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morguefile_pyramidLooking to earn some extra cash for the coming holidays? Feeling the pinch of the economic downturn? Just want to make a little more money for a rainy day?

When people feel this way, one of the opportunities that will evenutally knock on their doors is Multi Level Marketing (MLM). There are other names for it – network marketing, social marketing, direct distributing. Legally speaking, most of the legitimate companies that use this form of marketing are not pyramid schemes. At least not legally. However, they do strongly resemble pyramids in their structure.

Some people do make money with these opportunities. A few make really good money! However, often what you are told or shown isn’t the whole picture. The vast majority of people lose money in these businesses. If you’re meeting with someone about an opportunity like this, be forewarned with the information from these sites.

Pyramid Scheme Alert

psalogoPSA purports itself to be a non-profit, donation driven organization dedicated to revealing the truth about multi-level marketing and pyramid schemes. Founder Robert FitzPatrick has written a book on the topic and has been consulted as a professional by different media outlets in the U.S. and Canada.

Here you can find information on legal proceedings against MLM companies, news about them, and alerts as well. PSA does have an e-mail list that you can sign up for, to get regular information.


I find the site fairly well organized and easy to use. It appears to have the most in-depth information of the sites listed here.

MLM Survivor

MLMSurvivorThis is a bit of a different site, in that it is a site within a site. What the heck does that mean? Well, MLMSurvivor has had a site since 1999 that featured information about Quixtar/Amway, Equinox/Trek Alliance and other MLM’s.mlmsurvivorcomYou can get to it by clicking on the Original MLMSurvivor Site link.

The original site has hundreds of pages of personal stories, research, and an MLMSurvivorsClub with over 8,000 members on Yahoo! Groups.That site is somewhat wrapped inside a new blog that functions a bit more like a news site.

It appears to have been only recently resurrected, with just a few posts starting late last October. Looks like Amway is in the courts again.

The Pink Lighthouse

pinklighthouseJust in case it seems like all these sites are about Amway, well, they aren’t. The Pink Lighthouse is a blog put together by a former Mary Kay Consultant. It sure seems that the pink isn’t all that you might think!

There are dozens of personal stories to be found here. Perhaps the most common thread between them all is that the products are great! However, the personalities that they had to work with (more like work for) was the biggest problem. Lots of inventory purchasing that seldom gets sold and tons of pressure to keep buying inventory just so the upline can make their monthly goals. Apparently Mary Kay isn’t an MLM, but rather a Dual Marketing system. I’m not sure what that means, but I do know you can put lipstick on a pig and it’s still a pig.

After you’ve read through these sites, I can see how you wouldn’t touch an MLM pyramid scheme with someone else’s ten foot pole. Yet still, the fact remains that there are people that make money with some of these business and there are even a few that have made millions. The question then remains, are you willing to do what it takes? Statistics only would say the odds are against you.

Have you had an MLM pyramid scheme experience, good or bad? Do you know of any other resources you’d recommend to people checking out MLM’s? You’d be doing us all a favour by sharing them in the comments.

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  1. Bill
    November 10, 2009 at 10:43 am

    I enjoyed your article very much. As an avid Internet Marketer myself I am always looking for ways to make money working online!

  2. Grant
    November 9, 2009 at 10:40 am

    Thanks for your article. MLM and Avon typically do not go together in a sentence. When one thinks of MLM, I think of Amway or some form of health product. It is great to hear stories of how MLM businesses have changed people's lives.

  3. Giovanni Garinian
    November 8, 2009 at 9:26 am

    My family has been in the MLM Business for 20 years. They are enrolled on JaFra Mexico (competitor of Avon, but with heavier and solid finance indicators). Both my mama and my aunt are at the top category 'Lady Grand Master" since 12 years ago and my mama get to that recently this year. Thanks to that we manage to outstand the recurrent economy crisis on Mexico with success and helped a lot of other people sharing the opportunity and leading them step-by-step through the process. We've learned a lot, and today we are still growing.

  4. Nick
    November 8, 2009 at 7:03 am

    I'm a 45-year old man and I've been an Avon Representative for the past 5 months and have just achieved "President's Club" - an honor for those who have sold over $10,100 in product in a year. I know that many people consider Avon a Pyramid scheme, but it's not.

    The difference between a pyramid scheme and direct sales is simple: A pyramid scheme relies on up front payments to join. Example: A person pays $500 to join an organization and then needs to recruit others to do the same. The income generated and paid out is completely dependent upon the ability to recruit others and getting that cash flow up front.

    Avon, on the other hand, is direct sales. You pay $10 up front to receive basic supplies. You are then in business for yourself with Avon acting as your supplier. You can make money by selling Avon, or you can recruit others for a bigger piece of the pie. Either way, pay out can only happen if you are making sales. As a President's Club member, I make 40% commission of my sales. Not bad when you consider I'm not paying overhead for a store.

    For those wishing to learn more about Avon, I'll be happy to tell you of my experience.

    • Guy McDowell
      November 8, 2009 at 9:03 am

      You make a very good point Nick. Those MLM businesses that operate like a pyramid scheme often don't sell to people outside of the business. Or at least the people recruiting discourage doing that.

      Avon has a great reputation and you'll find Avon products all over our house. Seems to me the Avon business opportunity isn't pitched like a get-rich-quick scheme either. From what I know, they emphasize that it takes a lot of work and give realistic earnings information.

      Glad to hear you're doing well!