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Multi-level Marketing Gets What's Coming in the Movies

Aug 5, 2008
Multi-level marketing, or MLM, has a long history that really took off in 1959 when two highly successful distributors broke off to start their own company, the famous name of which conjures up images of living the "American Way." Now, with worldwide fame, it and other similar companies have become the target of many a MLM movie which pokes fun at the business model.

And thanks to the "creative" and sometimes desperate tactics of distributors, along with motivational pep meetings that are reminiscent of one's college frat days, it has made the business model such an easy target for those who would poke fun at them.

But just what is multi-level marketing, where did it come from, and how did it obtain such a firm grasp on the American public?

A Quick History of MLM

Although Amway is often thought of as being the first multi-level marketing -- sometimes also called direct marketing or network marketing -- company, its history actually goes back farther than that. However, Amway was the first one to really make it big and they are actually considered by many to be responsible for turning more home business owners into millionaires than any other company.

Two longtime friends, Jay Van Andel and Richard DeVos, had worked hard to become the most successful distributors in their organization during the 1950's. By 1959 Jay and Richard were looking to expand their product offering. That's when they began to venture out on their own to start their very own direct marketing company.

As Jay and Richard's company gained in popularity, it was hard for many people to not look at the structure and think, "That's a Ponzi scheme!" Indeed, the pyramid-type structure can remind one of Charles Ponzi's postal coupons scam of the early 20th century.

By the 1970's, the outcry had grown to a point that the FTC decided to investigate. After intense scrutiny, the FTC declared multi-level marketing to be a legal business model. What makes it legal is the fact that you are exchanging a product for money, unlike a Ponzi scam in which the investor is tricked into believing that there is a product when in reality there is none.

Today, network marketing is widely accepted, though there are still plenty of souls who frown upon it.

Main Criticism

The main criticism of companies like the one founded by Jay and Richard is that they tend to make exaggerated income claims, promises of wealth, and require distributors to make minimum purchases of products that are, in most cases, overpriced.

And the selling of overpriced "wholesale" products isn't the only place these companies make their money. Training and marketing materials, such as MLM DVD's, are often pushed in order to "help" distributors recruit more members into their organization.

The popularity of MLM has made it a large target for those who would lampoon it. Search the web for "MLM movie" and you're sure to find plenty of films both critical as well as comedic.
About the Author
Believe Ventures has put together a very entertaining and insightful MLM movie. To view the trailers and learn more about the plot, visit their website at http://www.believethemovie.com. The author, Art Gib, is a freelance writer.
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