MLM question about prize trips

[Anonymous]

My cousin started selling MLM a few years ago. In her first year, she won a trip for two to Hawaii. She quit a few months later and went to work for another MLM. In this new MLM, she has won a trip for two or four people every single year. She is very aggressive and if anyone could profit, she could. However, I just don't see how she's winning trips every year while selling products in the $8-15 range. I suspected these trips are mandatory conferences she can write off, but now she's taking friends on her latest prize trip. I am confused. Can anyone with experience explain how the prize trips work? I'm not trying to be snarky, but I don't see how the company could do this kind of reward trip every year when the mark up on the products is so low. She's the only MLM sales person I've ever known to win anything (or claim a profit - most dropped out after a year with inventory in their basements). I'm really curious. Thanks.

[Anonymous]

Anonymous wrote:My cousin started selling MLM a few years ago. In her first year, she won a trip for two to Hawaii. She quit a few months later and went to work for another MLM. In this new MLM, she has won a trip for two or four people every single year. She is very aggressive and if anyone could profit, she could. However, I just don't see how she's winning trips every year while selling products in the $8-15 range. I suspected these trips are mandatory conferences she can write off, but now she's taking friends on her latest prize trip. I am confused. Can anyone with experience explain how the prize trips work? I'm not trying to be snarky, but I don't see how the company could do this kind of reward trip every year when the mark up on the products is so low. She's the only MLM sales person I've ever known to win anything (or claim a profit - most dropped out after a year with inventory in their basements). I'm really curious. Thanks.

Also curious! And I'm guessing you're referring to Jamberry.

[Anonymous]

Most MLM is a scam or pyramid scheme. You are either correct that she's paying to attend a conference or alternatively, she's at the top levels of the pyramid.

Then they need to reward her for bringing in business. I bet that the people she brings in under her pay lots of fees for products and being affiliated, etc. and that is where the money is made, not necessarily the products.

[Anonymous]

Anonymous wrote:Most MLM is a scam or pyramid scheme. You are either correct that she's paying to attend a conference or alternatively, she's at the top levels of the pyramid.

Then they need to reward her for bringing in business. I bet that the people she brings in under her pay lots of fees for products and being affiliated, etc. and that is where the money is made, not necessarily the products.

Wrong. If the primary activity is sale of product, it's not a pyramid scheme. Some MLM products are good. That's why there's a demand for them.

It's also not illegal to be compensated for running a team, teaching them your techniques, and helping them build their business.

Actual pyramid schemes are investigated and shut down.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Most MLM is a scam or pyramid scheme. You are either correct that she's paying to attend a conference or alternatively, she's at the top levels of the pyramid.

Then they need to reward her for bringing in business. I bet that the people she brings in under her pay lots of fees for products and being affiliated, etc. and that is where the money is made, not necessarily the products.

Wrong. If the primary activity is sale of product, it's not a pyramid scheme. Some MLM products are good. That's why there's a demand for them.

It's also not illegal to be compensated for running a team, teaching them your techniques, and helping them build their business.

Actual pyramid schemes are investigated and shut down.

Lol. You are clearly in one. Feel free to dump your koolaid from your cup. Once you fill it will the reality coffee you will see that these new MLM companies are exactly like amway and other pyramid schemes. Maybe not illegal, but slimy and predatory. Slimy and predatory businesses have no problem being successful (see payday lending!) but don't think you're providing a valuable service.

[Anonymous]

Companies reward top sales people with trips--usually the top X people in the country. I know people in sales (not MLM, but legit companies) who have won trips.

[Anonymous]

Has she paid taxes on those trips?

[Anonymous]

Anonymous wrote:Has she paid taxes on those trips?

Not the OP, but I believe the cost of the trip is considered taxable income. I have a few friends who are very high up on the food chain of their respective MLMs and they frequently go on trips (Hawaii, Jamaica, etc). I am very, very curious about how much you have to make to qualify for one of those trips, btw.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Has she paid taxes on those trips?

Not the OP, but I believe the cost of the trip is considered taxable income. I have a few friends who are very high up on the food chain of their respective MLMs and they frequently go on trips (Hawaii, Jamaica, etc). I am very, very curious about how much you have to make to qualify for one of those trips, btw.

I'm the OP. I can't ask her anything about payment (I only see her about once a year anyway) so I don't know if she's paying taxes on the trips, writing them off as business expenses, etc. To the PP whose friends have gone on MLM trips, have they said anything that would indicate how they won it/earned it/paid for it? I just don't understand how even the corporate offices (if there are any) can spend thousands of dollars on prize trips when the items for sale are so inexpensive. DH's company used to reward to salespeople with trips, but the sales reps were each bringing in close to a million dollars. Something isn't adding up.

[Anonymous]

One colleague who's very into her MLM has "won" a couple of trips since she's started - not the really high-end trips that go to Hawaii or the Caribbean, but within the US. She's posted that she's had to pay the airfare, but everything else is covered. Don't know if that would apply to the trips outside the US as well.

[Anonymous]

The only possible way to earn money in these schemes is to recruit people. Then you not only earn commission on the products you sell, you also earn commission on the sales of your recruits and the people they recruited, and so on. Hence, the pyramid scheme. I was wondering if the people she's taking on the trip are some of her recruits. Perhaps they send their top recruiters on trips to seal the deal.

[Anonymous]

Op you don't know what the truth is when it comes to your friend's "business". There is so much fronting and faking of success with these mlms that it's safest to assume that at least 50% of what comes out of her mouth is not true.

[Anonymous]

I would much rather have a pink Cadillac a' Mary Kay or a clean white Mercedes Benz a' Arbonne.

[Anonymous]

Anonymous wrote:Op you don't know what the truth is when it comes to your friend's "business". There is so much fronting and faking of success with these mlms that it's safest to assume that at least 50% of what comes out of her mouth is not true.

Truth!! I am so f-ing tired of all the Rodan and Fields people. They're the WORST.

[Anonymous]

A lot of times the hotels donate free rooms because the pyramid scheme books that hotel formntheir scam conference.