"MLMs infuriate me!" (says Kaz, Founder of JobsinDevon). "They prey on vulnerable demographics such as new parents who are hoping to avoid slogging back into the office after parental leave, people who've lost their job and are desperate to make some cash, those who've retired and need a supplemental income - the list goes on. But the only person who ever makes money is the one at the top of the chain.
In fact, a recent study of 27 MLM schemes found that, on average, 99.6% of participants lost money. Just let that number sink in!!
The person recruiting will often declare that they’re not multi-level marketing, they're “social selling” or “network marketing” but these are schemes that rely on the never ending task of recruiting people, getting them to join and “invest” in more products. Simply put, if revenue relies on you recruiting friends & family then it is an MLM. It’s absolutely scandalous that these schemes are not regulated or, better still, illegal."
They promise easy money, flexible hours, and the opportunity to build your own empire. But the reality is that it's not that easy and you won't be retiring in 5 years or popping to the shops in your Porsche 911 in two. Let's take a look at some of the pitfalls.
The pyramid scheme:
At their core, multi-level marketing plans operate like pyramid schemes. The focus isn't really on selling products, but on recruiting more people into the scheme to buy their own investment products and continue the cycle. The only person who wins is the person at the top of the pyramid.
The pressure to buy and sell:
MLMs often require participants to buy large quantities of products to sell, which can be a significant financial burden. And when you don't sell enough, you will feel pressured to recruit more people, thus creating a vicious cycle. This could damage your relationship with the friends and family that you've recruited as they will suffer the same fate. But you'll have threats of being kicked out of the programme if you don't recruit/sell at the level required, thus applying more pressure.
The cult-like atmosphere:
Some MLMs actually foster a cult-like atmosphere, where participants are encouraged to cut ties with friends and family who won't join the scheme. This can lead to isolation and emotional upset all round. Often, MLM'ers are given a script to recruit which doesn't offer much by way of explanation but offers a consultation with a mentor. The opportunity to have your own business mentor is just too appealing for some. But they'll soon ask you to follow FRANK guidelines ie approaching friends, relations, acquaintances, neighbours and even kids to sign up.
The financial risk:
You will not succeed in an MLM. Remember, 99.6% of people end up losing money on their initial investment and on the products they buy to sell. Some MLM'ers have even bought their own products in an attempt to make their sales look higher and keep them on the scheme. It's a lose-lose situation that just causes stress.
The ethical concerns:
MLMs employ unethical tactics, such as pressuring people to join and making false claims about income potential. They'll make friends with people, just to recruit them. They might add images to social media of them stood beside a flashy car, or outside a large home, pretending that they've bought it with the proceeds of their business empire. But this is not the case and can be harmful to both individuals and their communities.
So, what should you do?
If you're considering joining an MLM, please do your research. (And then walk away.) Talk to people who have been involved in MLMs and ask about their experiences if you need feedback from someone closer to you. Ask about the reality of the financial side of things. Be wary of promises of easy money or quick successes. And remember if someone tries to recruit you, it's only because they're lost in the dream that they were sold but they'll soon realise the sad reality that they've been scammed.
What brands should you avoid?
The following brands seem to be commonplace in Devon at the moment: Amway, Arbonne, Avon (yep), Ann Summers, Cambridge Diet, FM Group, Forever Living Products, Herbalife, Mary Kay, NuSkin, Oriflame, Tropic, and Utility Warehouse. But there are plenty more out there and you can find a more exhaustive list here.
Remember, there are many legitimate ways to earn a living. Don't let the allure of quick riches lead you down a path that will end in disappointment and financial loss. Search through over 3k vacancies at jobsindevon.uk and see what else might be out there for you instead.