The stocks of some MLMs are publicly traded and given favorable reviews in business publications. Doesn’t that prove they are legitimate?
Unfortunately, this is an indictment of the shallow research and analyses of financial writers and the media who fall for the phony claims of the MLM industry. MLM is a pseudo-business without a significant base of legitimate customers (most buyers are recruits) And it is totally dependent on a network of thousands of distributors, 99% of whom are losing money. But MLM promoters have duped analysts and the media into believing they are legitimate – and even that the stocks of publicly traded MLMs are good investments. MLM is the Enron of the little guy. It has been reported to us that the SBA (Small Business Administration) refuses to finance any enterprise characterized as MLM (SBA 2006). And the SBDC (Small Business Development Corporation) refuses to counsel anyone involved with MLM, since many small business consultants do not consider MLMs legitimate entrepreneurial ventures. A banker told me that bankers will not loan money to finance MLM participation – and will require a large
