MLM companies prey on women looking for a side hustle
By Natalie Vinh
Ever had a friend suddenly start a business selling cosmetics? Chances are they were involved in a multilevel marketing scheme.
MLMs are a networking scam similar to pyramid schemes. Those at the top often rake in lots of money each month, while those beneath them end up losing more than they can make back. Aside from selling average-quality products, MLMers are expected to recruit a certain number of new salespeople to their team.
Unlike pyramid schemes, MLMs are typically not considered to be illegal, which means there’s nothing set in place to protect vulnerable individuals from getting involved. People are lured in by promises of working from home, getting to set their own schedule and making quick money easily. Some companies also promise rewards for their top sellers, including brand new cars and tropical vacations.
Ever heard the term “#GirlBoss”? It stems from MLMs.
Abysmal statistics are among one of the many problems with MLMs. According to a study published by the Consumer Awareness Institute, 99% of those who enter into MLMs end up losing money. They become trapped in a cycle in which the funds are practically impossible to gain back.
The cycle goes like this: MLMers are expected to purchase a supply of products to sell with their money, like cosmetics from Mary Kay or health supplements from Arbonne.
Then it’s up to them to sell their entire stock, usually to friends or family members. But as outlined by the Consumer Awareness Institute study, most MLMers aren’t successful in reselling their products, meaning the original money they spent to get started is lost for good.
The second problem is that MLMs are inherently anti-woman.
It’s no coincidence that many MLM products are targeted towards women, including cosmetics, weight loss supplements and nail stickers. Out of the top 25 MLMs by revenue, 18 of them sell cosmetics or nutrition-related products.
MLMs prey on women, especially those who are already in vulnerable positions, such as stay-at-home mothers looking to make some extra money or wives and girlfriends of military members who are typically on their own for long periods of time.
But why prey only on women?
Women are typically chosen because they are perceived as having large social networks; an MLM only works if more and more people are consistently recruited. Women are often seen as having connections with friends, family members and coworkers who could be potential customers.
In fact, MLMs are particularly popular in Utah, where there are large Mormon communities. These communities are believed to be good places to reach new customers due to the extensive size of the religious network.
A 2018 study done by the American Association of Retired Persons found 60% of MLMers are women. Although more men are joining, the core concept of these schemes targets women.
So, why is this a problem?
Aside from the potential mountains of debt, MLMers also risk destroying their relationships. Because MLMers have to get rid of their purchased products, they usually turn first to the people closest to them: friends and family members.
MLMers tend to be pushy, with good reason. Desperation can take over as they try to sell any of the products they’ve invested money into. There are plenty of horror stories of people having to block MLMers on social media to get away from the constant recruiting.
Even though MLMers need the support of their friends and family to help them escape the never-ending scheme, they’ve usually isolated themselves socially.
How can you protect yourself and the women in your life from falling into such a trap?
MLMs are not illegal, and likely won’t ever be. Therefore, it’s important to be aware of possible MLMs.
Know the signs. Is the product only average quality despite a high price? Does the company claim to earn you thousands of dollars per month? These are red flags that could mean it’s an MLM.
Unfortunately, once you’ve already lost money to an MLM, there’s no easy way to get it back.
The best solution is to walk away. The problem with this, however, is that many MLMers are so far in debt that they still believe they can make some of their money back over time and are reluctant to leave behind the business endeavor.
But as time has told, again and again, staying in an MLM will only hurt you.
Know when to walk away.
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