If you’re at all involved in social media you might have gotten a direct message on Instagram or Facebook that looks something like this: “Hey girlie! I was looking through your pictures and you’re so cute! I think you would really love some of the products we have to offer! Would you want to try out some free samples?”
It may seem innocuous but these messages are part of a predatory business practice called an MLM. An MLM, or a Multi-Level Marketing organization, is a modern version of a pyramid scheme. These companies sell products through a network of distributors who earn their money through sales and recruitment.
These “network marketing” companies rely on their distributors, or “representatives” to push products on friends, family, or social media platforms. For someone who has social media fluency these messages are easy to ignore, but these MLM pitches can be seductive for some of the most vulnerable populations. They open by offering free products, then they start a dialogue, they try to sell you other products, and before long they are introducing you to a “super exciting business opportunity”!
The modern MLM have learned that “entrepreneurial” language is extremely effective in recruiting representatives, specifically female representatives.
MLMs target stay-at-home moms, military spouses, and other vulnerable young women and advertise their ability to help these women become their own #girlboss, or to start their very own “side hustle.”
MLMs create a culture of community within their organizations, join an MLM and suddenly find yourself with twenty new ultra-supportive #girlboss friends! They will encourage new recruits not to give up! And new recruits will usually not want to give up, they will not want to lose their new-found community.
Usually to become a representative for an MLM, you need to buy the products outright, or buy a “starter pack”. What’s seductive about this approach is that the starter prices are fairly low, much lower than starting your own small business, and recruiters promise that they will make the money back fast! The issue is that selling these (usually low quality) products through networking alone is incredibly difficult. You only have so many friends, so you will quickly exhaust your pool of victims, sorry I mean clients.
However, you usually need to make monthly quotas, and you have to buy the product to be able to sell it. So, what typically happens is that distributors for MLMs will purchase products themselves to meet quota and not be able to sell them later, and find themselves out of more and more money. According to a report by the Federal Trade Commission, 99% of representatives lose money from MLM companies.
So how do other representatives recommend making up for the loss of money? Simple! All you need to do is recruit, recruit, recruit! In an MLM, you make money from the sales that the people you recruit make, so you can augment your income through recruiting new representatives, usually your friends and family.
Does this sound familiar to you? It should. MLMs are not very different from pyramid schemes. The way they are able to legally operate is that they emphasize the product, not in the recruitment of new sales representatives. But to anyone who looks at the company closely it’s clear they’ve gotten off on a technicality.
Some of the most notable MLMs are Tupperware, Herbalife, Avon, Mary Kay, and Amway. They are prolific and most of them target women. It’s not that the women involved in MLMs are evil, it’s exactly the opposite. The women who find themselves involved in MLMs are victims of an aggressive and targeted marketing campaign, and they usually unwittingly find themselves victimizing other women around them. It’s a failure on the part of the legal system that MLMs are still allowed to operate, but the best thing you can do is keep yourself, and the women around you, informed and aware.