Introduction
At the beginning of the pandemic, many people lost their jobs and were searching for new ways to make ends meet. Unfortunately, in the digital era, there are plenty of ways to scam and be scammed. One scam that has made its way even to reputable job-hunting sites like Indeed or Monster is multilevel marketing (MLM).
What is an MLM?
For those unfamiliar, multilevel marketing is a business model where a contractor receives commissions from selling goods or services on behalf of a larger company or for recruiting new contractors. Now, you may be thinking that this sounds awfully familiar. Perhaps even akin to a famous triangle-shaped business model that’s now illegal for its unethical practices. And with that thought, you’d be correct. The only differences between an MLM and a pyramid scheme are that MLMs are legal and do have real goods and/or services available for sale. However, just because they are a legal business model does not mean they aren’t predatory.
MLMs make most of their money from their very own contractors. In order for a contractor to be able to sell products, they are required to spend their own money to purchase a selection of products that they will then sell to their clients at an upcharge, thus earning them a commission. For those higher up in the model, their income is extremely passive. Those they’ve brought into the business are generating them funds through purchasing products to sell. The smaller contractors are at a disadvantage. The longer the MLM has existed, the worse the selling conditions are for new contractors.
A few good examples of MLMs include LuLaRoe, Herbalife, Amway, Avon, and Younique. LuLaRoe is perhaps the most famous of these MLMs due to their mishandling of merchandise and flooding of the fast fashion market. However, Amway stands at a whopping $8.8 billion dollars in revenue as of 2019, making it the largest MLM in the world.
Predatory Behavior
You might be wondering how these MLMs are predatory. After all, if someone doesn’t want to put in the work to grow in a multilevel marketing company, then they shouldn’t spend their own money to become part of that business, right? MLMs cannot function if new contractors aren’t being brought into the company. The main consumers of MLM goods are individual contractors, not clients of those contractors. This means there’s a huge pressure on contractors to induct more participants into the business. Some will use unethical means to pursue leads, including sending inappropriate messages, harassing individuals, and stalking online groups. For example, the MLM BeachBody often has contractors who join fitness groups to peddle their wares. Sometimes they’re kicked from these groups, but other times, they are able to find several marks to purchase their products and services.
There are three main categories of people who these MLM contractors – often referred to as “hunbots” due to their messages starting with “Hey hun!” – tend to target: army wives, stay-at-home moms, and women struggling to make income. These groups are all vulnerable to the recruitment tactics used by these hunbots. Because these groups often feel isolated or underachieving, the hunbots are able to leverage the idea of belonging to a group, creating income on their own time, and false positivity to lure in victims. A sample message from a hunbot to a mark might look like this:
“Hey hun! I saw your post on social media about wanting to be a healthier and better version of yourself this year. I just wanted to let you know that with my MLM, that’s totally possible! By selling these goods and services, not only can you make money literally from your phone in a few minutes a day at home, but you can also have access to great health-boosting products! Plus, you’d be starting your own business. Imagine being our own boss! All you have to do is purchase this starter pack, and then you can sell it to people you know! The money comes rolling in! Just message me back if you’re interested in this amazing opportunity! We can be girlbosses together! There’s even an exclusive group on social media that everyone in our area can network with and be friends! Looking forward to hearing from you! Xoxo”
There are a lot of aspects of this offer that look tempting, such as the promise of quick and low-effort income, being your own boss, and an exclusive group. However, the reality of MLMs is much different. There’s mounting pressure on contractors to sell and recruit more, and instead of just “a few minutes a day at home,” it becomes an on-call, low-income job. Selling products and recruiting, especially when more and more people are wary of MLM companies, becomes increasingly difficult. Those higher up in the business model rely on those lower down for their income. Because of this, they pressure those below them into selling and recruiting as much as possible, even gaslighting them into believing they’re not doing well enough. For example, a higher-level contractor might tell a lower-level contractor that if they’re not spending all of their time selling and recruiting, they aren’t cut out for the business and that their families will be disappointed. The stratification of contractors into different levels also creates a harsher power dynamic. The higher-ups will often say things such as, “If I could do it, then you can do it too! If you’re not doing well, it’s your own fault. You’re not trying hard enough.” Contractor burnout is a real issue. If they want to take time off to do something – even something like going to a funeral or taking a child to the doctor’s office – they feel pressured by the statements of their higher-ups to try and continue working even through important life events.
The groups these MLM contractors join are echo chambers of false positivity, gaslighting, and toxic mentalities. Contractors are sometimes encouraged to cut off anyone who disagrees with their choice to be involved with their chosen MLM, further isolating them from varied support systems. Like an abusive relationship, the MLM wants its contractors to rely solely on them, which takes advantage of someone just trying to make ends meet and find a place to belong.
Shoddy Products
Another major issue of MLMs is that they often sell shoddy products. LuLaRoe, which was mentioned previously, had cheaply-made clothing. This clothing was shipped to the U.S. from an international source. Once the clothing reached the warehouse, there was an issue: LuLaRoe had grown drastically, and the amount of clothing ordered by contractors was too large to fit into the warehouses to be sorted, packaged, and shipped off. The palettes of clothing sat outside, degrading their quality even more. Once the products actually reached the contractors, there were immediate issues. Some pieces of clothing had holes in them, they tore easily, or were even moldy or sun-bleached. These products that the contractors had spent their own money to purchase could not be sold, but because LuLaRoe had policies in place, returning the products was a nightmare for some and impossible for others. The company suffered greatly, but not as much as the contractors who lost life-changing amounts of money to a business model set up for their failure.
MLM products being shoddy also applies to the essential oils markets. Young Living is a good example of how some MLM products could affect the health of those purchasing them. On their website, Young Living does not guarantee the purity of their essential oils – something many purchasers use in ways that involve the product being ingested or otherwise put into or onto the body. Essential oils are often touted as a homeopathic remedy to some illnesses, and while some of the claims of hunbots pushing Young Living are scientifically incorrect, it is true that some people do seek essential oils as a health aid. By not disclosing the carrier oils mixed into the essential oils, Young Living could put the health of anyone using their products at risk. Moreover, hunbots have made ridiculous claims, such as certain oil blends can cure autism or rid the body of cancer. Neither of these things is backed by science and could have extremely adverse effects if a purchaser decided to rely on this shoddy advice.
Is This Job Offer an MLM?
With all of this said, you might be wondering how to spot an MLM job offer. Here are the main things to look for:
- There’s a buy-in. When you start a job, you shouldn’t have to pay any money to the company to get started. You do not need to buy products from a business in order to work for them.
- You can work from your phone in your spare time. Unless you’re working a small gig job, you will need to do more work than messing around on your phone messaging people in order to get paid.
- There’s the promise of quick cash. In entry-level jobs, there really isn’t such a thing as “making money fast.” You won’t be buying a yacht anytime soon when starting an entry-level job, so don’t let the hunbots’ promises of riches and luxuries trick you!
- The opportunity states you can be your own boss. When working for another company, you will never be your own boss. There will always be someone to report to.
- There’s no experience required. Most jobs nowadays require some sort of previous experience, education, or qualifications. If a job doesn’t list any qualifications other than “18 or older” and “can work in the U.S.,” then consider looking into the company a bit more before signing on with them.
- You were contacted through social media for the opportunity. Networking via social media is on the rise, but always be wary of opportunities DM’ed to you by a total stranger on the internet. They may not be who they say they are, and they might be scamming you.
Concluding Thoughts
Overall, MLMs aren’t illegal, but they are predatory at best and dangerous at worst. Make sure you know what kind of work you’re signing up for when you agree to be an employee.