Why I Hate MLMs
They seem to be freaking everywhere!
Multi-level marketing schemes are the bane of my existence. Every time someone random messages me to “say hi, it’s been so long!” I worry that their next message will inevitably be “I need a model/product testers for my business! Are you interested?”
Here’s the thing. They offer you discounts on products. That’s it. If you were really a model or product tester, you’d be getting paid for your time and also free products.
Also, I hate how pushy these independent consultants are. No, I don’t want overpriced leggings or miracle oils that have NOT been approved by the FDA or a pill that will make me skinny overnight.
While they are not true Ponzi schemes, since technically a product exists, there have been countless people who are heavily in debt, have ruined credit, and are still being pushed by their upline to sell more. Being told that they “just aren’t trying hard enough/working enough.”
Terrible Business Model
It’s a horrible business model where the only way you can really make money is by pushing people to sign up below you so you get a portion of their profits.
A perfect example is the all the news surrounding Lularoe. There are over 78,000 consultants selling Lularoe in the US, and according to Business Insider, “ More than 80% of LuLaRoe’s representatives generated less than $5,000 in sales last month, including 10,834 who sold nothing, the data shows.”
“Overall, only 13% of representatives were paid bonuses in 2015, according to a LuLaRoe income disclosure statement. About 71% of those representatives earned an annual bonus of $1,000 or less.”
And Lularoe requires almost $6000 initial investment. Then they get random assortments of stock, much of which is not sellable and unattractive, hoping for those few “unicorns” that are wanted. The clothes are not particularly attractive, relying on baggy tops and weird printed leggings which have recently come under fire for tearing after one wear. And they can be $45 or more!
Scentsy’s income disclosure statement shows that over 72,000 consultants made less than $676 in the whole year of 2015!
But don’t tell an MLM consultant their products are a sham. They are basically brainwashed by the company to think of those people as “haters” or “negative people.” They are given scripts on how to sell, highly encouraged to like and comment and interact with people for the sole purpose of bringing them into the business, and force them to monetize their friendships. They harp on how a regular job is just a scam — how a corporate structure of a company is a pyramid scheme, not their business.
If you haven’t seen John Oliver’s expose on MLMs, please watch it ASAP.
But the worst part, to me, for the people who buy into these companies is the lie that they are “starting their own business” and are #bossbabes.
Spoiler alert: If you have to purchase stock from a company and are only getting commission and not keeping the full profit and are beholden to their corporate rules, you are NOT a business owner. You’re an independent contractor. You’re a sales rep.
The only people who truly make money on these schemes are the people who got in early. And from the news surrounding Lularoe lately, people may just be waking up to that.
The horrible things I personally have seen with MLM “consultants” peddling their products using bad tactics include:
- Lularoe consultants using funeral outfits as a way to sell.
- doTerra oil consultants putting oils ON THEIR INFANTS, children, and pets — a HUGE no-no and can be dangerous and irritating for kids and toxic to pets.
- Younique consultants using funerals or illness as a way to push their mascara.
- Essential oil and pill pushers using people’s illnesses to push their products (one particularly bad example I saw was a young woman who was diagnosed with cancer, and a doTerra consultant trying to claim that her oils would cure her. I saw a similar thing with a Plexus consultant).
- Preying on new parents with the promise that their MLM will let them stay home with their children.
- ItWorks! consultants telling people they look great but could use whatever product to get rid of fat — essentially telling people they are fat.
Younique as a company sets their consultants up for failure by giving absolutely no training in applying makeup and just sending their consultants out with poorly-pigmented makeup. Many of whom are not makeup experts and end up looking ridiculous and wasting product when Younique encourages them to do challenges and videos of random looks.
doTerra reps often tell people they can ingest their oils, which can be toxic and harmful! As to doTerra specifically — there is no such thing as “therapeutic grade.” The company trademarked that phrase. It does not mean anything medically and is not FDA approved.
All this plus the fact that people who buy into MLMs try the shame people for having regular jobs where they get stable paychecks! They try to make it seem like they are superior for not working for “the man” and that they have seen the light and figured everything out.
MLMs are a scam. That’s the truth. I know I will get backlash from saying it, but as an actual entrepreneur and small business owner, it frustrates me to no end to see people being taken advantage of, with lies like “Only work a few hours per week and support your family!” And then people fall into the sunk cost fallacy where they feel they have already invested so much time and money that they cannot back away, going further into debt.
Please, take the time to research these companies. You are not starting a business, you are not a #bossbabe, you are being taken advantage of.
And if you know someone in an MLM and they keep pushing and pushing you to “support” them — just remember, if you do a pity buy, you are only encouraging them. If they make no sales, they may get out sooner rather than later.