Tuesday, August 23, 2016

Where do these MLMers get their "facts"? Certainly not from this reality.

In attempting to engage with some MLMers regarding their unbridled enthusiasm, I've since found out they seem to be armed with a lot of... nonsense from somewhere. They surely don't seem to have just... invented it. But where did they get such nonsense that they perceive as "facts"?

Here are a random sample of  several "not-facts" thrown out for sake of argument by these MLM supporters, all the while chanting "Worre pwn'ed Ramsey!" in the Youtube comments of a Dave Ramsey show where Ramsey provided some realistic outlook on MLM.

It makes one wonder, do they just make up "facts" as they go along?

S1. "MLM works for thousands of people around the world"

S2. "Amway Japan is the biggest company there and has been trading for over 55 years."

A1. I never said anything about "MLM doesn't work", but that's ignore that for the moment, as he did. He put up a strawman, then cited a non-sensical fact in support. "Thousands of people around world" found MLM to be working...

DSA estimates that there are 20.2 million (per 2015 fact sheet, DSA.org) in the US alone, and probably 100 million around the world, in MLM. If only "thousands" found it works, that would suggest TENS OF MILLIONS found it did not work, doesn't it?

Factualness rating: D, true, but not placed in context. A system that works for a tiny minority cannot be considered a working system.

A2. Even a modicum of logic should tell you this is impossible. The biggest corporations in Japan, the haibatsus are hundreds of billions big.  Toyota's revenue from 2013 was 224 BILLION dollars.  This guy seriously thinks Amway in Japan can beat 224 billion? How old did he thinks Amway is any way? Amway Wiki states clearly that Amway Japan opened in 1979. That makes it 37 years old, certainly quite a bit off from 55. And its revenue, as per Amway was 1.1 billion USD (2006) again, AmwayWiki.

Factualness rating: F, completely false in every facet

S3.  "marriage the figures of failure are much much higher"

S4.  "traditional business two in four fail in their first year"

A3. What is the marriage failure rate, compared to "thousand succeed, millions fail" in MLM?

Let's assume that by "thousands", he means 10 thousand, and 100 million in MLM. That's... 0.01% success rate, isn't it?

Even common sense should tell you marriage success rate is greater than 0.01%.  Indeed, latest figures, as cited by Jezebel, states that "nearly 75% of marriages from the last decade are going to make it to death."

Factualness rating: F    Not only it's wrong, it's wrong by a couple extra 0's.

A4.  Ah, the "50% of businesses die in first year" urban myth. What are the real stats? According to Bureau of Labor Statistics, who actually do keep track of such stats, 4 out of 5 businesses survive the first year.

Furthermore, based on a survey, 1/3 of the businesses were successful when shut down at the end of 5 years, at which point 50% of businesses are still standing. So the real "failure rate" is 33% at 5 years, not 50% at 1 year as this guy cited.

At least he's not being as egregious as Rand Paul who claimed that 9/10 startups die in the first year.

Factualness Rating: D  wrong, but not as so wrong as to be "not even right".

S5. Network Marketing is a 1.7 Trillion dollar industry

A5: WFDSA, that's World Federation of Direct Selling Associations, the parent organization of DSA, the spokesbody of MLM industry, only claimed the following:
Direct selling accounted for more than US$182 billion in retail sales globally in 2014 -- a new sales record for the industry -- Pg 5, WFDSA Annual Report 2015
Where did one get 1.7 trillion which is 10x the actual amount?  Who knows?

Factualness rating: F  Off by a few percentage, no big deal. Off by 1000%, very big deal.

S6. Avon is nothing compared to the bigger network marketing companies.

A6. How big is Avon? According to Google Stocks (search NYSE:AVP) tells you its revenue was 9.955 billion USD in 2013.

What are the biggest network marketing companies? Let's pick... Herbalife (HLF) and Amway. Big enough? There are none bigger, right?

Searching NYSE:HLF tells you that HLF's revenue 2014 was a mere 3.825 billion USD. That's 38% of Avon's revenue. HLF is MUCH smaller.

Amway is a private company so we have to do a bit more searching, but fortunately, their own press release states that their global revenue is 9.5 billion for 2015.

So Avon is still among the largest network marketing companies.

UPDATED July 31, 2017. Tex reminded me that I was using outdated data, so this section is updated as follows.

A6: First, Avon *IS* a network marketing company.  Trying to pretend they are not is disingenuous.

Second, just HOW BIG is Avon? I admit I failed to grab 2016 numbers, so I'll do so now.

Revenue for NYSE:AVP (Avon) as of end of 2016 is 5.7 billion (which is way down from 8.5 billion as of end of 2013)

Revenue for NYSE:HLF (Herbalife) as of end of 2016 is 4.5 billion (slightly down from 4.8 billion as of end of 2013)

Revenue for Amway is 8.8 billion for 2016 as reported by themselves, which is down from 9.5 billion as of 2015.

 So Avon is definitely "among" the largest network marketing companies. In fact, in DSn Global 100, Avon is 2nd, just behind Amway. Herbalife is 3rd.

Factualness rating: F  That's what happens when you post without fact-checking first.

What is interesting are the reactions of both when their... non-factualness was called into question. Remember earlier when Mike Cutts told me "come on do your research properly"? I did and posted a reply. His reaction?

Mark cutts: You never deal with reality Kasey as all your arguments are flawed
there are tons of video and the one above proves my point with a surname like your
Chang how big Amway China is too
Boy, he sounds like a sore loser, doesn't he? And trying to make a big deal with my surname? Muhahahaha. Ad hominem at its finest, and a derailment attempt. Pitiful. "Tons of videos online prove I'm right"?  Quite hilarious. Youtube had thousands of videos uploaded every day. As for the video by Eric Worre, I already answered it in a previous blogpost.

Clearly, Mr. Cutts is not dealing with our *the* reality, just as he accuses others of not dealing with his reality (which is not *the* reality, clearly).

So what's the takeaway?

When you post online, fact-check everything you write, else you end up looking as stupid as these two yahoos.

And if you are reading such stats... fact check them yourself. THAT is how you should determine what to believe or not, instead of how "sincere" the speaker looks or sounds.


  1. MLMer's use fuzzy math and fuzzy facts. Without that, MLM simply doesn't add up. I'll leave with this thought.

    "When the debate is lost, slander is the tool of the loser".

    1. Thanks for the quote. I get to use it on that guy too! :D

  2. Why are you using such old data (2013) for Avon? Avon is now MUCH smaller than Amway and Herbalife: http://csimarket.com/stocks/singleY_growth_rates.php?code=AVP&rev

    1. Still bigger than HLF (4.5 billion as of 2016, AVON is still 5.5 billion)

      Amway doesn't report its revenue publicly. It's ESTIMATED to be about 10 billion for the past couple years, I think.

    2. My error about Avon being smaller than Herbalife. Amway does report its revenue publicly: http://globalnews.amway.com/pressroom/news-release/news/amway-announces-2016-sales You really should use google more before making false statements.

    3. Okay, okay, I'll fix it. But the point is they are pretending that Avon wasn't network marketing!

    4. Where did they claim Avon wasn't a network marketing company? And which "they" are we talking about?

    5. Well, I guess it depends on the interpretation of "Avon is nothing compared to _____". Any way, it's fixed.

  3. I'm not sure I could come up with that interpretation if I smoked some dope. The context of the statement was in comparison to larger MLMs.

    1. I think we're splitting hair.

    2. I don't. You are free and loose with the facts, on a thread named "where do these MLMers get their facts?"