Risky Business : The Truth About Multi-Level Marketing

Picture this: it’s summer 2020. You’ve just lost your job because of a pandemic and spent July and August on the ultimate job search, hoping to snag something by the time school comes around, with no luck. 

Enters the Multi-Level Marketing girl. She slides into your DMs and promises a successful career where your iPhone is your office. All you need is dedication, a hustle mindset, a passion for sales and social media, and a sprinkle of creativity. She gets you on a phone call and BOOM! Suddenly, you’re a #GIRLBOSS running your own biz. Sounds too good to be true, right?

That’s because it is. 

In recent years, the success of multi-level marketing (or MLM) brands has skyrocketed, particularly among young, tech-savvy women. While there’s a serious appeal to this flexible, work-from-home lifestyle – especially for Millennials and Gen-Zers, who tend to prioritize work-life balance more than their parents’ generation – MLMs can also present considerable risks to those who join. 

For one thing, while MLMs are technically not illegal, their business model does bear a striking resemblance to something that’s totally illegal: the infamous pyramid scheme. Both MLMs and pyramid schemes require distributors to pay for some kind of membership, and to recruit distributors for their teams. In both instances, managers (sometimes called “uplines”) collect a cut every time someone joins the stack, and the cycle continues. The only difference – and it’s a pretty slight one – is that MLMs don’t only generate revenue through new membership fees; they claim to move a product too. And, well, that’s kind of it. 

If the actual structure of an MLM isn’t concerning enough, the legitimacy of network marketing as a stable, steady income-maker should be. Although the promise of a life-changing career has come true for some, the reality is that over 70% of people who join MLMs end up losing money or making none. That’s a far cry from the dream life and financial freedom preached about by network marketers. 

This is just the tip of the iceberg. Toss in the fact that network marketers are taught to recruit, recruit, recruit – no matter the cost, loss of friendship included – and you’ve got a pretty toxic work environment. 

As YouTuber and ex-Senegence distributor Chelsea Hansen put it, in her experience, the MLM structure favours an elite handful of members, leaving the rest scrambling. “They only support the top 1%,” she notes in her tell-all video I Was a Boss Babe. 

College student Deanna Mims echoes this point; as a former BeachBody coach, her job was more exhausting than studying for her degree – and with nearly no payoff. “No matter how hard I worked,” she says, “I wasn’t going to make it to the top.” 

Mims and Hansen are both influencers in the growing online Anti-MLM community. Their stories — like those of many other ex-distributors, almost of them women — start at a point of vulnerability. For lots of former MLMers, the tight-knit community and the lifestyle of wealth promised by a career in network marketing drew them in when they were at their lowest, and tightened its grip until it was too risky to get out.

I’m not here to tell you what to do, but if I may offer some advice, one college student to another: before buying into a get-rich-quick business, do your homework. And lots of it. 

Ask yourself, are you willing to spend hours on your phone, reaching out to friends and family about your product? What kinds of supports or benefits will this company offer you as an employee? Read into reviews, studies, and stats. Does this organization have a promising success rate, or are their members often left disappointed? What’s the general public consensus on the quality and value of the product?

Get to know some of the current sales people; what kind of tactics do they use to market to their clients? Is it genuine? If you sense that manipulation and false advertising are at play, you’d better stay away. 

Most importantly, do you believe in the product? In the mission behind it? In the results?

If the answer is yes, and you really, truly feel a special place in your heart for the company, then it’s up to you to use your judgement and decide if working for an MLM is worth it. Who knows? You very well may be one of the lucky few who get something great out of your experience!

Interested in learning more about the wild world of MLMs? Check out these creators and sources:

Becoming your own boss: yes, but not at any cost by The Competition Bureau of Canada The Dream Podcast by Little Everywhere & Witness Docs

The MLM Deep Dive Series by Kimbyrleigha

Questions to Ask Before Joining a Network Marketing Company by Zig Ziglar, John P. Hayes