Multi-level marketing companies are growing especially aggressive as more and more people search frantically to replace lost income and/or cover extra expenses brought on by moving workplaces and classrooms into the home. A few MLMs have solid reputations as companies that expect their representatives to sell the products in a respectful and reasonable manner, but overall, signing up to sell products for a company that offers the opportunity to build a sales team carries too many risks to make it a viable career plan.
The Big “Could”
There is no guarantee that your work will result in getting paid. You could make the amount you budget for each month plus $500 extra money, get to quit your job, and be a happy Mary Kay or Jafra or Tupperware consultant for life. Or you could work forty or even eighty hours every week and earn absolutely nothing. Yes, things can happen with any work you do. You could start your own business from the ground up and fail. You could get a job at a company that goes out of business. You could take on a client as an independent contractor and wind up scammed. But as long as the company or client is running and honest, projects or hours contributed result in money. As long as the online school where I teach keeps me on as an instructor, I will get between $800 and $1,200 at the end of every month. If I get a job that pays $12.00 an hour and hand in a time sheet with three hours on it, I know I will get $36.00. The path from work to income isn’t so clear with MLM.
There’s Too Much Out There
One of the reasons many people sign up for MLMs and make little to no money is market saturation. There is just too much of whatever you’re thinking about selling out there. Any makeup company you sign up for is competing with everything from the lines you find at Dollar Tree to luxury brands like Jeffree Star and Makeup Forever, and countless brands in between. Knives, food storage containers, and cookware can be found anywhere from the dollar store to upscale boutiques. Anything and everything can be ordered online.
The odds that someone is going to want the particular brand I sell when they have all those options are not great.
The Products Are Not Always Worth Peoples’ Time and Effort In Today’s World
In the past, it was necessary to go to a physical store to purchase everything, meaning store clerks did not have the time to give you the personalized service you might want. The person behind the makeup counter in a department store, for example, might grow irritated quickly if you asked numerous questions, wanted to see what every color in an entire line looked like on, or took an hour to select a single product. It was a huge convenience and a specia ltreat to have the Mary Kay or Avon representative show up at your house and allow you to ask all the questions you had, and take all the time you wanted poring over catalogs and samples. Today, you can camp out in front of your computer alone for an entire week doing nothing but looking at swatches of different products, reading reviews, and comparing prices on cosmetics products. Nobody needs to come over to your house for you to do that.
They Encourage You to Treat People like Dirt
In 2016, I said “yes” to the love of my life, and in 2017, we became engaged, making online dating something I need not worry about, unless it’s for a friend. But I do enjoy joining groups on Facebook and others sites to network and make friends with other women. After joining a plus-size women’s group a few months ago, I was pleasantly surprised when a fellow group member struck up a conversation about the upcoming fourth of July holiday with me. We talked about our plans. She told me about her husband. I told her about my fiance. We chatted briefly about pets. I’m not one to easily trust people I meet online, but I thought perhaps I’d found someone I had a bit in common with, someone to chat with while stuck in the apartment alone working online. Then she started talking about leggings. She wouldn’t quit talking about leggings. I wear jeans on days I don’t have to dress up, and pajama pants for lounge wear. I don’t have any leggings stories to swap. She kept talking about leggings. This would be because she was only trying to sell me some leggings. The “friendship” ended the minute I refused to buy any.
And I was just a random stranger online to this woman. Leaked materials from certain MLM companies encourage everything from getting back in touch with old friends just to try to sell them your products, to lying to your spouse about where the money you spent on kits and conferences and inventory went, to using your children’s college fund to pay for it all.
Many MLM Companies are Predatory or Even Cult-Like
This sounds ridiculous at first. What do you mean some company that sells makeup or kitchen items or candles is cult-like? What do they do, make you worship a lip gloss or ice cube tray or large red pillar candle? Yes, actually…they do.
Signing up for a multi-level marketing company makes you an independent consultant that’s allowed to sell their products. In order to earn and keep the right to do this, you have to pay for your initial kit, pay for any materials the company requires you to use to promote the products, and attend any conferences or meetings the person who signed you up requires you to attend. Between trying to earn all that money back plus make a profit, going to meetings, and tending to the required chats and phone calls with the person above you, more and more of your time and energy gets taken up by the company. Anti-MLM sites are full of stories about companies taking over consultants’ lives to the point that selling the products becomes the source of their every feeling and the inspiration behind their every action…in other words…that which they worship.
You probably aren’t going to earn nearly as much as it seems you are earning
Some people sink more and more money into an MLM, because they don’t realize they are not earning a profit. Suppose I start an MLM. We sell coffee and coffee making products. The sign up kit costs $100. It contains a red mug worth $10 that you wanted anyway, and a package of house blend coffee worth $10 that you really like once you try and decide to use. The quarantine has ended, and Covid-19 is no longer a threat, so you drive to Staples and make copies of your personalized flyer, then drive all over town, putting up flyers anywhere it’s acceptable to do so. Normally, you make yourself a sandwich or grab a can of soup at home during lunch, but you’re running around town today, so you stop and have lunch at your favorite fast food place. By the end of your first week, you have sold enough coffee, mugs, pots, and coffee themes merchandise from the catalog to earn $100. You are excited, because all you did was put up a few flyers and you made $100. But did you? You started out by paying $80 more than your coffee and mug actually cost. Now figure out the cost of replacing the gas you used in your car driving all around town. Add in the printing costs at Staples. Add on the cost of the meal you normally would not have purchased. Add that amount on to the $80. Let’s say you used $5.00 worth of gas, Staples cost $10, and the meal was another $10. That means you spent $105 in your efforts to earn $100, for a loss of $5.00, not a profit of $100.
MLMs can be tempting, especially now. Make sure you fully understand what you’re getting into, and have a realistic picture of what you can expect to earn before signing up.