Multi-level marketing is sold as a path to improve your life with untold riches – but the reality is it is a road to ruin for many.
Passionate marketers attract sales people with talk of an opportunity to improve their lives, but is MLM or network marketing really a scheme that only makes the marketers rich or a chance to succeed?
The industry is built around selling books, DVDs, and products to friends and acquaintances.
Sellers earn every time someone buys a product or pays to become part of their selling team.
Critics say the source of customers and team members will inevitably dry up, leaving the MLM marketer high and dry with no income and probably owing money to their suppliers.
It’s a lie for most
The Direct Selling Association (DSA), the MLM trade body, reckons 500,000 people are signed up to sell.
Many are mums consigned to working from home and fitting their MLM business around a busy schedule looking after children. Web site Mumsnet says the topic attracts thousands of posts in their forums – with more than 20,000 added in the past two years.
Some are successful – Joanna Bacon is a top seller and says she has earned more than £100,000 a year for the past three years after building a team of 1,800 people.
Others argue MLM offers a dream that won’t come true.
”They say they are offering a dream and the chance to make a lot of money while staying at home with their children, but for most it’s a lie,” says Jenny Mac, of Timeless Vie, a group campaigning against MLM marketing.
Other MLM experts warn the business is not about selling product, but that most money comes from recruiting new sales people.
Web site multiplestreams.org list the most popular MLM schemes – but also points out the average income for a seller is $1,833 a year and that the industry is flawed.
“Ask yourself this uncomfortable question,” says the web site. “Am I pretending to like these overpriced products to disguise the truth, which is that I’m selling an opportunity to make money, whereby statistics say that almost no one is?
“Too honest? There’s way better ways to quit your day job and live the good life.”