Guest Post by Greg Boudonck
Not all multi-level marketing companies are created equal. I have found some people claiming that all MLMs are pyramid schemes and ripoffs. If this were true, companies such as Amway, Avon, Mary Kay and others would not still be in business.
So why do I say this?
There have been companies that have given the multi-level marketing business approach a bad name. One of those companies was Equinox International. So, in today’s post, I am going to perform a complete review of Equinox International. My overall goal with this post is to provide some lessons both for MLM owners, independent representatives and prospects considering starting a home based MLM business.
Before I move forward, I must state that we cannot hold all MLMs in the same aspect as one bad one. That would be like saying that just because you had terrible service at a fast food franchise chain restaurant in Sacramento, California and you are now in Hoboken, New Jersey, and you will not go through the drive thru of that franchise’s competitor because you assume they will have bad service too.
In my opinion, that is just ignorant.
So, saying all MLMs are just like Equinox International is the same as the two fast food chains.
Are you familiar with Equinox International?
A Brief History of Equinox International
In 1991 Equinox International was founded By Bill Gouldd. He was actually Bill Gould at birth (some guru told him that his name showed an unbalanced life) and by adding the D he would bring his life into a balance.
The company relied on independent distributors to sell their wide array of products that included water and air filters, vitamins and many other products. All in all, there were approximately 300 different products at one point.
In 1996, Equinox International under Bill Gould’s leadership had grown to unbelievable proportions. Revenues for that year were around $196 million, and Equinox International hit #1 on Inc.’s top 500 list.
But, the bottom was about to fall out.
In 1996, the Federal Trade Commission began investigating Equinox International for numerous complaints and possible illegal acts. There were many people who filed both civil and criminal claims against Bill Gouldd and Equinox International. They claimed that deceptive recruitment practices, extortion and an illegal pyramid scam swindled them out of money.
For the next 4 years, Equinox International struggled, and revenues dropped. In 2000, Equinox International settled the court case (which had become a class action suit) for $40,000,000. Another part of the case meant that Equinox International had to liquidate all assets, as did Bill Gouldd himself. Also, Bill Gouldd was ordered not to participate in any network marketing organizations within the United States.
Equinox International was gone completely in 2001. It is also my opinion that Bill Gouldd is breaking the order too; more on that towards the end of this post.
The Equinox International System
The system Bill Gouldd and Equinox International used has me amazed that people would “fall for it.” Distributors were recruited by other distributors or through newspaper advertisements. They were promised monthly incomes of $2,000-$3,000. They were told they had to purchase $5,000 worth of Equinox International products to be deemed “managers,” and to earn any commissions on distributors they recruited (their downline).
Training conferences were not free. As a matter of fact, the average cost for one person to attend one of the Bill Gouldd training conferences was $2,500.
When we look back, the revenue generated by Equinox International came directly from the pockets of the independent distributors. Very few Equinox International products were being sold to non distributors. It was an illegal pyramid scheme.
Some Lessons To Be Learned From Equinox International
There are quite a few lessons that can be learned from the Equinox International situation. Some are:
Don’t use, and don’t fall for advertisements and promotions that are too good to be true. This is often spoke about at the Online MLM Community. Promising people they will make outrageous amounts of money can land you in hot water, and falling for it is naive.
Poor ratings or reviews. Do yourself a huge favor before you sign up for an MLM; check the Better Business Bureau and reviews of the business. No, not every review will be great, but you should be able to get a good idea about the company.
Job interview??? No it’s an interrogation. DO NOT! Let me reiterate…DO NOT lead people to believe they are going to a job interview. If you go to what you believe is a job interview and it turns into an interrogation about your personal life, I suggest you run the other way. Reputable MLM representatives will educate and not interrogate.
Pay for training. There is no reason that you should have to pay for “basic training” in the network marketing business you started. There are many companies that allow distributors to sell added training methods, but the basic method should be free.
Over-the-top product claims. If the rep is saying a product will do something that is outrageous, it probably is best to stay clear. Don’t tell customers a product will do something you are not sure of, because there could be a major lawsuit.
Recruitment over product sales. I often say it, and I know Chuck does too…Product before recruitment. If you are not selling the company’s products, there won’t be a company to recruit for. If the MLM is pushing recruiting over product sales, they are bound to be investigated for being an illegal pyramid, because that is a key sign.
Pressure…High pressure! Using pressure techniques against me may get you punched in the nose. I don’t like it, and many other people don’t either. Don’t pressure people to buy in to the company or to buy products. Show them the advantages and if they say no, you can gently ask them why and answer with a rebuttal, but if the no persists, smile and leave them be. Stay in touch with educative material, but do not pressure, because you just may run into someone like me and you will have to go get your nose fixed. (Don’t take me serious, I’m just joking. I wouldn’t punch you in the nose, I would kick you in the shin.)
Yes, the Equinox International debacle should teach us all some serious lessons.
Bill Is Back At It
As I mentioned earlier, I believe that Bill Gouldd is back in the game. Naturally, there will be those who follow his devious charismatic ways. He claims it is not an MLM or network marketing, but his Avant-Garde Marketing Solutions is quite close to being a deal breaker for Bill Gouldd.
Bill has his own website, and he states that he lost everything like many other people, but from what I understand, he kept a lot more than many other people. I won’t give any more of my opinions on Bill Gouldd, but we would like to hear all other opinions about Bill and the Equinox International MLM system.
To all those people who lost in the Equinox situation, I am sorry you faced such a thing. Please do not give the whole MLM system a bad name because of this one bad apple. There are many good MLM companies.
It is up to each of us to share the good and also the bad. If we confront the ones that are ruining the MLM reputation, maybe we can clean it up so we all can do business the right way.
What are your thoughts? Do you have any questions? You can post all comments, questions or suggestions below. Thank you.
- Equinox (MLM)
- Fast-Sinking Star
- Gently With a Chainsaw
- FTC v. Equinox – Deja Vu
- Complaint Review: Bill Gouldd, Avant-Garde Marketing Solutions, AGMS, Marc Accetta, And Greg Ammerman, Greg Amerman
- Network Marketing (M.L.M.) – Equinox International
- Signs It Is An MLM Scam: The Red Flags To Watch For When Seeking Out a Direct Sales Company
About the Author: Greg Boudonck is a full time freelance writer and a part time network marketer. With over 50 books published, and a variety of articles all over the world wide web, you can see more about Greg by visiting his website at Lancer Life.com.
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