MLMs with at least 4 of the 5 red flags
of a recruitment-driven MLM (A to D)
After the most extensive research ever done on MLM as a business model, Dr. Taylor has identified four (and in most cases five) causative and defining characteristics, or “red flags,” in MLM compensation systems that lie at the root of the deceptions and horrendous loss rates suffered by MLM participants. Where data is available, approximately 99% of all participants are found to lose money, after subtracting incentivized purchases and minimum operating expenses.
But before we share our list of approximately 500 MLM programs we have evaluated, in addition to some shut down by law enforcement. it is important that you do your own "5-step Do-it-yourself Evaluation."We will not be responsible for the consequences of a decision about participation that is ultimately yours to make. (See Disclaimer to the right.) But we are confident that here you will receive the best advice available on how to make that decision.
To begin, obtain the compensation plan of the MLM program you are considering. Then answer the questions for each of the five steps and follow the links to its conclusion. You might also want to review some of the feedback we have received.
Listed below are MLMs we have found to use recruitment-driven and top-weighted pay plans, which is the case with virtually all MLMs. For a thorough discussion of problems associated with such programs, download and read the ebook The Case against Multi-level Marketing - an Unfair and Deceptive Practice , (especially Chapter 2) which can be downloaded in whole or in sections from this website. MLMs listed with an asterisk (*) have released average earnings data, which Dr. Taylor has analyzed (See Chapter 7).
(MLM's come and go, so a few may now be defunct.)
MLMs Evaluated A – D (below)
MLMs that begin with a number
4 the Good Life
A. L. Williams (now Primerica)
Advantage Marketing Systems
American Marketing Systems (AMS)
APP - American Petroleum Prom’s
At Home America
Ava Anderson Non-toxic
Avon – now MLM
Beyond Freedom Evolution
Big Planet (Nu Skin division)
Business in Motion
Cajun Country Candies
Common Sense Communications (Telex Free)
Consumer Choice Marketing
Cookie Lee Jewelry
CR Health & Beauty Systems
DBN- Downline Builders Network
DCHL - Digital Crown Holdings Ltd.
De Marle at Home
Direct from Vatican City
Discount Home Shoppers Club
(now Global Income Partners)
Do Terra Earth Essence
Dove Chocolate Discoveries
Dynasty of Diamonds
NOTE: This list (A to D) includes only those MLM's for which we have been able to obtain and evaluate compensation plans.
*A recruitment-driven MLM, or product-based pyramid scheme, is an MLM with a compensation system that rewards recruitment more than actual sales of products to persons outside the network of participants. So significant income is unlikely without recruitment of a large downline, which requires deceiving recruits into believing it is a legitimate "business opportunity – and persuading them to invest in inventory (front-loading) and/or to subscribe to ongoing monthly product purchases or payments to "do the business," to "be a product of the products," etc. For purposes of analysis, a recruitment-driven MLM could also be considered a "product-based pyramid scheme;" i.e., a pyramid scheme that requires purchases of products to participate in commissions or advancement in the scheme, rather than a cash investment such as those required for no-product pyramid schemes. Product-based pyramid schemes do far more damage than classic, no-product pyramid schemes, by any measure - loss rates, aggregate losses, and number of victims.