I’m writing to you because an article appeared yesterday [8-26] on the front page of the Sunday Business Section of the Washington Post that I believe leaves a negative impression about network marketing. I think a response should be written and suggest that you’d be the perfect person to do so. — Susan Katz Clark

Thanks to Susan for pointing this out; the article, “A 400 Percent Return in 7 Days? Riiight,” is by Post writer Michelle Singletary, and you can read it here. My reply is below. — J.D.M.

Dear Michelle,

In your 8-26 column, “A 400 Percent Return in 7 Days? Riiight,” you say in your opening paragraphs, “two tried-and-true scams—pyramid and multilevel marketing schemes—keep trapping investors.” Later on you say that the FTC, SEC and BBB have all “issued warnings about multilevel plans.”

I’m sure this is not what you intended to communicate, but the unmistakable impression the reader would draw from these casually worded salvos is, Watch out for multilevels, they’re all scams!

The facts are quite different. According to the web site of the Direct Selling Association (www.dsa.org), multilevel marketing organizations account for 96.6 percent of direct selling worldwide. We are talking here about an industry comprised of 55 million people worldwide, doing about $100 billion in annual sales—a market segment roughly the size of New Zealand, Pakistan or the Philippines. (Mr. Musharraf is having his share of political challenges these days; having his entire nation labeled a “tried-and-true scam” is not one of them.)

It’s true that a few paragraphs into your piece, you do refer to “legitimate multilevel marketing schemes” (although the nonchalant use of the word “scheme” in conjunction with “legitimate” makes for quite a mixed message!). But the context just piles on more condemnation: “It is difficult to distinguish legitimate multilevel marketing schemes from pyramid schemes, which is why you need to be very cautious about joining.”

In fact, making this kind of distinction is not at all difficult. Visit the DSA’s web site for clear, articulate guidelines. It’s actually fairly easy to distinguish the legitimate players in this $100 billion community from the transparent hucksters. You provide some succinct guidelines right in your piece.

I am not familiar with Financial Independence Group, the specific company you investigated in your article. I note that they are not among the DSA’s 210 member organizations. While that does not in itself mean they are not a legitimate operation, it certainly doesn’t bolster confidence. And as you point out, just a few minutes spent on the company’s own web site yields an almost absurd lack of any tangible information about who they are, what they sell, or anything else. (The site mentions that they have not yet finalized particulars for their “October Conference and Boot Camp in Las Vegas.” Hmm. Today is September 1. This does not augur well!)

But no matter how suspect or slipshod this particular operation might be, that doesn’t justify indicting the entire industry. The subprime mortgage fiasco doesn’t mean all mortgage operations are scams, and Enron doesn’t mean the entire corporate world is rotten.

John David Mann
Editor, Networking Times, author, The Zen of MLM