Four Lies about MLM

John Milton Fogg
May 28, 2002

The lies that limit the future of network marketing began as so many untruths do. They were told initially to bolster up our insecurity — in this case, our industry’s perceived lack of self-esteem. The lies were harmless “little white” (i.e. “okay”) ones, meant to make us seem bigger and better than we really thought we were. As they always do, the lies backfired. Now, when people ask us about this or that “false-fact”, and we have to admit to their fabrication, we come up looking smaller and worse than we are.

What lies am I talking about? These:

  • The Wall Street Journal has said that by the year 2000, 60 to 70 percent of all goods and services will be sold through MLM.
  • “Network marketing is taught at Harvard and Stanford business schools and in numerous other leading colleges and universities throughout the country.
  • Some 20 percent of all the millionaires in America were created through network marketing.
  • John Naisbitt, in his best-selling book, Megatrends, says network marketing is the wave of the future.

There are others. These are the leading offenders. I have yet to speak to any group of people about network marketing — from established MLMers to the general public — and not be asked about one or all of these statements.

And when that happens, here’s what I say:

According to more than a dozen reporters and staffers, The Wall Street Journal never endorsed network marketing or “network marketing methods.”

Yes, they have reported on some companies. But they certainly never said that MLM would be moving 60-plus percent of all U.S. commerce – goods and services — by the year 2000.

They’re not stupid!

The U.S. sells about $6 trillion plus worth of goods and services per year – give and take ten or twenty billion. By the most aggressive accounts, network marketing (which for the sake of quoting really BIG numbers must include the Direct Selling industry) accounts for $50 billion in annual sales. More conservative estimates put the figure at a max. of $15 to $20 billion worldwide. Super-conservative folks say MLM is about $10 billion really.

Hmmm. One percent of all U.S. goods and services would amount to $55 billion. 50 percent — 10 to 20 percent less than the journal was falsely quoted as saying — would be $3 trillion. Not bad growth for the next six years!

Okay — get out your calculators. This is a lie of the lowest order; not even creative — just stupid.

If someone tried to sponsor you, boastfully claiming he or she made $30,000 per month, and you discovered that he or she really made one percent of that — or $300 — what would you think of that person?

Enough said.

Network Marketing Sales is not taught at Harvard and Stanford business schools — or in “numerous other leading colleges and universities throughout the country”. Truth is, most of them detest us. They don’t understand us and do not care to. As Harvard ‘B’ School professor Thomas Bonora recently said in an article in Marketing News:

We do not teach such methods [MLM] at the Harvard Business School; they are not part of the curriculum; to my knowledge, they are not taught at this or any other reputable business school in the country . . . Multi-Level Marketing schemes, like chain letters and other devices, sometimes are at the borderline of what is legal — and over the borderline of what is ethical . . .

He concluded by saying that examples of legit MLMs are few and far between. Not a glowing endorsement for such a valuable curriculum.

Harvard has reviewed a case study of Mary Kay Cosmetics. Also, there are courses in “Networking” as it pertains to management resources. That’s it. Stanford refuses to discuss the subject.

Twenty percent of all the millionaires in America were not created through network marketing. By most accounts, as many as 90 percent of them were created through real estate, 90 plus 20 equals 110, and that kind of math would get an F in any school — even Harvard ‘B’. And how many millionaires came from manufacturing or distribution (the family Walton of Walmart — $25 billion plus) . . . ? High-tech . . . (Bill Gates of Microsoft, the richest man in America — and the 300-plus millionaires his company has created . .or Ross Perot)? Franchising (Mrs. Ray Kroc of McDonald’s) . . . ? Entertainment . . . ? Etc. . . . ?

We’ve got lots of men and women who make a million dollars a year in this business. Many more who’ve made $1,000,000-plus in their Networking careers. But . . . 20 percent of all the millionaires in the U.S.? Please, use some common sense.

The only possible reason I can think of as a basis for the existence of this 20 percent figure is that the founders of Amway, Rich Devos and Jay Van Andel, have a combined net worth in excess of $6 billion. That’s 6,000 millionaires right there. Maybe that’s where the 20 percent comes from.

John Naisbitt never mentioned network marketing in Megatrends, Megatrends 2000, Megatrends for Women, or anywhere else for that matter. I can’t even find a mention in back issues of his far more liberal Trend Letter. (If you can, please let me know.) I called him and asked him for his opinion on MLM and he said — well, his people told me — he didn’t have one. There is no listing of network marketing or MLM in any index of a Naisbitt book. The references he makes to Networking are many. The use of them by MLMers are convoluted misquotes and rubbery stretches of the truth.

A good friend of mine — a leading MLM trainer and acknowledged expert who is depended upon by many people as a source of “how-to truth” about this business — recently sent me a generic prospecting product, proudly offering it for listing in our Upline Resources catalog. Sadly, I couldn’t offer it — because it included every one of the above lies.

If this garbage (it’s much nicer to use then the affected French pronunciation) finds its way into this guy’s repertoire, how many others are running around saying this stuff? We’ve got to paper-train this industry!

You can’t build lasting relationships with people — let alone government regulators and the press — with lies. You will be found out — and when you are, your stock, and the stock of the entire industry, will go way down.

The truth is, there is so much that’s positive to be shared about network marketing — facts, not even opinion, much less lies. You may make a sale with a lie, but you won’t create a customer, and you certainly won’t build a successful Network of Distributors.

What you’ll make is a house built on get-rich-quick-sand.

Here’s my request: Please — Do not say false and misleading things about network marketing to anyone. If you are insecure about the legitimacy of this business and feel the need to bolster up your courage and confidence — please shut up ’till you bone up and grow up. . . .

I urge each of you to quash the lies you find out there. Tell the truth. Honesty is and always will be the very best of policies. For my part, I will continue to set the record straight every chance I get. Integrity is our most precious asset. Like our bodies, it requires proper diet (the truth) and exercise (telling it) to become healthy and prosper.


Mr. Fogg is a widely recognized writer and authority on network marketing sales. He founded two MLM magazines (Upline and Network Marketing Lifestyles) and has authored more than 25 books and tapes, the most prominent of which is the book, The Greatest Networker in the World. No longer involved with either of the magazines, he now operates The Greatest Networker.comUnity, of Crozet, Virginia, which offers consultation and training in network marketing. This article was slightly condensed from its original publication in Upline several years ago.

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The article was posted on May 28, 2002.