An Introduction to Multi-Level Marketing
You’ve probably had someone approach you on social media asking you to join their party where you can earn great rewards on products or maybe your mom back in the day went to people’s houses for a “party” that consisted of looking at a catalog of products. Well, these businesses were most likely Multi-Level Marketing (MLM). We’ve all come across one at least once in our lives and maybe even bought products to support a friend. But what is an MLM? It’s a business model that promotes the individual selling the products from home and recruitment of new sellers. So, say my friend sells for a company, she might want to recruit me to sell under her. Once I start selling, I try to recruit others to sell with us and buy our products. Now, I am not in the business field, so my understanding is from someone who has seen the effects of these businesses not as someone who studies them.
I’ve noticed a few problematic things with MLM’s recently as a couple of my friends have started to participate in them. The first thing is their drive for sales. The seller of the product offers discounts and credits. The credits are won through buying products or participating in online tasks. Such as, add a friend to the group and get $20 off your order or if we sell ten of these, I will give away a $50 shopping spree. This leads people to buy items that they didn’t need just to get into these draws to try and win money back. The community also provides pressure to buy this and try that. The business model leads people to overconsumption of products. People buy more than what they need. People also get hooked on the community and the prizes that they can quickly see their money disappear into these products that may never get used.
Additionally, some of these brands use marketing techniques that can be harmful. Some use messages that promote health but have no scientific studies to back them up. If the word “detox” or “cleanse” is on the label of a supplement, it is probably worth checking the research before spending your money on it. They also market their products with goals like aesthetics in mind instead of health. Things like “look slimmer” will be used instead of “focus on health and wellness”. They might also market being a seller of their products as being a financial gold mine, which often isn’t the case. For those at the top, the business model might be profitable, but for those who are at the bottom, you might find yourself spending more money stocking up on products than making money selling them.
Now, I don’t think these companies are all bad. In fact, some of them have products that I actually like. It’s also worth mentioning that some of them are more problematic than others. I can see the benefit in having a community of sellers and buyers that enjoy similar things. However, I think it is a business model that can prey on people who have low self-esteem and can get hooked on things like goop that claims to make you skinny or easily get pressured into buying item after item. If you think it might be hard to resist getting hooked into buying and selling products, then it might be best for you to stay away from MLM’s and their parties. But if you enjoy buying an item now and then because it’s something you need, go for it. Moral of the story, do your research on brands before diving in.