Why I HATE Multi Level Marketing And You Should Too – Answers about making money through direct sales from someone who ISN’T trying to recruit you to “join their team.”
I was on Facebook the other day and read something from a woman in one of the budgeting groups that I’m part of saying that she saved up all of her money so that she could join a multi-level marketing company and that she was hoping to make a lot of money before her baby was born in 3 weeks. She then went on to explain that she was struggling every month with her bills and wanted to contribute to her family’s income.
This is a story that I hear all too frequently: stay-at-home parent wants to add extra money to the family and joins a multi-level marketing company.
The next part of that story is often never publicized. It usually looks a lot like the same person having spent $200 of their own money just to get started, losing their friends by trying to sell to them too much, making $0 for more than 6 months, having to pay the monthly fees, and then ending with them having lost money and now they have tons of useless products that they bought in their garage.
Fair warning, I’ve got some very strong feelings about multi-level marketing and direct sales companies. It might not be a popular opinion, but you need to hear about multi-level marketing scams from someone who isn’t secretly trying to get you to join their team.
I can’t go anywhere without someone asking me to join their team.
My answer is, and will always be: NO.
The marketing of certain direct sales products targeted moms who just had a baby on Instagram. They hunted people down using hashtags like #newmom, #newborn, #motherhood, and preyed on these new, self-conscious moms. Then these salespeople would try to peddle their shrink wraps to these new moms.
(That one got under my skin, can you tell? No, I don’t need you to comment on my baby’s picture asking if I’m “ready to get back to my pre-pregnancy body” using your products!)
Why I HATE Multi Level Marketing And You Should Too.
The company makes most of their money from getting people to sign up as distributors.
It’s worth mentioning right up front that the multi-level marketing companies/ direct sales companies are very secretive about their numbers. They will share that you can make $1,000 or more each week, but the reality is that that is likely an inflated figure.
The biggest way that these companies make money is through getting new distributors to sign up. They get the distributor to buy the start-up kit for $200 (as an average across many of the different MLMs), then they tell you that you need to buy an inventory to keep on-hand. Buying the products costs money and there’s no guarantee that you’ll get that money back.
It’s a pyramid scheme.
They prey on stay-at-home parents with lofty promises.
Who hasn’t seen one of those adorable pink Mary Kay Cadillacs? That’s the lifestyle promise that comes along with these direct sales companies.
Their marketing is geared toward promising financial independence and a huge paycheck all while working from the comfort of your own home on your own schedule.
The reality is this:
93% of all retailers for one of the biggest multi-level marketing companies out there will make $0. The next step up, at 5.9% of all distributors, will make $475 all year. That’s about $40 per month. At this point, we’ve accounted for 98.9% of all of Herbalife’s distributors.
That doesn’t scream “financial independence” to me! That sounds like a huge waste of time and money!
The only way to actually make money is to get people to “join your team.”
This is the ACTUAL definition of a pyramid scheme: when a company makes more money off of recruiting new distributors than it does on the sale of products (source).
This infographic is from an actual Herbalife marketing brochure. It shows just how easy it is to make $4,150/month. Not by actually selling, but by getting people to work under you. You can also see that this person made $2,500 from their own sales… making their actual sales income 5.6% of their overall income.
So basically, you don’t need to actually work on selling your products, just on making sure that everyone that you know “joins your team.”
( It might seem like I’m picking on Herbalife, I’m not; they just happened to be the company most closely associated with being a pyramid scheme. There are many, many more companies out there that make most of their money from recruiting new people. )
Guys, please use your heads. This is not a realistic way to make money.
You will waste your time and your hard-earned money trying to make that made up $44,000/month. It’s just not worth it. Don’t get lured in by the promises to “have financial freedom” and to “be your own boss.” The reality is that you’re going to lose money and still wind up working for someone else with every sale you make.
Here’s my suggestion instead: Start a blog.
I spent $75 starting my blog and it’s made me a full-time income. And I still have my friends. And I’m not associated with a pyramid scheme. Also, I don’t need to go around trying to recruit people to “join my team” in order to actually make money.
Here are my other favorite ways to earn money as a stay-at-home mom:
- Side Hustles That Work Challenge!
- How to Start a Profitable Blog the Right Way
- Side Hustles That Work: Start a Home Daycare
- Side Hustles That Work: Make Money Taking Surveys
- 6 Easy Ways to Make Money From Home
- Side Hustles That Work: Make It, Sell It!
- Side Hustles That Work: Pay for Date Nights, Birthdays and More Watching Videos
- How I Earn Money as a Stay-at-Home Mom
- Money Saving Websites That Thrifty People Love
(Side note: I know that people who are direct sales reps and distributors for multi-level marketing companies will get VERY angry at this post. And I’m ok with that. Any and all negative or self-promoting comments will be deleted. Another bonus of owning my own business as a blogger.)
Have you ever tried making money as a multi-level marketing distributor?