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While in the outhouse reading the latest issue of Forbes (free subscription from now defunct airline miles), I spotted an article highlighting the fast rising “multi-level marketing” company, MonaVie.

As a former moron who got suckered into a pyramid scheme back at the naive age of 18 (more on this in future post), my first impulse was to rip the pages apart and ignore the article, but the fear of paper cuts and lack of entertainment in the outhouse kept me reading.

I quickly realized that the authors of the Forbes article shared a similar view with me on MonaView — if it smells like a pyramid scheme, looks like a pyramid scheme, sells like pyramid scheme — it’s a freaking pyramid scheme.

Based in Salt Lake City, Utah (the capital of multi-level marketing companies, where laws are more favorable to MLMs), MonaVie pitches $39 juices that “blends unequaled nutritional power with unparalleled business opportunity.” As a MonaVie indepdent distributor, you are required to purchase or sell at least four of these bottle per month ($130 before shipping and taxes) before to being able to earn commissions.

Sounds freaking wonderful.

If you or anyone you know are ever in a situation where you are presented with a business opportunity to sell some mystical product, consider the following tips below.

Eight tips from the FTC on evaluating a multi-level marketing program:

1. Avoid any plan that includes commissions for recruiting additional distributors. It may be an illegal pyramid.
2. Beware of plans that ask new distributors to purchase expensive products and marketing materials. These plans may be pyramids in disguise.
3. Be cautious of plans that claim you will make money through continued growth of your downline, that is, the number of distributors you recruit.
4. Beware of plans that claim to sell miracle products or promise enormous earnings. Ask the promoter to substantiate claims.
5. Beware of shills - “decoy” references paid by a plan’s promoter to lie about their earnings through the plan.
6. Don’t pay or sign any contracts in an “opportunity meeting” or any other pressure-filled situation. Insist on taking your time to think over your decision. Talk it over with a family member, friend, accountant or lawyer.
7. Do your homework! Check with your local Better Business Bureau and state Attorney General about any plan you’re considering - especially when the claims about the product or your potential earnings seem too good to be true.
8. Remember that no matter how good a product and how solid a multilevel marketing plan may be, you’ll need to invest sweat equity as well as dollars for your investment to pay off.

Four additional tips from yours truly on spotting pyramid schemes:

1. If a “business program” recruiters dismisses your questions because they were “negative” or “unhelpful,” wave the red flag and prepare to run. Fast.
2. If the program and compensation plan is so confusing that the recruiter/promoter has trouble explain it clearly, you may be looking at a plan that’s trying very hard to skirt pyramid scheme laws.
3. If the product has fanatic distributors who embrace the program’s product and marketing material as if it was the second coming of Christ, be wary.
4. Ask yourself this: if whatever products they’re pitching is so wonderful that it justified the higher price tag, why are they being distributed through a multi-level marketing method? If it can “change lives;” “empower your health; and “raise your energy level;” why aren’t they sold through regular retail channel? Why “share” the profit and “dreams” for other independent distributors? Because these people have an underlying good heart to share wealth? Or is it because without a potential distributor and thousands of others, the products can’t be competitive in a real market? If the only ones buying and using the product are the distributors and “downlines,” you’re looking at a pyramid scheme.

Not all multi-level marketing programs are outright pyramid schemes where the business model is unsustainable. There are a few out there with competitive and reasonably priced products. But as the FTC tip said, even if the program is solid and the products are good — as with all worthwhile things in life — you’ll need to invest hard work and time.

Every once and a while my wife and I will head over to the local mall to walk around and shop. I kid to her about how I like watching capitalism in action, all the people milling about the corridors, popping in and out of shops, spending money, etc. Well lately, the motion of capitalism has slowed down a bit. There are still people milling around the corridors but more and more of them are there for the free AC than the shopping, but you still see the occasional shopping bag full of crap.

So, in celebration of capitalisms stoicism in the face of the slowdown and its resilience, I’ve decided to add to Cap’s growing list of things that are crap by offering up my four things that are crap.

Fancy Wine Openers

I’ve received many a fancy wine opener as a gift and I’ve broken them all. I’m hardly an Incredible Hulk but for whatever reason, fancy corkscrews always get jacked up and break on me. Funny thing is that the little freebie manual corkscrew has never broken, was totally free, and reliable opened every single bottle of wine it’s tried to open. And, to top it all off, it has a bottle opened on the other side so I can crack open a beer after the hard work of opening a bottle of wine!

Ridiculously Awesome HD Televisions

I like good picture quality and excellent crisp 7.1 Dolby Digital sound as much as the next guy, but I like a comfortable retirement just as much. The kicker is that retirement is something I’ll enjoy for many many years whereas home electronics will likely burn out or grow painfully obsolete within a few years. What do I get instead? I get decent electronics that was top of the line a year ago. I let the early adopters buy the stuff early and then sell it to me when they want the latest and greatest.

Cutting Edge Cell Phones

This iPhone mania is insane. People lining up for hours to get a cell phone? I’ve seen them, they are very nice, but the minimum total cost of owning one for the two year required period is nearly two thousand dollars. Sure you can surf the web, watching videos, and do all sorts of touch screen coolness… but two grand? That’s a sizable down payment on a car, you know, one of those machines that gets you from point A to point B by burning old dinosaur bones? That’s also a brand new top of the line laptop. Heck, that’s a Ridiculously Awesome HD Television!

Anything at Brookstone…

… or was at Sharper Image. Do I really need a spinning clock that shows the time in the air? No. Do I really need a coin sorter or a foot massager? No and no. Those stores are bright beacons of consumerism in our economic turmoil and a few months ago one beacons was extinguished. Why? Because they’re full of crap you shouldn’t be buying and people ran out of credit to buy it with. I don’t need a singing egg light, I don’t need a pocket Texas Hold ‘Em game, and I certainly don’t need a two thousand dollar massaging chair.

What do you think? Worthy of being called crap or was I too harsh?

From the issue where Bane broke Batman’s back, to the kick-ass Batmobile toy from Batman Returns, and finally to the Batman mug that I broke due to pouring cold milk into a mug full of hot chocolate (oh how I miss you, Batman mug) — my crap of Batman collectibles spells one clear thing: I’m a fairly big Batman fanboy.

But $150 per ticket for The Dark Knight?

Uh, no thanks.

According to an article on wcbstv.com, Craiglist was flooded Friday with ads for buyers and sellers of weekend Batman tickets. Most are willing to dish out $50 per ticket, but one hardcore fan is willing to shell out $150 per ticket:

Of course, Jafri says there’s some other motivation involved as well. “I’ve never seen anything you can text a girl that’ll get her to respond with a ‘YES!’ to meeting up more promptly than, ‘Dark Knight IMAX tonight. You in?’” he says.

I don’t want to be an ass, but if an IMAX movie is the fastest “yes” you’ve gotten for a date — maybe it’s time to cut back a little on the Batman love (says the super-senior-college- student-fellow-hobbyist-who-still-doesn’t-have-a-day-job).

Anyway, maybe it’s a Manhattan thing.

From [wcbstv.com] (Thanks Jim!)

As I was stuck in traffic on a fine 4th of July Friday, I noticed that the minivan in front of me had a gigantic LCD TV installed for their kids viewing pleasure. Before I knew it, I was tailgating the minivan to catch the ending to another fine episode of Sponge Bob SquarePants.

The problem with buying lots of crap for your kids is that you may be unintentionally giving your children a sense of entitlement. Being a former brat, I know how it is to annoy surrounding adults with the wanting, whining, and complaining.

From my experiences, the quickest way to raise a bratty child is to buy them lots of crap to appease them, and what better way than a gigantic TV in the car, with a full collection of Sponge Bob DVD?

Here’s a list of five things I’ll never buy for my future kids:

1) TV in the family car.

I’m not about to spoil my kids with hours of entertainment as we drive cross-country to visit grandma (because daddy was too ‘frugal’ to waste money on plane tickets). What my kids will get are important stories on life and personal development. “Why, just a decade ago, daddy had to wake up midmorning, walk all the way to his home office, and slave away on blogs and other web projects…”

2) $20,000 playhouse.

If daddy didn’t get one, you don’t get one too.

[From The Digerati Life].

3) Massively Multilayer Online Role-Playing Games

Are you kidding me? Just look at uncle James, who’s been playing World of Warcraft since 2004 and you’ll see why.

4) A brand new car.

Now, daddy’s not a cheap bastard like mommy’s new boyfriend. See here, a 1985 Toyota Corolla — Japanese engineering at its finest!

5) 6th Generation iPhone

My kid’s phone will be able to do three things: 1) Call mom. 2) Call dad. 3) Call 911.

Long time readers that have forgotten to unsubscribe would know that I have a certain unhealthy fetish for Cap’n Crunch cereal — enough so that I’d find numerous attempt to work the cereal into various post on a “personal finance” blog (and even taken screencaps of said cereal when it appears on TV).

Although I love to crunch away in the morning, afternoon, and evening… my love and loyalty for Cap’n Crunch came into an abrupt halt back in 2005, when I switched brand (gasp) and tried another cheaper alternative.

Was I crazy that fateful night in Wal-Mart? Did my years of loyalty vanish due to competitive pricing? Yes to the first and double-oh-yes to the second.

My post detailing the switch can be a bit exaggerating (and lame); but at the end, I bought Cap’n Crunch for years because I thought it was the only choice available — a pretty silly mindset for an easily reproduced preprocessed food such as cereal — but that’s the power of marketing, and the power of a brand.

Being a savvy consumer is about going beyond such mindsets, to be able to distinguish between hype and value, and be able to get the most out of your purchasing dollars. Here are some things a consumer should always keep in mind:

1. Everyone will always have a favorite brand.
   Apple products lover. Starbucks addicts. Crunch Berries enthusiasts. Name the company or brand, and you’ll have a following. There is nothing wrong with having a preferred brand for certain products, but if you always limit your choices to the tried-and-true, you may be doing yourself a disservice to discovering, cheaper, or even better alternatives.
2. Not all brands are created equal.
   The big names do well because they deliver great products at consistent quality. You generally know what to expect when you buy a Honda and the shipping time is fairly consistent when you order a book from Amazon. That’s the problem with trying something different, you might end up with a crappy result. But with the help of the Internet and a little comparative shopping, a savvy consumer can always find actual differences between choices. And it’s not always about the cheaper but just-as-good choices too, sometimes, you’ll simply find better stuff for higher prices.
3. Understand the marketing and identity shaped behind a brand.
   Marketers poke brains to find image and terms you can relate to. Apple iPod commercials are hip and cool. AARP TV spots are slow and soft spoken. If you’ve ever seen the other side of the fence, you’ll see that the companies may label you as “easy going,” “price conscious,” “value oriented,” “image conscious,” “early adopter,” and “trend follower.” You may think you want or need a certain widget and you may think you have the best widget for your needs, but understand that there are other forces at work, constantly influencing your purchasing decisions. Being able to see through the layers and truly differentiate products is the hallmark of a savvy consumer. And of course, the Internet made all of this much easier. Search “### review” or “### sucks” to get opinions that can help you narrow your choices.
4. Challenge these identity and make them earn and keep your loyalty.
   Dell may have treated you right for years. Fidelity may have never screwed you over. If you deal with a company for years because you trust them, make them constantly earn and keep your business — especially if they screw up. This isn’t about being a hard-ass customer, it’s about reminding the companies that there are always other alternatives out there. Any businesses worth their salt knows this, and any company that’s respectable would want to take that extra small step to help win you over or keep your business. In a world where different choices are clicks away, there is nothing wrong with expecting companies to fight over each other for your business.

There is nothing wrong with having a preferred brand for certain products. It’s okay to trust a big brand over some unknown generic, but you should always challenge these notions and thoughts.

No one sane needs to research intensively over a breakfast cereal, but just because your car has treated you right for years doesn’t mean there aren’t better rides out there. Just because your financial institution fits your current need doesn’t mean there aren’t more personalized banking solutions out there.

At the end, we’re the driving force behind the share prices, the earning reports, and the executive compensations. Never stop challenging them to earn and keep your loyalty.

Related Post:

• Brand Conscious Buying #3 - Gasoline
• Brand Conscious Buying #2 - Toilet Papers
• Brand Conscious Buying #1 - Cap’n Crunch

In early 2006, when the 7th generation console from Nintendo went from its codename of “Revolution” to the official name “Wii,” I soundly scoffed at the silly video game console’s name and immediately declared that the Wii will be a hype-only product, quickly forgotten — just like the Apple iPod.

With about 7.8 million units sold in the U.S. as of January 2008, it appears that I’m a tad bit wrong on Wii’s potential downfall (FYI: iPod sales to date ~ 140 million).

“How can you call this a next generation console?” I asked aloud (to no one in particular) back in 2006. “Where’s the 20 core CPU? The steel melting GPU? And what is this crazy wannabe remote controller?”

None of these questions stopped my extended families from purchasing the $250 video game console unit, nor did it stopped me from joining in on the Wii fun during family gatherings.

During one such recent gathering, my younger cousin asked me if I was the one who declared Wii to be lame and “craptastic.” I promptly told him to eat his cookie and shut up.

Kids these days. No respect for their elders.

Crap or not? You can vote below or vote on the top left of the blog (for RSS readers).

Poll Result:

Related Post:

• Crap or Not #7 - Digital Cameras
• Crap or Not #6 - First & Business Class
• Crap or Not #5 - Gym Membership
• Crap or Not #4 - TMX Elmo
• Crap or Not #3 - Tempur-Pedic Mattresses
• Crap or Not #2 - AAA Membership
• Crap or Not #1 - Ionic Breeze Air Purifiers

Stop Buying Crap #10 | #11 | #12 | #13 | #14 | #15 | #16 | #17 | #18 | #19 | #20

Buy Me Please Because Moderation and Arithmetic is Difficult

When I came across the 100 calorie goods two years ago, I thought it was some stupid trend for people without abbacus, but as it turns out, I was dead wrong.

I remember reading somewhere recently that 100 calorie aisle may start appearing in a supermarket near you, which got me so infuriated, I tore the newspaper into atom-size pieces.

Please people; for the sake of the sanity of an online-stranger-you-don’t-know, please start using ziplock bags and a knife.

Or hey, maybe even your fingers. They’re really good at breaking processed food, especially the bar type. There’s also this thing called the mouth, which you can close when you’ve consumed a sensible amount of Cheetos.

If the mouth method is too difficult to do (and I’ll admit I fail in this almost 90% of the time), you can utilize the last line of defense and revisit what I’ve already mentioned — use this thing called THE BRAIN, and count the portions you want and throw them into a ziplock bag!

Non-rant Related Resources:

• In Small Packages, Few Calories, and More Profit - NY Times
• 100 calorie packs review - taquitos.net