This myth claims that by looking at the percentage of IBOs that reach a certain level of achievement in their business, and comparing that percentage to the "odds" of winning at various games of chance – well, you're better off heading to Vegas! But is this true?
I'll answer this with an extract from a superb article, Anti-MLM Zealots by Len Clements of MarketWave. In this extract he is talking about Dr. Jon Taylor of the bogus "pyramid scheme alert" organisation –
In yet another example of Taylor's gross lack of objectivity, he states, "It is interesting to compare the odds of success of MLM schemes with legalized gambling in Nevada. It appears that on average one could do better at most any of the gaming tables or slot machines…". Once again we have an anti-MLM zealot (previously it was Robert FitzPatrick) suggesting our successes are somehow a game of chance. It’s interesting to note how one’s "odds" of success in MLM seem to increase the longer they commit to it, the more they study it, and the harder they work at it. Taylor provides charts, graphs and numerous footnotes to create the illusion of substance to his findings. But when held up the light it reveals itself to be nothing more than gussied up garbage math. In one case he provides a chart showing the odds of turning a profit in a "no product" pyramid scheme, a single bet on a roulette wheel, and an MLM opportunity. He claims the percent who lose money in a classic pyramid scheme is 9.4% (9.6% make a profit), but 99.95% lose money in MLM. If we follow the asterisks to the fine print, we discover that his 9.6% figure came from a news report of a scheme called "The Original Dinner Party" and Robert FitzPatrick's experience with the "Airplane Game" over 2 years ago. That's it. Another asterisk leads us to where Taylor arrived at his so often cited "99.9% fail" figure. He picked six MLM companies (out of thousands) and analyzed "internal reports" along with SEC and FTC filings, even though only one is a public company in the United States. He also factored in "reports from ex-distributors." But apparently his findings were still not to his liking, so he had to "correct" what he refers to as "deceptive data." First, he didn't care for the way MLM companies only report the earnings of those who are "active." Adding back in all those who made no money because they didn't do anything to earn it (signed up, bought a kit, and quit) would certainly increase his "failure" percentage. Next, he had to factor in each distributor's average annual expenses. How he arrived at this number is not stated, nor does he even reveal the number he chose to use – because there's only one way he could have arrived at it. He made it up. For someone who demands such statistical facts and verification from us, it’s both ironic and hypocritical of Taylor to pull flimsy, baseless, claims such as this out of thin air. His "99.9% fail" mantra is based on nothing more than a grossly bias guess. (source)
I strongly recommend reading the entire article.
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