She Means Business: Beware of MLM schemes
Published By admin with Comments 0
Multilevel marketing (MLM) has been around since the advent of Nutralite in 1945. And it has flourished in the shadows, enriching some while bankrupting others. (This aspect is highlighted in the Amazon Prime docuseries “LuLaRich” about the MLM company LuLaRoe.)
Despite its risks, the MLM industry grew rapidly during and after the pandemic. Why? Blame an unfortunate combination of shutdowns, financial need and people looking for a childcare-friendly side hustle. The ability to advertise and market on social media has only added to its popularity.
Most MLMs have sprung up in the health and wellness arena, but there are examples in many other industries. In the last few months, most people have been exposed to at least one.
But what exactly is an MLM? It is a scheme where more money is made from recruitment than from product sales. Please understand that this is baked into the organization from the start. The chances of making money in a MLM are less than the odds of winning at roulette, according to Jon Taylor of the Consumer Awareness Institute. In fact, he calculated that 996 out of 1,000 people lost money at these.
Even the Direct Sales Association (the organization representing MLMs or at least some of the more legitimate ones) has disheartening figures. It notes that the average outlay for reps is $82.50, and the average seller makes $5,208 a year. BUT, when you think of what the top dogs who orchestrate the scheme are making, most people make much less than $5,208 a year. In fact, most lose money.
Content retrieved from: https://www.bizjournals.com/pacific/bizwomen/news/profiles-strategies/2024/11/she-means-business-beware-of-mlm-schemes.html.
