Thinking About Joining An MLM Team? Here's What You Need To Know
It happens almost daily these days, and we’ve all seen the posts from “that” friend in our newsfeeds:
“Hi everyone! GUESS WHAT?? I’m the newest peddler of some overpriced, market saturated item that I’m going to harass you about on Facebook and at cocktail parties because OMG, you guys, this product is the best! Now, who wants to have a party? Does anyone want to join me on this adventure?”
Usually, the post is accompanied by a photo of her looking super excited while she holds a product that she’s convinced will change her life and improve her family’s financial stability.
She’s just so excited about her new “business.” And you want to be excited for her because she’s your friend and you truly want the very best for her — even if she’s decided that selling scented wax that is heated with a light bulb is the key to her success.
But we all know how this story ends. It’s safe to say she won’t be going on an all-expenses-paid cruise as she sips Cristal on her sundeck while counting her wads of cash.
That’s because multi-level marketing schemes, nay, companies, make sure that their coffers are full first and that their consultants are kept down in steerage where they belong.
Every time I see another friend succumb to the multi-level marketing company Kool-Aid, I quietly shake my head. I wonder what exactly they are thinking when they sign on to sell products made by companies that exploit women with high startup costs, exorbitant monthly consultant fees, and products that are already market-saturated. The world only needs so much under-eye cream and pink drinks.
Of course, MLM companies and their consultants will vehemently disagree with me. In fact, I’ll probably have to go into hiding for blatantly saying that their business plans often take advantage of women and prey on those who have the most to lose when it comes to those “startup fees.” All of their websites and glossy catalogs show women who are #blessed and helping their families through financial hardships all while barely lifting a finger because these products sell themselves, ladies. You can work from your phone!
It’s a goddamned miracle wrapped in a bow made of $100 bills, and these companies are here to help you become the best version of yourself. #sellsellsell
Let’s stop right here, though, so I can tell you that, since I wrote my now infamous LuLaRoe piece, I have gotten a chance to try the product. I will admit right here and right now: Those fuckers are actually like freaking buttah, and OMG, where have they been all my life? And the consultant who hooked me up was an absolute delight. She was professional, accommodating, and helpful. In fact, I’m wearing my leggings right now. Seriously. BUTTAH. I get it now.
But just because I love a product does not mean that I have to agree with how it’s marketed and sold to the masses. There’s a reason that 50% of MLM business owners leave their companies within the first year and 90% quit by five years out, people. The MLM business model is unsustainable by its very design, but these companies target women who are desperate to help their families in a budget-crushing economy.
And before you start yelling about your sister’s friend’s aunt’s niece who paid off her student loans and bought a restored farmhouse with 14,000-square-feet of shiplap, of course I realize there are consultants who are successful at this gig. These companies wouldn’t exist without them! They are busting their asses every day to sell products that are already market-saturated.
What I can’t understand is why this business model is so appealing to so many women and why we continue to opt into these companies and their shitty business practices.
Of course, we all want to be women who support other women, and I sure as hell don’t want to rain on a financially strapped mother’s parade, but let’s all be honest here: These companies do nothing to help a woman provide for her family beyond a couple of bucks at the end of the month, if she’s lucky enough to break even. Like I said, some women are able to rake in the dough as “Top 1%” or the “Quadruple Platinum Leader,” but those women are the very, very few of the many who never have a return on their investment. MLM companies thrive on the premise that there will always be a new woman looking for a way to support her family, long after the women who have realized begging their friends for “pity purchases” was a bad idea.
Because I like facts (not the alternative kind) and because I wanted to find out what is going on behind the scenes at various MLM setups, I interviewed three former direct sales consultants from three different companies. I value their friendships, and since I don’t need their former company consultants coming at me like rabid bunnies (hi, LuLaRoe friends!), I won’t divulge their personal details. But they spoke openly about the downside of buying into and working for their MLM companies.
Here’s what I learned:
1. You have to pay to play.
Oh, you want to sell anything for these companies? Well, step right up and hand over a huge chunk of change so that you, too, can strike it rich. Well, after you recoup the $250 to $6000 “startup fees” MLM companies charge up front. For the most part, these fees are nonrefundable (some companies charge a restocking fee, and you can get some of your money back but let’s face it, it’s still bullshit). MLM companies claim that you are starting your very own “business,” and as such, there are fees in order to get started.
2. Did they tell you about the “hidden” fees?
Oh, yes, there are fees that aren’t mentioned at those fun rah-rah sessions where everyone is telling you how rich you’ll be and how easy it will be to pawn the product off on your friends and co-workers. Marketing costs money, people, and it ain’t coming out of the MLM’s pockets. Nope. You want to mail your clients a brochure? Postage is on you, dear. Want to have fancy, glossy business cards, so your clients can contact you? Yep, that’s on you too. Oh, you want to maintain a website within your MLM company? There’s a monthly fee for that, bitch. And some companies require you to buy products monthly, whether you need them or not. It adds up quickly.
One consultant I talked to told me she spends on average $150 to $200 a month to keep her status within her MLM company. Just to be able to sell products, this is the fee she forks over. She has never been profitable. She remains hopeful though.
3. I hope you don’t get sick, or have a baby, or need a day off for jury duty.
Because MLM companies do not grant mere underlings access to things like medical insurance or paid time off. Those luxuries are only granted to their top sellers, their crème de la crème consultants who hock their products 24/7/365. The consultants who got in at the “top” of the pyramid. On the days the baby is sick and you can’t make it to that home party that you’ve scheduled to sell those sex toys to your friends, you don’t get paid a dime. And the MLM company doesn’t give a fuck because they have 50,000-plus just like you who are showing up to those parties and padding the company’s bottom line.
4. There’s a little thing called taxes.
Because you are an independent consultant of a MLM company, they don’t take federal, state or local taxes out of your earnings so it’s on you to make sure you don’t wind up in the slammer for tax evasion. What’s worse? As an independent consultant, you are considered self-employed which in many states comes with a hefty tax that eats into your profits quickly. One consultant told me that even though she grossed $90,0000 in product sales in a six-month period and her take-home was about $20,000, because of her tax bracket and her self-employment status, she’s walking away with a cool $2,000 for working 90-to-100 hour weeks in the last year for a a major MLM. She’s gonna be rich, real soon, I can feel it! #soblessed
5. Don’t worry, MLM companies really care — a lot. About their bottom line, not yours.
The resounding theme in my interviews with the three former consultants was that their companies didn’t give two shits about their lowly marketers. They talked of “trainers” who had upwards of 160 consultants working “downline” and of getting little to no help or direction with marketing plans, sales strategies, and client retention. All three told stories of feeling the pressure to sign friends on as consultants to increase their commissions and, at the end of the day, feeling like the amount of work they put in to succeed didn’t reflect in their paychecks. They all felt let down, and they all admitted that they felt taken advantage of in one way or another.
If I’ve learned anything from my interviews with former consultants, it’s that no one is openly speaking of the dark side of multi-level marketing. Every one of the the consultants I spoke with for this piece all said the same thing to me, “If I had only known the full truth, I’d never have invested my family’s money in this business.” Knowledge is power, ladies, and if that means admitting that our favorite leggings or protein shakes come from a company that doesn’t put women first, then I’m willing to amplify those voices that feel misled by the promise of a “journey” to “financial freedom” that has virtually no chance of panning out.
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