Saskatchewan·Opinion

Not your 'boss babe': Why I avoid multi-level marketing schemes at all costs

I am sure many people recognize this scenario. An old friend from high school or an acquaintance from work messages you up and tries to sell you shampoo that may or may not make your hair fall out.

The promises all sound way too good to be true and definitely are

Multi-level marketing (MLM) is used to sell everything from cosmetics to clothing to fitness classes. (Prostock-studio - stock.adobe.co)

This Opinion piece is by Paige Reimer, a journalism student in Regina.

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My phone buzzes and my screen lights up while I'm washing dishes. I look down and see a message.

"Jen? I don't think I have talked to her in like two years," I think as I dry my hands "I wonder what she wants."
Another message appears. 

"Hey friend!! How is school going?! This is your last semester, right?? That is exciting…"

Oh, that's nice of her! I don't remember us being that close… but maybe she wants to get to know me more now that we both live in Regina? 

My phone buzzes again. Wow, she must really want to be friends with me if she has already sent me another message.  

"Just thought I would reach out to see if you would like to join my team of boss babes…" 

Oh.

I am sure many people recognize this scenario. An old friend from high school or an acquaintance from work messages you up and tries to sell you shampoo that may or may not make your hair fall out, a skin-care product you might have to take out a small loan to afford but is "totally worth it," or an online workout program you could do on your own but could also spend $49.99 a month to do in front of strangers.

They all have the same agenda. They want to make as much money as they can from you. 

What are MLMs?

If you have no idea what I am talking about then you are one of the lucky ones. These business ventures are called Multi-Level Marketing, or MLMs for short. 

MLMs are a marketing strategy that very closely resembles its much more illegal cousin, pyramid schemes. Both rely on person-to-person sales, meaning participants sell directly to their friends or family. 

These salespeople in turn recruit and sponsor other representatives and the organization continues to grow. Unlike pyramid schemes, multi-level marketing strategies are supposed to pay their employees based on their sales, rather than employees having to recruit new distributors to make a profit.

Yet this is rarely the case. A 2011 report that analyzed 350 MLM found all of them were recruitment driven and all were top-weighted, meaning those at the top made the most money. 

So if these organizations are basically two pyramid schemes standing on top of each other wearing a trench coat with a nametag that says "Multi-Level Marketing," why are people still giving them their money? 

The answer is simple. When someone says that you can make money from home and earn exclusive products, trips or a brand-new car, and all you have to do is tell your friends about this product on social media, it can be hard to pass up. This is especially true during a global pandemic when jobs are no longer as secure as they once were. 

The problem is that not enough research has been done into many of these organizations. The veil of secrecy and general ignorance surrounding MLMs makes it difficult to find any concrete answers about their legitimacy. Everyone seems to just take what the businesses tell them at face value. 

Too good to be true

My old college roommate got sucked into these pyramid … *ahem* … I mean MLM ventures. We had both ended up moving to Regina after university. 

She, like many others who are only looking for more friends to make money from, contacted me about wanting to catch up. I naively said yes and was genuinely excited to see her again. We had some good times as poor college students living off ramen noodles and Starbucks coffee. 

Once she found out that I wasn't interested in a new product that is supposed to make my hair grow longer, help me lose weight, clear up my acne, pay off my student loans and give me 20/20 vision, she stopped texting me. I have not heard from her since. 

I can admit, these offers are tempting. The initial rewards and ease of working for these platforms seem perfect. That is why I originally began researching these schemes that everyone assures me are totally not schemes. I wanted all the information before giving my friends money for their overpriced products or even considering, dare I say, joining an MLM myself. 

Once you have signed up there are promises that all sound way too good to be true and definitely are. When you first start, you're expected to purchase most of the products offered by the business and recruit more people before you can even make money. 

The Federal Trade Commission reports that less than one per cent of participants of these MLMs ever make a profit. Even when you buy in you are not supporting your friend directly. You are giving money to a giant corporation that is underpaying its employees. 

This does not sound like an ideal business venture to me. 

Sorry Jen. I think you may have asked the wrong person to join your team of "boss babes."


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ABOUT THE AUTHOR

Paige Reimer grew up on a small ranch in Southern Alberta. She moved to Regina to study journalism three years ago to further her passion for writing and pursue her lifelong dream of becoming a journalist.

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