You may know it as network marketing or your friend’s elusive home-based business, but multilevel marketing is equal parts controversial and compelling. MLMs (think Herbalife, Rodan + Fields, and Cutco) run the gamut, peddling everything from essential oils to legal services. Along the way, they promise their independent retailers free vacations, lifelong friendships and maybe even a Cadillac. In recent years, documentaries, podcasts and former distributors have shed light on the industry’s notoriously scam-like nature. But even with the bleak statistics spelled out, curious recruits are still taking the bait. So how do you know if that “once-in-a-lifetime business opportunity” is actually an MLM? Here are 5 very obvious signs you’re being targeted by a multilevel marketing scheme.
The Out-of-the-Blue Business Pitch
It usually starts with a sales pitch masquerading as a friendly gesture. A social media follower or a former coworker you haven’t spoken to in years pops up in your Facebook messages: “Let’s get coffee! It’s been too long!” They’re coming out of the woodwork to grow their downline (the distributors below them) and, thus, earn a commission. They might frame it as a business opportunity for you, but they’re ultimately the ones who benefit. It’s not usually a stranger proposing an opportunity, but “your cousin, your mom, your aunt, your former sorority sister or a micro-influencer who you admire,” says Amanda Montell, author of Cultish: The Language of Fanaticism. “And that person probably doesn’t realize that they themselves are being scammed.”
The Promise of Easy Profit
In their recruiting efforts, MLMs often market themselves (pun intended) as easy ways to bring in additional income: Work from your phone! Get paid to post on Facebook! But don’t be tricked into thinking the money will come easily, quickly or even at all. Every current and former rep we tapped for our recent MLMs exposé attests to working nonstop to see a payout. “I was putting in 16-hour days,” notes former It Works seller and anti-MLM advocate Jessica Hickson. She’s not alone. Jill Drehmer, a passionate LuLaRoe seller, says she got her start in the biz by hustling: “I worked at night when my kids were sleeping and packaged items for the post office at naptime,” she explains.
The Too-Good-To-Be-True Potential
Sorry, but if this prospective business opportunity sounds unbelievably lucrative, it’s highly unrealistic (and likely deceptive). The business model is probably placing more emphasis on growing your downline than peddling products, which is one of the hallmarks of an MLM structure. “‘High returns and fast cash’ may suggest that commissions are based on recruitment rather than actual product sales,” warns the U.S. Securities and Exchange Commission. The harsh reality that cannot be stressed enough, per the Federal Trade Commission, is that “most people who join legitimate MLMs make little or no money.”
The Outlandish (and Problematic) Product Claims
MLMs are no strangers to claiming their products can yield health or wellness miracles. Spoiler alert: They can’t. At the height of the pandemic, several MLMs received warning letters from the FTC because they falsely claimed their wares (think essential oils and protein shakes) were the secret to treating or preventing COVID. And this phenomenon is nothing new. In 2008, Arbonne settled a $23.3-million lawsuit after proclaiming a dietary supplement could cure and prevent colds. The takeaway? If the benefits sound outrageous, you should assume the claims are unfounded.
The Endless Love Bombing
If you’re being showered in love with the fervor of a college sorority member, there’s reason to have your guard up. This manipulative tactic is called love bombing, and it’s often used in MLM recruitment to make newbies feel extra special. It’s a topic that leading cult expert Steven Hassan, PhD, describes as the “courtship phase.” And it’s something Hickson vividly recalls from her MLM past; she says she was showered with attention and affection, which is undeniably tempting. After all, “we crave community and belonging, and that’s what these groups are fundamentally offering,” concludes Montell. The bottom line: It’s a strategy that’s unlikely genuine.
