Ethan Vanderbuilt – Scam Buster or Scam Artist?

Is MLM a Scam?  According to Ethan Vanderbuilt, “All MLM is a Scam”.  Those are his words as you can see from the screen shot that I included in the video below.  So today’s let’s look at the facts.  Just because a company has an MLM compensation structure, does that make it a scam?  Does Ethan Vanderbuilt have a solid argument or does he have an unfair bias against MLM?  As I will show you in today’s post, Ethan has a clear agenda against all MLM (regardless of reputation or results) and he also has ulterior motives which we will discuss as well.

(you may want to scroll down and watch the Video rebuttal that I recorded for more information – it is much more detailed than even this written blog post)

Additionally, if you want to know what 6 things to look for when selecting a business opportunity so you can discern what is and what is NOT a scam, feel free to download this free video that reveals the 6 traits you should look for in a solid and legitimate business opportunity.

“MLM is a Scam” (but Affiliate Marketing is NOT?)

If you don’t know who Ethan Vanderbuilt is, he considers himeself a scam buster.  He does reviews of various companies (mostly network marketing companies) and he gives reasons why he believes they are scams.  The problem is that Ethan has an obvious bias and he has some ulterior motives which I want to expose in today’s post.

According to Ethan Vanderbuilt – “anything that is MLM (Multi-Level Marketing) is a scam”.  But as you can see in the screen shot above, he goes on to say that affiliate marketing (such as clickbank and amazon affiliate links) are not scams.  That’s interesting because I know many insurance companies that pay out EXACTLY the same way as MLM companies do (agents receive commissions for selling insurance policies, sales managers receive overrides when they help the agents underneath them to create success, branch managers who are at the top of the pyramid shaped comp plan receive over-rides from the sales managers underneath them and the agents that are recruited at the bottom of the pyramid).  Where is Ethan Vanderbuilt’s scam busting video on all of these insurance companies?  They offer great wealth as a possibility to the agents they recruit.  They pay out exactly the same way as MLM companies do.  It must be a scam too (according to Ethan Vanderbuilt’s logic)

In fact, let’s take a look at another comment from Ethan Vanderbuilt (on another website as shown in the screen shot below) where he indicates that his main criteria for calling something a scam is if the vast majority of people lose money and fail while being offered great wealth, that makes it a scam (once again, why is he not calling insurance companies a scam … most agents don’t succeed.  In fact many of them pay for their own training and their own gas to get to the training which results in “a loss for the vast majority”).

And herein lies the truth about success (in anything) and the flaws behind Ethan’s logic.

The truth is that most people in this world will get average results because most people are average.  Most people are not willing to step out of their comfort zone and endure the pain and frustration that is required on the road to success.  Instead, the average person will look at “the odds of success” as if it’s some sort of lottery ticket or as if their success relies on luck just like rolling a pair of dice.  Average people will look at what’s “probable” based on how many other people succeed and fail.  Winners don’t look at what’s probable.  Winners look at what’s POSSIBLE.  Winners will see that 5% of people are making life changing income and they’ll say to themselves, “Why can’t I do it too” while average people will say “Oh 95% of people don’t make money, I probably won’t either.”  Winners know that if somebody else was able to create success, they can do it too if they put in the work to create the life and success of their dreams.  Unfortunately, Ethan Vanderbuilt panders to the weak minded people who are looking for what’s probable.  He panders to the people who want to blame something outside of themselves for their failure so they don’t have to take personal responsibility.

Affiliate Marketing Success vs. MLM?

So according to Ethan, MLM is a scam because the vast majority of people suffer losses and don’t succeed, but affiliate marketing is not a scam because … why?  I’m confused here.  Is Ethan Vanderbuilt under the impression that the vast majority of people DO succeed in affiliate marketing?  Even Clickbank would tell you that’s not the case (have a look at the screen shot below from Clickbank’s own website).

So Ethan Vanderbuilt says that Clickbank is NOT a scam and YET it meets his exact same criteria for why something should be a scam.  (According to Clickbank themselves) The vast majority of people do NOT make money.  Clickbank clearly states that “only a small percentage ever make enough to quit their day job or significantly change their lifestyle”.  What’s interesting is that this article on Clickbank (which you can read for yourself here) goes on to say that the main 3 reasons most people fail is that they lack desire and dedication.  They don’t pick a system and follow it and they don’t make the time to become successful.  That’s funny … those are the exact same reasons why most people fail in MLM and yet according to Ethan Vanderbuilt, it’s the MLM company’s fault when a rep fails at network marketing, but with affiliate marketing it’s not a scam when somebody fails.  Why are Ethan’s rules and scam criteria different for affiliate marketing than they are for MLM?

What are the Real Motives of Ethan Vanderbuilt?

The truth is Ethan Vanderbuilt is a marketer (not that there’s anything wrong with that.  I’m a marketer too).  But he’s using what I call the bottom feeder approach.  Allow me to explain.

The word “scam” is a great marketing word because it gets people’s attention.  Just think about how the news outlets use these kinds of words to get people to tune in and pay attention to the evening broadcast.  This is the same thing Ethan is doing.  Words like “scam” and “scheme” and “fraud” … they all elicit fear.  They grab attention.  And on the internet … these attention grabbing words help to drive traffic which is exactly what Ethan Vanderbuilt is after.  He gets lots of traffic by grabbing people’s attention with this kind of marketing strategy and then he monetizes that traffic by placing YouTube ads in front of his YouTube videos.  He monetizes his website traffic by placing ads all over his website (some of these ads are from network marketers of all people … interesting!)  And by the way, I’m not against Ethan monetizing his traffic.  I just want people to understand that Ethan is not doing this as a selfless act to the world as he would want you to believe.  He’s running a business!  Make no mistakes about it.  And selling advertising space on his website and on his YouTube videso is just one way that Ethan monetizes his traffic.

Additionally, I don’t know if Ethan still promotes a program called Wealthy Affiliate, but I know for a fact that he did at one time.  That’s interesting.  If somebody buys Wealthy Affiliate and they don’t succeed at selling affiliate products (as Clickbank clearly states is the case), aren’t the vast majority of people suffering a loss? This is Ethan’s very same criteria for calling MLM a scam.  And yet affiliate marketing (which he endorses) is NOT a scam?

Now just to be clear, I am FOR both affiliate marketing AND MLM.  They are both low risk, low overhead ways for the average person to start a business from home and make a supplemental income.  I’ve been successful with both.  And I know what it takes to succeed in BOTH.  I make multiple 6 figures a year in affiliate marketing and I have built large teams and have residual income streams inside of MLM.  I know what it takes to succeed in both.  But I also know why most people fail and I know what to look for in an opportunity to increase the chances of success (if you want my list of 6 traits to look for, be sure to grab that free video here)

Do Most People Really Lose Money in MLM?

According to Ethan Vanderbuilt, most people lose money in MLM which is his main criteria for calling it a scam.  And he backs up these claims by using the income disclosure statements provided on the various company websites.  But here’s 2 very important things that most people don’t realize and what Ethan Vanderbuilt doesn’t seem to take into account about these income disclosure statements.

#1 – People in MLM are receiving a product for their money

Is it considered a loss when somebody spends their money and receives a product in return?  No!  That’s not a loss.  That’s a transaction.  If you don’t want the product or you don’t use it, then don’t join the company.  That’s a pretty simple solution.  But don’t blame the company for the fact that you bought a bunch of product that you either didn’t want or didn’t need and then claim that you ‘lost money’.

Let me give you a better example that might make more sense.  Growing up, I wanted to be a famous musician.  More specifically, I wanted to be a rock star.  My parents spent money on guitars and amplifiers and music lessons and yet I never got a record deal.  I never sold out stadiums and today I don’t make any money doing music at all.  Is music a scam?  It must be a scam because most people who want to get a record deal never do and Ethan Vanderbuilt (based on his other logic) would probably argue that my parent’s ‘lost money’ by purchasing all of those guitars and amps and music lessons.  Of course any person with half a brain would realize that they didn’t LOSE money.  They got a product or a service in exchange for the money that they spent.  If I don’t make a return on that investment, that doesn’t make it a scam.  It just means that I didn’t have what it takes to succeed.

Why is it any different for MLM?  For heaven’s sake, let’s start putting on our big boy and big girl pants and taking responsibility for our own successes and failures and let’s stop letting these bottom feeders like Ethan Vanderbuilt hand out a scapegoat for so many weak minded people who are simply looking for an excuse to NOT create success in their lives.

#2 – Many people are reps JUST because they want to get their product for free

The 2nd thing most people don’t realize about the company income disclosure statements is that many people are NOT doing the business to go full time or quit their jobs or make 6-figures a year.  There are LOTS of people inside of MLM who just want to refer enough other people so that they can get their product for free every month.  They love the product.  They believe in the product.  They use it.   If the company is offering to pay them for sharing it with others, why shouldn’t they get compensated for referring other customers?  Not everyone gets in to MLM to make a full time income and yet ALL of those people who JUST want their product for free every month are required to be included on the income statements for the company (which to the uneducated analyst would look like a loss of income).  All of the people who just want to make a few extra hundred dollars per month to cover some additional expenses in thier life like their utilities or their car payment … they are also included on the income disclosure statements  (which makes it look like most people make very little money in MLM), but people like Ethan Vanderbuilt look at the income disclosures and they don’t take these facts into account.  They make the assumption that most people are “losing money” when they’re not losing money at all.  They’re getting a PRODUCT for their money, and many of them don’t have a desire to make a full time income at all.

Henry Ford Said it Best

Here’s one of my favorite Henry Ford Quotes:  “Whether you think you can or or you think you can’t — you’re right.”  I’m here to tell you that if you’re looking for a reason to NOT succeed in MLM, you will find it and Ethan Vanderbuilt panders to those people who are looking for a reason why they can’t succeed.  But make no mistake, you can do a web search for just about anything and find out that it’s a scam.  Do a search for your religion + the word ‘scam’ and I guarantee that you’ll find somebody who says your religion is a scam.  Do a web search for St. Jude’s Children Hospital + complaints and you’ll find negative things about even the most reputable charities, companies and organizations.  Let’s start thinking for ourselves and let’s start taking responsibility for our own successes and failures.

Ethan Vanderbuilt Video Rebuttal

I could go on and on with many more facts to dispute Ethan Vanderbuilt and his misguided opinions.  If you want to hear everything that I have to say on the topic and if you want to take a look at a comment I posted on his website that Ethan Vanderbuilt deleted twice (because he doesn’t want you to see it), be sure to watch this entire video below.

Did you like this post about Ethan Vanderbuilt?   Do you agree or disagree with me?  Make sure you comment below and share it with other’s who would find it interesting …

To your success!

Tyson’s Marketing and Success Blog
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Email: tyson [at] marketing-boot-camp.com

P.S. If you haven’t recruiting anyone (or less than 10 people), you should check out this free “Sponsoring Secrets” Training.