Email Courtney Harrington

I. Topic Introduction

Network Marketing: Scam or Legitimate Business?

     Network Marketing, or Multi-Level Marketing, uses word of mouth and individual contact to sell products. People sign up with a company and then attempt to get others to either use the product only, or to use the product and try to get others to use the product as well. The media has often linked Network Marketing with scams and pyramid schemes. Through the media, Network Marketing has gotten the reputation of scams that are geared at signing people up instead of selling a legitimate product. Others, such as Donald Trump and best-selling financial author Robert Allen, tout Network Marketing as an amazing business opportunity, and the wave of the future.

     I would like to find out if Network Marketing in general is a scam, or if it has only been abused by some people. Also I would like to know why Network Marketing has gotten a bad name, and if there are any legitimate business opportunities using this form of marketing / advertising.

     The audience is a general audience of those interested in any type of marketing, and especially those with an interest in newer, non-traditional methods of getting word out to consumers about products. Those who have been part of Network Marketing companies in the past, or are considering it would also be interested.

I-b Keywords:

UNC Library Catalog Keyword Searches:
Network Marketing AND Wealth NOT Internet
Multi-Level Marketing AND Opportunity
Fi (Network Marketing OR Multi-Level Marketing) AND Scam
Fi MLM n5 Pyramid Scheme
Fi Network Market? OR Multi-Level Market?
Fi Adverti? AND Distributorship

Academic Universe Lexis-Nexis Keyword Searches:
Multi-Level Marketing w/25 Advertising
Multi-Level Marketing and not Company
Network Marketing w/25 Wave 3

Search Engine on Web Keyword Searches: www.altavista.com
Multi-Level Marketing AND History
Multi-Level Marketing AND Research AND NOT Company
Word of Mouth AND Advertising

II. Library Sources: Books and Audiotapes

Print Sources:
Clements, Leonard W. Inside Network Marketing: an expert's view into the hidden truths and exploited myths of America's most misunderstood industry / Rev. and updated 2nd ed. Roseville, CA : Prima Publishing, 2000. Davis HF5415.126 .C54 2000

Carmichael, Allen. Network & Multi-level Marketing : the essential handbook to introduce you to an exciting business opportunity / 2nd ed. Polegate, East Sussex: Concept, 1991. Davis HF5415.126 .C37 1991

Non-Paper Source:
Poe, Richard. Wave 3: The New Era in Network Marketing. [Magnetic Tape]. Rocklin, CA: Prima Audio, 1997.

III. Electronic Indexes and Databases

1.) Laymon, Rob. (1999, August 20). Multi-level marketing proves a hit on 'Net. Philadelphia Business Journal [Online], v18, i28, pB5(2). Available: Infotrac General Reference Center Gold [2003, January 16]

2.) Ziwica, Kristine. (1999, May). ABCD ... MLM. Success [Online], v65, i5, p78(1). Available: Infotrac General Reference Center Gold [2003, January 16]

3.) Rubin, Jerry. (1992, March). The flee generation: in the '90s, baby boomers will find freedom through MLM. Success [Online], v39, n2, p32(1). Available: Infotrac General Reference Center Gold [2003, January 16]

4.) Owen, David. (1987, October). Dreams and Downlines. The Atlantic [Online], v260, p84(7). Available: Infotrac General Reference Center Gold [2003, January 16]

5.) Robinson, Ruth. (1997, February ). Australian Tourist Commission uses multi-level marketing to encourage visitors "Down Under." Direct Marketing [Online], v59, n10, p14(3). Available: Infotrac General Reference Center Gold [2003, January 16]

6.) Kahaner, Larry. (1996, July-August). The big switch to home-based selling. Executive Female [Online], v19 n4 p38(6). Available: Infotrac General Reference Center Gold [2003, January 16]

IV. Web Sources

Title of Web Page: The History of Network Marketing
Web Address: http://kbmweb.com/history
Brief Description: This is a brief overview of the evolution of network marketing, based in part on a book on the subject by Richard Poe. The overview starts with the first known introduction of a Network Marketing plan to sell products, introduced by Carl Rehnborg in 1945. It then follows the marketing style through its growth, looking at companies such as Amway, and the different phases that Network Marketing has gone through since 1945.
Source of Website: Kamal Mustajab ; http://www.kbmweb.com

Title of Web Page: Network Marketing Success Now
Web Address: http://nmsnow.com/
Brief Description: Site on how to be successful at Network Marketing, with tips and hints. Explains why some people fail at Network Marketing - basically they expect it to be a get rich quick deal and are not willing to do any work or give it any time. The site has a heavy emphasis on the use of the Internet for Network Marketing. Also has a what is Network Marketing section with a description of the marketing method. This site contains a listing of Network Marketing companies that an interested person could look into and sign up with.
Source of Website: Copyright is to nmsnow.com. No real person or group is identified.

Title of Web Page: Free MLM Info
Web Address: http://www.free-mlm-info.com/
Brief Description: Site trying to get people involved in Network Marketing. Obvious bias towards the positive side of MLM. This site is focusing on what it says is the most important aspect of a successful Network Marketing plan - duplicatable plans. This site gives a little insight into the strategies used to build a Network Marketing Business.
Source of Website: The Duplicator – Network Marketing Company

Title of Web Page: Is Network Marketing Just a Scam?
Web Address: http://www.entrepreneur.com/Your_Business/YB_SegArticle/0,4621,285135,00.html
Brief Description: Article set up to answer questions regarding the legitimacy of Network Marketing. Author explains some of the myths and fallacies regarding MLM. Goes into detail about the difference between Network Marketing and pyramid schemes. Good article giving some of the common complaints about Network Marketing, and then the responses to them. Readers can make up their own minds about the validity of the complaints and the responses.
Source of Website: Michael L. Sheffield - chair of the Multi Level Marketing International Association (MLMIA),

Title of Web Page: Scam Sentry – Multilevel (MLM) and Network Marketing
Web Address: http://www.scamsentry.com/mlm.html
Brief Description: Short article on the realities of Network Marketing. Explains why some scams have developed, but also shows that overall the business is on the up and up. Gives examples of legitimate Network Marketing companies like Pampered Chef and Avon. Also gives examples of the style of the not so legitimate Network Marketing companies that focus on getting people to sign up by pushing the "get rich quick" idea.
Source of Website: Individual not involved in Network Marketing, with no advertising on site. Other than an email link to author, no source is given.

V. Mini Essay

Electronic Mail: Should it be Treated Different than Snail Mail?
     Wouldn’t it be nice to check your e-mail and get a few from friends, maybe a daily joke you had requested, and nothing else. No junk you didn’t ask for, no advertisements for web cams, no links to porn sites, no spam. Most would agree that this is the ideal for the online world, but some argue that Internet advertising, even the aggressive, often intrusive, forms of it are necessary for the Web to continue to exist as it does, and are protected by the First Amendment. (1)

     As of 2002, spam accounted for 38% of all e-mail traffic and the number continues to rise. (1) It would seem that something needs to be done at a federal, and possibly even international, level to control the situation. But, on the other hand, why should e-mail be handled by the law any differently than regular mail. The laws regarding the mail service in the United States do nothing to keep people from filling the mailbox out by the road with junk. The only restrictions are those in regards to fraud, pornography, and other such activities. (2)

     The problem with censorship of any form has always been the same. It is a problem of who gets to decide what is acceptable and what is not. ``Once the government starts deciding which speech is valid and which isn't, then you are in a dangerous area,'' says David G. Post, an Internet-law expert at Temple University. ``That's exactly what the First Amendment is about.'' (1)

     So maybe in our desire to keep our inboxes tidy and save ourselves from the deluge of spam, we need to step back and look at the bigger picture and not set a bad precedent because of a few annoying e-mails. Filtering programs will improve over time and should be available to those who want them. Most of all though, if we all just quit responding to the spam it will show itself to be useless and the practice will die out.

NOTES:
(1) Mike France, “Needed Now: Laws to Can Spam,” Business Week, 7 October 2002, i3802 p100 Also Available [Online]: Infotrac General Reference Center Gold [Accessed: 28 January, 2003]

(2) Leon A. Kappelman, “Free Speech Vs. Free Markets -- Our zeal to E-commercialize the world sometimes leads otherwise strong proponents of free speech to inadvertently compromise their rights-and those of others,” InformationWeek, 17 April 2000, p193 Also Available [Online]: Infotrac General Reference Center Gold [Accessed: 28 January, 2003]

Web Sites For More Information:

Title of Web Page: CPTech on Spam Regulation
Web Address: http://www.cptech.org/ecom/spam/
Brief Description: Has many links regarding spam regulation throughout the world. Section on the United States looks at the different states and their approaches.
Source of Website: Consumer Project on Technology. Started by Ralph Nader

Title of Web Page: SpamCon Foundation: to reduce spam (junk email)
Web Address: http://www.spamcon.org/about/
Brief Description: Anti-spam site that goes through the costs of spam and justifications for the regulation of spam.
Source of Website: Non-profit group in California. Executive Director is Daniel Birchall

Title of Web Page: Essays on Junk E-mail (spam)
Web Address: http://www.templetons.com/brad/spume/
Brief Description: Author of site has written numerous essays regarding spam, including one on spam and the First Amendment.
Source of Website: Brad Templeton. He was the founder and publisher of ClariNet – an online newspaper. Chairman of the Board of the Electronic Frontier Foundation.