Myth: Network marketing programs by their very nature will, if continued over a long enough period of time, exhaust the available population able to participate in the program. This is argued as a deceptive trade practice under state and federal law because it’s inherently unfair to the later joining distributor unless the company in a meaningful way tells each new distributor that their prospect for success are less than that of the people who joined before them.
Truth: As any competent statistician will confirm, in a defined geographical area the number of persons available to become distributors and to become customers in fact remains relatively stable. This is so because the “pool of people comprising distributors and customers, although reduced by active customers and distributors and by deaths of persons over 18, is continually increased by the addition of new persons reaching 18 and, critically, the ability of persons who were previously distributors or customers to renew those relationships with the company.” For the most part the state and federal regulatory authorities are aware of and understand the “truth”, but sometimes this false concept is argued by the authorities.
