The site will be divided into two sections: The main page will showcase BlueIsland. The user will then have the opportunity to enter into their relevant area.
Business model[ edit ] Participant profits and losses[ edit ] The overwhelming majority of MLM participants most sources estimated to be over This creates great profit for the MLM company's actual owners and shareholders.
As noted, many MLM companies do generate billions of dollars in annual revenue and hundreds of millions of dollars in annual profit.
However, the profits of the MLM company are derived to the detriment of the overwhelming majority of the company's non-salaried workforce the MLM participants. Only some of the profit is then significantly shared with none but a few individual participants at the top of the MLM participant pyramid.
The earnings of those top few participants then allows the creation of an illusion of how one can potentially become financially successful if one becomes a participant in the MLM.
This is then emphasized and advertised by the MLM company to recruit more participants to participate in the MLM with a false anticipation of earning margins which are in reality merely theoretical and statistically improbable.
Participants, other than the few individuals at the top, provide nothing more than their own financial loss for the company's own profit and the profit of the top few individual participants. Rather, the true sales pitch and emphasis is on a confidence given to participants of potential financial independence through participation in the MLM, luring with phrases like "the lifestyle you deserve" or "independent distributor.
MLMs very rarely emphasize the extreme likelihood of failure, or the extreme likelihood of financial loss, from participation in MLM. MLMs are also seldom forthcoming about the fact that any significant success of the few individuals at the top of the MLM participant pyramid is in fact dependant on the continued financial loss and failure of all other participants below them in the MLM pyramid.
Differences and similarities to pyramid schemes[ edit ] MLMs have been made illegal in some jurisdictions as a mere variation of the traditional pyramid schemeincluding in mainland China. According to the U. Federal Trade Commission FTCsome MLM companies already constitute illegal pyramid schemes even by the narrower existing legislation, exploiting members of the organization.
Jurisdictions that retain a legal distinction between MLM pyramid businesses versus illegal pyramid schemes retain said distinction on two key distinguishing features: Please help improve this section by adding citations to reliable sources. Unsourced material may be challenged and removed.
The income of participants, if any income is made at all, is derived only from commissions on their personal sales or their share of the commissions on the personal sales of their downlines the MLM compensation structure. As non-employees, participants are not protected by legal rights of employment law provisions.
Instead, salespeople are typically presented by the MLM company as "independent contractors" or "independent business owners". However, participants do not possess a business in the traditional legal sense, as the participants do not hold any tangible business assets or intangible business goodwill able to be sold or purchased in a sale or acquisition of a business.
These are the property of the MLM company. Lawsuits[ edit ] Companies that use the MLM business model have been a frequent subject of criticism and lawsuits. Legal claims against MLMs have included, among other things: Critics have argued that the use of these and other different terms and " buzzwords " is an effort to distinguish multi-level marketing from illegal Ponzi schemeschain lettersand consumer fraud scams.
Bythis had grown to However, they later introduced multi-level compensation plans, becoming MLMs. The blue individual will receive compensation from the sales of the downline red members.
Independent non-salaried participants, referred to as distributors variously called "associates", "independent business owners", "independent agents", etc. They are awarded their own immediate retail profit from customers plus commission from the company, not downlines, through a multi-level marketing compensation plan, which is based upon the volume of products sold through their own sales efforts as well as that of their downline organization.
Independent distributors develop their organizations by either building an active consumer network, who buy direct from the company, or by recruiting a downline of independent distributors who also build a consumer network base, thereby expanding the overall organization.
The combined number of recruits from these cycles are the sales force which is referred to as the salesperson's "downline". This "downline" is the pyramid in MLM's multiple level structure of compensation. And big money is what recruiters often allude to in their pitches. The strongest, most powerful motivational force today is false hope.
Businesses may use terms such as "affiliate marketing" or "home-based business franchising". Many pyramid schemes attempt to present themselves as legitimate MLM businesses. They're actually illegal pyramid schemes.
Why is pyramiding dangerous? Because plans that pay commissions for recruiting new distributors inevitably collapse when no new distributors can be recruited.
And when a plan collapses, most people—except perhaps those at the very top of the pyramid—end up empty-handed. Much has been made of the personal, or internal, consumption issue in recent years. In fact, the amount of internal consumption in any multi-level compensation business does not determine whether or not the FTC will consider the plan a pyramid scheme.
The critical question for the FTC is whether the revenues that primarily support the commissions paid to all participants are generated from purchases of goods and services that are not simply incidental to the purchase of the right to participate in a money-making venture.Dec 03, · In this section of your business plan, specify why customers want or need your products and/or services.
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