of people for reaching new levels. People kept talking about how they had so much free time to travel, but the rep who recruited me was booked that entire week doing presentations and she lead the training saying she had nothing but free time!

    Anyway, none of my questions were answered by the seminar, and when I went out to dinner with the other rep after and asked her to pitch me like she would a customer, she said, “You have to say, ‘do me a favor and switch your phone contracts’, because you can’t guarantee that the service will be cheaper or a better quality.” This is the same rep who assured me the day before that their cell phone service was cheaper.

    I mailed in my cancellation form today certified with return receipt. Thank you for cutting through all the emotion and vague language and presenting facts. Without this blog, I would still feel uncertain. Now I feel empowered and that I see the structure for what it is. Now I have to figure out how to show my friend.

    Thank you, Jon!

    1. JonMTaylor

      Thank you for sharing your experience. Now you can do a service to others by warning them about these MLM schemes.

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