Don’t know what an MLM is? Well, they’re taking over the world.
According to Wikipedia, Multi-Level Marketing (MLM), is also called pyramid selling, network marketing, and referral marketing.
It is a marketing strategy for the sale of products or services where the revenue of the MLM company is derived from a non-salaried workforce selling the company's products/services, while the earnings of the participants are derived from a pyramid-shaped or binary compensation commission system.
In Layman’s terms, rather than gaining revenue from the purchase of actual products, the company, and those “selling” for the company, gain the majority of their revenue through the recruitment of others under them, creating a pyramid-shaped business structure.
Therefore, the company has a guaranteed income from the new sellers of their product because they must first buy starter packs of the products in order to sell. The sellers will then recruit others under them, and the person who has recruited gets a percentage of every sale of all of the people under them. This is what creates the pyramid shape of the business structure.
These are illegal companies that are only still in commission because the laws against pyramid schemes have yet to be rewritten to include more of them. This is because the companies have tried harder over the years to cover their true identities.
Because of the nature of how these companies and sales reps make money, they have become very aggressive and practice pitching the “opportunity” to work under them to nearly everyone they meet. This desperation comes from the necessity to recruit in order to make money; the more you recruit, the more you make.
But the line doesn’t stop with friends and family. Reps are encouraged by their uplines, those who recruited them, to cold message people on social media platforms and reach out to anyone who meets the basic criteria.
This is where reps become predatory; locking their sights on women, minorities and immigrants. They choose to target those seeking friendship and a place of belonging like many women and immigrants do. Specifically, they single moms who could also benefit from extra money.
They also target those who are going through a hard financial times and try to lure them in with the promise of the possibility of six figures a year. This is false, of course.
According to many of the MLM’s income disclosure statements, most consultants make at the most $200 annually and some even lose money without ever profiting.
For more info, you can check out this seasoned Youtuber Kiki Chanel.
Don’t know if you’re in an MLM? Check here.
Do you know anyone in an MLM? Let us know in the comments!