Multi-Level Marketing: A Manipulative, Financial Beast


Within the field of business, there are among many different marketing structures, specifically designed to suit each business, enabling them to make profit, and succeed with their good and/or service. One of these practices, labeled as “Multi-Level Marketing”, is among one of the most controversial structures. Today, I will share in depth details of how they operate, what makes them popular, and how they reap in profits from unsuspecting victims looking for financial freedom. 

Multi-Level Marketing, otherwise known as Pyramid Selling, is defined as a specially designed sales strategy crafted to sell products directly to consumers via sales representatives, who make primarily commission off of sold products. A representative is most often recruited by other representatives, and this creates a strategy leading to multiple stacked recruiters, which explains the name of “pyramid selling”. 

However, this is where problems arise. 

In order to receive product to sell to consumers, representatives must purchase product from their “Team Leader”, or whomever recruited them into the company. If we use the company Herbalife for example, the average cost of a container of shake mix, which makes 30 servings, costs $40. Most recruited members will earn 25% commission, which means if they sell one container of shake mix, they will make 25% of the profit. In this circumstance, it would be around $10. They often give distributors a percentage discount when purchasing product to sell, although this does not help in the end, as you will end up purchasing more product for the next month with the small amounts of earned profit. 

Many companies that follow the direct selling marketing structure promise a false fantasy, training recruiters to share the “endless opportunities” and “guaranteed income”. They may try to recruit members with the promise of gifts as well like cars, vacations, and company merchandise, which are earned through meeting quotas and recruiting more people to the company. However, most individuals do not earn these, as only one quarter of recruited members are reported to make any profit within the time spent in the company. 

Among these individuals, most often, are women. Over 60% of individuals involved in a Multi Level Marketing company are female, which shows another form of manipulation that these companies do. Many representatives or recruiters may target women, primarily mothers who may stay at home with their children, and insist that this “opportunity” will allow them to make money while permanently at home, allowing them to contribute to the household income. Many of these tactics rely on emotional manipulation, making women feel “empowered” and leading them to adopt a “boss babe” mentality for “owning their own business”, while in reality they are paying for someone else’s financial paradise and receiving the thin scraps of profit leftover. They also may try to tell uneducated recruits that they are “not working hard enough to sell product”, unbeknownst the profit they could potentially make compared to the price of buying product to sell is next to nothing, if not losing money instead in most cases. Recruiters are specifically taught to have answers to every commonly asked question, especially the questions that accuse the company of being illegitimate or questions that regard the lack of profits made for most distributors. 

Social Media has caused the popularity of Multi Level Marketing companies to explode, leading it to become easier to be recruited to a company, and making the spread of misinformation more simple as well. If you know someone who is in one of these schemes, they may post about the products often, much to the annoyance of their friends, family and acquaintances. When a distributor struggles with selling product, they may end up becoming desperate, continuously and endlessly talking about the company and its products, which can break relationships and bonds due to the individual being essentially brainwashed to believe they are making profit, while ones who care are left to watch one chase an impossible dream of financial freedom. 

Learning about the predatory tactics and names of companies who use an MLM structure, you begin to see the advertisements and warning signs of them quite often. Some popular companies you may have heard of include Herbalife, Color Street, Younique, Mary Kay, Paparazzi, Beachbody, Amway, Scentsy, Young Living, Rodan and Fields, Pure Romance, and Lularoe. These are a few of the most well known ones, but a masterlist of them can be found here, as well as a company name search here

In closing, it should be no mystery that these companies have knowledge in manipulation and sketchy tactics, especially when it comes to recruiting vulnerable groups to sell overpriced products in order to siphon profits from both the consumer and the seller. If someone you know is involved with one of these companies, there are resources for support. Many victims of pyramid schemes feel ashamed and foolish once they find out the truth of their supposed employer. They also may struggle with financial loss and overall management depending on how much money they may have spent on the product they intended to sell. It is the result of being exploited into chasing a false dream. 

If a financial dreamstate is promised with minimum effort, it is nearly always too good to be true.