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Vulture culture: How MLMs prey on the vulnerable

Writer's picture: Christine DayChristine Day

Updated: Dec 14, 2024

First, let me start by saying that I hate MLMs. And this includes the MLMs who say they're not MLMs. If you earn more money by getting other people on your "team" to schlock the company's wares, you're in a pyramid-shaped scheme. End of story.


Let me back up a bit... and start with explaining what MLMs are. They're Multi-Level Marketing companies. Otherwise known as network marketing, MLMs offer products by enlisting entry-level sales people to purchase product and sell it to their "network." They move up the payscale by recruiting other people to "join their team" to also sell more product. People up the ladder take percentages of either the sales or inventory purchases their "team members" make, so you can see why they would be incentivized to enlist more people to join them in the mayhem. Here are some of the most famous (and infamous) MLMs throughout the years: Tupperware, Avon, Amway, Herbalife, Mary Kay, Lularoe, Rodan + Fields, DoTerra, Younique, Pampered Chef, and Scentsy. But there are many, many more (even Real Housewives are allegedly getting in on it - which makes sense because Salt Lake is essentially the MLM mecca). But the thing is, direct selling companies these days do not behave in the same way as they did in your mom's (and grandma's) days...


During the pandemic was particularly shady.


Over the years, I've unfollowed the majority of my network who have somehow gotten swallowed up into this industry, so during COVID, they very much used that chaotic time to benefit themselves under the guise of being helpful.


Here are some examples...

Blog - Vulture culture: How MLMers are taking advantage of coronavirus by Christine Day
Blog - Vulture culture: How MLMers are taking advantage of coronavirus by Christine Day
Blog - Vulture culture: How MLMers are taking advantage of coronavirus by Christine Day

Gross.


Thankfully, it seems like many people understand that pyramid schemes don't work for the majority of people. There are many, many cases of people at the bottom who invest what little money they have because they believe the "get rich quick" promise MLMs convey. Add in the mantra of "work from home" and "work as much as you want" and you can see why those who feel desperate are tempted to jump in. The Federal Trade Commission published a paper that indicates that 99% of people in an MLM lose money. And that 1% are generally the people at the very top of the pyramid. In order to inch your way to the top, you have to recruit people below you, so you can get a cut of their investment. So you can see why those people in the lower rungs are so incentivized to use fear to their advantage.


But things are changing… somewhat.


The New Face of MLMs


Many traditional MLMs are now being forced to adopt affiliate marketing models (meaning the seller earns a commission on the direct sale attributed to them) due to increased regulatory scrutiny and public awareness of their predatory practices.


MLMs have adapted their recruitment tactics. We're living in economically uncertain times. With ongoing inflation, layoffs in the tech sector, good jobs being harder and harder to come by, and many people struggling to make ends meet, MLMs have had to change up the pitch. They no longer just promise "financial freedom" and "being your own boss" – they now promote "recession-proof income streams" and "digital entrepreneurship opportunities." But it's still the same dicey game.


The landscape has shifted somewhat – many MLMs now require less upfront inventory investment but push expensive "starter kits," training programs, and mandatory subscription services instead. They've also mastered the art of social media manipulation, using carefully curated content to create FOMO and pressure potential recruits.


With things changing so much, you may be tricked into believing MLMs are a thing of the past. But they’re not – they just have a new face. If you hear your friends or family express that they are suffering, talk to them about it. See how you can support and proactively offer them solutions. Encourage them to create or update their resume, help them connect with recruiters or get on gig websites like Upwork or Fiver, create or update their website. Reach out to your network and see if anyone is hiring or needs help, even temporarily. If your friend expresses any sort of desire to sign up with an MLM, encourage them not to take action based upon fear or a scarcity mentality, and to do A LOT of independent research before investing any time or money.


The MLM horror stories are real. While LuLaRoe's implosion was legendary, newer casualties include companies like MONAT facing class action lawsuits over product safety issues, and AdvoCare being forced to abandon its MLM structure entirely after FTC investigation. And if you have some free time, the Huffpost shared a great article called "10 Horror Stories that Prove MLM Companies are Complete Trash" – it’s worth a read! Point being, it's hard to believe that so many people (particularly women) have succumbed to this trap and continue to do so, despite the widespread news coverage and abysmal success rates.


As economic uncertainty persists and social media continues to blur the lines between authentic connection and marketing, we need to remain vigilant about MLM tactics. Self-isolation during the pandemic taught us the importance of authentic connection – let's use those lessons to protect our communities from predatory business practices. Whether it's through education, support, or simply speaking up when we see MLM recruitment tactics in action, we all have a role to play in preventing these modern-day pyramid schemes from claiming more victims



Blog - Vulture culture: How MLMers are taking advantage of coronavirus by Christine Day







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