There Are No Strangers, Only Prospects: How MLMs May Ruin Your Life
You might be urged to stop paying bills in order to invest in the dream. The urgency of buying more inventory may override your most basic needs, paying utilities and car insurance. The self-employment hook of you as glorified sales consultant selling over-hyped products, joining a supportive tribe of like-minded entrepreneurs, people just like you, stay-at-home moms, hustlers, and others who want to make an extra two thousand a month. Your only hurdle may be the initial buy-in, usually in the thousands, but this can be borrowed from family members or extended on a credit card. Whatever it will take, say yes today! Your future self will thank you.
Economic opportunities are afforded to those who actively seek economic liberty. Is it all too good to be true when you are now cast as the legitimate business person you always saw yourself as. Welcome to the world of Multi Level-Marketing, or MLM, a business model fed as part of the American dream since the 1960s. A fantastical existence of fancy cars, making it rain while being at home with your children, setting your own hours, and the ambition to make your own money now. MLMs, or “social selling” or “direct sales,” are pitched as a promise of a better life because now you have economic freedom. However, the pitch of quick income, often from the comfort of your phone, is quickly debunked with the stark reality that signing on quite possibly will plunge you further into debt and alienate you from friends and family.
Multi Level-Marketing has been part of the American business fabric for years and is constantly rebranded. This is due in part to technology, but mostly to shed the stigma of the pyramid scam label. Some of the more well-known companies include Avon, Amway, Mary Kay, Pampered Chef, Herbalife, Rodan + Fields, and LuLaRoe. These brands have been pitched as women’s empowerment but in reality are disempowering in the personal loss of large amounts of money. The Federal Trade Commission’s own website declares that 99% of all aspiring entrepreneurs lose money when joining an MLM. That means only 1% can squeeze out a profit. Those are perhaps the hardest odds one can face in business. Starting your own restaurant would offer you a higher chance at success.
MLMs sell themselves to the public with loaded language of self-empowerment and products that relate to wellness or beauty. What started in the 1950s with Tupperware, targeted to stay-at-home moms, has morphed into a millennial fever pitch of unattainable dreams of making a financial windfall from your phone and through your enviable social media influence. Because, after all, you slay as a mom boss and you can do anything, girl.
MLMs are not in conventional stores or online retailers, rather they are structured through networks of “associates” or “partners” who buy their inventory from “corporate” to sell to family or friends or followers of their socials. Profits are paid out on sales but the real push, and real money, is in the building of a “down line” network, a team that you amass through aggressive and consistent recruitment. Newly acquired “partners” will need to do the same to move up the ladder themselves. This ensures more payouts and commissions for all in the “upline.” To get around being defined as a pyramid scheme these companies pay out on sales and do not require recruitment of new members in order to make money. This is the difference and is important as pyramid schemes are illegal.
Adding to the hype is the MLM stressing how much back-end support associates receive from the home office, or “corporate.” Resources, talent, time...all at your disposal 24/7. This is ingrained into the indoctrination so that when you fail, or begin to question why the whole endeavor has become so difficult you are left gaslit, wondering what you did wrong since you have so much at your disposal. Carrot stick psychological ploys are constantly dangled like new cars or all-inclusive trips to Cancun. But remember, those manic achievers who do garner the success are only 1 percent of the “team.”
Thirty four percent of your social media friends are involved in an MLM. Rural America is the breeding ground for MLM flourishment. States like Colorado have more consultants than states like New York. This could be due to stay-at-home mom populations. Certainly there is more likelihood for “pleasure parties” or “pampered chef” meet-ups when these Sunday night events can best be arranged from card tables at bake sales or PTA meetings, even Target parking lots.
In 2012, the federal government unsuccessfully attempted to require MLMs to disclose documents which would weigh the risks of signing up. Big MLM companies fought legislation by sending in lobbyists with testimonials from their brainwashed consultants, adding how burdensome new paperwork would be. To this day, MLMs are not required to disclose any information related to the risks inherent to their endeavors. This of course leaves many without the front-end knowledge of how difficult the system will be--frankly, virtually impossible--and will leave the new consultant feeling alone, confused by their own inadequacy, and unable to bring up these new vulnerabilities with family or friends out of some “told you so” shame. Furthermore, the full outing of companies is quieted by non-disparagement agreements that are signed with the initial paperwork when joining the MLM.
MLMs began with scarcity a factor of retail life. In the 1960s, many Americans were limited on where they could buy certain products like Tupperware or makeup. Under this new direct-to-consumer model, convenience and supply were the selling point. There simply were not alternatives and MLMs were able to thrive. With the advent of social media, “associates” can now bring you the sale digitally, from the comfort of their pajamas or hanging out with their kids. This potential for profits model of hashtag “stay-at-home mom boss” ethos is what appeals to so many who sign on. Yet, in the end, the perpetrators are also victims. In the recruitment of family members and desperate friends, they have bought into the lifestyle you have begun portraying online. Without fully analyzing it, these folks who you have recruited, now placed in your downline, have now become competitors in who is targeted in your limited, and ever-shrinking, potential buyer pool.
Positive emails are constantly sent from corporate, with messages of freedom, of your hustle, and your personal branding of #mompreneur. A tidal wave of optimism is cast to offset the inner-voice of growing vulnerability and swelling shame. In this gaslighting you are left to wonder what is it that you do not get. What is wrong with you? How is it so much easier for others? All the while not knowing every single one involved is in the same boat and share the same insecurities as you. The new “social selling” modeled businesses emphasize friendship with other “associates” by hosting meet-ups in fancy hotel meeting rooms where everyone is encouraged to take pictures of each other for use on their social media profiles. With a newly formed group of friends, you are left with another tribe to not let down, your new MLM squad. This builds to the existing pressure from your immediate family who believed in you from day one when you came home and explained the initial buy-in.
In the barrage of emails are offers for new investments, with coded confusing language, just enough to confuse the associate that they simply need to buy more to buffer up their inventory, because we all know that the big sellers maintain big inventories. There is additional hype and fear of missing out (FOMO) from the others in the squad, via social media groups or from lavish posts of growing success.
The massive disconnect that exists in MLMs is that regular, often inexperienced, people are recruited then provided zero small-business training. All that is offered is hype and dreams of endless success. Any inner-voice that whispers, but if this was so easy why isn’t everyone doing it?, is suppressed with the secretive allure of this particular business model, one-of-a-kind product, or amazing founder. Why would you want everyone in on the secret?
If you are thinking that MLMs are cult-like you are correct. Much of the language used is from successful cult tactics. There is training to avoid those who may be adverse to the business model. There is talk of haters and the need to steer clear from them. There is the threat that if you suddenly speak ill of the MLM that you will be shamed by your new squad of associates. Even if you were to open up about having a difficult time with your business, you may be talked down to and told you are not trying hard enough and you need more inventory or downline sign-ups.
And suddenly when you think you need to finally give in, you are rewarded with some new unbelievable offer that you cannot refuse. Maybe a buy one get one free, or 20% off and free shipping. The dopamine hit is similar to when you are about to walk away from the slot machine but decide to keep playing. When you finally are burnt out enough to quit you are told once you pull the plug, there will be no more commissions from your downline, there will be no opportunity to re-sign up, and you will be stuck with whatever inventory you have to sell on your own, without corporate support. Most MLMs do not allow for online sales of their products by former associates, meaning any listing on ebay or craigslist violates the original terms you signed up for and corporate will have these listings removed.
There is a kool-aid factor to buying into the machine of MLMs. That suspended belief in thinking it will be easy money. For this, there is nobody to blame. Then there is the added hyped-up enthusiasm to sign up those in your life who may be even more vulnerable. There is immense pressure to bring friends and family into this new network, with the downside being that they are now trapped, and have you in their sights for advice and guidance. Your enthusiasm must remain in a constant manic state for the entire ruse to work. And you must suspend any compassion for those people who can neither afford your product or have zero business signing on as an associate. Because, through it all, you know that you are struggling yourself. Like the disconnect of the image you are portraying online as a successful mompreneur you now have to disconnect the selling of goods to people who cannot afford them.
There has been a collective manipulation of the aspiring entrepreneur in the selling of the MLM dream. This dream consists of minimal time spent with maximum reward in return. A dream that consists of all-expenses paid trips to Las Vegas and new Lexuses gifted with the ascension of the corporate ladder. There is a deliberate targeting of the most naive and gullible among us, those who will not question the viability of such business endeavors. It’s almost a pitch for the hopeless to find a glimmer of hope to attach themselves to, and in this carrot stick they will not question their own failures and insecurities to avoid standing out. It is a game of well-designed psychological guilting, and without the regulations or warnings in place they will continue to prosper and the end result will be 99% of those involved losing money.
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