Multi-Level Marketing companies. We’ve all known somebody who has been involved in one. Sometimes they are advertising these products on Facebook, sometimes they are giving you awkward presentations in your living room. These people are not bad people. They are usually just trying to increase their income. But the MLM companies themselves are scams, and they are full of awful, greedy people, who prey on the ignorance of others.
I have a special hatred for MLMs. Back in middle school and high school, my parents worked their way through a few key MLMs. My trumpet instructor was part of the cause: that guy deserved to be decked in the face, as he was the first person to talk about his stupid “opportunity”. My parents would go on to lose a lot of money from these MLMs at a time in life when they really needed to not be losing money. But they were trying to do the right thing – they were trying to earn more. But in the end, it ended up costing them far, far more than they earned, and that is how these things operate: they try to convince you that you will earn money, but the joke is on you, and the companies make out like bandits.
First of all, let’s talk economics. One of the most central elements of MLMs when you sign on to be a “distributor” is that they almost always require you to buy a certain amount of “product” each month or each year. Think of this as their “subscription fee”, and it’s a steep one, often in the hundreds or thousands of dollars, depending on the sign-up options. I have never seen anybody describe it as a subscription fee, but that’s essentially what it is. People will complain about a $100 phone bill, but they’ll gladly pay $400 a month for “product” they intend to resell. There you go. That’s it. That’s how MLMs make money off of you. Whether you are able to sell your product or not, nobody really cares at the top, because they just sold you the lie that you are a business owner, and you keep paying because it makes you feel good. You have “a business”!
I have friends who own their own businesses. And they did not get there easily. They are pretty smart people. When people pay a subscription fee for a “business”, it’s kind of an insult to people who own real businesses, but I digress.
Okay, so you pay your $400 per month subscription fee, hoping to turn around and make money. You usually won’t, but let’s say you do. Let’s say you make $800 that month. Doubled your money, huh? In one sense, yes, in a more important sense, no. You spent every evening posting on Facebook, hawking the products, and nagging your friends, buying them coffee ‘n shit. You’re telling me that after a whole month of work you only made $400? First of all, you have to pay taxes on that, second of all, you have to calculate your dollar-per-hour income. This is what gets people – they aren’t often thinking in these terms. They just think, “I earned a profit! I am a successful business owner!” Usually these items are overpriced junk, and that’s the kicker. Some small business do take time to get established, and some simply have lower margins by virtue of their industry, but simply reselling things you already bought from the MLM company doesn’t mean you have a positive ROI. Most of the time, it’d be more profitable to get a part time job at a convenience store nearby. I’m not saying I would want to work retail, either, but at least the pay would be consistent and it wouldn’t be costing you that monthly subscription fee.
There was this girl at one of my churches, and she was all proud of how she owned two or three businesses. But it’s like, if you were really good at owning a business, you’d have one business, not two or three. This only changes when you’re a super-successful entrepreneur, and that’s one in a million, which this individual was not. The mental overload of running two marginally successful businesses is, in my opinion, not worth the hassle, and is also an indicator that you may not be very good at owning businesses in the first place. Or you’re just in the wrong field of business. The fact that you don’t realize this is why you aren’t getting anywhere and why you need two businesses to compensate for the money you’d be earning from one actually successful business. I guess if you enjoy both, then it doesn’t matter, but don’t mistake quantity for success, because it doesn’t work like that.
The real tragedy is that these people often need the money and end up with even less of it. After all, you are usually forced to buy product to keep playing the game, so when your friends and contacts dry out, your “inventory” keeps piling up and costing you. It’s just painful thinking about this. My parents would have been better off having a family meeting, discussing the lack of money, and brainstorming ways to spend less, whether that meant eating out less, buying less, or planning family stuff at home more. It’s all in the past now, we’ve all changed and grown since, but there were so many better solutions than just trying to earn more money “on the fly”. I was too young to understand the financial implications of things, but we sure went to the chiropractor a lot. I could have brought lunch to school more often. We could have talked it out, I don’t know why we didn’t. Was it pride? Was it ignorance? I don’t know, but it could have been done differently.
And yeah, sometimes there is a legitimate need to increase money. But sometimes people are paying $200 every month for cable. Or $400 per month for a car payment. Or buying expensive tires. Or driving all over the place all the damn time. Or eating McDonald’s all week. I appreciated my parents paying for my trumpet lessons, as this was a requirement for being in jazz band, but I gave my trumpet away years ago, and playing trumpet really had nothing to do with my success as an adult. I get that parents want their kids to succeed and all, but fuck me, if you can’t afford it, don’t buy it. You spend your way through life on this that and the other, thinking you need these things, then you jump into shady “business” deals like MLMs for some extra scratch. It might turn out you never needed to earn more, you just needed to spend less! But in the process, somebody snookered you for thousands of dollars, and that is what MLMs are all about.
Here’s what you need to ask yourself if you need more money: how can I provide value that others are willing to pay me for? There’s only so much makeup, or clothes, or “health shakes” (gross), or candles you can sell to your friends. And don’t think for one second that women are not the primary targets, because the vast majority of the time, they are. It’s not just a scam, it’s a predominantly sexist scam.
What am I going to pay you to do? Can you fix my car? Can you file my taxes? Can you walk my dog? (not that I actually have a dog). Mow my grass? Make me furniture? Create art? Program video games? Train me at interesting things? Entertain me? Create gear that shaves three pounds off my total backpacking weight? Take my family photos? Help me file a patent?
And I get it – I’m no side-hussler. There are only a few things I’m good at to the extent that I could charge somebody for my labor. But all the strategies fall along this spectrum. You’ve got to have something to offer in exchange for money. Not all good things in this world have a high monetary value, but it’s still a basic principle that you must add ascribed value if you want to exchange your labor for money. Just buying a box of retail junk from an MLM that has snookered you into a monthly fee just for the privilege of working with them is a horrible decision. It’s going to cost you money, and you’re not really adding value to anybody’s life, as you can only expect to make so many sales, and most of those sales will be to friends who feel sorry for you and want to support you. DO NOT BUILD A BUSINESS WHOSE SALES ARE BASED ON SYMPATHY! I just want to flip tables when I think about it. These shit companies scam people, and those people will be worse off in the end. And I don’t want that! I get sick of seeing it, seeing people throw themselves in line with these horrible people, and then losing money, the exact opposite of what they needed to happen.
There are no more words for today, I just hate these companies that offer hope and end up screwing people over. But ‘fool me twice, shame on me’ still applies. If you’ve been screwed, you need to wake up.