Updated: Apr 8, 2021
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... and direct selling companies these days do not behave in the same way as they did in your mom's (and grandma's) days...
We're in our first week of government-directed "social distancing" for the coronavirus. Just a few days ago, many small businesses were ordered to either shut down temporarily or adjust their business model to be to-go or delivery only. This means there are lots of people who are either in danger of losing their jobs or having their income severely impacted. There's currently a lot of goodwill aimed at supporting these people during this time, and also calls for the government to come up with some sort of package to offset challenges associated with this period of self-quarantine. But a dicey time.
Enter the MLMers. I've unfollowed the majority of my network who have somehow gotten swallowed up into this industry, so I decided to check in on them during this time of job instability. What I discovered didn't exactly surprise me but it annoyed me just the same. They're using this chaotic time to benefit themselves under the guise of being helpful.
Here are some examples...
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 in 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 the fear we are currently experiencing to their advantage.
We are in the early days of this crisis so it hasn't reached its peak yet. It's up to the rest of us to continue to address this "vulture culture" of MLMs if things continue to get worse for those who live paycheck to paycheck or are unable to work remotely for their jobs. 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. Maybe they can see temporary relief from unemployment, or take advantage of the hiring wave that's happening with essential services companies like Amazon and grocery stores. 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 to not take action based upon fear or a scarcity mentality, and to do research before investing any time or money.
The MLM horror stories are real. My favorite is watching Lularoe blow up into tiny, tiny pieces but the Huffpost shared a great article called "10 Horror Stories that Prove MLM Companies are Complete Trash." 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.
This coronavirus epidemic and its aftermath is likely to have long-term impact on the world, particularly when it comes to the economy. Much like those people who have horded products and are attempting to take advantage of shortages through price gouging, we need to be vigilant to other bad actors (like MLMs) who seek to benefit from the struggles people are currently experiencing. Self-isolation doesn't mean we need to cease communication or insulate ourselves. Rather, we should seek to connect authentically and look out for our neighbors. And that includes protecting ourselves from predators like MLMs.