Delving into The World of MLMs

“Hey babe! I’ve just been taking a look through your feed/blog/account and think you would be the PERFECT addition to my team. Are you looking to quit your 9-5 and make money from home?” if the latter rings a bell (a potentially alarming one), then you my friend, appeared to have stumbled across an MLM scheme.

Disclaimer: There are some legitimate MLM programmes available, and by no means am I tarnishing every person and every business with the same brush, nor shaming anyone if they want to participate. I just disagree with the fake-friendliness and programmes that have negatively affected people’s lives.

What does MLM actually mean?

MLM stands for multi-level marketing. It’s a controversial method of network marketing and the illegal versions are called pyramid schemes. The most common form of MLM is for a person to be ‘recruited’ into a team; to sell products/services to family and friends. Doesn’t sound too fishy just yet? Well, they can be fraudulent and can cause the recruited member to actually lose money rather than make anything back. Losing money can also consequently land people in debt.

MLM participants and recruiters can come across very friendly, approachable, likeable and honest. It is a clever technique to lure people into the depths of a scheme that can cause more harm than good. Often the targets of these schemes are students, stay at home mums and people looking for additional income.

It’s a system that preys on the vulnerable and makes a mockery of true, hard-working business owners. It takes advantage of those less financially advantaged and with little to no knowledge on the truth behind MLMs. It’s not dissimilar to a form of brainwashing.

So what does MLM involve?

From my research online, and vast personal experience of coming across these participants daily, is that it works by signing up, paying for a ‘starter kit’, and selling *cough nagging* your family and friends into buying your products and/or joining your team to gain commission and profit. Can you see how the cycle continues? It appears most money comes from the recruiting aspect and the commission gained from recruiting others into the business. This is where the ‘pyramid’ aspect starts to make more sense.

Photo by John Schnobrich on Unsplash

 

So what is a pyramid scheme and how does this differ to MLM?

If you picture a literal pyramid shape, it starts at a point at the top and gradually widens out into a lower, wider level. So business CEOs recruit and enroll people at the top-level and work their way down continuously in a chain. All the while promising payments and rewards for recruiting others rather than selling a product/service.

An article by Randy Duermyer states; “To be legal and not a scam, money needs to be primarily earned from the sales of products and services rather than the recruitment of new members. MLM programs with no or a low-quality product or a focus on getting paid per recruit could be an illegal pyramid scheme”.

The lower level earns little to no money, and the big bosses at the top walk away with the cash. Some invest thousands into these businesses with the hopes that they can quit their job and get rich from home. But they don’t get rich, and they end up worse off. It’s a false sense of security.

So in short MLMs are pyramid schemes, just not always illegal ones.

How do MLMs/pyramid schemes work?

If you know what warning signs to look out for – you can become a pro at spotting an MLM recruiter from a mile away. I delete multiple DMs a week, which have all been from young women. They claim to be business owners, travel agents and “entrepreneurs”, but this could not be further from the truth. You may be enticed into what seems like a generic, friendly conversation. The second you reply, you are bombarded with over-friendly, pushy messages.

A few messages in, you may be hit with “have you considered earning extra money from home?” or “I’m part of an amazing business opportunity I think you would be great at, would you like to hear more?”. Their pitches are quite obvious, so shouldn’t be hard to spot. Voice messages are now a common form, which makes your invite look personalised when they’re more than likely following a script and changing the name each time.

The so-called “benefits” of these schemes can involve all expenses paid trips, winning a car and luxury prizes. So to people who are struggling to put food on the table and have no idea what MLMs are, it looks like a life-changing opportunity. The problem is how morally wrong they are, as well as financially.

Photo by You X Ventures on Unsplash

Examples of MLMs that you may recognise are:

  • Avon (who have built reputability and personally, I have used and still use Avon as a consumer, as it’s a better established, legitimate business that just uses MLM techiques with its Avon reps)
  • The Body Shop has been a new and upcoming one
  • Arbonne
  • Herbalife
  • NuSkin
  • Juice Plus

How did it all begin?

Network Experience state “The first direct seller that made the breakthrough was the “California Perfume Company” established in 1886. California Perfume Company was renamed as “Avon Products” in 1939 and is still at the top of the MLM industry. ” so they weren’t the creators of this type of business model, but they seem to have paved the way. In 1945, another company changed its name from the California Vitamin Company to Nurti Lite, which practiced MLM strategies still used today to sell their products.

It appears the earliest MLM business was JR Watkins Medical Company in 1886, explained by Tony on Quora.

But WHY can they be so bad?

The primary reason is because it’s a predatory method that preys on unknowing and vulnerable communities worldwide. It seemingly offers care-free income and great prospects which most of the time, is not true. A fantastic in-depth article I came across by Eliza Romero describes that “Using the language of third-wave feminism and borrowing quotes or phrases from real female CEOs helps recruiters and recruits see themselves as legitimate professionals, no different from a founder of a startup company”.

It’s all a facade and a beautiful lie. It is psychologically manipulative too, giving people sales pitches and leading them into a false sense of security. They have also kept going since the start of the Covid pandemic, which I think is a disgusting technique when people are facing so much personal and financial devastation.

It’s hard to locate UK statistics for MLM schemes, but they are vast across the US.

“Among the more than 20 million Americans who participate or have participated in multilevel marketing (MLM) organizations, 90 percent say they got involved to make money. However, nearly half (47 percent) lose money and a quarter (27 percent) make no money, according to a new study released by AARP Foundation.” – quote from PR Newswire

Where can I find out more?

I remember watching the BBC documentary by Ellie Flynn which gave an insight into the households directly affected by MLMs and it was shocking. One of the young women involved ended up £3000 in debt due to the false promises of an MLM scheme. She invested expecting to seek results, and gained nothing in return.

I, among many, find the fake friendly conversations by MLM recruiters insanely tiresome and annoying. I know family and friends that are involved who thankfully, do not seem disadvantaged thus far. There are some legitimate schemes, but please do your research if you are interested. I am not here to promote these models of “business” but to raise awareness into the dangers and toxicity of the majority of them. The truth behind the true earning success rates of these businesses needs to be shared more publically to avoid others falling into the same trap.

I’m really interested to hear your thoughts and experiences with MLM in the comments down below.

Until next time,

Emily x

12 thoughts on “Delving into The World of MLMs

  1. Gemma says:

    The messages are the worst thing about MLMs and pretending they like my feed etc. It’s total bullshit and very tiresome. They make me cringe! Loved reading your thoughts on it.

    Like

  2. Emily says:

    This post kind of made me sad. I am part of Arbonne myself and disagree with a lot of what you say here, and think that you have some misconceptions about what a MLM business is. A lot of what you mention here (having to invest thousands of dollars, losing money, needing to recruit other people in order to be a part of it) is not really what happens in a true MLM, so I think perhaps you are lumping MLMs in with other scammy business things like pyramid schemes. A true MLM like Arbonne, Avon, etc. is not a “scheme”. They are real businesses with quality products. I had to pay $50 to start my Arbonne business but did not have to buy any stock of product. I have not recruited any people to work under me, I have simply purchased the products for myself and had a few friends purchase products from me as well, so I have made a small amount of money from them (more than my $50 investment). My goal was never to make tons of money and reach those bonuses and top levels, and I lose nothing by not pursuing those higher levels. There are no monthly minimum orders or anything like that. Also really how is a pyramid structure different from any other business? In any business there’s a CEO, there are Vice Presidents and regional managers and area managers, all the way down to the store managers and clerks who make very little money. Arbonne is also a certified B Corporation, which means that they have undergone a rigorous evaluation and have been certified in balancing purpose over profit and being a company that benefits their employees, the planet, and their communities. You should look up B Corporations if you haven’t already, they’re awesome! Ben and Jerry’s and Patagonia are also B Corporations. Anyway, sorry for this really long comment but I had a lot of thoughts, haha. I’d love to talk about it more if you still think that MLMs are harmful and prey on vulnerable people. It’s simply not true.

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    • emilygabriellax says:

      Hi Emily, thank you for taking the time to read my post and share your thoughts. I absolutely don’t believe that MLMs are all about the money-making, it’s the way a lot of them operate as well. It’s the pushiness of many participants that I know bothers many people; especially when they’ve been politely declined – yet they continue on and on. The fake friendliness is an issue. This is not the same for every participant of course – but it does seem to occur fairly often. This is why it’s not the same as an ‘every day’ business because it operates via different techniques. I agree that any business is comparable to a pyramid ‘shape’ though. I do think MLMs as a whole have created a bad reputation for themselves. I do state in my post that I believe Avon are reputable and I am still a customer to this day. I also mention that there are legitimate schemes out there too if people are interested, I just urge people to research so as not to fall victim to any scams. It just doesn’t sit right with me when people label themselves business owners, travel agents etc when it’s not really accurate.

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      • Emily says:

        I’ll definitely agree that some people in MLMs can be very pushy and fake friendly about it. It’s so weird because I never get those DMs from other people in MLMs, so I don’t see that side of it very much. I do follow a few people who are part of other ones and all they do is post on their insta stories about the product, which really isn’t any different from an influencer or blogger doing an ad for something. So I think those who randomly enter your DMs and constantly nag you about trying the products or “starting your own business” are basically just doing it wrong in my opinion, and they give the whole concept of MLMs a bad name. I think what bothers me in your post is that you call all MLMs “schemes”. There are schemes out there, of course, but those are not true MLMs. I had a friend fall victim to a pyramid scheme in college, so I’ve seen the difference first hand. Also I hope I’m not coming across as upset, I did enjoy the post even if I disagree with some of your opinions on MLMs 😊 and thanks for your thoughtful reply!

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      • emilygabriellax says:

        You’re absolutely entitled to your own opinion and I will always listen and respect what others have to say! I guess my post is focusing on the darker side to MLMs and the harm that those particular ones cause; which unfortunately seems to be the only ones present on most people’s timelines. I’d hate to see anyone directly affected by a pyramid scheme. I of course don’t see a problem in product promoting because like you said, it’s what bloggers do too. I’m sorry for any upset caused that was not my intention at all!

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  3. Millie says:

    YESS I’ve been waiting to read this! I know someone who has just started Avon (for the 3rd time) and I feel so bad cause they are always sending me stuff that I’m not interested in. I hate the messages but always feel bad for the people who have managed to get themselves into a situation like that. It was really interesting to find out that Avon was actually the one who paved the way which was a surprise! I think the worst is Arbonne ATM. Thanks for sharing this great post Emily! 🙂

    Like

    • emilygabriellax says:

      I think there are 2 very different sides to Avon; reps that drop a catalogue off every now and then, and then there’s the ‘pushy product’ type and I will NEVER be rude to people but it gets tiring. Thanks so much for reading as always Millie!

      Like

  4. Elen Mai says:

    Finally, a post about MLM’s that actually makes sense! I hate the fake friendliness approach too, it’s like, if you wanna sell my something just be upfront about it. Because at the end of the day, I’m not going to buy it either way so it’s a waste of both of our times.
    I also watched the BBC doc with Ellie Flynn and fund it super eye opening to see exactly to what extent these families end up being affected by MLM involvement. It’s so sad and such a shame that companies with this predatory nature can continue to cause such damage with little to no repercussions.
    Elen Mai x

    Like

    • emilygabriellax says:

      That’s a really good point, just cut to the chase haha! And I completely agree. There doesn’t seem to be much cracking down on them at all. Thank you for reading X

      Like

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