Is Forever Living Products a scam? should I beocme a seller?
July 2, 2013 6:09 PM Subscribe
My compadre asked me to become a seller of Forever Living Products. They told me I can make a lot of money, and they told me they became millionaires by selling this product. They told me they now travel the world, but they used to be school teachers. Is this a legitimate product? It seems like it might be a scam? Can someone please tell me the history on the product? I am Mexican immigrant and I don't know much about it.
Thank you
Multi-level marketing is always a scam. Basically, your friend gets money when you sign up. The company gets money when your buy their products in order to sell them to other people. The products are cheap and not something most people want; you would have to work ridiculously hard to sell them at a level that would make any serious money. But if you sign other people up, you get a kickback from the company....see where this is going? Do not sign up for this.
Rob Cockerham has a really good explanation of why MLM does not work, although his research pertains to a different company: Work from home scams
posted by blnkfrnk at 6:20 PM on July 2, 2013 [9 favorites]
Rob Cockerham has a really good explanation of why MLM does not work, although his research pertains to a different company: Work from home scams
posted by blnkfrnk at 6:20 PM on July 2, 2013 [9 favorites]
Yes, your instincts are correct here. This is a scam, specifically a multi-level marketing (MLM) scam. Essentially, the way these work is people are approached to sell a product (the product itself doesn't matter much), with unrealistic descriptions of the kind of profits they can make (such as being able to quit your job to travel the world.) The point is to get people to buy large quantities of the product to sell, pay for "seminars" about being a better salesman, recruit more people who will pay in more money, etc. More information.
posted by kagredon at 6:20 PM on July 2, 2013 [2 favorites]
posted by kagredon at 6:20 PM on July 2, 2013 [2 favorites]
If anyone ever asks you to become a seller of a product, it is almost definitely a scam. Maybe not a scam exactly but so close to being a scam that for all intents and purposes there is no difference.
Here is the main question you need to get answered: in the model of how much money you will make in the future, what percentage comes from selling the product, and what percentage comes from people you've signed up?
In a real business, the profit will come almost entirely from selling your product. I don't know if Dunkin' Donuts or Herbalife sets you up with a referral fee for signing up new franchisees, but it sounds perfectly possible. However, the franchisees of these businesses make their money from selling donuts, or whatever it is the business makes.
In a scam business, the profit is promised mostly from selling signups to other people. It looks so tempting on paper, but it essentially only ever works for a few people involved at the beginning of each scam. Partly because the horrible reality of the mathematics of exponential growth quickly mean that every person in the world has to sign up as a Forever Living Products rep, and partly because for the downline people to kick up to you *someone still has to actually buy the goddamn products*.
I've never heard of Forever Living Products, but I just looked at their website. Every single thing on the front page is about becoming a reseller of FLP. Not about who would actually buy the soap or whatever. Also, their products look indistinguishable from the dozens of other products on the shelves at every single grocery store.
Real businesses sell products and services for more than it costs to provide them. This difference is profit. That's the money you make. Scam businesses have illogical promises of ever-growing amounts of income from...what? Convincing other people to get involved in the same scam? How long can that go on? Or, looked at another way, how do you know you are not the last generation of people paying in to the business? If you were, could you still make money? With a real business, the answer will be 'yes', because you'll plan on profiting from your sales of whatever the product or service is to customers. If the answer is 'no', because the only real profits come from signing up new members/franchisees/reps, etc, then it is a scam business.
posted by jeb at 6:26 PM on July 2, 2013 [2 favorites]
Here is the main question you need to get answered: in the model of how much money you will make in the future, what percentage comes from selling the product, and what percentage comes from people you've signed up?
In a real business, the profit will come almost entirely from selling your product. I don't know if Dunkin' Donuts or Herbalife sets you up with a referral fee for signing up new franchisees, but it sounds perfectly possible. However, the franchisees of these businesses make their money from selling donuts, or whatever it is the business makes.
In a scam business, the profit is promised mostly from selling signups to other people. It looks so tempting on paper, but it essentially only ever works for a few people involved at the beginning of each scam. Partly because the horrible reality of the mathematics of exponential growth quickly mean that every person in the world has to sign up as a Forever Living Products rep, and partly because for the downline people to kick up to you *someone still has to actually buy the goddamn products*.
I've never heard of Forever Living Products, but I just looked at their website. Every single thing on the front page is about becoming a reseller of FLP. Not about who would actually buy the soap or whatever. Also, their products look indistinguishable from the dozens of other products on the shelves at every single grocery store.
Real businesses sell products and services for more than it costs to provide them. This difference is profit. That's the money you make. Scam businesses have illogical promises of ever-growing amounts of income from...what? Convincing other people to get involved in the same scam? How long can that go on? Or, looked at another way, how do you know you are not the last generation of people paying in to the business? If you were, could you still make money? With a real business, the answer will be 'yes', because you'll plan on profiting from your sales of whatever the product or service is to customers. If the answer is 'no', because the only real profits come from signing up new members/franchisees/reps, etc, then it is a scam business.
posted by jeb at 6:26 PM on July 2, 2013 [2 favorites]
Response by poster: So maybe my compadre was one of the very first people in the company, and really did make millions of dollars? but now it' too late for me to make that money, right?
posted by kikithekat at 6:31 PM on July 2, 2013 [1 favorite]
posted by kikithekat at 6:31 PM on July 2, 2013 [1 favorite]
Real millionaires don't give you their "oh-so-simple" secrets.
posted by oceanjesse at 6:32 PM on July 2, 2013 [8 favorites]
posted by oceanjesse at 6:32 PM on July 2, 2013 [8 favorites]
Maybe, in which case they essentially made their money by preying on other people. Maybe they're lying (I'd lean towards this possibility, unless you know for a fact that they now travel the world and are millionaires.) Maybe they're the sort of extremely rare, extremely lucky and talented person who actually manages to turn a decent profit on sales (in which case, they should really consider turning their talents towards selling things that aren't crap, aren't unethical, and don't require kicking such a large portion of profits upstream.) Whatever the case, they are not asking you to join because they think/hope the same will happen for you; they're asking you to join so that they can get a small portion of your fees.
posted by kagredon at 6:40 PM on July 2, 2013 [1 favorite]
posted by kagredon at 6:40 PM on July 2, 2013 [1 favorite]
How long have you known your compadre, and how did you meet them?
posted by bunderful at 6:51 PM on July 2, 2013
posted by bunderful at 6:51 PM on July 2, 2013
Psst, bunderful: wikipedia.org/wiki/Compadre
posted by phunniemee at 6:53 PM on July 2, 2013 [2 favorites]
posted by phunniemee at 6:53 PM on July 2, 2013 [2 favorites]
I hadn't heard of it before, but it doesn't pass "the smell test" and I agree that it's MLM crap. There are a range of MLM companies out there. Some sell useful stuff, some sell crap. Some have high-pressure sales and high-pressure recruiting, some are more low-key. I stay away from it entirely because I think the business model is sketchy. This guy sounds like he is using high-pressure sales techniques, so be careful because he will probably push back if you aren't firm with him that you are not interested. How did you meet this compadre?
posted by radioamy at 6:53 PM on July 2, 2013 [1 favorite]
posted by radioamy at 6:53 PM on July 2, 2013 [1 favorite]
Response by poster: Hehe, yeah, they are the godparents of my first born daughter, I've known them for 34 years. They joined forever living in about 1985, and they quit their jobs around 1990.
Compadre is the relationship between the parents and godparents.
posted by kikithekat at 6:59 PM on July 2, 2013
Compadre is the relationship between the parents and godparents.
posted by kikithekat at 6:59 PM on July 2, 2013
Maybe they're lying (I'd lean towards this possibility, unless you know for a fact that they now travel the world and are millionaires.)
Note that there is a strong incentive for them to mislead you about this: they make money if you sign up. At the very least, "they became millionaires by selling this product" is shading the truth a lot: you don't make big money in MLMs by selling the product, you make it by recruiting other people into the business.
And note also to become successful in MLM you will need to do what your compadre is doing: always be working your social and family networks for sales and recruitment. My extended family has such a guy in it, and put bluntly he's a pain in the ass.
oh, and:
It's not too late to make money: open a gas station. People buy gas very regularly because they need it.
Not so fast.
posted by We had a deal, Kyle at 6:59 PM on July 2, 2013
Note that there is a strong incentive for them to mislead you about this: they make money if you sign up. At the very least, "they became millionaires by selling this product" is shading the truth a lot: you don't make big money in MLMs by selling the product, you make it by recruiting other people into the business.
And note also to become successful in MLM you will need to do what your compadre is doing: always be working your social and family networks for sales and recruitment. My extended family has such a guy in it, and put bluntly he's a pain in the ass.
oh, and:
It's not too late to make money: open a gas station. People buy gas very regularly because they need it.
Not so fast.
posted by We had a deal, Kyle at 6:59 PM on July 2, 2013
Oh ha, I had no idea that "compadre" actually meant something specific, I assumed it was just slang for "friend!"
I imagine that this is kindof a sucky situation for you because this is coming from someone you respect and care about. But a quick look on their website shows that they definitely encourage you to keep recruiting new members. I am actually surprised that you weren't recruited earlier if you have known these people for so long.
posted by radioamy at 7:02 PM on July 2, 2013
I imagine that this is kindof a sucky situation for you because this is coming from someone you respect and care about. But a quick look on their website shows that they definitely encourage you to keep recruiting new members. I am actually surprised that you weren't recruited earlier if you have known these people for so long.
posted by radioamy at 7:02 PM on July 2, 2013
Since it hasn't been spelled out, I'll mention something that's been hashed over on this site before: the awful thing about MLM is that it forces you to see all your friends, relatives, co-workers and other associates as possible marks. Not customers – marks. MLMs seep out and taint all your personal relationships. Please resist this.
posted by zadcat at 7:05 PM on July 2, 2013 [10 favorites]
posted by zadcat at 7:05 PM on July 2, 2013 [10 favorites]
I'd also wonder: why, after all this time, is my compadre only now asking me to join? If the money's so great, and it's not a scam, you'd have been jumped in long ago. Perhaps the bottom's fallen out for your compadre, and he's turning to people he didn't want to involve in the past because there is nobody else he can tap.
posted by Scram at 9:01 PM on July 2, 2013 [6 favorites]
posted by Scram at 9:01 PM on July 2, 2013 [6 favorites]
So maybe my compadre was one of the very first people in the company, and really did make millions of dollars? but now it' too late for me to make that money, right?
Yes, this is possible.
Let's assume you're the first person to join the company. How many affiliates do you need to sign up to become a millionaire? I don't know, but let's say it's one hundred.
Now, each of those 100 people also want to become millionaires -- so each of them need to sign up 100 people, too. And if 100 people each bring in 100 new people, that makes a total of 10,000 new people! That's a lot, but it is certainly possible there are 10,000 people out there who might want to join.
The thing is, though, each of those 10,000 people also want to become millionaires. So each of them needs to bring in 100 new people. And if 10,000 people each have to find 100 new people-- that's a total of 1 million new people needed just to keep the whole thing from collapsing!
And if those 1 million people are going to become millionaires, they need to bring in 100 people each, so now you need 100 million new people to stop it from collapsing!
Let's assume there is one new wave of people every year. The company has been around since 1985, so we are now on the 28th wave. If everybody involved has made a million dollars, the 28th wave would have to include 100,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000 people-- which is more than the entire population of the earth!
Of course, that's impossible. So, you can conclude that the vast majority of people involved in this did NOT find enough new recruits to get rich.
This is the problem with all multi-level marketing. A few people might get rich, but there simply aren't enough humans on the planet for it to keep going forever.
A lot of people are assuming your compadre is trying to scam you, but it's possible he never did the math, so he doesn't genuinely realize how incredibly lucky he was. (And, to be fair, most people don't do the math -- which is why so many people participate in schemes like this, when they would be much better off investing their money in real companies, or even just sticking it in a savings account.)
posted by yankeefog at 2:53 AM on July 3, 2013
Yes, this is possible.
Let's assume you're the first person to join the company. How many affiliates do you need to sign up to become a millionaire? I don't know, but let's say it's one hundred.
Now, each of those 100 people also want to become millionaires -- so each of them need to sign up 100 people, too. And if 100 people each bring in 100 new people, that makes a total of 10,000 new people! That's a lot, but it is certainly possible there are 10,000 people out there who might want to join.
The thing is, though, each of those 10,000 people also want to become millionaires. So each of them needs to bring in 100 new people. And if 10,000 people each have to find 100 new people-- that's a total of 1 million new people needed just to keep the whole thing from collapsing!
And if those 1 million people are going to become millionaires, they need to bring in 100 people each, so now you need 100 million new people to stop it from collapsing!
Let's assume there is one new wave of people every year. The company has been around since 1985, so we are now on the 28th wave. If everybody involved has made a million dollars, the 28th wave would have to include 100,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000 people-- which is more than the entire population of the earth!
Of course, that's impossible. So, you can conclude that the vast majority of people involved in this did NOT find enough new recruits to get rich.
This is the problem with all multi-level marketing. A few people might get rich, but there simply aren't enough humans on the planet for it to keep going forever.
A lot of people are assuming your compadre is trying to scam you, but it's possible he never did the math, so he doesn't genuinely realize how incredibly lucky he was. (And, to be fair, most people don't do the math -- which is why so many people participate in schemes like this, when they would be much better off investing their money in real companies, or even just sticking it in a savings account.)
posted by yankeefog at 2:53 AM on July 3, 2013
Forever Living ripped off the book "Jonathan Livingstone Seagull" for their logo and marketing material. This book - with its "be all you can be" message is still popular with some people and it is taught in schools. I have personally disliked it since the day a senior manager gave all of our department copies at the same time as firing 10% of us (I am happily not alone).
My biggest criticism of it is ornithological: no bird that really cares about the technicalities of being able to soar ever higher is every going to call itself a "seagull" - which is a laughably blunt layman's term. It would be a sabines gull or an ivory gull - something damn specific. If you are putting a winning business plan together then details matter a great deal. Don't trust a company that offers only heart warming flannel (especially when it is stolen flannel).
posted by rongorongo at 3:14 AM on July 3, 2013 [1 favorite]
My biggest criticism of it is ornithological: no bird that really cares about the technicalities of being able to soar ever higher is every going to call itself a "seagull" - which is a laughably blunt layman's term. It would be a sabines gull or an ivory gull - something damn specific. If you are putting a winning business plan together then details matter a great deal. Don't trust a company that offers only heart warming flannel (especially when it is stolen flannel).
posted by rongorongo at 3:14 AM on July 3, 2013 [1 favorite]
Here's the thing. Do you want to do this job instead of whatever it is that you currently do for money?
Anyone who is successful in an MLM scheme is primarily a recruiter and motivator of salespeople. Those successful in MLM structures are very work oriented, and they have wide networks fo people from which to recruit.
The key to making money isn't selling the product, the product is a MacGuffin, it has no intrinsic value itself, it is the mechanism around which we're getting people to rally.
So if you enjoy having meetings, talking to lots and lots of people, if you enjoy pestering everyone you know to join your plan, then by all means, this may be for you.
If all you want to do is sell the product, you may get a few extra bucks in your pocket, but you won't really be able to retire on your proceeds.
I once got roped into signing up for Mary Kay. It was a very weird and charismatic experience. When I got home, I realized that I didn't want a part-time job selling Mary Kay, so I bailed.
posted by Ruthless Bunny at 6:22 AM on July 3, 2013
Anyone who is successful in an MLM scheme is primarily a recruiter and motivator of salespeople. Those successful in MLM structures are very work oriented, and they have wide networks fo people from which to recruit.
The key to making money isn't selling the product, the product is a MacGuffin, it has no intrinsic value itself, it is the mechanism around which we're getting people to rally.
So if you enjoy having meetings, talking to lots and lots of people, if you enjoy pestering everyone you know to join your plan, then by all means, this may be for you.
If all you want to do is sell the product, you may get a few extra bucks in your pocket, but you won't really be able to retire on your proceeds.
I once got roped into signing up for Mary Kay. It was a very weird and charismatic experience. When I got home, I realized that I didn't want a part-time job selling Mary Kay, so I bailed.
posted by Ruthless Bunny at 6:22 AM on July 3, 2013
This thread is closed to new comments.
posted by elizardbits at 6:18 PM on July 2, 2013 [14 favorites]