The trope is familiar. My phone pings with a Facebook Messenger from a “friend”, who is actually a friend of a friend, a casual acquaintance, or someone who sat behind me in 8th-grade science. She starts with a super nice opening and then goes straight for the sale. It is usually something to the effect of “Hey hun/babe/sweetie, I recently started my own business selling (fill in the blank with random overpriced crap). Check it out! I just know that you are going to love (random overpriced crap).” The possibilities of what I am being sold are truly endless – leggings, skincare, mascara, kitchen tools, diet plans, etc.
I don’t understand why people are always trying to sell me something, but there is another type of message that makes me furious. It is usually from the same “friend” who not only wants me to buy their stuff but also sell it. That message is usually something that uses phrases like “get in on the ground floor,” “own your own business,” “be your own boss,” “make over $100,000 a year working from home.” This is frustrating on many levels because I already own my own business, a real business, and I am already my own boss. This also means that I “got in on the ground floor” of my own business. The most infuriating thing of all is that if these ladies obviously don’t know me, or they would know these things about me and not offer me the “opportunity of a lifetime.”
What these people, mainly ladies, are selling is an MLM. For those of you who do not know what an MLM is, I envy you, and I am going to tell you what this is and why it is not as lucrative as many people think. MLM stands for Multi-Level Marketing and goes by a few other aliases including pyramid scheme or direct sales.
My response to being sold MLM products is always the same - a simple “no, thank you.” This hurts my heart because I love to support local and women-owned businesses. I believe in empowering other women by giving them my patronage and support of their small business, but I do not support anyone who is selling a product from an MLM. These companies don’t support women, they prey on them and oppress them. If I buy a product from a woman who is selling something from an MLM, I am not supporting that woman, I am supporting a corporation that takes advantage of women.
In a 15-year independent study of more than 350 MLMs, the Federal Trade Commission found that: “Our studies, along with those done by other independent analysts (not connected to the MLM industry), clearly prove that MLM as a business model – with its endless chain of recruitment of participants as primary customers – is flawed, unfair, and deceptive.”
These companies are built on false promises of financial success and independence through the sale of one product or another. The truth is, the sale of the product is often secondary to the recruitment of salespeople. People who sell products through an MLM make their money through commission or recruiting, and most of the people who make money this way do so by recruiting other people for their “downline.”
An FTC report said, “The vast majority of commissions paid by MLM companies go to a tiny percentage of TOPPs (top-of-the-pyramid promoters) at the expense of a revolving door of recruits, 99% of whom lose money.” Yes, 99% of people who buy into an MLM will LOSE money. Let’s be clear, this isn’t a “nothing ventured, nothing gained” kind of thing. There is no guarantee of even breaking even. There is a 99% chance of someone losing money from working for an MLM. The report also says that there is a better chance of winning at craps than making money from an MLM.
When comparing the failure and loss rates of an MLM compared to that of legitimate small businesses, there is a huge difference. Small businesses are profitable nearly 40% of the time, as compared to 1% of MLMs participants. People shell out hundreds if not thousands of dollars to buy a product. Hint: you shouldn’t ever have to pay a company to work for them. If it is legit, it is the other way around. This is also what keeps people working for MLMs long after they realized that the promises of SO MUCH MONEY by the person that recruited them just aren’t there.
These messages usually leave me feeling two ways – annoyed and guilty. I feel annoyed because the majority of people who reach out to me to sell me something only contact me to sell me something or ask me to join their downline. If we talked on a regular basis and you just happened to mention that you are embarking on a new business venture, I will be far more likely to support you. When I say that I will support you, I mean that I will love and encourage you - I am still not buying your stuff. I also feel guilty because I then have to explain that I am personally opposed to supporting MLMs, and I end up looking like the asshole who doesn’t support other women.