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Multi-Level Marketing Schemes Are Not A Small Business, Karen

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Karen and her “small business” took a hit this month when TikTok announced a ban on multi-level marketing schemes. Under the “frauds and scams” policy, TikTok includes multi-level marketing schemes along with Ponzi schemes, get-rich-quick scams, and phishing attempts. To your Facebook friend, Karen, this was a huge blow to recruiting attempts. 

Karen has probably told you that her small business has made her so much money. She makes her own hours, answers to no one, and is #BossBabe-ing all the way to the bank. “How is she able to do all this?” she hopes you ask in response to her invasive Facebook message. “Easy!” she answers. 

By then, Karen’s got you. 

What Are Multi-Level Marketing Schemes?

Multi-Level Marketing (MLM) is a strategy used by direct sales companies to sell products and services. They aggressively encourage existing members to promote and sell their offerings to other individuals and bring on new recruits into the business. 

A generation ago, MLMs were harmless Tupperware parties and teenagers selling CutCo knives door-to-door. Now, MLMs are harmful, predatory schemes that are cleverly disguised pyramid schemes that most often leave their victims in debt. 

Some notable MLM companies are: 

  • Amway
  • Avon
  • Herbalife
  • Mary Kay
  • Tupperware
  • NuSkin
  • CutCo
  • LuLaRoe
  • Youngevity

Karen will almost certainly tell you, repeatedly, that her “small business” is NOT a pyramid scheme. She is emphatic about that, even a little offended you even brought that up. 

Difference Between MLM and Pyramid Schemes

Pyramid schemes are illegal, MLMs are not. The most notable difference is that pyramid schemes do not have a product while MLMs do. Avon sells makeup, Herbalife sells shakes, LuLaRoe sells leggings, and so on. 

Both pyramid schemes and MLMs rely far more on selling to salespeople underneath you rather than sales from the product itself. The reason why these schemes are so dangerous is that there is a limit to recruiting efforts.

Let’s say you are recruited into an MLM. You then recruit five people, who then recruit five people. Once you’ve done that thirteen times, you’ve reached the global human population. And that’s assuming that everyone in the world has nothing better to do than hawk leggings and protein shakes from their garage. 

The thing that most people don’t realize is that no multi-level marketing company has ever-ever actually stopped. It’s one pulsating, giant, many-tentacled pyramid scheme out there. If one happens to fail, it only diffuses out. The top-level leaders move onto schemes. The down liners are moved into other schemes. 

The scheme will only migrate, transform. It’s a hydra.” – Robert Fitzpatrick, MLM Expert, LuLaRich

Doesn’t sound totally sustainable, does it? 

The MLM Boom of 2020

During the pandemic, people felt pretty desperate and hungry for a new type of employment. MLM companies all over the world became aggressive in their recruiting tactics. As a result, 7.7 million Americans worked for an MLM in 2020 – 13% more than in 2019. 

Wellness products were particularly popular. This makes sense considering that a pandemic was raging and everyone was scrambling for anything and everything that even smelled like good health. 

One company that stood out among the others was Black Oxygen Organics, or BOO. They promoted themselves as a cure-all wellness product. It was dirt. Literally. BOO sold people dirt and said it was a health product. 

Karen drank and bathed in dirt and told people it was curing her COVID. Thanks, Karen. 

BOO is now defunct, but not before it hurt plenty of people physically and financially

Legality Issues With Multi-Level Marketing Schemes

MLM companies are designed to make a profit for the owners/shareholders of the company and a few select individual participants at the top levels. According to the U.S. Federal Trade Commission (FTC), some MLM companies already constitute illegal pyramid schemes even by the narrower existing legislation, exploiting members of the organization. 

Steer clear of multi-level marketing plans that pay commissions for recruiting new distributors. They’re actually illegal pyramid schemes. Why is pyramiding dangerous? Because plans that pay commissions for recruiting new distributors inevitably collapse when no new distributors can be recruited. And when a plan collapses, most people– except perhaps those at the very top of the pyramid – end up empty-handed.” 

You can read these guides on how to avoid or recover from these predatory multi-level marketing schemes. Don’t let Karen get you!

Chris Blondell is a Philadelphia-based writer and social media strategist with a current focus on tech industry news. He has written about startups and entrepreneurs based in Denver, Seattle, Chicago, New Haven, and more. He has also written content for a true-crime blog, Sword and Scale, and developed social media content for a local spice shop. An occasional comedian, Chris Blondell also spends his time writing humorous content and performing stand-up for local audiences.

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Business

Adobe Drops Pantone Colors From Creative Cloud

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Print and pre-press professionals were worried about the information gap regarding Adobe’s decision to remove the Pantone color system from the upcoming versions of its Creative Cloud products. 

In November, Adobe released a technical bulletin about the changes to the Pantone Color Libraries. The company stated that: In March 2022, the Pantone Color Libraries pre-loaded in Adobe Photoshop, Illustrator, InDesign Color, and Adobe Captured will be deleted from future software updates. While Adobe drops Pantone, they said they are working on an alternative solution for the affected products. With that said, Adobe encourages its users to stay tuned for updates. 

Still, the news has caused dismay among influential users of Adobe in print and graphic arts.

Color management whiz Paul Sherfield, the founder, and owner of The Missing Horse consultancy, told Printweek that they have been talking to their customers about Adobe’s decision. For him, it is a disappointing example of big firms in the graphic arts supply chain not supporting the industry itself. He noted that there’s a need to pay for a subscription to download the latest library. Printers can afford that, but the thing is, how many graphic designers and publishers will. 

Adobe and Pantone’s Comments

Pantone official Marcie Foster responded and said Adobe and Pantone have been and will continue to be long-standing business partners. 

But, the current implementation of the Pantone color system with Adobe’s Creative Cloud products is outdated, with many missing colors and inaccurate information. The two companies have decided to remove the obsolete libraries and continue to work together on better in-app features. 

Similarly, Pantone will continue to explore new collaborations with other companies. It’s to ensure that Pantone users can easily access the latest color libraries depending on the design application they are using. 

Danaher owns Pantone, which also runs Esko, X-rite, Videojet, and Linx.

On the other hand, Adobe had not commented at the time of writing. 

Industry Reactions

From Simon Eccles, Printweek

As a long-time user of Adobe products, Simon Eccles said Pantone libraries were always an essential element of their usability for print across the whole industry, especially labels and packaging. 

Mr. Eccles expressed that the “Adobe drops Pantone” announcement is quite disrespectful to many designers and printers who dutifully pay Adobe’s subscription fees regularly.

Mr. Eccles wonders if Adobe consults any users before arriving at such a decision. 

From Bill Greenwood, high-end image manipulation and retouching specialist

Bill Greenwood told Printweek that Pantone creates an Adobe Extension known as Pantone Connect, allowing users to access the Pantone libraries. I hope that Adobe integrates the Pantone Connect extension automatically. Otherwise, users can download it from another site (exchange.adobe.com).

The software mainly operates on a rental basis, and Adobe minus the Pantone libraries in its suite is an exciting development. Sadly, the changes will force them to register for the Pantone monthly subscription plan.

If Pantone wants to retain its customers, it must offer more standard vital features accessible to designers and other users. Smaller companies and designers will choose not to pay a monthly subscription. After all, Pantone is just a guide – there are many different ways to specify color. Users may decide to select RGB values or HTML Hex color codes or just CMYK print color values in exchange for Pantone colors. 

Mr. Greenwood concluded that people might start to move away from Pantone if the cost is not worth it.

Simon Gambling, Zebra managing director

It would be somewhat scary and hard to imagine when Adobe drops Pantone. Also, it would be challenging for them to prove that an alternative solution to Pantone removal will be a hassle-free transition. Users could only await further updates from Adobe to be sure.

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Sony Stocks Plummet After Microsoft-Activision Deal

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Sony shares fell by more than after a Microsoft-Activision deal was announced. 

There is no doubt that this deal weakens Sony’s position in the market.

“Whether or not Activison Blizzard’s content is progressively made exclusive to Xbox platforms and services, inclusion of new releases into Xbox Game Pass for several major games franchises, including Call of Duty, will undermine Sony’s third-party business.” 

Piers Harding-Rolls, games research director at Ampere Analysis, explains the situation. 

Sony has benefitted from the ability to negotiate timed exclusive content for Call of Duty but this is now under threat.” 

Shots fired in the never-ending console war. 

Did The Market Overreact?

Serkan Toto, CEO of Kantan Games, thinks so:

I think the market has totally overreacted in Japan today.

See?

Sony will continue to push out blockbusters, there can be no doubt about that.

Those PlayStation exclusives are pretty sweet. Spider-Man, The Last Of Us, Ghost of Tsushima? Come on now. 

Sony can, of course, fight back: they still have their own top in-house studios spread around the world, PlayStation remains a powerful brand in gaming, and acquisitions are in the cards for Sony as well.” 

PlayStation isn’t going down without a fight. 

The Console Wars Continue

For some time, Sony has been ahead of Microsoft. But the $68.7 billion Microsoft-Activision deal raises the stakes the highest they’ve been since the Black Friday Battle of 2013. Franchises like Call of Duty and World of Warcraft could become exclusive. 

How will Sony respond? We shall see what happens next in the seemingly never-ending console wars.

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Silicon Valley Blue-Collar Workers Hope To Return To Their Posts

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While big tech companies are delaying return to offices, Silicon Valley Blue-Collar workers anticipate full return in the coming months. 

Despite the economic disruption experienced due to the COVID-19 outbreak, businesses tried their best to ensure business continuity. Big tech companies were the first to allow their white-collar employees to work from home when the pandemic hit. However, not everyone can work remotely, like in the case of service workers.

Madeleine Rivera, 33, is a contractual food service worker at Google’s campus. Rivera is holding on to the slightest signs that workers will return to the company in the future. Recently, she handed out free peach ice pops to Google employees who have returned to work already. She’s trying not to overthink about the rising COVID cases in the country. According to her, being optimistic and happy matters. 

As the Delta variant enters a new troubling phase, more tech companies like Lyft and Facebook delay re-opening their workplaces early next year. Because of this, the companies’ contracted cafeteria workers, cleaners, and shuttle drivers are becoming more anxious. 

Most Silicon Valley blue-collar workers are not sure whether the Delta variant will delay their returns even longer or, worse, risk their jobs entirely if in-office work becomes less significant than it was before. As many white-collar employees have settled into work from home, blue-collar workers are struggling even more because of the unpredictable situation. 

“My kids don’t want me to go back to work, but I said I have to do it,” said Liliana Morales, 37, a food service staff at Facebook. Morales recently returned to work after having been on paid vacation since the pandemic started. Everyone needs to go back to their everyday routines, and it has been months that she has been out of work, Morales said.

Image Credit: SIPA USA via AP

Country-wide Concerns

While some Silicon Valley blue-collar workers are in better condition, they still have the same concerns as many fellow workers across the country. UCLA Labor Center director, Kent Wong, co-authored a book about the late Mike Garcia, a janitorial labor organizer who led strikes at Oracle and Apple. Wong said that because Morales and Rivera are members of a labor union, they are likely to be doing better than their non-union member counterparts. 

Previously, on a website Amazon created this year to convince workers in Alabama to vote against unionization, the company announced that they provided them with excellent hourly rates, attractive healthcare benefits, and career advancement. There is so much more than the workers can do with their career and family without paying premiums, Amazon said. 

But Wong said all blue-collar workers face problems, whether or not they have union membership. The bottom line is, they are still very vulnerable. 

Image Credit: SIPA USA via AP

Looking Ahead

In interviews, Silicon Valley blue-collar workers said that big tech companies primarily supported them throughout the pandemic. Others said the companies tried to find them other jobs when their original work was gone. Take, for example, the experience of Rivera, a former kitchen staff across Google’s campus in Mountain View, California. She was temporarily assigned to work as a receptionist in almost empty office buildings.

Some companies like Google are already starting to upgrade their headquarters. It’s to return to a sense of normalcy in Santa Clara County, the geographic heart of Silicon Valley.

Facebook is starting to recall their contractors. On the other hand, drivers are being asked to do training and practice driving empty buses, said Stacy Murphy, the representative for Teamsters Local 853 – the union of some Silicon Valley bus and shuttle drivers. 

Morales said that whatever her company orders, they will abide by it. If they say return to work, they will return to work.

Murphy believed that it had been a mixed bag for Silicon Valley firms needing shuttle drivers. Facebook continues to let its drivers make practice trips. While, Netflix and Amazon have been back to 100% capacity since June 2021. Tesla even expanded their service during the pandemic. On the contrary, Apple, LinkedIn, Twitter, and Salesforce never returned. 

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