Advocare and Market America Have Transformed The Pyramid Scheme

For those of you that read my article titled “Advocare Distributors Should Read This”, you already know a little bit about me, and why I write about multilevel marketing (MLM). In this article I am going to try and build on that and explain why I continue to press the conversation, when I get nothing of monetary value in return. Bringing awareness to the deception that lies within MLM is something I believe is important. If you are one of those people that are just using the product because you like it, this is not about you. Using deceptive behavior, and talking about the transformation of MLM into a new pyramid scheme, that is what motivates me to continue writing. One thing I have noticed lately is that these companies are getting smarter.

Companies such as Advocare, Amway, Market America, and many more feast on individual wants and needs. They know there are two types of people. There are those that are going to buy the product either because they want to help a friend, or because they really like the product. Then there are those people that are going to put all their hopes and dreams into one of those baskets, and start selling the products. Hoping they will be the next one percent that actually makes money. When I first started reading about MLM, I could accept a person’s decision to go all in, as if gambling at the casino. You’re probably asking yourself, what did he just say? Please, allow me to explain.

See, when a person goes to the casino, they know or should know that they are going to either win, or lose. Gambling is a game of chance or luck if you prefer. Unless you are cheating, then it is a crime. I do not need to start blogging to inform people that they most likely will not win a jackpot while gambling. If that were the case everyone would just quit their job and go gambling.

Unfortunately, after reading all the information about MLM, I realized many people were being brainwashed into believing that it is possible for everyone to be successful. All they have to do is implement Advocares marketing strategy, and Danny McDaniel’s bullet proof shield. Success will come to those that work hard at their business. Danny McDaniel presents the idea that failure typically comes to those that did not follow the market plan. The marketing strategy is simple. Get as many people from your warm market (family and friends) to join, and get at least three of them to advisor. Oh yea, and repeat.

That is when I decided to calculate how long it would take to go through the city of Oswego using the Advocare market plan. I provide the simple mathematical analysis in one of my earlier articles, but I believe it took less than 7 months to saturate the market in Oswego. Let me add the fact that my analysis was assuming that the whole population of Oswego was actually going to buy into Advocare. If I was being realistic, and calculated those that are already selling for a different company, and those that just are not interested, I could probably cut the months into half. That would ensure market saturation in about 4 months. But as I aforementioned, the companies have transitioned into a new breed of MLM. That is what really drives my writing.

If you take a close look at each company you will notice they implement some of the same techniques. McDaniel likes to compare the business structure to a franchise, and so does Market America. If you go to the Market America website and click on the UnFranchise button at the top of the page you will be able to read all about it. It is an interesting concept at best. The idea is to sell the prospective reader the idea that Market America businesses are similar to a franchise, without the extremely large franchise fee. I am not going to bore you with a full description when you can read it for yourself. But I am going to point something out that I noticed.

The company gives me the impression that you can have multiple business locations. This is the statement in the UnFranchise section and I quote:

“Like a franchise, Market America provides systemization, standardization, state-of-the-art management systems, merchandising and marketing tools, growing visibility and the opportunity to own multiple business locations.”

Now I am having a really hard time swallowing that! What does multiple business locations mean? I read that you can only have one distributorship, right?

So, now I am forced to research that particular business concept a little further. I went online and found several of their marketing material being used by distributors of Market America. One of them is titled “UnFranchise Owner (UFO) Program. I am not going to go through it with you, but I assure you there is nothing in that PDF that indicates someone has actual ownership of multiple business’s, or in multiple areas. As a matter of fact, from what I read, fulfilling requirements would be much more difficult than an Advocare International distributorship. That is my opinion. But this article is about their similarities and the transition into a new and more deceptive MLM. Trust me, I found plenty of deceptive rhetoric within Market America that is congruent with Advocares marketing strategy. Please, allow me to compare and contrast what I believe is the new evolving MLM utilizing Advocare and Market America. I think you will have a better idea of what motivates me to keep writing when I am done.

The traditional MLM was an exact pyramid structure, where the people at the top were making the big money. The concept really has not changed, but the structure has. Like I said, typically the structure would look like the following Diagram. You can turn it upside down, and nothing would change.

As you can see, the government’s traditional picture of a pyramid starts with one person at the top, and at some point exceeds the world population. The end result is an imminent destruction of the pyramid. Personally I do not believe you would have to run out of people in the world. Losing investors would in and of itself be enough to bring the pyramid down. That type of pyramid system has been shutdown for reasons I am not going to discuss here. If you want to learn more you can visit the United State government site. The problem I see with the governments’ analysis is, I am not so sure they really know what a pyramid scheme is anymore.

 Unfortunately, the pyramid design is not even close to looking like the traditional pyramid, and to be honest, when I started writing this, I was not sure I would be able to provide an adequate visualization. The following image will give you the clean, neat, organized image, but it is not that perfect in reality. The image will give you an idea how the new MLM pyramid structures are embedded within. 

As you can see, inside the big pyramid there are several other pyramids that take on a variety of shapes. Not necessarily congruent with the traditional triangle structure the government is familiar with. In the new type of MLM, such as Advocare, you can go as wide as you want to infinity (although the contract may contradict that) and three levels deep. Someone that joins can surpass the person that originally got them into the program. But I already went over that in one of my previous articles. My mission here is to point out how the two companies have taken the traditional pyramid scheme, and turned it into multiple pyramids in one scheme controlled by Advocare and Market America. I call it a scheme because the end result is the intentional and mischievous intent to deceive all the distributors that participate. The unfortunate truth is that it is working.

Remember I said the traditional pyramid would eventually collapse. Well, I probably should have also told you many of the traditional pyramids did not have a tangible product, and that contributed to the certain failure or collapse. Advocare has a product that many people want and need. The same can be said about Market America. Both companies know that if they provide a product that is in demand, and they can get people to believe in the marketing strategy, they will never collapse. Well, until the Federal Trades Commission finally forces them to change their marketing strategy, or close them for good. Or when people wake up and figure out their products are similar to others on the market. In regards to Advocare, most people could lose weight and get into shape without their products. Here is a side by side comparison of the two companies.

I think that should sum it up. As you can see they have implemented many of the same strategies. If you do not believe Market America distributors are not deceptive then explain to me why they had to send out a letter in response to a Fox 6 Now story. Because many of their distributors were using deceptive business practices to ensure they met their monthly quota. Why, if it is such a profitable business, does anyone have to cheat?

Distributors from both sides claim that the companies many years in service is a product of a successful marketing plan. Technically they are telling you the truth. Unfortunately, there are two marketing plans in motion. The distributors are utilizing one type, and the company is using their own. The business strategy of Market America and Advocare is almost impeccable. Both Advocare and Market America have been successful since the early 90’s. Both attract distributors to sell their products, and commission is contingent on recruiting. An attorney might say but for recruiting, commission will never be recognized, period! The unfortunate truth is that distributor’s market plan is not so successful. Yes, you can make an extra income from just selling for either company. But, turning either business plan into a full-time job is highly unlikely according to the statistics. I am certain if distributors were making tons of money just selling the product without recruiting, Advocare and Market America would find a way to emphasize that fact.  

Do these companies have products people want? Yes, they do have products, and they are marketable. The unfortunate truth is that the products are way over priced compared to similar products on the market. Now, I am going to cut Market America a little break because they have a wide variety of products people want and need, where Advocare is limited. I still have some more research to do on Market America, but from what I have read so far, they are very similar.

  This is the fact, and what drives me to continue until something changes. Both Advocare and Market America have implemented a type of scheme. If you read the definition I provided early on, you know that a scheme is something the company does to implement plans, in this case, devious plans. The first part of the plan was to find a way to implement the pyramid system in a way that would allow them to circumvent the anti-pyramid scheme laws. To help them do that, they implement products that are viable, and marketable. To avoid negative rhetoric they enlist endorsers that are trusted by the communities such as doctors and athletes. Create a market plan that entails recruiting, but incorporate the need to have customers. Or in Advocares case, call the distributor a customer, or wholesale customer. I believe you get the idea, and I am starting to border on redundant.

The end result is a new improved pyramid scheme or MLM system. One big pyramid with thousands of miniature pyramids inside. On any given day several of those little pyramids will disappear, and the market will level off again. That is called market saturation. Selling the product will become so difficult for many, they have no choice but to give up. But, the corporate pyramid scheme survives as long as new distributors come to the plate, and are willing to play the game. Welcome to the new Pyramid Scheme.

That is why I continue to write about MLM. Until many of these companies and their distributors (not all) stop using deception, lies, and God to advance their financial situation, I will keep writing. Many people have lost their savings and their family because of companies such as Advocare. Husbands and wives divorce, and brothers and sisters stop talking. Friends avoid you like the plague. The aforementioned are realities of MLM. Sometimes, although their little pyramid still stands strong, their family relationships crumble. In the end, many of you will have nothing to show for it. Yes, that is an intuitive conjecture at this point. But I assure you, I will be bringing an article to you soon that will bring that reality to life.

Thanks for reading and please share your thoughts here or join me on Facebook

Here is an interesting post from someone that used to be in Market America if you are interested in reading more.

http://blog.happierabroad.com/2012/10/market-america-scam-and-misleading.html