So… there’s a person on Facebook. Or Instagram. Or a Snapchat. They’re typically in between jobs. Perhaps its a new mom who’s trying to work from home. Maybe it’s an unfortunate soul that you attended high school with who spends too much time online. Their posts look strikingly similar though. They say the same things while smiling into the camera: “join me, let me know if you would like to purchase, sign up for a free program, be a part of an exclusive group, LOSE WEIGHT!” I click through them without reading them anymore. Like old memes, I push them aside.
But after awhile, I realize that they’re everywhere. My inbox is jammed–overflowing!–with people trying to sell me makeup, hair products, services, homely crafts, joining a small business. What is going on?
MLM: Breakdown
For those who are unfamiliar with the term, multi-level marketing refers to the process of making money by selling through networking and word of mouth. According to the Federal Trade Commission:
” If the money you make is based on your sales to the public, it may be a legitimate multilevel marketing plan. If the money you make is based on the number of people you recruit and your sales to them, it’s probably not. It could be a pyramid scheme. Pyramid schemes are illegal, and the vast majority of participants lose money. “
Federal Trade Commission on Multilevel Marketing
https://www.consumer.ftc.gov/articles/0065-multilevel-marketing
Basically, if a majority of the income generated from recruiting and creating a ‘downline’ or group under a seller or ‘consultant’ instead of sale of products, it may be a pyramid scheme. While a lot of the ads you encounter may not be pyramid schemes, you should always be weary when it comes to selling things for other people. Especially when the company promises to get you quick money with nothing but your cell phone or computer, utilizing the network marketing techniques of working from home.
The Basics of MLM: Need to Know
A typically cheerful person approaches you. Offer you some overpriced products. You politely decline. They offer to help you make money with you working under them on the line. Maybe you need a small sum to get started…? $99? $500? $5000?
Your gut should tell you to run. Save your money! But for others, the unique proposition looks more like an investment. So you fork out a few hundred…or thousand. Next thing you know, you’re thousands in debt, attending conferences, maybe even cruises. Your online presence has grown. Your bank account may have too. But there never seems to be enough time.
With your family, friends. They don’t understand the business. They distance themselves from you. Your selling crew becomes a surrogate family. Your starting to get into debt. Your scared to tell your significant other about the debt. Maybe the company tells you that you have to spend money to make money. Maybe it becomes too overwhelming. Everything sounded too good to be true.
Though this may not be every MLM seller, a disturbing VICE video exposed the inner workings of one reputed MLM online clothing seller LulaRoe. The company in question offers variations of leggings, dresses, and other items. But you can’t buy them just anywhere. You have to get them from a special LulaRoe consultant who paid $5000 to get that privilege.
Other companies like Younique, Herbalife, Amway, JamBerry (now closed), Scentsy, Nu Skin and numerous others use the same strategies of coordinating chains of sellers. The people at the top get richer. The people at the bottom are doing the work. It’s not a bad strategy. If you’re at the top.
A Hellish Marriage: Armies of Influencers
With the rise of social media, the MLM scheme empire has been pumped full of steroids. Live videos of women opening clams, unpacking jewelry or clothing, or simply posing with items has enflamed the industry with those at the top becoming billionaires in some cases. Those at the bottom can feel manipulated and even exploited by their higher ups. Pressures to gain more followers, consultants, or products can harm those who have invested money (sometimes life savings) and their precious time chasing down friends to sell them beauty supplements.
Why Should I Care?
Odds are that you have encountered or will encounter someone trying to tangle you into something. With the rise of social media, people in MLMs have easy access to hundreds if not thousands of online profiles and emails in order to gain followers or those who need extra cash.
College students are especially vulnerable to the siren’s song of easy money and are willing to make small investments through purchasing a beginners kit. Instagram accounts portraying filthy rich millennials pouring champagne over sports cars while vaguely mentioning a product or company can entice even the most skeptical millennial.
The disastrous Fyre festival was one such event where Instagram influencers used their images and large amounts of followers to get participants to buy tickets to a music festival that would turn out to be giant scheme. Those who attended described hellish Mad Max style survival instead of a music festival of epic proportions. The musicians that were promised never arrived. Instead of models, there were ravenous stray dogs. And the promised luxury tents were actually flimsy emergency shelters. Though it sounds like a good time to me (practice for Survivor, anyone?), those who paid $5,000 to $250,000 weren’t so pleased.
So what does an MLM have in common with the Fyre festival? Both originated through social media and heavily followed influencers. Anyone who tries to sell you something that is too good to be true should be treated with extreme caution. Don’t be like the attendees of the Fyre festival.
If someone promises that you can pay off student debt, work your own hours, become a better you, spend more time with your family, or gain more followers, be aware that these are common manipulation tactics to entice you into purchasing beginner kits or becoming a part of someone’s “downline“. MLMs and other online scams can destroy credit, relationships, and even lives. Keep an eye out for people who rarely want to talk to you unless they’re trying to get you to purchase something. Beware even of computer ads that push the stay-at-home agenda of running your own business while working for a company. No matter what you’re told, it’s NOT your business. And maybe you will avoid becoming a cog in the machine of the 9-to-5 that you sought to escape.
NOTE: Looking up MLM related content will bring up MLM ads. Look at the formats and keep in mind that they want you to click on them if you’re interested. Be aware of your online surroundings, friends!
Story Quest Decoded 