What others say..

Ok, first of all, I want to apologize for my previous harsh remarks. It's really an outburst of anger. I wish to say again, it's uncalled for. For those young LB members, it's better you guys find a better job than LB. Your uplines are more slick than you are.

There are some contributions from others regarding D.C.H.L. that I got. So, I will put this below. This one is interesting, as I have planned to write regarding Direct Selling Association of Malaysia article on the comparison between Direct Selling and Pyramid Plan.

http://www.dsam.org.my/pyramid.html

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From Calvin:

Hi there,

I started to get interested in finding the nature of the business call Multi-Level Marketing when my friends were getting seriously involved in several MLM company.

Basically under the definition of DASM (www.dsam.org.my/selling.html) MLM is under the roof of Direct Sales.

Types of Direct Sales:

1. Door-to-door / Simple Commission Plan
2. The Hostess / Party Plan
3. Multi-Level Marketing / Distributor Network Plan
4. Pyramid Plan

Since a lot of people mostly (pro-MLM person), would like to emphasis on MLM is the business structure of the cutting edge stuff, yet the truth is always bitter, according to my research, it turns out to be false. The earliest form of MLM were started by the Amway around 70s~80s. So, anyone pitching about how “Cutting Edge” MLM are, please don’t use that phrase again.

“Door-to-door” & “The Hostess” are earliest form of MLM before combining the franchising idea. Whereas MLM is a business model that combines direct marketing with franchising. At the early development of MLM, these company found themselves facing the problem that they overproduce product (in financial terms a.k.a. poor market dynamic), hence more money have to spend on inventory storage, which ultimately resulting in greater cost. So, how do they solve this crisis? So, they introduced motivational system (Brainwashing) into MLM, resulting a group of total depended users. So, some clever guy might pointed out that in Lampe Berger it won’t happen such thing because it sounded more like an daily consume product (e.g. soap, detergent… etc.), right? But the truth that I brought up this is try to imagine, motivational materials are needed even for selling daily usable product, how about a product such as Lampe Berger, which is known for it’s pricy collectors’ lamp? Try to imagine Lampe Berger without the motivating classes/seminars?

For those who don’t understand this paragraph, please refer yourself to (http://www.vandruff.com/mlm.html) this webpage explains the fundamental flaws in MLM. I am merely comparing Lampe Berger to Amway, which is often using as a bench mark to justify other MLM. Looking only in the types of product that they offer it would be very easy to spot that, there is a serious problem in these lamp’s Market.

Some might pull out the triumph card, where something similar often being said “If it doesn’t work, why does it exist?”. It is not questionable that MLM works, since so many companies adopted the structure, and success. Comparing to the conventional business it would be very obvious that MLM is just like an infant, a lot of work needed to be done in legal issue and a great deal of time is needed to patch up some major loop holes. And to do that, people need to understand the full-picture. So, please don’t stereotype those that opposing your view as a Negative person. In fact what you did it information control (a way of mind control). Some might even came across some roguish comment claming we don’t understand the nature of the business, discrediting other people without any proof, some even ended with some ridiculous speech, such as “Why don’t go to report to police?” Oh! Please, these kinds of cases are to report to “Kementerian Perdagangan”. And I don’t think that is the best way to approach this issue, as one says the Wiseman solve problem before they arises, vise versa. So stop ranting nonsense when you were asked to defend your business, rather I would prefer proof.

One of the things that concerns me the most is by definition Lampe Berger is very close to the pyramid thingy: (Quoted from: http://www.dsam.org.my/pyramid.html)

QUALIFICATION FOR BEING A PYRAMID SCHEME:

(Wow! Are you one of them? Let’s check)

1. “Pyramid schemes often disguise high entry fees as part of the price charged for required purchases of training, product inventory etc. Pyramid schemes make virtually all their profits from recruiting.” – True, Lampe Berger requires a big lump of money to join.

2. “Pyramid schemes are frequently disguised to appear as legitimate direct selling companies. Such schemes are not interested in marketing these products which are of dubious value. Instead, money is made in typical pyramid fashion, from recruiting, with new distributors being pushed to purchase high cost/large inventory when they sign up.” – True! Once upon a time, Lampe Berger’s distributor might still ethical by solely introducing the product (Occasionally introduce the system), but now since the crowd is so big, that they no longer keep good track on how they how perform. People now tend to sale the opportunity than the product. And lamps are merely use as a disguise to fool government officer. (Look! We Sells Lamps!)

3. “Pyramid schemes will not buy back unsold inventory. Such schemes will collapse very quickly if there is this condition for re-purchase of goods.” – True! Black and White they did stress out that they will buy back, but in reality there is a lot of deception upon refund issue.

4. “Pyramid schemes are get-rich quick schemes. The nature of the pyramids, in which large numbers of people at the bottom of the pyramid pay money to a few people at the top, clearly explains why the scheme cannot sustain itself for long.” – Okay, let’s be fair, some says it is and some say it isn’t, I think I will let reader justify themselves on this. But showing off fancy cars, shiny jewelries, and claming one could being “Financial Independent” within few years ~ what do you all think?

5. “Position could be purchased.” – Let’s see, with RM 30,000 a person can bought what? Hmmm… I guess, position really can be sold at Lampe Berger! This makes it another True!

6. “Pyramid schemes are not concerned with repeat sales to users of the products. Profits are made on volume sales to new recruits who buy the products not because they are useful or attractively priced, but because they must buy them to participate in the scheme. As a result, new participants are stuck with products that are way below the market value in relation to the high entry fees paid by them. Should the pyramid scheme collapse, there is no way for the participants to recover their "investments".” – High entry fees?!! RM 2345 is it highest among MLM companies? Who knows? Maybe some position buying MLM with the price tag RM 30,000 are the highest (wait a minute, isn’t both of them from the same company?). Hmmm… products below market value… I think a search on ebay will give a clearer description on this issue. So, I guess another True!

7. “Promoters of a pyramid scheme are engaging in fraud, knowingly deceiving participants in the schemes.” – True! By not telling the risk a person undertaken prior to introducing them into the business, and exaggerating the power of aromatherapy, in not only ill moral, they are deceptive. (D

8. 
   

o “Participants in a pyramid scheme have no choice but indulge in inventory loading/high fees to participate.”

o “Participation is essentially based on recruiting, not necessarily on the sale of products or services.”

– Both are similar to above, so, I guess will have concluded as True.

9. “Pyramid schemes have been outlawed throughout the United States and many countries many countries around the world.” – Uncertain, because I don’t have proof! (this is were where is really dislike a lot of MLM distributor, they so easily claming stuff that they just heard without showing any proof )

Yes, you all do sell “Lamps”, yet, why do they prefer recruiting people than selling these magnificent lamps? I don’t even recall once I met a Lamper Berger distributor approach me talking solely on Lamps, most of the time these Lamps are merely pawns to lure people interest. Okay, let’s says some of the INEXPERINCED distributor abusing the flaws in this business, but why even among high level (Marquis) also emphasised on the system part rather than the product? Well at least they are being HONEST in what their intention. Strangely, I have to admit that I do adore the Marquis perverted honesty.

Lastly no matter how hard you argue, it is still a money game, allow me to explain:

Using the 8 ball/passenger network, let says in a 4 level of binary expanding network tree, the blue circle represent a person who earn himself a higher ranking (e.g. count). The blue circle required to sustain the network in order to maintain position. Now please look at the a macro situation where we assume no loss in numbers of member in first pyramid diagram, and we assume the lowest 8 person get their own 4 level of people, where they now are promoted to be one of the blue circle. So, looking at the picture we can see, the numbers in red circle increased exponentially where as the ones in blue increase much slower. With an 88.1% of loser/supporting person in the system, then percentage will only grow higher as the pyramid grow bigger. If in a world where people will just pop up and increase with the speed of the pyramid expanding, it would be an ideal structure to operate, but in reality, populations are constrains be limited resources, strategic locations, degrees of education… etc. People won’t be able to breading like pigs. That’s why market saturation factor kick in. Looking at the RM 30K position buying mechanism, it is terribly wrong, because it is like adding petrol on madly burning fire – why do I say so? In order to maintain one’s position he/she must maintain the structure of network/pyramid, but smart DCHL – operating under the product name of Lampe Berger created a short cut, where people at the bottom base supporting the structure suddenly come up with the money to skip a level, the structure will definitely crumble. So, why haven’t it crumble? This is the main reason that they are targeting fresh graduates or even undergraduates to join into the system so that they can manage to remedy the instability caused by the short cut they have created.

Fig1


Fig 2
Fig 3

So, let’s change a different perspective looking at this matter, Mental issue! Yes, I’m not saying people get crazy (but close enough). When we were brought into some meeting/seminars they will always says starting the “BUSINESS” it’s like a piece of cake, but when people really did try and fail, they claim that they:

1. You where not part of a wining team
2. You didn’t submit yourself into the system
3. LAZYNESS
4. NO heart
5. Easily influenced by negative
6. NOT willing to commit
7. Did not apply the 3 powers!
8. You gave up

Hmmm… I guess it isn’t really as easy as what they said, isn’t that unethical? Claming one thing at first and then blaming then when they quit? I’m not saying those joined and didn’t do anything, what I’m saying is those that really gave up a lot of time participating it and found themselves facing a lot of problem. This will certainly put people into confusion because the only thing they know is blaming themselves, since they were told so many times that people fails because the reason stated above. There is a free book on talking how a former distributor experienced when he is trying to get out from MLM (http://www.merchantsofdeception.com/), the higher the distributor position is when he decided to get out, the more harsh it would be in his mind to accept the reality and moving one with his life.

Finally, I do hope people have come to their senses before joining MLM Company, especially Lampe Berger operating under DCHL (MLM + Motivating Material). And by the way, please don’t lose your temper, don’t use vulgar words. The one thing that separates us from them is that we are able to tell what is right. Where as those that totally plug into the corrupted system, are ignorant and most of the time denying reality by using improper words. So, the point is that you are not them, please don’t get yourself down and dirty. Wishing you all the best! And this is only one mans perception!

Cheers,

Calvin

Resources:

http://www.merchantsofdeception.com/

http://www.quixtarinsideout.com/

http://www.vandruff.com/mlm.html

http://www.quackwatch.org/01QuackeryRelatedTopics/mlm.html

http://links.jstor.org/sici?sici=0022-2429(199507)59%3A3%3C63%3AMOATLO%3E2.0.CO%3B2-N

http://www.dsam.org.my/

http://en.wikipedia.org/wiki/Pyramid_scheme

http://en.wikipedia.org/wiki/Ponzi_scheme

http://www.pyramidschemealert.org/