The Anti-MLM Episode

I’ve never joined an MLM. Until recently, though, I didn’t consider how predatory these companies were. Today, I wanted to shed light on what MLMs are and why they are not a great way to make money from home.

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In today’s episode, we’ll be chatting about why multi-level marketing is terrible.

What Is An MLM?

An MLM is a multi-level marketing scheme. It is essentially a pyramid scheme even though these companies will swear it’s not. MLMs are organizations that allow individuals to sell their products. Here’s the kicker, though, they also allow you to recruit other salespeople. These salespeople then become your downline. A downline is the flow of people under you and the people they recruit into the company. This structure is what makes an MLM an MLM. Your downline is also bringing you income because you usually make a percent of what your downline earns through product purchases.

So, this creates a lot of inequity in MLMs. If you get into the company at the very beginning, your downline will be huge. You will likely make more money recruiting than you do selling the product. The government has cracked down on company’s where the primary way to get paid is through recruiting, but it can take a while to build a case and make companies restructure.

Why MLMs Are Bad

MLMs are bad because they prey on people who need the money or want a more flexible income. It’s so important to understand this as you are thinking about working from home. These people who work from home in MLMs aren’t bringing in all that much. If they are bringing in a lot, it’s because they got in the business early and have a large downline.

Here is a stat you might want to consider before joining an MLM: 99% of MLM participants lose money. It’s not because you aren’t working hard enough. If 99% of people fail at something, it because the cards are stacked against you.

MLMs are also bad because their business model is inherently bad. There are only so many people on the planet. Eventually, you run out of people to recruit or sell to. Someone is going to be at the bottom of the pyramid, holding everyone else up, and getting nothing in return. John Oliver talked about this on his show Last Week Tonight. John shared that within 15 cycles of one person connecting with other people and bringing them into the pyramid, you run out of people. We only have 7.4 billion people on the planet. Network marketing can’t be successful for everyone.

How Do You Stop Those You Love From Falling Prey To MLMs

Compassion is your most important asset when stopping people from joining or falling deeper into MLMs. You cannot go into these situations guns a-blazing. Make sure they know it’s not their fault if they don’t see success with MLMs. Support them, share facts, and listen when they need a shoulder to cry on.

At the same time, you should also put your foot down and guard your own money and time. Don’t support their stores, go to their parties, participate in their lives, etc. If you are anti-MLM, you don’t need to support anything people are doing to show compassion for them.

Anti-MLM Resources

Here are some extra resources to consider so that you can learn more about MLMs.

The Offbeat Grad episode that started my spiral into anti-MLMness
Sounds like MLM but ok Facebook Group
The Dream Podcast (the first season is on MLMs)
Anti-MLM Reddit
Kiki Chanel (she does a ton of anti-MLM videos on YouTube)
VICE's Lularoe Doc
The Financial Diet’s 7 Signs An MLM Is Taking Over Your Friend’s Life video