Avon disavowed MLMs in 2014.
"Avon Products is leaving the trade association (the Direct Selling Association) it helped to found more than a century ago, writing in a letter to other member companies last week that the group's bylaws might not adequately protect consumers from fraud...Many multilevel-marketing companies have been accused of operating pyramid schemes over the past few decades, including Herbalife, a member of the association that sells nutritional products and herbal supplements.
Avon's departure suggests the historically lucrative and powerful firm is concerned about the public perception of its business and the possibility of broader regulatory action on multilevel marketing...In dropping out of the Direct Selling Association, Avon joins Tupperware, another iconic direct-sales brand that has become leery of the "direct sales" label. "We didn't leave direct selling," Tupperware chief executive officer Rick Goings told The Wall Street Journal last year. "Direct selling left us, because the industry became dominated by buying clubs and what looked like pyramid schemes."
HLF just spent that past year or so fighting pyrmaid scheme charges by the FTC. The stock got battered during that time.
You really couldn't have picked two worse examples to defend what YGYI is doing. But aside from these two high profile examples, the DSA is rife with lesser know MLMs (the bulk of their membership), most of which are blatant pyrmaid schemes selling blatantly fraudulent products.
MLM companies are so acutely aware of the negative public perceptions of MLM that they refuse to call themselves MLM companies, preferring instead to call themselves "direct selling" businesses, which is a deceptive misnomer.
MLMs have a deservedly horrid reputation and they are volatile risky enterprises, constantly facing the threat of either imploding under the weight of an unsustainable pyramid scheme, or being the target of prosecution by regulatory agencies and class action suits.
A sober-minded investor would never ignore such risks. YGYI's troll-pumpers do though, on purpose. Their M.O. is to sweep inconvenient facts like these under the rug because they are an obstacle to scamming people.
