Multi-level marketing schemes have been among my greatest pet peeves for a long time. These younger sisters of pyramid schemes, which are barely legal and barely not pyramid schemes only on a mere technicality, are a dangerous fad. I’ve been glad to see that more and more people have been making others aware of the harm of MLM schemes, and how to identify one of these scams is becoming more widely known. Even so, I’ll start with a brief overview of what they are:
A multi-level marketing scheme is one in which the company makes its money primarily through recruiting new members to sell their product rather than from directly selling the product to customers. This means that the new members, or distributors, have to start their job, which they will be told is their own small business, by purchasing a large quantity of products to sell. They’re then thrown to the wolves: they have to sell these products—which can be anything imaginable but commonly relate to health, fitness, wellness, or beauty—to anyone who will buy them. This typically means using your personal social media accounts to sell products to friends and family.
Even if you are miraculously able to sell products, you can only achieve success by recruiting other people (your “downline”—often those same friends or family members) who go on to recruit more people. This is where the pyramid shape comes in. The person who recruited you is your “upline”, and each person’s upline reaches all the way to the top, where all the wealth is distributed among very few. So you can easily identify an MLM scheme distributor if she (they are almost always women) frequently tries to defend her company from accusations of being a pyramid scheme. (Like I said, they are technically different. Pyramid schemes work the same way but without a product by recruiting “investors”.)
Beyond deflecting pyramid scheme accusations, there are several types of posts that I’m sure you’ve seen on social media that are MLM scheme red flags. Sometimes someone will post that they are throwing a party revolving around (most commonly) Tupperware, Mary Kay, or LulaRoe, they will plainly try to sell products in a post, or most often, they will gush about how they love their working-from-home lifestyle, their extra time with their kids, and how all they have to do is sell makeup from their phone. Often, they will never even mention that they are an MLM scheme distributor (sometimes painted as a “network marketer”), and interested friends might not find out until it is too late. This brings me to my first point as to why these schemes should be avoided at all costs.
1. Vague and dishonest recruiting tactics
To my knowledge, I have only ever followed two MLM scheme distributors on Instagram, and both of them were for the notorious Beachbody. I had never heard of Beachbody before, but something was fishy about these girls’ posts. In both cases, neither of them had posted in a long time, until suddenly they were constantly going on about how their shakes and home workouts were helping them lose weight. I only found out that they were part of an MLM scheme after clicking many links deep from the links in their profiles. If I hadn’t known better, it would have been all too easy to take them up on their offers by simply asking them how I could improve my own life and health the way that they were doing.
The Breakaway Movement is another example of an MLM scheme disguised as something else. Of course, the movement alone gives me great red flags of being a cult, but that doesn’t mean it has to be an MLM scheme as well. This video goes in depth about how the Breakaway Movement at first glance seems to be a cultish group centered on drinking water and achieving “abundance”, but when you get to the bottom of it, it is a ploy to sell Kangen water filters as part of an MLM scheme. This feels like as good a time as any to share with you the site listing every known MLM scheme and how to educate yourself on it. Do your research, folks.
2. Preying on vulnerable people, usually women and young moms
This factor is one of the saddest. It is not uncommon for MLM scheme distributors to prey on the vulnerability of young moms who are home with their kids all day but who are not making enough money. It’s the perfect formula, and it was the situation that I saw play out with one of the two girls I followed on Instagram. What’s worse is that she would try to recruit others to either join Beachbody or buy her products by opening up about how truly difficult her life was. I don’t even want to imagine how manipulative the conversation with her upline, or her “coach”, was when she must have been told to use her personal pain to sell bland protein shakes.
Stemming from this false narrative of empowered women are many buzzwords that, if you see them, you’ll know you’re almost certainly face-to-face with an MLM scheme, including: “boss babe”, “girl boss”, and “mom-trepreneur”.
3. Lying about how successful you will be and how little work you have to do
That “girl boss” narrative is one of the greatest identifying factors of an MLM scheme. The promises that you can make your own hours, work as much or as little as you want, have time with your kids, and have a steady income are all lies. The most consistent problem is that you make little to no money, seeing as you have to pay to have the job in the first place, and there will never be enough people willing to buy your product—especially when the product is a one-time purchase (like a cast-iron skillet or water filtration system) and each customer will only buy your product once.
But even if you don’t make money, at least you have flexible hours as you try to make it big, right? Wrong. Just because you are using social media to do work doesn’t mean that it’s easy or quick. In this team meeting, after Beachbody distributors had been pulled in by the “fabulous lifestyle”, their uplines essentially yelled at them that the only reason why they themselves ever became moderately successful was by working long hours and messaging so many strangers on Instagram that they were temporarily blocked from sending messages. Only once these girls were eyes deep did they find out that it would be time-consuming, tedious work that would have no reward in the end.
4. Exploiting and shaming distributors
In that same video and many others like it, these same failing distributors, who unknowingly saw the MLM scheme as an opportunity to make extra money in a time of need, learn why it really is that they’re failing. In reality, they were set up for failure all along, with their uplines seeing them and their loved ones as products to be bought. In reality, those same uplines are telling them that is it their fault that they’re not making money. In short, they are being told they will never be good enough. They need to spend more time recruiting, be more confident, and not be at all wary that they’re doing something wrong when they spam so many people that Instagram disables their messages. I can’t imagine how humiliating it must feel to slide into people’s DMs asking them to buy your weight loss shakes. I wouldn’t be able to do it either.
5. Turning distributors against their loved ones
More often than not, these people that you invite to your MLM scheme will ignore you or decline your offer. But what about when it’s someone you know? How are you supposed to feel when even your sister or your best friend refuses to buy makeup from you? What do you do when your husband refuses to support your essential oils business, even though you’ve told him that soon you’re finally going to gain financial freedom? Easy. Don’t listen to them, listen to your upline! Only the other people in your MLM scheme understand what you are going through trying to sell to friends and family who are being difficult. In the worst case, in fact, they might even tell you that they’re your family now, and they’re all you need. Where have we heard this before?
6. Cult tendencies
You can identify a cult if its culture has heavy themes of control; cults control behavior, information, thoughts, and emotions. If a company is an MLM scheme, it is not automatically a cult, but many of them are known for having cult tendencies. Arguably the most famous MLM scheme that is also a cult is Young Living Essential Oils, which, not surprisingly, is one of the most notorious for unethical practices, so I’ll come back to that soon. But first, I want to recommend this video which explains why MLM schemes are often called cults, and this one in which a former distributor goes through the criteria to determine whether his former MLM scheme was a cult or not.
7. Corrupt founders, leadership, and origin stories
Less than savory beginnings are par for the course in the world of MLM schemes. I can barely scratch the surface in a single paragraph, seeing as there are multiple YouTube channels, like this one and this one, dedicated to exposing the stories of various MLM schemes. Again, the most famous for bad leadership is Young Living Essential Oils, whose notorious founder Donald Gary Young pretended to be a doctor and also let a child drown at the facility where he delivered babies without a medical license.
8. Overpriced, cheap, useless, even dangerous products
Even if it wasn’t a cult, if its founder wasn’t a criminal, and if it wasn’t an MLM scheme, Young Living would still be harmful, and that’s because of its products, which are the parts of MLM schemes that often go unnoticed. This is because in many cases, the products being sold in MLM schemes are nothing to write home about. For example, the workout videos for Beachbody are probably run-of-the-mill workouts, but there are dozens of workout videos free on the Internet that are just as good. Even in those companies with average products, like Scentsy candles, or Pampered Chef kitchen equipment, it’s overpriced and you could find something of equal quality at a better price at your local Target.
Being overpriced is the best case scenario, though. Many MLM schemes are known for shoddy products. Take LulaRoe, whose leggings are known to rip after only a few wears, and Monat, whose shampoo is known to cause hair loss. Even worse is when an MLM scheme, like Young Living, makes health claims regarding their products when they are ineffective at best and dangerous at worst.
9. Using loopholes to make false or exaggerated claims about their products
It would be easy to respond to allegations of false claims by pointing out that they are, well, illegal. But like the workaround that keeps MLM schemes from qualifying legally as pyramid schemes, there is a workaround that allows distributors to make any claims they want. That’s the technicality that MLM scheme distributors are not technically company employees but contractors. Since they’re not actually employed by the companies, they can claim anything they want: “Essential oils cured my dog’s asthma,” “Monat shampoo made my hair grow ten feet,” or “Beachbody gave me the body of an Olympian goddess.” So if you try these products and don’t transform into the ideal human, you can’t blame the company. They can’t control how much their distributors claim to love their products.
10. Profiting from tragedy
Even after all of that, the tendency of MLM scheme distributors to use tragedies to sell their products or their lifestyle is the most disgusting thing they do. It is the quickest way that you can be sure that they have no morals. People who have been sucked into these scams for long enough can lose any sense of morality and are overtaken by a tunnel vision where all they care about is themselves and their “business”. This is evident in this video, where you can see the responses of several distributors (mostly Beachbody) to the coronavirus. Some were elated that they might now get more opportunities to scam people into their “working from home” network and sell them (non-FDA-approved) fitness products thanks to the world’s new hyperawareness of health. Some were sad that their allegedly “completely paid-for” company trips were canceled, but they were debating using the plane tickets that they were now stuck with anyways (because they did have to pay for those themselves). Not surprisingly, their latest ploy has been trying to convince people to “invest” their stimulus checks in an MLM scam so that they can lose the little money they did receive.
Furthermore, there is one Beachbody distributor in particular that is often featured on this same channel who has quickly become known as Most Problematic. Among other things, this video goes over the Instagram story she made on the day that she lost her grandmother, and how grateful she seems that her MLM scheme didn’t even allow her time off to grieve. This is the same distributor who has also tried to monetize the death of her boyfriend’s dog.
I’m just going to end this right there, where hopefully it can’t get any worse! I have been watching videos from the anti-MLM community on YouTube for a long time now, and I have wanted to write a post about MLM schemes for months, but I know there is far too much to say to fit in one post! While the companies’ unethical practices are saddening, I’ve been glad to see more and more people speaking out about MLM schemes. I know I am only one person, and one blog post is nothing compared to entire YouTube channels, but I wanted to do my part to bring awareness to these harmful practices. Hopefully you can keep in mind that most of the people involved in these schemes are themselves victims of scams, and they shouldn’t be the target of hate. Instead we should show them that they are being taken advantage of and are worth more than some leggings that rip in the butt.
To learn more about MLM schemes, I recommend these YouTube channels. There are dozens, but these are the ones I’ve watched so far:
Genetically Modified Skeptic (the harm of MLM schemes, often tied to cults, religion, and alternative medicine)
The Antibot (a newer channel exploring MLM schemes and related topics)
Kiki Chanel (inside looks at distributors’ social media posts and how they act)
Cruel World Happy Mind (deep dives into specific companies and other unethical business practices)
iilluminaughtii (deep dives into specific companies, MLM scheme or otherwise)
Bravo for your great post on MLM scams.
Just after high school an otherwise very intelligent friend got hooked in by the KIRBY Vacuum MLM . The machines were horribly expensive and sales pitches were aimed at every friend and relative . No amount of pointing out to him that the potential customer base was very small and the number of distributors was growing all the time had any effect on his faith .
Amway was another one that fleeced a family member .
Good work …keep it up !!
Great article. My Dad got pulled into Amway for a few years in the late 1970’s, so I’ve been aware of the problems of MLM’s for a long time now. They are often spread through churches, especially evangelical ones.
Here’s a really interesting report on the actual annual costs of a lot of common MLM’s and the percentage of participants who lose money (start at page 26 for the figures on this). In general, more than 99% of people getting involved in MLM’s lose money. https://www.ftc.gov/sites/default/files/documents/public_comments/trade-regulation-rule-disclosure-requirements-and-prohibitions-concerning-business-opportunities-ftc.r511993-00008%C2%A0/00008-57281.pdf
I’ve picked up some good terminology for discussion this subject: A “hun” is someone pushing an MLM, because they call each other “hun” so often. A “hunbot” is someone whose life has become dominated by pushing the MLM. And then there’s being “hunzoned”, which is when when you are contacted out of the blue by an old friend who supposedly wants to catch up and reconnect, but it really turns out that they are trying to recruit you into their MLM. I’ve been hunzoned a couple of times so far.
And I wanted to mention one more of the terrible things that MLM’s do to people. They force you to burn through your social capital. We spend our lives building relationships with others, and by means of good interactions, fun times, and doing things for each other, we build social capital with them. When we need to ask a huge favor that we are not in a position to repay right away, we spend some of that social capital. When a person has exhausted all of their social capital with another and yet continues to make demands, there will be no more favors forthcoming, the friendship has been pushed too far, and may have been irreparably damaged. MLMs push their huns into drawing on all of the social capital they have with their friends, family, colleagues and acquaintances, until they have alienated everyone they know.
That is a really good point on social capital. And yes, I think the whole thing with huns and hunbots is so weird. I could have included a glossary if the post was not already far too long as it is, haha so thank you!
Great post. MLM schemes are destructive to the point that they should be made illegal. The only people who really make money are those at the top, and it’s not just from the products… it’s the meaningless promotional content they dish out to their members who need a reason for why they aren’t as successful as they would like to be.
I had a ‘friend’ at uni who tried to get me into an Amway affiliate company. After I told him I wasn’t interested he was very rude and I never saw him again. You don’t just have money to lose by joining these groups.
I absolutely agree they should be illegal. I wish that the decision to make “pyramid schemes” illegal and MLM schemes not can be reversed. All these anti-MLM YouTubers I follow would be out of a job, but I think even they agree it would be worth it.