Multi-Level Marketing companies have been around for decades. The incarnations of MLMs are prevalent today: Nu Skin, Mary Kay, Arbonne, Amway, USANA and Herbalife, to name a few. Each of these companies promise wealth beyond one’s wildest dreams with hard work and smart selling. But these promises are as useless as their products. Their pyramid schemes harm everyone involved while they rake in billions. All MLMs are an abhorrent menace to society, and their unacceptable practices, along with their promises, should cease to exist. As a society we should all be on board with shutting down these companies.
The products that MLM companies are selling are not much different than the products in many stores. In addition, their products often have wildly ridiculous claims attached. This has resulted in numerous lawsuits and inquiries by the Food and Drug Administration. Nonetheless, these companies have sold individuals on their “amazing” products. In reality, these products are not technological or scientific advancements, just marketing successes. Companies use shrewd wording to get around the FDA, but wording does not change the product itself. Nu Skin claims to have over 200 products which — according to their website — “offer exclusive benefits that can be demonstrated.” Back to reality — it’s incredibly clear that scientific data does not back that statement up.
The FDA has released numerous warnings about the so-called science used by MLM marketers. They released this statement in 2011: “Despite claims about pills or treatments that lead to endless youth, no treatment has been proven to slow or reverse the aging process.” No amount of clever wording can change the fact that this company is perpetrating a barefaced lie. These problems are not specific to Nu Skin. Every single MLM says their products — regardless of what they sell — are the best. MLMs monopolize their markets so they can spike their prices. Regardless, MLM markets make money by taking advantage of everyone involved.
In one episode of the TV show, “The Office,” Michael Scott tells everyone about a fantastic business venture called a pyramid scheme. The MLM marketing strategy is creative, but still easily understood as a pyramid scheme. It relies on “distributors” to sell products. Each distributor sells their product for a commission, but if you add more distributors below, you can make more money. Thus, a pyramid is born. Each person selling these products has an “upline,” someone who is supposedly helping each “downline” sell products. And the upline gets a portion of sales from the seller who is below them. Yes, it is a pyramid, and anyone who has failed to see this is a complete Michael Scott. Herbalife was recently ruled by the Commercial Court in Belgium to be a pyramid scheme.
The MLM strategy is always based on getting someone below you to make sales, but the real person on top in this underhanded plot is the corporation itself, which rakes in ridiculous amounts of money each year. Mary Kay raked in $2.9 billion in 2011, Amway $10.9 billion and Avon a whopping $11.3 billion. Each of these companies offer an allure of getting in on their profits, with millions starting into the company each year. But the simple fact of the matter is that the vast majority are not making diddly-squat, according to a USA Today article. Roland Whitsell, a former business professor who spent 40 years researching and teaching the pitfalls of multi-level marketing said, “You’d be hard-pressed to find anyone making over $1.50 an hour. The primary product is opportunity. The strongest, most powerful motivational force today is false hope.” They are making money on the new recruits and not the products themselves. These are all ways to coax people already struggling for money to join their scamming system.
Many people have a hard time earning a living-wage in this world, and multi-level marketing is only making it harder. It is an exploitative system put in place by these huge conglomerates as a way to make money. But, it’s just re-distributing the money from working folks into the pockets of companies for no return. For some, it’s been difficult to prove that these monstrosities are illegal, but it’s time to put an end to every company participating in this scheme. Because they are all a house of cards, sitting on a throne of lies, in the middle of a sea of troubles.