Jon M. Taylor, PhD
His Background and His Experiment with Multi-level Marketing
Jon Taylor's experience with MLM's is summarized in his own words:
"In the past, whenever asked to express my opinion on MLM, I openly shared my opinion that they were in fact pyramid schemes in which only a few made money at the expense of many who came away empty. My outlook changed when in 1994, I was approached by influential friends, who insisted I was wrong and should take a more objective look at the MLM industry.
"For confirmation of what they were saying, I went to Utah's Division of Consumer Protection and the Better Business Bureau and obtained guidelines from the Federal Trade Commission. Information supplied by each seemed favorable to MLM companies, as long as they were financially solid and legitimate products were offered. Numerous articles and books on MLM supplied by my friends confirmed this view.
"Being an entrepreneur by nature and a researcher both by training and experience, I was curious and considered proving for myself once and for all whether or not MLM was a legitimate business -- by trying it myself. I would test MLM in the crucible of personal experience. Then I would tell the world the truth, whatever I discovered -- positive or negative.
"So I picked a well-established company with excellent products and went to work. My dedication was total, as it seemed that it would not be a valid test otherwise.
"I did everything my company and upline recommended -- subscribed to and tried all the products, recruited many people I knew and sought any referrals I could get, advertised extensively (especially when personal recruiting became unproductive), attended all the training and opportunity meetings, used my best efforts to train and motivate my recruits, and drove my wife crazy with my single-minded dedication to MLM recruiting.
"My wife began asking questions after a few months of no income (though I rose to a level of about the top 1% of distributors). She did not like the changes that were occurring in me as a person -- neglecting the family and seeing everyone as a prospect, even our most treasured friends and family members. Fortunately, as a researcher I had kept detailed notes of my experiences and observations with MLM and was still in an investigative mode.
"Another facet of MLM fascinated me even more than the money. I discovered a whole range of ethical conflicts that for me -- as a former teacher of ethics and one who considers himself an honest person -- made MLM an unacceptable way of conducting a business.
"In fact, before I quit my program after about a year of concentrated effort, I could see clearly what I would have to do to earn huge commission checks. I decided it was simply not worth it. Why? Because I would have to recruit by deceiving hundreds, even thousands of downline distributors (like I had been deceived), into believing they too could achieve what I had achieved. For me to receive that much money, thousands would have to lose their investment, since the money would have to come from somewhere. Also, I would have to continue to insist that MLM programs were not pyramid schemes (after all, the FTC and the BBB had implied that they were not).
"Upon learning of my dissatisfaction, many other MLM promoters tried to recruit me into their programs. But I felt my time and resources were too valuable to learn everything by experience. My primary interest by this time was in presenting a good overview of the generic problems of MLM's, which led to extensive telephone surveys and other research about the pros and cons of this unique business model. Out of all this research came research and analytical papers, guidelines for consumers, and involvement in a consumer awareness movement focused on product-based pyramid schemes."
In 1998, Taylor mailed his conclusions to the presidents of 60 of the most prominent MLM companies, asking them to "prove me wrong." (See "Network Marketing Payout Distribution Study") To this day, this challenge remains unmet.
Also, because of so much MLM activity among members of the Church of the Jesus Christ of Latter-day Saints LDS), Taylor wrote a book directed towards the LDS culture, entitled The Network Marketing Game, which received extensive coverage in the Utah press.
"Some critics see my analyses of the MLM industry resulting from a 'sour grapes' attitude after failing at MLM. I can only respond that I was successful as one of the company's top 1% of distributors, but that such success was not reflected in any profits -- after all purchases and operating expenses were subtracted. Also, I was fulfilling my initial pledge to myself to make public whatever I learned from my experiment with MLM. I feel a moral imperative to help others avoid the pitfalls inherent in this industry."
Jon Taylor's educational credentials include an MBA degree from Brigham Young University in 1965 and a Ph.D. in Applied Psychology from the University of Utah in 1986. An inveterate entrepreneur and communicator, Taylor has over 30 years of sales, marketing, and entrepreneurial experience, having personally started or assisted in the creation of over 40 businesses.
Taylor worked on the administrative staff of and performed research for two universities and has taught adjunct college classes in business management, entrepreneurship, personal finance, communications, and business ethics. He has traveled the country teaching business-related seminars and has sponsored income opportunity events, as well as educational programs for businesses and consumers. He has also written and published on numerous consumer and business topics.
You can contact Dr. Taylor at [email protected].