If you’re ever on Facebook, chances are you know someone who works for a multi-level marketing company. Whether it’s your next-door neighbor, your coworker’s wife or your very own sister, you’re probably just as tired as I am with receiving all those Mary Kay and LipSense invites.
I once had a landlord try to convince me to become a consultant for one of her multi-level marketing companies, and she just wouldn’t listen to me when I told her I wasn’t interested in investing the $250 it took to become a consultant.
That was more than enough experience I needed with these companies.
Aside from all those pesky invites, there’s a much darker side to these marketing companies.
While becoming a consultant for an MLM might seem appealing at first – what with its supposed freedom and economic independence, some argue that MLM consultants don’t make any more than pocket change – and since MLMs demand an outrageous original deposit, that pocket change just isn’t worth it.
In fact, many MLM specifically pinpoint stay-at-home moms for their pyramid schemes. They’re an easy target for quick cash, emotional support, and quite possibly empowerment.
One woman said she worked as a consultant for LulaRoe and was urged to stop paying her bills and pawn her television and car so she could invest more in her inventory. She was told if she quit her day job, she could provide for her family and join a sisterhood of supportive women if she could invest a “measly” $5,000 upfront.
Another woman shared her experience when she had $8,000 worth of LulaRoe inventory sitting in her living room while she was running to food banks to feed her family.
“I really feel like I failed my family,” she said.
When the Federal Trade Commission studied MLMs, they found that 99.6 percent of all MLM participants ended up losing money after “subtracting ‘pay-to-play’ purchases and minimum operating expenses.”
The FTC also found that when you look into an MLM’s compensation plans, the company won’t tell you that their records are recruitment-driven and top-weighted. (Legalized pyramid scheme at its finest.)
If that isn’t enough to convince you, the FTC report called the MLM industry “flawed, unfair, deceptive, extremely viral, predatory and harmful.”
Ultimately, they came to the conclusion that MLMs are “deception-dependent,” arguing that “if prospects were clearly told the truth about [MLMs], few if any would sign up.”
Does anyone really want to work for a company that has to lie to their consultants in order to make a profit? For the one percent living comfortable at the top of the pyramid, it seems like a brilliant business plan. But for the other 99 percent, it’s a wonder MLMs are able to get away with everything they do.
So if you’re looking for a way to earn a few easy bucks, MLMs might seem appealing at first, but they definitely won’t end up being worth it.