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Business Outlook
November 2007
Multi-level Marketing:
A Pyramid Scheme by Design
Dr. Michael R. Hyman, NMSU
Page | 1
Also, under MLM schemes (1) sales associates are recruited by
exploiting their materialism, greed, and religious zealotry, and (2)
unproven, bogus, low quality, and unneeded goods often are sold
at inflated prices (Barrett 2001; Koehn 2001; Muncy 2004).
Page | 2
among sales associates is a critical ethical issue. For the seven
MLM companies listed in the Table, the mean annual payout to the
top 0.22% of sales associates is $236,216, which comprises 44.0%
of total payouts; in contrast, the mean annual payout to the bottom
99 percent of sales associates is $380. Seemingly, payouts are
skewed heavily and unfairly toward only a few people.
Table
Payout Skewedness
Conclusion
References
Page | 4
Rice, Berkeley (1997), Whats a Doctor Doing Selling Amway?
Medical Economics, 74 (13), 79-85.
Page | 5