Understanding MLMs: A Quiz

What is often mischaracterized as pyramid schemes?

• School fundraisers

• Charities

• Banks

• Multi-level marketing companies

Which company was mentioned as targeting people making two to five dollars a day?

• Amway

• Lularoe

• Herbalife

• Avon

What percentage of Americans have been part of MLM schemes?

• 12%

• 15%

• 8%

• 5%

How much did the person lose being in Amway LTD?

• $18,000

• $10,000

• $25,000

• $5,000

What is the average return of a multi-level marketing company according to their own marketing materials?

• 50%

• 30%

• 10%

• 90%

What did the Federal Trade Commission conclude about Herbalife?

• It is not a pyramid scheme

• It is a pyramid scheme

• It is a legitimate business

• It is a fraudulent business

What separates MLMs legally from fraudulent pyramid schemes?

• Their products

• Their marketing

• Their membership fees

• Their business model

What is a common complaint among former MLM members?

• Product quality

• High membership fees

• Too much competition

• Lack of training

What do MLM companies use to promote their business?

• Online ads

• Members

• Billboards

• Television ads

What do high-ranking MLM members often struggle with financially?

• Hiring employees

• Travel expenses

• Buying products for personal consumption

• Paying rent