This article doesn’t dig into the details, but these companies are really vicious. They aggressively recruit at my college and I’ve seen them to convince students to take what they would have spent on next semesters tuition and use it to buy “inventory” (i.e. more products than they’ll ever be able to resell) instead. These things ruin people’s lives
When I worked retail sales in the 90s there was an Amway cult meeting nearby. Every few weeks, they would drop in after a pep-rally type thing and try to waste your time looking at the most expensive thing and talk about their amazing business. Then they'd drop the pitch (at the time it was about their e-commerce business).<p>Once you ran into them, you could spot them. It was a mix of desperate mid-life crisis guys looking for cash, clean-cut naive younger people, and diligent moms starting a business. Really sad.
I found « The Dream » podcast to be pretty good on the topic.<p><a href="https://www.stitcher.com/podcast/stitcher/the-dream" rel="nofollow">https://www.stitcher.com/podcast/stitcher/the-dream</a>
I wrote and deleted a long response. The short version is that they can be broken into two groups:<p>1. Distributors are paying well over wholesale and their margins are much closer to referral fees that really don't support the full retail effort.<p>2. Distributors are paying closer to wholesale but are buying junk that nobody actually wants. This is more like a ponzi scheme with items that theoretically hold value.
I wonder why MLM's are so rampant in the mountain west. I know "mormons" and "sales experience from missionary work" but the analysis can go deeper. From personal, anecdotal experience, a lot of these MLM people I've seen are moms. Could it be that that area is so sales heavy that stay-at-home moms want to run their own thing so they get into MLM on the side?
This is my favorite article on MLMs, how they basically consume and destroy female friendships for a quick buck. <a href="https://www.washingtonpost.com/outlook/2019/01/21/how-mlms-are-hurting-female-friendships/" rel="nofollow">https://www.washingtonpost.com/outlook/2019/01/21/how-mlms-a...</a>
I'm not sure what the purpose of the article is. It mentions a bunch of companies I've never heard of and has maps apparently of which states people search for their company name on Google, each year from 2008 to 2018. I suppose they are showing growth of interest in each company name. But there's not much commentary in the article. Just maps and a paragraph description of what the company is selling and a brief history.<p>The first on the list claims is an oil and gas company popular in Texas that somehow sells oil and gas using a multi-level marketing scheme?!? Whaaaat? The article doesn't even explain how that works or what they are really selling. Do random independent distributors buy gas tanker trucks and make deliveries to farm houses then try to recruit the farmer to sell to his neighbors? They could have tried to explain what this company is about. But instead it's just these maps and cryptic descriptions.<p>Another one says a MLM company sold leggings that became popular, then lowered in quality, which resulted in lawsuits. But no mention of lawsuits about what.<p>Not sure the article is useful or the title "epidemic" is justified. There probably is a MLM epidemic, but the article doesn't really support that. Just lists some random companies with spartan facts and some maps derived from Google search data.
These MLM "companies" are a scourge on many desperate and under-educated people. They prey on the desperate and it's unbelievably unfortunate that it's still actually legal.
I'm always amazed by how well MLMs inoculate their sellers to criticism. Questioning the merits of the product or the distribution system usually results in conflict. A lot of people selling these things think they've discovered something special and that they're clever to have picked it up and run with it. Once they're at that point there is no stopping ego.
What if all the businesses were MLM?<p>What if MLM schemes were also designed to re-distribute rewards so all the wealth wouldn't concentrate in the the top members' pockets?
Over the past 15 years, I've had the opportunity to work with more than a dozen MLM companies in the UK. This won't be a popular opinion, however I believe great quality products and a self-regulating industry can create businesses that are far from being a Ponzi scheme but are legitimate companies with ethics, great support and opportunity to earn decent money.