Inquiry: Critical Thinking Across the Disciplines
Inquiry: Critical Thinking Across the Disciplines (Photo credit: Wikipedia)
These are resources about critical thinking, skepticism, scam busting, and MLM.

Critical Thinking


Scam and hoax busting

MLM and MLM criticism
  • Rod Cook's MLM Watchdog: warning people off scams
  • Stephen Barrett's MLMWatch: skeptical look at MLM and their claims. Also see his companion website Quackwatch, on bogus medical claims and such
  •, homepage of Grimes and Reese LLC, MLM lawyers
  •, homepage of Kevin Thompson, a very plain-spoken MLM attorney who's not afraid to point out failure of MLM industry to police itself
  •, no bullsh__ look at MLM, no marketing speak here
  •, operated by Troy Dooly, advocate for MLM affiliates (though he's more prone to take the MLM side of things)
  • Inside Network Marketing, operated by Len Clements, a MLM consultant with his own no-nonsense look at MLM, from a MLM insider's perspective.
  • Pyramid Scheme Alert, operated by Robert Fitzpatrick, a long-time opponent of MLM probably best known for his appearance on Penn & Teller's Bullsh**! episode on MLM, stating that MLM is just one big fancy pyramid scheme. There's SOME truth to his criticism, you'll have to figure out how much of it to believe, and which parts are extrapolated or conjectured.

Enhanced by Zemanta


  1. Great Show!

    Good thinking! Fantastic material


  2. I don't seem to be calling out the same scams you are so I'll refer folks over to my site category "scams and cons"

    Thanks to someone I called out I decide to combine them since I've lost my AdSense account :)


  3. how about

  4. Have you done a review on Jason Spurlock's new scam Spurlock is the scammer that took everyone's money in Network Marketing VT and then shut the company down.

    1. I think Oz at BehindMLM already did that one.

      As for Spurlock... I'm pretty sure like Paul Burks of Zeek, he thinks that it's not his fault that ya'll lost money. it's y'all who didn't recruit enough people and you knew it could fail. ;)

  5. Hi kschang, I met you through your research Wazzub and rippln application. I was very pleased with your research. Today published a part of your research rippln in my Spanish blog. I am a blogger and I have had some success in the world of blogging. But now I want to try other ways to make money online as MLM. I did not find any way to contact you privately so I leave this comment on your blog. I wanted to know if you can do some review of and I would like to know your opinion and I decided to work in that business but I want a neutral opinion. Thanks in advance for your comments, greetings.

  6. Hello Kasey Chang, I've browsed through your blogsite a little and saw some of the information you post. I appreciate every person's opinions and always try to be open-minded to all sides of a story. I see that you are a skeptic of MLMs, and you are not trying to hide that fact. I can respect that. Everyone is entitled to their own opinion. I appreciate unbiased, fact-based opinion the most, but that's not always available without more research than I care to do. I wonder if you would be as open about a potential success (and legitimate MLM opportunity) as you would clumping all MLMs into the "scemes and scams" category?
    I believe in the theory and the opportunity of MLMs, but they also succumb to the 80/20 rule (Pareto's Law) that 80% of people make 20% of the money, and conversely 20% of the people make 80% of the money. This is also the truth in normal corporate America. I have been involved in several MLMs over the years and have had mediocre results at best. I think this is more typical than most would like to admit (the 80%, at least). Over the years, I have also gained knowledge about MLMs. I recently found one, that with my years of experience (or lack of success if you want to call it that), that I believe will work for me. It happens to fall within the criteria of the supposed HBS study, which I agree probably does not come from HBS but is likely accurate.
    Anyway, here's my proposition. I would like for you to follow my progress, or lack thereof within this current company. I have been involved with it since late December, and I only have three people in my organization (as of March 5, 2014) which is a slow start for those "ultra-successful" MLM'ers. Follow my progress which my take the span of a few years, but compare the level of success to that of a typical corporate job. I have a bachelor's degree in business and 20 years of military experience, so compare my potential salary to that of someone with equivalent background and experience. Compare the earnings now and in the future as a corporate business persone would advance, to my actual earnings. This study will take a long time, but would be very comprehensive and would give an actual/true account of the potential.
    If you like the idea we can exchange personal emails and keep in regular contact.
    Let me know what you think.

    1. In my opinion, after studying all of the MAJOR MLMers in the US, they are all probably product-based pyramid schemes. At the minimum, they have no data to prove that they are not, and they have all lost their will to really retail, though Amway and Avon a bit less so. Amway was hit hard in the 80's and 90's with multiple lawsuits and reined in its AMO's, (much like how Herbalife distanced itself from the various "lead generation companies" ran by its top affiliates in 2013) and Avon simply joined MLM bandwagon late and wasn't nearly as corrupted as the other entities.

      While there may be exceptions out there, such as an MLM that truly concentrates on retail and team building (in that order), its impact would be so small it's the exception rather than the rule.

      However, keep in mind that I call myself a skeptic, not a cynic, unlike the "MLM Opponents", who's simply anti-MLM in any way, shape, or form. Like Professor William Keep one of this countries top experts on pyramid schemes, I think MLM can be saved... from itself if that's what it takes. That's one reason I talk about the failings of MLM, the parts that other people don't talk about, or simply trot out as "evils" of MLM. Instead, I go over the failings, WHY they are failings, and usually, what can be done about it, and many of which are actually related to SCAMS, not MLMs. (Though pyramid schemes are scams, and pyramid schemes are very close cousins of MLM)

      I am glad to see you think you found the perfect opportunity, and from your description, it seem to have a proper emphasis on retail instead of recruiting, which is always a good sign, that it's closer to direct sales than a pyramid scheme. However, I do want to point out that as an affiliate of an MLM, you're really half-way between E and S, if you do Cashflow Quadrant (i.e. you have a job and you own your job), when you really want to be B or I (you own a business / you invest).

      With your experience in military (some of which must have been leading others) and degree in business, could you not have found more lucrative business ventures that would actually give you a piece of success, rather than stuck in the 80/20? or perhaps I'm just asking you... Do you ENJOY selling and motivating? Do you enjoy doing it full time, double-time, so it consumes most of your life for years at a time?

      Richard Bliss Brooke, one of the MLM pioneers, once stated that if you REALLY want to be successful, you need to plan to make a FULL-TIME commitment to a MLM for more than a year, up to 5, to "build your empire". and in the first year, you will likely LOSE MONEY as you try to build up your repertoire of sales techniques and motivational toolset to be applied later, as well as build your social and business network and your contacts in the industry.

      Consider the cost, risk, and reward, as always, to you and your family if you do make this choice and commitment. Or as you military types would say, OODA loop. :) Seems you've been through the loop a few times.

    2. Hello again Kasey,
      I'm glad you prefaced your response with "in my opinion." That opens the door for me to respect your comments. As I said previously, I believe everyone is entitled to their opinion and should be respected for it. In response to your comment "after studying all of the MAJOR MLMers in the US, they are all probably product-based pyramid schemes. At the minimum, they have no data to prove that they are not." Do you have data to prove they are? Or, are you asking for data or proof to prove they are not and relying on your own opinion to state that they are? Yes you are a skeptic, but that;s your right. I believe you move to the cynic side often, but I appreciate you pulling back in your response to me. I do my best not to disrespect anyone's opinion and hope to receive the same courtesy. As you have shown, thank you.
      Well as you've eluded to in another entry, virtually all business are pyramid structures. Now without debating the semantics of pyramid scheme versus pyramid structure, let me explain the sublte differences from one end of the spectrum to the other. A ponzi scheme IS a scheme in which one takes investements from one person to pay returns to another. Ponzi schemes are illegal in most countries. A "pyramid scheme" walks a thin line. As you correctly stated it intentionally does not rely on retail sales although there typicall IS a product. It can also involve an exchange of money with no exchange of product or service (closer to a ponzi). Most well known "legitimate" MLMs do have an entry cost and promote retail sales, but often the higher-paid earners build their income more on recruiting than retail sales, that is true. The reason the "more legitimate" MLMs are NOT pyramid or ponzi schemes is because they allow for any and all representative to purchase the product or service for the same price and sell the product or service at an equivalent mark-up, regardless of whether they are the 1st rep or the 500,000th rep. In a pyramid scheme that has products, a product is purchased by rep A and sold to rep B at a mark-up, therefore leaving less available profit for rep B. Rep B is then taught to recruit and sell the same product to rep C, again leaving less room for profit. Eventually someone is recruited and purchases the product from another rep for more than the product is actually worth.
      Another hurdle for many people is cost of entry. I'll touch on that next.
      So as you said previously, most businesses (corporations, military, etc.) are shaped like a pyramid in structure. So let's examine those and apply the same 80/20 rule (which truly is very conservative, but we'll stick with it for these examples). Given all other things are equal, if a person enters one of these at "entry-level" he/she has the same opportunity to advance based on performance as the next person. There is no cost for entry other than possible appropriate clothing or some required equipment. This person can typically (and we're going to stick with the typical scenarios because we both know there are exceptions) advance to a certain point without further education. To get beyond that point (into middle management) a degree is usually required. There is a cost for that education (possibly $40k to upwards of $150k for a 4-year degree), cost of entry to higher pay. The ratio of those who make it into upper management is even smaller. That's probably around 3-5%. So in comparing the difference between a CEO and board of directors (or even upper management) to workers in a large company, we find a large disparity. Ask either group and they both tell you they work harder or have comensurate responsibility in comparison to the other group. Continued...

    3. Continuation...
      Now let's transition to an arena in which a person is not completely but more "self-employed." Before retiring from 20 years of military service I went to school to get my real estate license. I knew that was what I wanted to do after i retired, so I decided to get a jump on things. This 'self-employment" is less expensive than a typical sole-preprietor business with a storefront, overhead, etc. To enter this business, I paid for real estate school, testing, and multiple "association" dues. It cost me over $2000 to get into this profession and about $2000 per year, just to maintain my Realtor (r) status. This for of self-employment can be lucrative. After I retired from the military and shifted to full-time real estate, I made a lot of money. During the "foreclosure crisis," I found a niche, selling bank-owned/foreclosed homes for the banks. When I entered this niche, only about 3% of agents were doing this. By the time I gave it up, about 80% of agents were trying to get into this niche and probably about 35% of agents were in it. I made over $1M over a 4 year span. That put me in the "20%" category. I had a team 7 people to support all the business I had. None of the people on my team made more than $35k/year, but that was better than the average rate for what each of them were doing. So was I was solely the top 15% of my own organization. Is that wrong? Or is that OK because it was a more traditional business?
      After a few years, the bank-owned property niche was no longer a niche, and I found that despite all my hard work, I was still a slave to the market.
      Now let's transition over to MLMs. There is a cost for entry, but for most it's less than what I paid to become a real estate agent. It doesn't require a degree. It is a business (regardless of the category one puts it in), so it is subject to the same 80/20 rule. They are not for most people. If you aren't self-motivated, neither real estate nor MLMs are right for you. If one aspires to make a substantial income in corporate America, one most often needs a degree which comes at a substantial cost as well. So, that leaves MLMs to the 20% and successful MLMers are 20% of that 20%. Still typical of any business.
      That's the truth about adult life. Some people are happy with their nine-to-five, some people want a college education and be in management, and some people want to be self-employed or pursue whatever else they think will get them what and where they want.
      My last point. We all take our own chances and make our own decisions. One person is not wrong for making a choice that another person wouldn't make. If one compares possibilities and is equally diligent and motivated, the possibility of making a substantial income in a shorter amount of time is with an MLM. If it takes me 7 years to achieve a $500k annual income in an MLM, which I can do because I HAVE researched MLMs and understand what it takes to get does that compare to the possiblity of making a comparable income in corporate America or by being self-employed (and I made it to $400k in one year in real estate)?
      The military isn't for most people, and being self-employed isn't for most people, just as MLMs aren't for most people. The ratio between the cost of entry and the potential return is the best in MLMs in comparison to the other choices. What it comes down to is as adults, we are all responsible for our own decisions and to do our own due diligence. If we take a chance at something, we all have the right to decide it's not for us and go another direction.
      Not a Skeptic, not blind, and not stupid.

    4. This is going to be some interesting and perhaps way too long comments. :)

      Regarding the Rep A to B to C example... Do people still do that? With UPS / Fedex / USPS / Ontrac deliveries so prevalent rep to rep sales are obsolete. Instead companies simply set different discount levels and dropship straight from warehosue. I think Herbalife gives noobs 25% off that it goes up and maxes out at 50% off.

      I think you are using a non-standard definition of pyramid scheme, but let's put that aside for a moment. The reason I say that most major MLM companies are likely product based pyramid schemes is because they don't track retail, when retail is the ONLY difference between MLM and pyramid scheme. I'll refer you to Omnitrition decision as explained here in the blog.

      The fact that the products are sold to affiliates for X price is actually irrelevant. Only sales to OUTSIDE the company is called retail. Sales to insiders are wholesale. No retail, no MLM (thus pyramid scheme). So it's for the FTC to figure out... HOW MUCH retail is enough? A commonly accepted figure is 70%, though that's more of a misinterpretation of the 70% rule. IMHO, it needs to be HIGHER, like 80%. :) But that's just me.

      I am actually quite familiar with real estate industry. You are a "slave" to the market, but the market is perpetual. People will always want a place to live or work. Markets can shift, prices can fluctuate, but there's always the market, and commission to be made. EVERYBODY is a slave to the market.

      And compared to real estate, MLM is transitory and flash in the pan. isn't it? How are you NOT a slave to the wax and wane of public taste that MLM is perpetually trying to fulfill? One year it's uberfruit juice, next year it's fortified coffee...

      The problem I have with network marketing, esp. the cult-ish ones, is they rely way too much on social pressure and merged it with economics, when normally you don't mix social with economical (except in certain sales situations).

      If you quit a job, you quit. You are not shamed into staying, unlike some really cultish MLMs.

      And I'd like to point out that even if you do achieve 500K annual income, your NET income would likely to be noticeably less as you have to appear at various events and such, travelling around the country to various seminars, meetings, engagements, talks, etc. If you like that sort of stuff. Not to mention spend quite a bit to write books (or have it ghostwritten), do online webinars, and basically build your sales network AND establish your credibility, and hope you don't run into crooks along the way that ruined your years of work.

      I have no problem with people going into MLM if it is their passion, but IMHO, a lot of people have a completely MISTAKEN impression of MLM that they need to recruit, recruit, and recruit. And that' means they think MLM is a PYRAMID SCHEME, and they have a cognitive dissonance when they think they joined a real business, but learned that they're actually doing it wrong.

      Or as MLM expert Len Clements put it, bass ackwards. ;) And you can HEAR this mistake from most MLM pushers who only talk about recruiting, not sales.

      As I said, I'm not a cynic. My "negativity" are all based on fact. If this dissuaded some people from pursuing MLM, that is their right, as you said, as they consider the factors to be too risky for their OODA loop so they act to preserve their interest in line with their risk profile. Other people may decide that's exactly how they like to live... life on the edge, joy of meeting and talking to large group of people and inspire them (wait, was that evangelical? :D )

  7. Hi Kasey,
    Sorry, was on one of those horrible, tax deductible working vacations. Lol, just a little undeserved sarcasm...sorry. Anyway, I will be totally honest (as I always try to be) and tell you that I completely agree with you concerning recruiting vs retailing. I've never liked the idea of climbing to the top just based on recruiting. I agree that products sales must be the foundation of the company, or it is another fly-by-night, flash-in-the-pan company. I won't go back and forth with you because as I've said, I respect the fact that you can have your own opinion. I understand your and many peoples' negativity towards MLMs, It just doesn't make them ALL bad, nor does it make the idea or theory behind it bad. If the company has a good, consumable product that is not a "fad" or "trendy" product; fair compensation; and they disclose everything, it could be a good company, MLM or not.
    I guess I'm just a proponent of giving both sides of a story. I think that is when someone can truly make an educated decision. Just because you don't think traveling and helping people is fun and that there IS an opportunity for SOME people, doesn't mean everyone must think the same way. For me, it's an opportunity to make comparable money (if not more) than I did in real estate with a lot more freedom.
    Anyway, as much as I've enjoyed our banter, I will put it to rest. Everyone is entitled to their own opinion, and I thank you for allowing me to express mine on your forum.

    1. Of course, an insider's perspective is always welcome... If they talk realistically rather than the marketing "rah-rah". I at least would like to *think* myself as not merely being negative, but "critical" of the FAULTS of MLM which is the difference between a cynic vs. a skeptic.

  8. Thank you both for your intelligent banter that has both sides stated, the pro's and the con's. This has helped me pick out which companies I will look at and consider to "make money" with. It would be a great idea for someone to start a company that operates like they should (retail vs wholesale %) instead of how to just squeak over being legal looking!

  9. Is it possible to add to the list?

  10. I would like to thank the participants in this discussion. It was very professional and handled at an adult level. Very impressive forum.