Multi Level Marketing (MLM's) Pyramid Schemes in the Weight Loss Industry

 

By Ellen Coleman, RD, MA, MPH a registered nutritionist

Quackery exploits the dream of success by drawing numerous people into multilevel marketing (MLM) schemes to market dietary supplements, weight loss products, herbs, and other unproven health products. Multilevel marketing is a form of direct sales in which independent distributors sell products, usually in their customers home or by telephone.

In theory, distributors can make money from their own sales and from the sales of the people they recruit. In actuality, the income opportunities in multilevel companies are greatly exaggerated. Only the first few distributors in a community are likely to build up enough of a sales pyramid to do well.

Most multilevel companies that market health products claim that their products can prevent or cure disease. Some companies make therapeutic claims in their product literature, hoping the government won't act until their customer base is well-established. Other companies make no claims in their literature but rely on their distributors to supply anecdotes, testimonials, and independently published literature. MLM distributors usually encourage people to buy their products and then give credit to the product if the person "feels better".

Americans waste a billion or more dollars each year on multilevel health products. Those that have nutritional value (such as vitamins and low-cholesterol foods) are without fail overpriced and generally useless as well. The products promoted as remedies are phony, unproven, or intended for conditions that are unsuitable for self-medication. Also, the people who distribute multilevel products are not qualified to give health advice.

Government actions against multilevel organizations have not been energetic. These companies are left alone unless their advertising is so flagrant and their sales volume so great that a regulatory agency is obliged to intercede. Even then, few agency interventions have much of an impact once a company is well established.

Consumers should not buy supplements from the person that recommends them. Otherwise, there is a conflict of interest.

The following article is re-printed with permission from the author.

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