Scrolling through Facebook or Instagram, you’ve no doubt come across one of your friends boasting about the new latest, greatest opportunity.
One that can see you “retire in your 30’s” and “live the laptop lifestyle” while apparently doing good for the planet.
Or – going a step further – perhaps you’ve even experienced *that* strange DM about “you’ll be so great at this!!” despite not having chatted with that individual for years.
Welcome to the strange world of network marketing in 2024, otherwise known as MLM.
Proponents of such schemes would love to have you believe how wonderful their company is with their ‘training’ and ‘support’ for distributors.
Or how you’ll “get to finally own your own business!” and “live the life of your dreams”.
But you, my friend, know better.
You know something isn’t right.
Today I’ll be going through the top reasons why multi-level marketing schemes are bad for 99% of people.
And they’re not just bad for bank accounts. Too often, it’s the lost friendships, time, resources and stress that we can’t as accurately quantify.
Mind you, there is a 1% minority who do legitimately make some money and sing their praises.
But for the other 99% of folks out there, they simply make nothing.
So if you’re doing your due diligence, I’ve certainly got you covered.
I’m someone who got naively caught up in several MLM schemes during his 20’s.
Now older and wiser, this is the advice I wished my 20-year old self knew, and maybe, just maybe, I can save someone from a potentially long-term damaging decision.
Here are the top reasons why such MLM companies are simply bad to join (and why you should avoid them)…
1. MLMs Provide No Formalized Vetting Of Recruits
Unfortunately, any old Tom, Dick or Harry can sign up for an MLM company.
To become a distributor, you simply pay a joining fee to receive their products.
Once they arrive, you too can have the ‘priviledge’ of becoming a distributor.
Yet none of these companies actively vet their representatives for their ability to succeed.
It’s simply a case of “You look like you’re motivated” and thus, another person is enrolled.
I believe the ability to win comes down to background, salesmenship skills and the like.
In a traditional job, you’d come in for an interview and have references thoroughly checked.
In an MLM, your ‘interview’ is a sales pitch as to why you’d make “the perfect candidate…”
2. 99% of MLM Recruits End Up Losing Money
Sadly, most recruits do lose money on the ‘opportunity’ side of the MLM company.
Mind you, they still have a real product which makes the MLM unquestionably legal.
Now, most new recruits join with one motive: To make some additional cashflow.
Yet the work involved is severely unstated, as is the sheer difficulty in recruiting.
With many new distributors simply quitting within their first year out of frustration.
3. Most Companies Have a Cult-Like Feel
Many network marketing companies are accused of being modern-day cults.
After all, there is a cult-leader (often the company founder) with their legion of followers.
Nothing is more evident than the multi-day live events for each large company.
And unlike traditional sales roles, distributors are expected to pay the company.
Also, these distributors are often given a ‘set way of doing things’ to recruit others in.
While often being prohibited towards talking negatively about “the family”.
4. Recruits Are Expected To Do The Hard Sell
Network marketing companies often tout their superior products to their representatives.
However, it’s the representatives themselves who often have to do the hard sell.
This includes awkwardly posting photos on social media spruiking said products.
Or constantly following up through strange messages on Facebook and Instagram
And should they not be able to recruit an individual, they “didn’t work hard enough”.
5. Hiding Some of The Facts Is Routinely Practice
As a network marketing distributor, one must hide some of the facts all of the time.
Can you say that the vast majority of distributors make next to no money? Certainly not.
Can you also say that the compensation plan makes things tricky to figure out? Nope.
Can you also say that you’re making next to no money? Certainly avoid this one.
Should you get involved in one of these schemes, some hiding is certainly necessary.
6. Blocking Out Negative Friends/Family is Encouraged
Coming back to my cult-like feel, these MLM companies actively promote blocking others out.
Should your friends or family discourage you from your MLM, you’ll be asked to block them out.
After all, you “have a big dream” and these “dream stealers” are simply pulling you down right?
In actual fact, these friends and family are often like me. Awaken to the reality of MLM schemes.
This is why such schemes have the reputation of destroying friendships over such trivial pursuits.
7. MLM Reps Falsely Call Themselves ‘Entrepreneurs’
A common mistake by nieve millenials is referencing to themselves as ‘entrepreneurs’ in an MLM.
The term has become sexy in the last 5 or so years, romanticised fully by social media culture.
It’s insulting to real entrepreneurs who work so hard over many years to build real businesses.
Real entrepreneurship is a cruel, hard and tiresome road and with no guarantee of success.
Pretty photos on IG isn’t entrepreneurship. That’s posing. And inboxing friends is sales.
8. Having A Job or Career Is Considered To Be ‘Bad’
Proponents of the ‘entrepreneurial lifestyle’ also consider having a career to be a bad decision.
This is despite themselves often having a career while building their MLM as a side hustle.
Jobs provide many benefits that are overlooked by distributors including a stable income.
Not only that, but can be significantly easier paired with paid company training and travel.
While most won’t stick to their career forever, it’s a fantastic sounding board for millinenials.
9. Network Marketing Products Are Often Low Quality
Many claim “We have the best product(s) in the world!” but a quick Google reveals the opposite.
Often these products are mid-shelf at best. They are designed for a certain demographic.
In many cases, MLM products are produced in China or other lower socio-economic countries.
While at the same time, somehow claiming to have superior qualities and North American values.
This leads nieve distributors to represent products that just aren’t as superior as they claim.
10. Network Marketing Products Are Also Overpriced
Not only are the products often low quality, but they’re also quite expensive in comparison.
Their defence often is “we cut out the middle man”, otherwise known as retail distribution.
Yet the pyramid requires commissions to be paid multiple levels deep to representatives.
A large portion of a product’s ‘retail price’ is made up of active distributor commissions.
Ideally, they do aspire to not have recuits research for superior products which cost less.
11. Fresh Recruits Use ‘Fake It Till You Make It’ Mentality
Coming back to millenials, a consistent issue is the ‘Fake It Till You Make It’ mentality in MLM.
Many proclaim to be successful with regular luxury travel and expensive retail purchases.
You may have seen “My new business gives me the freedom to travel like this” which is unlikely.
Often they have a regular source of income like a job or have extensive cash reserves.
Further more, some of these distributors have…shall we say…quite generous parents?
It’s fair to state that such lifestyles perpetuated on social media often aren’t reality.
12. The #antimlm Hashtag Makes Success Even Harder
Fresh recruits in 2024 are in for a real uphill battle as the world awakens to the MLM industry.
YouTube has provided a platform for #antimlm content to go viral with many shared experiences.
When recruits attempt to recruit, it’s difficult when potential candicates search online.
YouTubers like Anna’s Analysis, Kiki Chanel and The Recovering Hunbot have millions of views
While the /r/antimlm/ discussions on Reddit have racked up 700,000+ followers since 2011.
13. Most People Have Had Success Prior to MLMs
Many successful people in network marketing schemes have been in such schemes prior.
They have brought over existing teams which makes their scalability significantly easier.
Likewise, they likely have joined in the early days when such schemes were easier to start.
In the network marketing industry, this is referred to ‘ground floor opportunity’ to get in early.
And thus, it is significantly harder for younger recruits to find success in any established MLM.
14. It Takes Several Years To Build A Full-Time Income
Many millenials perpetuate the notion of quitting their job within months and travelling the world.
Unfortunately, so few people ever reach a job-replacing income. It’s several years later if they do.
This is much-like many online businesses that require several years of work first as a side hustle.
Sadly, many do fall victim to the dream of being able to “fire the boss” very soon into the journey.
Some might have even written their resignation letter, with some leaving their jobs far too early.
15. Quitters Are Told They ‘Never Worked Hard Enough’
As briefly mentioned in a previous point, the “didn’t work hard enough” is a common catchcry.
While it’s 200% true that success requires relentless hard work, MLM is an uphill battle already.
So much so that distributors have significantly more work to do than other business owners.
Many representives end up quitting early on, and as mentioned, 99% make no money at all.
Sadly, few representatives have the audacity to address fundamental flaws of the MLM model.
16. Any Constructive Criticism Is Quickly Subdued
Should you post anything negative towards an MLM scheme, these are quickly surpressed.
This happens regularly in Facebook groups, and most recently on Google and YouTube too.
As a blogger, I’ve had content surpressed which examined how challenging most MLMs are.
Distributors are often addressed with “stop being negative” or “you need to work harder”
While uplines never address root causes such as poor quality products and high prices.
Let’s not forget distributors playing the victim card when others (like myself) call them out.
17. Distributors Are Routinely Upsold Conferences
To be really successful in any MLM, you’re encouraged to attend regular national conferences.
Proponents say it’s for the successful folks who can learn from “the best in the business”
Conversely, skeptics claim that conferences are modern-day indoctrination techniques.
This is where I see some value in MLM companies given their personal development content.
Unfortunately, distributors pay up for flights, hotels and of course, their own conference ticket.
18. MLMs Destroy Friendships When Recruits Churn
Managing one’s attrition-rate is a challenge for many network marketers, both new and old.
Ideally, you need to recruit in more which overtakes the rate of which people leave the company.
And an often overlooked component is the lost friendships, as friends lose thousands of dollars.
Unfortunately, this creates a divide between friends based on “I didn’t make any money with you”
When in reality, the industry itself doesn’t lend itself to those who are green-faced to sales.
19. Recruits In 2024 Fly Under The Radar
I’ve touched on this point several times lightly in this article. That is – flying under the radar.
Many millenials in network marketing schemes routinely use poor choices of catchphrases.
Lines such as ‘entrepreneurship’ and ‘building my empire’ or ‘travelling makes me money’
These are all designed to engage individuals on social media and eventually create recruitment
While also perpetuating the dream of ‘being your own boss’ and having ‘lifestyle freedom’
20. Most MLMs Falsely Use ‘Direct Selling’
A popular defence is “We’re not MLM, we’re direct selling!” to move away from prejudices.
Direct selling would entain only selling such products and not engaging in any recruiting.
Unfortunately, most network marketing companies only fluorish from recruitng activities.
Otherwise, if the products were actually ‘so great’, you’d find them on shelves nationally.
So network marketing companies are simply that – networking to recruit more distributors.
21. Real Companies Are Called Pyramid Schemes
A common mistake by millenials in MLM schemes is calling real companies ‘pyramid schemes’.
This is because they see the typical corporate heirachy as not rewarding those starting out.
Funnily enough, they fail to see the security that real jobs bring such as income and benefits.
While this comparison is less popular than the other strategies on this list, it does happen.
And the #antimlm movement frowns upon this a lot given the intrinsic benefits of careers.
22. Products Cannot Be Purchased In Stores
With many network marketing companies, their products cannot readily be found in retail stores.
This is very odd as such companies proclaim the sheer quality and demand of their own products.
In some cases, such as Amway, you can purchase their products online without joining as an IBO.
Yet companies such as Amway have been around for many years and are now a household name.
Given that MLM products are often pricier, it’s likely they’ll be slow-movers on the shelves.
23. Representatives Routinely Make False Health Claims
Of everything listed, this one really frustrates me the most. MLM distributors often break the law.
Whether it’s Enagic reps claiming their alkaline water machines can magically cure cancer
Or untrained aDoTerra recruits overestimating the benefits of their essential oils.
These distributors either play in a grey area or outright cross the line.
Sometimes, this brings the attention of the FTC.
Fortunately, today, some companies are defending their reputation by secretly auditing reps.
24. Some Distributors Use Tragic Events to Recruit
Perhaps the worse practice by network marketing reps is the use of emotional moments to sell.
Whether it’s a disaster that caused multiple fatalities, or simply the passing of a family member
These representatives truly place themselves on the firing line for such disrespectful behaviour.
Luckily, this practice is frowned upon by those on the outside and those on the inside too.
It’s these times where the real ethics of network marketing and their distributors is on show.
25. MLMs Target Those Who Love to ‘Manifest’ Success
A recent trend is recruiting folks who believe that success is ‘manifested’ instead of earned.
Many are huge proponents of the Law of Attraction and believe immensely in universal power.
These individuals can be quite vulnerable as they believe a ‘magical genie’ is ready to give.
This may explain the failure rate of MLMs globally as they underestimate the work involved.
Oddly, many of these spiritually awakened folk do feel a sense of awkwardness in MLMs.
26. Distributors Never Actually Own Their Own Business
A popular recruiting tactic is the claim that everyday folks can own their own business.
Unfortunately, this is a completely false claim. Distributors become members of the MLM scheme.
And yet, recruits who started 5 minutes ago tout their new ‘business freedom’ on socials.
While not having business plans, marketing plans or even a basic P&L statement handy.
Worse – their ‘business’ can be taken away at any moment if the MLM company fails.
27. The Real Money In In Owning The Business
Many only find success in a network marketing company by bringing over an existing team.
But yet – the real money is in owning the business while others sell the product and opportunity.
This way you’ll have a biz that grows with few employees, as reps typically are volunteers.
Better yet – they’ll have to pay first to sell the product, then pay for company events and travel.
Essentially, people’s time, motivation and dreams become the commodity many MLM companies.
In Closing
There you have it! The ultimate cheat-sheet as to why MLMs are bad for everyday people.
Should you be chased by someone seeking to recruit you, then these are 27 legit rebuttals.
Why are they still legal? Because they have a product paired with an army of supporters.
Now I believe their future commercial viability is in question, based on 3 main points:
👉 Consumers can research more easily and become fully informed prior to making a purchase.
👉 eCommerce allows anyone to start a business where consumers can access cheaper products.
👉 Today’s digital economy allows most people in developed countries to work 100% online already.
I imagine the roaring ’20s will highlight a sharp decline in MLM recruitment.
In fact, it’s already started.
Then the real entrepreneurs working 80/hour weeks in the dark can have their well-earned titles back.