There are now tens if not hundreds of MLM companies across the globe: Monat, Younique, Forever Living, doTerra, Arbonne, Herbalife, Amway, Mary Kay, and Juice Plus are just a few. MLM representatives often promise new recruits that they can earn hundreds from the comfort of their homes – in reality, the results are mixed.
A 2018 survey from the American advocacy group AARP found that 73 per cent of direct sellers make no money or lose money, while an oft-cited 2011 report from the US Federal Trade Commission (FTC) claims that 99 per cent of MLM recruits lose money.
While MLM companies stress that they do not advocate this behaviour, many sellers use social media to make outlandish claims about earnings and some even claim the products they’re selling can treat or prevent coronavirus.
Amy – whose name has been changed to protect her identity – says many of the people who encouraged her to join the essential oils MLM were nurses who said the products could ward off coronavirus and even treat cancer.
To remain a sales representative, Amy had to buy more stock every month, eating into her savings. “I was kind of brainwashed into it, it was to the point where I didn’t even want to look at how much I’d spent.”
Amy failed to make any sales as she felt uncomfortable pressuring her friends and family, some of whom were out of work or suffering with their mental health during the pandemic. Miranda – whose name has also been changed – lives in Wales and joined a make-up MLM this autumn before quitting after a month. The 32-year-old says her fellow direct sellers talked about recruiting people who’d been furloughed or lost their jobs.
Miranda herself was pressured into joining the company by a former colleague who knew she had left her job after giving birth. “Every couple of weeks she would message me (asking me to join),” Miranda says.
When Miranda, who is on Universal Credit, got some extra cash in the autumn, she spent over £50 to join the MLM. “I thought I’d do it just to get her off my back.”
Although Miranda did make some sales, she has never recovered the initial money she spent on stock. The stay-at-home mother was largely motivated to join the MLM because of the promise of female friendship during an isolated time.
She was added to group chats which “pinged from six o’clock in the morning” until late at night with toxic messages that told representatives to “cut off” friends and family who were sceptical about MLMs.
Amy describes her MLM experiences as “cult-y”. “It was kind of hard to distinguish sometimes if it was my friend talking to me or a sales person talking to me.” Both women left their MLMs after doing online research, but there are undoubtedly more women waiting to take their place.
Grace, a 29-year-old from the Philippines, says a number of her Facebook friends joined an oils MLM during the pandemic.
“People are stressed and scared because of health concerns, so [the oils MLM] is perfect because it banks on this fear,” she says.
“People turn to MLMs out of desperation, thinking it could be a good source of income… [Coming from] a country with low financial literacy and generally low wages, I can’t help but hate how MLMs take advantage.”
This content was originally published here.