127. How MLM’s Prey On The Weak & Vulnerable, What To Look Out For

MLMs are really a cult designed to suck you in. You are the product. I don't like it when people in a position of power prey on those that are weak or vulnerable. Say Goodbye to the 9 to 5. You don't need it, Ben. An online business lets you work when and where you want, giving you the freedom to design your own life. It's a lifestyle, Ben, not just a job. An online business isn't just about work. It's about crafting the life you want, pursue your passions and live on your own terms. DM me if you're ready to change your life for 2024.

Welcome back to another episode of the Ben and Bourgs podcast. I'm Ben, your favorite high school dropout and founder of Collective Shift alongside Ms. Bergs, your favorite MBA and CEO of Collective Shift. Join us as we bring you world class crypto research and strategies to help you dominate this crypto bull market as well as behind the scenes view of us scaling a fully remote crypto subscription business in Australia. And today we're talking about MLMs, multi level marketing and how they are basically built as a Ponzi scheme to suck you in, get your money, get your friends money and they make all the profits and you lose all your money and lose all your friends money and you've got no idea what's going on. And this was born out of, you know, just a 2024, I guess vision of filtering the nonsense content that is out there today. So many more content creators creating content and there's just so many more of these fake entrepreneurs, fake people, you know, selling this idea of success and living the life that you want to live when they themselves are not living that life. They're creating an artificial online presence to make you feel a certain way to buy their course or buy their product when it's all a bunch of nonsense. And the reason we know this is because the only real way to give advice that is genuine is through stories and experiences. And it's something we try to do here on the podcast all the time. But yet you notice for a lot of people that they don't share from experiences or stories because they don't have any experience or stories. They're just selling you the pipe dream that they've been fed and are now selling you And Bergs, you and I both had some people in our feeds recently that seemingly listening to the same people because it is crazy cringeworthy, mate.

My Facebook and Twitter have exploded with these. First of all, the the fake entrepreneurs that come through and are Trying to sell you something that are experts in an area that have done basically nothing with their lives, have no proof of work apart from what they post about themselves. They can't point to a thing and you can independently verify it. But also so many people I know on particularly Facebook have joined MLMs and they're just posting madness about it. I don't know if there's like an it went nuts during COVID now it's gone nuts again. I don't know if it's the interplay with AI, but mate, these people are in and it is absolutely shocking. And I want to go through this and give you some stats on mlm. So Ben and I know what they are. We know the numbers behind it. And the general numbers are from a few studies that have been done. Only 25% of multi level marketing participants turn a profit. While the NFTC reports that 99% of MLM participants lose money. There's a recent AARP study that finds the numbers aren't as stark as that. It found that 25% of those surveyed made a profit. Just remember, $1 is a profit while 27% broke even. And what bothers me the most is I don't like it when people in a position of power prey on those that are weak or vulnerable. And you see this over and over again. And MLMs are really a cult designed to suck you in. You are the product. They've got things called downlines. You have to work incredibly hard. You have to buy all this stock, right? So you make someone else money. And then like eventually if you work really hard, like you get a car for a month, but if you don't hit your targets, you won't get the car next month. And it's just, it is so, so crazy. And you go to bed and you go to all these events and it's like some like swanky hotel and everyone's eating nice food, not knowing that you're actually going to work and be paying for that, right? Or it seems amazing, but these people have to keep working. And you just see then the original person and the next person under that they earn a percent and the next person, the next one. This is pyramid forming. And the reason it's not clarified as a Ponzi or a pyramid scheme is because they have a product involved. And it's when you do the numbers, you see it clear as day. I saw this on a podcast of I will teach you to be rich by Ramit Sethi where someone was stuck in there and she was, she was Sold. She's like, I've got 700 people beneath me. This is happening. That's happening. I got this car. And he's like, yeah, but look at what you're doing. You've convinced all of those people, none of them making a profit. They're losing money in order for you to gain a little bit of money. He ran the numbers. He's like, you'd be much better off just working a minimum wage job. It was so eye opening. And you were telling me just before the podcast, you got invited to one of these.

Ben, I got invited to one of these. This was probably, man, six or seven years ago, I was doing my sportswear business. A buddy of mine was like, man, you need to come to this dinner. There's a bunch of entrepreneurs. There's this new opportunity. I'm like, I'm. I'm in it. I'm making money. Like, it's just going to be huge. It's like, okay, cool. I'm in. You know, came across the dinner and sat down with this group of people. And I just remember just walking in. It was a dinner now, paid for the dinner. Walked in and, you know, I got handed all these products and this fancy, you know, you know, pamphlets, like these booklets that was all laying it out. And it showed you how much money you could make and the t's you had to get to. And if you. If you hit these targets, this is what happened. There was no explanation about how the referral program worked and how there was people above me. And there was a lot of questions I had walking out afterwards. But then why they made you feel was like, this is your opportunity to get out. This is a great product. They were like nutrients or nutrients. I don't know what that was. Vitamins?

Like herbalife or something?

Yeah, something like that.

That's a lot.

It was like a herbalife competitor.

Yeah.

And. But to start, you've got to buy, like, five or six hundred bucks worth of, like, you know, of these tablets, right? And then you buy the product, and then you can start to hand them to other people and get other people involved. And the more people you sign up, the more money you make. I was like, hold up. How does this work? And then I'd start to question, like, well, who's above me? And then it just get really blurry. No one would really answer the question.

But there was then, how many people do you. How many people do you have to sign up? And then you get to a point where there aren't enough people on earth. Because you have to sign up so many people.

And this was in, like, long sets. I'm like, okay, well, then if you're above me, and then like, that's above me there. Like, what does that. Like, like, how high does this go? Like. And, you know, I remember going home, I think I was like 17 at the time, and explaining it to dad, and he's like, yeah, mate, that's. That sounds like Ponzi.

Exactly, man. And like, I, I. You just tweaked my memory. And I remember going to a dinner with a mate of mine, and he, to be. To be fair to him, he told me about, like, what it was before I went to dinner, so I wasn't, like, surprised. And I think I've heard from a lot of friends where it's like, this random person from high school will ask you, like, to catch up for a beer. It'd be like, oh, it's. It's mlm. And he went through it and it was like a subscription thing. I think it might have been like some Amway kind of thing.

He's like, oh, but you can get.

It cheaper and you can get your Coke delivered and your, you know, your toilet paper and like, Sandra Bullock's in it. It's legit. They make so much money. I'm like, ah, bro, like, I hate to tell you, but, like, look, I just did, like, back of the napkin math. I'm like, look at all the money you're making here. It's like, if you just worked, like, at McDonald's, you would make more money. And he was just like, he still really believed it because they sell you so hard on it. And Ben, you're gone.

No, it's. They sell you as a cult. It's a community. It's a group. It's a way out. It's like, join us. Join this movement. What, you don't want a life of, you know, abundance? And you don't want to spend more time with your kids? And what, you want to work with your 9 to 5. Like, they, they hook you in and they prey on the weak, mate.

So this is what revved me up. I'm going to read you a post now that I saw on Facebook from a person who will remain nameless. This is what they've written. Ever wondered what financial freedom looks like? Imagine this. Earn while you rest. With an online business. Business, you can make money even when you're not actively working. Pass it on. Your online business isn't just for you. It can be a legacy, Ben, for you. And Your family. Imagine, Ben, passing down a source of income to your children. Work on your terms. Say Goodbye to the 9 to 5. You don't need a Ben. An online business lets you work when and where you want, giving you the freedom to design your own life. It's a lifestyle then, not just a job. And online business isn't just about work. It's about crafting the life you want, pursue your passions and live on your own terms. In a nutshell, an online business is a pathway to a simpler, more flexible and fulfilling life. It's not just about making a living, it's about creating the life that suits you. DM me if you're ready to change your life for 2024. Now, Ben, you run an online business. What is it like running an online business and all of those things?

Nothing like that. You know, it's far from that. I've been doing this for seven years and I've never had a day like that, mate.

It is. This is not what an online business is like. And let's just remove the online part, okay? Because people get sucked in and they, they do these posters like just work in your pockets of time. Like you're a stay at home mom or stay at home dad or a carer or. Oh, you just need 15 minutes and your phone and you can earn from anywhere and think about what you could really do in 15 minutes and what you are earning, how long it would actually take to build an audience. What are you selling? How's it working? It is unbelievable.

Well, that's what they're not selling the business or the product, they're selling the lifestyle, they're selling the results, you know, and then that's what so many people get sucked into. And you know, and that's why they pray on the week, because, you know, or not the week, but like it's, it's like the people that need that, you know, really vulnerable. Vulnerable, that's the word.

Yeah. And it's people that are, you know, you might, they might be stuck in a certain position, they might want a better life, they might be aspirational, but they might not have the knowledge to see through what this actually is. And then you've got this person that does it, then your friend does it and another friend does it and they bring you in and then it's like, oh, we'll just give you the product. You just do it at your house once, I'll then do it again. All of a sudden you bought all this stuff, you bought into this life. You're using this language and you're like, oh my God. And mate, this is the cream on top. This is just another post. There are thousands of these posts. Ben, what is it costing you? Ever stop to think about the choices we make in life and what they're really costing us? Number one, time with loved ones. Are we spending enough time with our family and friends? Those precious moments with the people we care about are so important. Number two, relationships. Ben, how are things in your personal relationships? Are you making an effort to keep those relationships strong or is life getting in the way? First of all, MLM is going to ruin your relationships. Number three, health. Are you taking care of yourself, Ben? Is it worth thinking about how your lifestyle choices affect your health physically and mentally with others? You have nothing. Career and finances. Life satisfaction goes on and on at the end. Are you ready to make a change comment? I'm ready below and we can chat.

Well, this is what I remember, man. Back in like, you know, back in 2018 we went around the country and did crypto conferences and like there was this lady that had signed up her and all of her friends to bitconnect. This was before bitconnect really came out as like a scam.

She signed up all of her friends.

And family, like hundreds of people. Right. She was one of the biggest referrals. And then all of a sudden the Ponzi collapse, it goes to zero and you've lost everyone all of this money. And like I've met these people in real life and like it's like someone's got in their brain and twisted their, like they're thinking to believe that this is the way out, this is the future, this is what life looks like, this is what they need to be in. But yet it's just all nonsense, mate.

If you have to sign someone else up for you to get make money and there's downlines, that is not a good business. That is just weird. Like the deals that do work are affiliate deals. Like if someone out there signs up someone to my business, I, I'll give them a 10% referral fee. Great. That works like a one off fee that incentivizes both sides. It works because I don't have to spend money on advertising. Great. But when you have to sign people up, they have to buy a product, they have to go out and do an activity and you take a cut of everything that they do. And also think about the effort you have to put in and go and question those top earners. Like how did they get to 2,000 people below them, how much effort did they have to put in, how much they have to put in now? And how plausible is it for you to get 2,000 people under you? What would you have to do?

And also what is the product like? Are people signing you up and selling it to you because of the product or because of the revenue opportunity? You know, that's really the thing you got to think about this product actually good or is it just this whole big ecosystem of everyone trying to make money and they're just selling a nonsense product?

This is such a good point. If you have a brilliant product, why would you sell it door to door and person to person? You would do that because you need face to face, which is the highest level of communication and generally high pressure sales tactics. Like a lot of this is not like this. Like when Avon started back in the day, it was a way for women to be able to sell makeup door to door. And it was a thing to, you know, empower them and, you know, sell that product. They specifically chose that model because they wanted to. I don't know about Avon nowadays, but back then it made sense. But if I've got a cracking product and am I going to get people to sell it door to door or am I going to go to Kohl's or wherever and get huge distribution? There is something to be said. Like if you look at, I don't know if Thermomix is an MLM still. It might be, but like a high pressure thing, sorry, a high ticket item like that, there's $2,000 to sell to someone at a normal store is very, very hard. Like you need a demo, you need the sales tactics, you need to convince them to buy it. Right? But I can't think of a model where your product, your, your product can't be that good if you need high pressure, face to face sales.

And also again, like that, you know, I'm just looking at, you know, my, my version of the person you just read out on my, my feed. You know, it's all about starting your business. Are you ready to start your business and start the, the life you want to live? Like they've got a discount that you should just get access to it and listen to these products, man. Like the success product pack, the overachiever product package.

Oh, I definitely identify with the overachiever product pack with this. Do you notice, do you notice what they do? They talk about the life you could have, right? And they activate that emotional part in your brain to think about and make that, like to try and make A rational decision, but using the emotional part, like, I want to be there. They don't tell you what it is. This particular person drove me nuts because I saw it. I'm like, what is it? I'm not DMing you. I don't want to know. So I ended up, like, looking at the people that liked it and commented and then found them, found the website, found out what it was, and I was like, this is horseshit.

But I believe that's how they're taught to sell it. Don't give information out, don't say the price. Do private calls. Like. Like what? You know, like, it's weird.

It's like, keep it a big secret. Get people interested, get them in the door, and then tell them what it is. And when you find out what it is, you're like, oh, that's weird. But by that time, you've been to five events, they're now your friends, you've now bought stuff and you're in.

Because that's the thing that, man, they're not selling the product. They're selling the. The. The. Like you said, the vision. They're not talking about what's in the product and why it's beneficial. They're talking about how much money you can make. Look at the numbers. Look, if you shine up five people, you could be earning this amount a month.

You could quit your job.

Imagine what you could do, how much time you could spend with your family.

It's all bullshit. And if you are considering joining an mlm, ask the person that's trying to sign you up. Can you give me 10 other people that you have signed up? Go and talk to them and ask them, hey, you signed up two months before me. How's it going for you? How much have you spent? How much money are you making? Get them to show you the receipts. Because a lot of people, like, this happens a lot in investing. Like, a lot of people lose money in business. Most. Most small businesses close. A lot of people lose money in investing. But when you ask them, they'll tell you how much money they're making. It's great. It's. This. Is that because they don't want to admit that it's not working out for them. But ask and be like, how many people have you signed up? How many hours do you spend? How much have you made? You.

You just made a great point, mate. Like, this is. This is the epitome of, you know, of. Of the, the society that we live in. And that's kind of. It's kind of sucks. That it's sad but like people put on a front. I've done it before, like she's your rock up to events and people ask how you're doing and you're like, yeah, things are great but you know, you're actually running out of money. You haven't seen your family in a month, you haven't slept, you're depressed, you're sad, but you won't say that. You know, do you actually genuinely start a business so you can have more time with your family? Well, you might have that as a motivation. But is that reality for five years? Absolutely not. In fact, it goes down for like the first four or five years.

It's weird where we look at the people that have been in business for 20 years and the lifestyles they have, but we don't look at the 20 years where they didn't see their family, their significant other hasn't spent time with them, they don't even know what their kids names are. Like they've missed every birthday, every, you know, school thing. Like you don't get those rewards and be able to spend heaps of time with your family and have a successful business. You have to choose what you are willing to sacrifice.

Mate, you hit the nail on the head. And I've seen, as I said, this happens in crypto as well. There's another group I'm a part of and I see this all the time and I'm like, oh my God. And these are the, these are the, you know, the referral people that are, you know, making this money. They put out posts like, you know, I'm, I'm looking for the next person to become a millionaire who, who wants to, you know, finally not, you know, work the job that they've hated for their life and actually change the trajectory of their family. I'm looking to work one on one with you to, to change your life. Like comment. Let's get started to, to take your first step on becoming a millionaire. Like give it a spell, please, please choose me.

I want to be a millionaire. You see it a lot in, in trading groups as well. A lot of people get wrecked. I joined one recently which was a, a fire group. So financially independent, retire early. I used to like look at those groups and learn some stuff. I've changed my mentality since then but I'm like, oh, it popped up. So I joined it and it's like, it's literally a calls group and all people are posting is oh, I started off with like 19 grand two months ago. Now I've got $48,000. And everyone's like, oh, my God, how'd you do that? Oh, I joined the WhatsApp calls group. How do I join it? I'll DM this guy and they'll get you in, and then you have to pay. And on, on it goes. It was nice.

That's my favorite. The screenshot of the stripe returns of the revenue. But they haven't shown you their ads account where they've spent $100,000 on ads to get $20,000 of revenue.

This is it. Oh, okay, let's get into it now. So when you see the rich guy with a Lambo, right, you see what they're driving. You don't see the debt side of the equation, and you don't see their income either.

The credit cards.

Yeah, exactly, right. So it's like, let's say we got a hundred grand in sales. Everyone's like, oh, my God, you're a million dollars in sales. Great. Yeah. But you spent 10 mil on ads. Oh, and by the way, those sales were comped 50%. Oh, and now you've got all refunds as well. So you actually.

Oh, by the way, you're getting sued because you didn't actually deliver a product.

Yeah, this is exactly it. So what we're trying to say here, folks, is first of all, with anything you do in your life, have some scrutiny and independent thought, especially when it comes to investing. And MLMs and MLMs are really an investment in your time, as is a job. Like, make sure these things are as legit as can be. And if you don't understand it, first of all, don't do it or get the opinion of someone who does or ask people that have been here for a while and get a wide range of opinions.

Yeah, spot on, man. Couldn't have said it better myself. And if you want to start a business, get after it. But you know, and just know the upsides and downsides to what you're joining, you know, and there's a. There's a big difference between, you know, signing up and selling someone else's product to send sign up more people to that product to create revenue for the person that just signed you up versus starting your own business. Like, don't get sucked into that dream, you know, of. Of those results. And I see that as well. Like in a more like, real level, like even trading and trading bots and like these automated algorithms, like, you know, it's sales and marketing people are like sucking you into the dream of making automated income. Like, you know, passive income, it's like 99 of it is a bunch of shit. If someone genuinely had an algorithm that made money while you slept, why on God's green earth would he be giving it to you?

Hundred percent. Why would you sell something that printed money? You would keep it for yourself because it just works. You wouldn't have to run ads, you wouldn't have to sell another product you wouldn't have to do. But Ben, Ben, you got to understand, why would you, why would you, why.

Would you sign up?

Customer support, mate. Like it. Because, Ben, they're so rich now. They want to give back and they want to do it out of the goodness of their hearts. Ben, you know what they're probably doing? They're probably got a bot that counter trades what you do and that's how they make money as well as you paying for it.

That's, that's literally Robin Hood. It's like, let's sign up a bunch of people, make it really like exciting to like buy your own stocks and buy your shares, but let's actually just counter trade through a market maker and know all the data that you're buying and just make a spread trades.

Yeah, we're going to sell the data, payment for order flow, it's a legit name and we're going to give it to all the big boys so they know exactly what you're trading, what you're buying and they can front run your trades.

Yeah, but it's fee free trading and no spreads. Oh yeah, okay, yeah, it's fee free.

Because you're the bloody product.

Now that, that's the key right here. You are the product. You know, at the end of the day, Facebook, MLMs, you know, Robin Hood, whatever it might be, you are the product. Just remember that, yeah?

There's no free lunch guys.

Let's wrap it up there. Don't do MLMs. Thank you so much for listening. Please subscribe if you like the podcast. We're going to be coming to you each every week, twice a week, 2024, giving you the beans. Giving you what you need to know so you don't lose money in this nonsense. Marketing, Ponzi schemes, perks. I'll see you next time, mate.

We're saving the world. Thanks, champions.