You’ve seen the videos: women, from all over the country, posting motivational Reels and Tik Toks-their well-lit faces on the foreground of beautifully-decorated homes. They include inspirational captions, with empowering quotes; they really make you feel you can achieve this happiness, this aesthetic, just by signing up to their team. They bait women by telling them “You can do this from home, all you need is wifi and a phone!” They become even more relatable when they showcase their children and make parenting look like a breeze. They boast about their freedom to spend, now that they also have a household income. While on the surface their “business” looks like a great investment, the scary truth is: 99.6% of people in direct-sales lose money throughout their time in that business model.
What is an MLM?
These companies sell their products and services through person-to-person sales; distributors purchase inventory at reduced prices, and sell them to clients at retail price, also passing on the tax and shipping costs. These distributors recruit new distributors, and earn commission based on what is purchased and sold by their “downline.”
The majority of people do not earn money; in fact Herbalife reported “…nearly 86% of US Distributorship (399,673) did not receive any earnings from Herbalife.” It is almost IMPOSSIBLE to earn money off this business model.
Wait, that CAN’T be true!
Oh, but it can. This information is posted online by the companies themselves. Let’s take a look at Monat. Their Income Disclosure Statement indicates roughly 92.26% of people are considered “Market Partners.” This seems to be entry-level (but includes the vast majority of people in this company).
HIGH Annual Gross: $12,913 (woah!)
Low Annual Gross: $0 (to be expected)
AVERAGE Annual Earning: $161 (WAIT A SECOND).
A whopping $161 for the year? That doesn’t even cover my gas for the month!
The next tier of the pyramid has an average annual income of $1988. Reminder, these averages do not include expenses. The opening line on this page on their site is “The average annual income for ALL U.S. Market Partners at all ranks (which includes Active and Inactive Market Partners) in 2020 was $876” ALL – this includes that 1%. This is incredibly low; considering the cost of their products (which are claimed to damage hair/skin), it cannot possibly be worth it. (I don’t know where y’all live, but $876 won’t even cover my my monthly taxes).
Seduced By the Glamour
Ask any former victim of an MLM- they’ll tell you they racked up so much debt in stocking up inventory. They’ll tell you this dream sold to them was really a nightmare: paraded by distributors at the top of the pyramid at conventions, which eerily resemble those of the evangelical type. In an age when body-image is everything, you have people posting their before and after pictures, insisting this new weight is the reason they are happy. They tell you these powders and teas are the reason they’ve lost weight, and proceed to sell you a container of powder for $43+taxes and shipping (far too expensive). They’ll tell you to join their team and achieve this body, but not tell you they’re trying to get back the money spent on the inventory they sold to you (which you, in turn, would also need to purchase). The industry, flooded with validation and compliments, preys on vulnerable populations like stay at home moms working on getting back their pre-baby bodies, the unemployed, and disabled people. Their cult-like strategy involves considering family & friends who speak up against them “haters” and convince people we all want them to fail. Most of these women also sell to friends. Its a familiar face, someone trusted. This is why so many women fall for the trap.
Ask those Questions
If a distributor approaches you, ask what products they’re selling you. What is that company reporting? Understand costs/refunds. Ask other distributors what their income/expenses were for the previous year. RESEARCH THE COMPANY. The FTC recommends- if after all this, you think this is the right move for you- you ask yourself, do you want to be a salesperson? Do you have a solid sales plan? What are your income goals? Can you afford to risk this money?
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Lu
Jo & Jade 