Multi-level marketing represents the dark, deceiving, and depressing part of my industry.
We all have a Facebook friend or two who’s wrapped up in an MLM. And at one time or another, we have maybe been part of one ourselves.
If you’re not familiar with MLMs, here are some of the common characteristics:
- Representatives (aka victims) are paid a commission of what they sell, and more importantly, they are paid a commission for everything one of their recruits sells
- The actual product(s) the MLM sells are usually not very good products (there are few exceptions to this)
- MLMs host regular events for their top-representatives to boast about the lavish lifestyles they’re living with luxury cars and white sand beaches
Now, do I think MLMs are an effective way to grow a massive business?
Do I think MLMs are an ethical way to grow a business?
The problem stems from the combination of the 3 characteristics I mentioned above.
Simply put, people who are recruited to “work for” these MLMs are not being taught to sell the product(s) to customers, they are being taught to sell a fantasy lifestyle to friends and family.
Yes, one of the major tenets of an MLM is that the people you are taught to sell to are the ones who you actually know (read: your friends and family).
My experience working for a MLM
Back in the Summer of 2006, going into my sophomore year of college, I received a sketchy phone call.
I was told that there was a job opportunity for me at a company called Cutco, where my friend had been working as one of their top sales people.
The fact that I was being solicited an interview set off my bullshit radar, but I ignored it because a) my friend was already working there and doing well and b) I wanted a job.
So off I went for an interview in San Francisco, which felt especially fancy and official to me, even back then.
The office was in a crummy neighborhood and building, and right then and there I should have turned around and left.
But I continued down the dark rabbit hole.
I waited for my “interview” behind several other people, who were around my age.
The reason I put interview in quotes was because the guy barely asked me anything before telling me to come back for a second round.
The second round was more of a presentation than anything.
The room was filled with about 20 individuals, a good amount of diversity in the room.
Yet, when the presentation was over, the same guy who interviewed me (aka the boss) pulled me and a few other white and asian people to the side and told us he could see something in us that made him think we were going to do well working for Cutco.
The guy didn’t even know anything about any of us. This was one of the most blatant examples of racial profiling I had experienced in my young life, and it actually got worse.
As I was walking to the train, naively feeling good about myself, me and this other white kid ran into another one of the “interviewees”, a black kid.
He told us that the “boss” had told him he wouldn’t be getting the job.
I’ll never forget that moment.
Deep down inside of me I knew how wrong it was, but for whatever reason, I still continued down the dark rabbit hole.
Young and dumb, not acknowledging the white privilege nor the injustice.
In the end though, that kid who wasn’t hired lucked out.
I didn’t mention it before, but Cutco sells premium kitchen cutlery. In fact, I’d argue that Cutco’s products are an exception to the MLM rule of shitty products.
Cutco knives are actually pretty decent.
But let’s be honest, who needs a butter knife that can cut through leather?
Or a pair of scissors that can cut a penny in half?
(These were the demonstrations they had us do for friends and family).
The saving grace is that we got paid hourly to do these presentations, in addition to the commissions we would earn for selling the knives or recruiting someone under us.
I ended up selling a few sets to family and friends, kept my demo kit, and ultimately broke even from the whole experience (not factoring in my time).
I didn’t do it for more than a month or two before finally realizing this bullshit wasn’t for me.
I learned some valuable lessons from the experience though.
The most important lesson?
Never touch a MLM again.
Nowadays, I can smell a MLM from a mile away.
We commonly see them on Facebook, but I’ll also have the occasional victim try and pitch to me in person.
I run like hell as soon as I sense it.
Recently, I went to a retirement party for a dear loved one. It was here that I encountered one of the most egregious examples of MLM behavior I’ve ever experienced.
A guest of this party (a friend of a friend) had the audacity to ask if she could do a 2-hour presentation pitching her product.
This product, by the way, costs $4-6k USD.
My dear loved one felt obligated to compromise (for reasons I won’t go into), so she allowed it to happen downstairs, away from the party.
About 20% of the guests remained upstairs.
This was so unacceptably inappropriate.
Here we were, celebrating someone’s long and difficult career, and a snake oil salesman had somehow managed to infiltrate and potentially brainwash 80% of the guests.
Fortunately, the few of us with sense steered clear, but that’s not the point.
The point is that these companies are built to tap into peoples’ greed and desperation.
Even after this woman had stolen the majority of the guests from the party for more than an hour, she still continued to slither into disingenuous conversations trying to peddle her snake oil.
And I would normally feel sorry for people like her, but she doesn’t deserve an ounce of it. She took a shit on what was supposed to be a happy celebration.
There’s no “easy” button
So if you’re reading this rant, I’ll leave you with one small piece of advice.
As an experienced entrepreneur (I say this humbly…in fact, I hated writing it), one of the most important things I’ve learned is that success does not come easy.
MLMs sell easy buttons.
I would bet that most people would love to be their own boss and rake in boatloads of passive income.
But this isn’t the real world.
If you want any semblance of that life, you’re gonna have to find another way.
But that discussion is for another day.