Your Stupid Pyramid Scheme Sucks

…and you’re not a business owner, either.

What’s that? Blog posts have to be longer than twelve words? OK, I’ll elaborate.

As long-time readers of the blog know, I am both fascinated with and grossed out by hucksters and charlatans. If I had to pick a single reason for so despising all of the “get rich quick” and “be your own boss” organizations out there, it’s that they target and wring the last pennies from the most vulnerable of people. Anyone who makes their living selling you a fantasy of quick wealth– be they real estate guru or personal finance blogger– is by definition a snake-oil salesman.

Oils, Nail Wallpaper, and Vitamins

Let’s say I made you a bet: You flip a coin 100 times. If it comes up heads every single time, I give you a hundred bucks. If it comes up tails even once, you give me a hundred bucks.

Would you take the bet?

Of course you wouldn’t! You’re not a complete freaking idiot! And yet, this is the exact same bet being made by every member of a multi-level marketing scheme. A staggering 99.7% of participants in MLM-type schemes lose money after subtracting expenses. Here is a list of things that you are more likely to do than profit in an MLM scheme:

So yeah, if you are comfortable with being literally 14 times as likely to be murdered by a flagellate than to profit, by all means stock up on some shakes.

Monetizing The Love and Guilt of Friends and Family

MLM schemes actively encourage their sellers to capitalize on their network of friends and family for sales, or to recruit the next level of their pyramid.

Reframing the discussion, let’s say you owned a boutique shop in a nice area of town. You’ve got a product you believe in, but business has been hard lately. So, naturally, you call up your closest friends and family and ask them to come in and shop right away so that you can keep the store open, right?

No, of course you don’t. Most people recognize that there is a line between business and personal, and that violating personal acquaintances to make money is in poor taste. MLM schemes blur that line, using the power of suggestion to make monetizing your relations seem like somethng perfectly normal. In fact, they reason, you’re not taking advantage of them at all! By bringing them in to your network, you’re actually giving them an opportunity to make money with you!

Gross.

This is Personal

If this post feels a little more raw and personal than usual, it’s because it is. One of the reasons I feel so strongly about this is that I some people in my life– people who I really care about– participate in one pyramid scheme after another. These are friends and family members who can ill-afford to waste a dollar, let alone the hundreds that the average MLM participant loses.

Here’s another question for you– is there any reason you can think of that you need a “consultant” or a “representative” to purchase nail flair, FDA-unapproved oils subtly marketed as miracle cures (these guys couldn’t come up with a better product than actual snake oil?), vitamins, cosmetics, or weight loss shakes? Scam MLM companies will tell you that they lower overhead, and thus prices, by selling through their network– but ask yourself this: is anything you ahve ever purchased through an MLM scheme actually better (or cheaper) than what you could purchase in a store? By and large, the answer is no.

Alternatives

OK, we’ve established that nonsense pyramid schemes are nonsense. What should you do instead? Let it never be said that I’m not solutions-oriented.  Here are some legitimate side hustles that you might consider instead.

  1. Take part in the sharing economy. Uber, Lyft, Door Dash, and all the rest are the new hotness. There are a number of recent startups that allow you to clock in and out as you please, work as little or as much as you like, and make more money than you will ever make as a tiny stone at the bottom of a pyramid.
  2. Start an Amazon FBA business. Short for “Fulfilled by Amazon,” this is a business where you essentially purchase products, create an Amazon listing, ship them to an Amazon warehouse, and sell them transparently on the world’s largest online retailer. Note that this is not a plan completely without risk. It’s possible to lose a lot of money doing Amazon FBA, too, but some people have made serious money. As with real estate, personal finance, and basically everything else, beware charlatans. Most people in the FBA space make their money by selling you courses about FBA. What’s that we said above about selling a fantasy?
  3. Write eBooks. KDP (Kindle Direct Publishing) has made the barrier to entry on Amazon’s Kindle Marketplace astonishingly low. Self-published authors (particularly in the field of romance/erotica novels) can make a huge amount writing relatively short books with zero overhead. My own book makes a 20-30 bucks a month. It’s not much, but I do literally nothing to promote it, and it’s in a niche genre (long distance real estate investment).
  4. Pick up free stuff from CraigsList, then sell it. Sometimes, people just want stuff to disappear. Pick up anything of value on CraigsList, take some decent pictures of it, and sell it at a bargain price. Don’t deliver. Boom, instant money.
  5. Learn to write software. No, really! It’s not as hard as you think. If you can think logically, you can write software. If you can write software, someone will be willing to hire you to do it. Pick something cool and audacious that you’ve always wanted to build, then learn the bare minimum you need to complete your project. In fact, I learned Python and rudimentary Javascript just to write The Earth Awaits. It’s my very first web app. Build something cool, put yourself up on UpWork, work cheap for a bit to get experience, and then jack up your rates. Ka-ching!

In short, “do literally anything else.” MLM companies exist because they are able to convince good-hearted, well-meaning people to rope in other good-hearted, well-meaning people for the benefit of some executive who doesn’t care one bit about you or your family. Business is hard. Successful business is really hard. If you’re going to take a risk, at least build your business around something you can really trust– yourself.

54 thoughts on “Your Stupid Pyramid Scheme Sucks

  1. Ty

    With the name of my blog I’m a bit worried about chiming in, but I’ll do so anyway. 🙂

    I’ve got a list of family and friends that I hate talking to because I know they’re going to start recruiting me to their downline (I hate that I even know that word). My neighbors are involved in one of the more well known MLMs and I’m dreading the day when they’ll inevitably ask to come talk about this “oppotunity.”

    I’ve been pitched to “sell” chocolate for weight loss, health care products, skin care, essential oils, juice from the berries found only on some tropical island, makeup, and home products. Thankfully I’ve not been pitched on the shakes…but give it some time.

    I’ve been promised “ground floor” opportunities that would make me rich. I’ve been told that I don’t even need to sell the product, I just need to get new recruits. The whole model is crap, and those that do make money at it do so at the expense of those below then.

  2. Sara

    For the first time, I am offended by one of your articles. I think the perspective you provide here and the downsides you present are legitimate ones which many people do experience. However, it is one-sided and it does not capture other aspects of these types of businesses. I have been part of a direct sales company for 2 years, and many of your points definitely did not occur for me. Perhaps one of the differences is that neither my livelihood nor my self-worth is tied up in this at all, so I am not desperate to make it succeed at any cost. I give it a good effort because I like the product and it is something fun to do that is very different from my “day job”. But I could also walk away at any time if I found a reason to. So my experience has been VERY different from what your article describes. For one thing, I make an effort not to prey upon or pressure my friends and family. Not a single one of my family members has ever bought from me, and now that I think about it, I don’t know that any of them have even used or tried the product. I think my own mother doesn’t even know that I do this. I understand that people are instantaneously annoyed at the idea of being marketed to “on personal time” (even though we are constantly marketing to eachother… Every time we share a discount code for an online store or mention a new restaurant we tried out, or we brag about our successes at work… That is all free marketing! The only difference is that if you decide to patronize MY business, I will/may make a profit on your purchase, and to be honest I believe that is where most of the irritation lies… I guess I just have a different philosophy, if any of my friends is starting a business or venture of any kind, I will do what I can do support it. Whether that means buying, or maybe just sharing the word or Like’ing a Facebook business page – even if it’s a product I may never use or it’s located in another state etc… I want to see my friends succeed at things that they feel strongly about.) Secondly, some of my sales are done as fundraisers, in which I donate 100% of my commission to the organization or cause of somebody else’s choosing (sometimes doubled through corporate matching). So there is no personal gain in that for me, other than the satisfaction of helping others. Third, despite giving away about half of my total profits, I do still make significant money at this. These things are not always black holes financially. When I first joined after trying out the product, I did so with the intention of just getting a discount on my own purchases. I figured I would buy a few things for the holidays and then drop out. But before I could even make my second purchase, 3 of my friends had decided to join as well, through NO doing on my part (I had no intention of sticking around, so I had NEVER mentioned anything about joining the company or my team). So as luck would have it, it was November, the hottest retail month of the year, and within 3 weeks I had made enough for an impromptu vacation to Hawaii the following month and had advanced into the top 2% of the company. Suffice it to say I was then willing to give it a fair shot instead of quitting right away as planned. And 2 years later I’m still here, still believe in the product, still making money, still willing to detach from it, and hopefully still not annoying my friends. That is because (and lastly), while I do share and market the products, I primarily do so at events where I am one booth among an expo of other vendor booths – in other words, I am exposing myself/products to people who have voluntarily and specifically come there to browse and buy. I’m not invading their space, they are coming to me. And it’s fine with me if they walk on by. That is how I’ve chosen to do this, but I know not everyone does. Within this company we do talk openly about how to conduct ourselves so as not to be the stereotype or “that friend”. I realize that my experience may be one of the anomalies in this industry, and I just felt that I needed to provide this alternate perspective. I agree with you that often these things sounds too good to be true, and do not in fact provide the magical financial fix that is sometimes advertised or implied. And every person should do their due diligence and be realistic and conscientious before choosing to begin any business, venture, investment, etc. and all along the way while doing it. 🙂

    1. The Vagabond Post author

      Hi Sara, I wondered if this might be coming 🙂

      As they say, if you’re not pissing someone off, you’re not writing anything important. 🙂 Thanks for this spirited disagreement, and as always, respectful contrary opinions are welcome here.

      So, a few things. First off, it sounds as though you follow a pretty boundaries-appropriate approach to the sales itself, which is awesome. If all MLM-type-companies were that way, I think there would be a lot less bad blood. The hard part about these things is that generally speaking, we love (or at least like) the people in our lives who are involved in them, and so we fear speaking out about how uncomfortable the barrage of advertising, cajoling, and salesmanship makes us. We love the person, we want them to make money, but we feel like we don’t have a right to say “this isn’t a great way of doing it, it makes me really uncomfortable” for fear of offending them.

      Second off, can I ask what number of people you have recruited under you since that initial week? What percentage of them are profitable? What number of them are still involved in the organization? What percentage of your MLM income comes from the commission they owe to you versus your own sales?

      It may be that you have people above any below you in the organization that handle things just like you do, in which case you are awesome, but I think that also makes you the exception. The comments here reveal jut how intensely people feel about typical MLM sales tactics. It feels a lot like emotional blackmail when your peers in these organizations leverage emotional attachments for financial gain. Surely we can at least agree that these organizations strongly encourage reaching out to your familial and social relations for sales and to recruit them into your sales network?

      1. Sara

        Thank you for providing a place where everyone can share their opinions and discuss things. I do see exactly what you and others here are describing, especially the guilt and pressure (both from the rep on potential customers, or from the home company on the rep), and the encouragement to turn every single personal interaction into a sales pitch. I agree that it can be F-ing annoying and I try not to do it. More times than not, when somebody compliments me on the product while I’m wearing it, and I say “Thank you” WITHOUT whipping a catalog out of my purse, or telling them how great it would look on them too… Perhaps that translates to lost sales, but hopefully preserved respect and relationships. I do think that makes me the minority in this industry, sadly.

        It was interesting for me to look into my stats in order to answer your questions, since I don’t normally track them. I don’t really know what they mean, especially as far as whether I am making money on the shoulders of unsuspecting others, but I would welcome your input and opinion on any aspect of it.

        -I currently have 101 people under me, of which I personally signed 10 (there is an 11th who was assigned to me by the company). Perhaps about a dozen more have come and gone, but I believe all of my personal “recruits” are still here.
        -Last month 44 of the 101 showed sales, ranging from $25 to $1,852 (average/most look to be around $300-500). I know at least 3 who also do a majority of their sales as fundraisers where they donate away their whole commission.
        -Last month I was paid $1,132 in commissions on my personal sales, and another $452 in bonuses on the team sales. Of that, I donated $875. The rest I am hoarding to take my kids to Disneyland this winter LOL 🙂 I also received $535 in free products because on my sales.
        -Last month I spent $8.25 on my website, and another $90 on various things to store my stuff, display at booths, and DIY projects (I like to use the products to make jewelry which I then give as gifts).

        I do try to conduct myself ethically and conscientiously, but like I said I would definitely welcome your input and questions so that I can continue to assess whether it’s a good venture or not.

  3. Secret Retirees 2018

    I had a friend in college try to recruit me to join him with an MLM. Seemed crazy then and can’t believe people still do this. Congratulations again on The Earth Awaits my friend.

    1. The Vagabond Post author

      Thanks!! I feel like a reckoning is coming. There are just *so many* MLM companies in recent years. It would be interesting to graph the incidence of MLM schemes against economic conditions. I’d bet that their numbers increase significantly as recessions/financial crashes occur.

    2. Sara

      I remember one time a friend came over to try to sell me on joining his thing, and I use the term “thing” because to this day I do not know WHAT his company was selling! He was doing the usual sales schpeel “How much money would you like to earn in the next 6 months?” and other dumb “answering my question with another question to which nobody would ever say No” kind of sales tactics, and I kept asking him “Okay, but WHAT is the product?” and he would not answer me!! I really think he was selling the opportunity to sell more people the opportunity to sell. I wish I would remember the name of the company, because I would love to take a closer look now at what it was and whether it still exists.

      Now if somebody has an actual product that might have some value… For example, P90X is hugely popular and millions of people have bought it via direct sales/MLM, and use it with great results. Why not buy that through your friend instead of directly from the company from one of their infomercials? It’s the same price, and I don’t think it’s a sham of a product. Sales gimmicks are still the sales gimmicks, but the products are not all automatically crap just because they are sold through the MLM format.

  4. Allison

    I think the worst part about MLMs is the targeting of friends and family that you mention. I had an old friend call me out of the blue and was thrilled to talk with her. But 5 minutes into the conversation, she brought up the reason for the call – she wanted me to buy makeup. Seriously, she hunted me down across the country after MORE THAN 15 YEARS for that. MLMs make people do some seriously stupid stuff. Needless to say, it’s been another 5 years and we haven’t talked since.

    1. The Vagabond Post author

      Hey Allison, that’s sad. I had to unfriend some people that I used to really look up to for the same kind of thing. They sought me out on Facebook after years and I was totally delighted– next thing I new I was getting a barrage of MLM sale and ‘networking’ ads all day, every day.

  5. Vicki@Make Smarter Decisions

    I have a colleague who is in Las Vegas right now because the person is a “high level” rep and the “company” is footing the bill. The person has recruited other colleagues to the business as well. My fear is that this person may leave a career they worked at for years (with good benefits, retirement) to climb the corporate ladder of this company only to figure out in the end what a mistake it was.

    1. The Vagabond Post author

      Hey, Vicki, thanks. Yikes, I hope your friend doesn’t go all-in and give up their hard-earned stability. Hopefully he or she has some grounding influences around them to keep them from going completely off the deep end… if all else fails, maybe you can drop some knowledge on them 🙂

  6. Gwen@ Fiery Millennials

    Ugh. Yes. So many of my friends are stay at home moms with “businesses”. No. You exploit your friends and family for money. If you need money, ask me. I’ll still probably say no, but at least I can use it as an opportunity to help with their finances rather than buy crap I don’t need that doesn’t work. I’ve had to block people on Facebook who were too pushy.

    1. The Vagabond Post author

      Thanks for mentioning the SAHM part, Gwen. One section of this article that I actually deleted before publishing it was about sexism. These companies disproportionally target stay at home moms, and the products sold are, by and large, products with a much larger female customer base. I deleted it because I worried that I didn’t have the proper perspective to prove my point, but I think it’s still a valid one. These companies, overtly or covertly, seem to think that SAHMs are a more vulnerable target.

      1. Sara

        As a woman and former SAHM, I can speak to the fact that YES a lot of these definitely do target/try to appeal to the SAHM. In general, they tend to be a more vulnerable demographic because they MIGHT: feel socially isolated, feel a down shift in their self-worth bc of this new role which let’s face it can be pretty devalued in our society, have left a career and be missing that sense of personal achievement and status, feel unproductive, feel unattractive etc. All of that in addition to the practical side of perhaps having gone from 2 incomes down to 1, plus the added expenses of having children. I hear a lot of things like “I finally have something that is JUST MINE” and “I finally get to have adult conversations again”. Those are good reasons to seek out new activities, and the MLM might provide some of that, but it’s not a fail-proof miracle worker that some would try to tote it as.

        I also think that companies and products tend to be targeted at females simply because females tend to be the bigger consumers in the retail industry, not necessarily because they are more vulnerable (look at the number of stores in a typical mall geared toward women vs men). That is not necessarily sexist but rather an actual reflection of who tends to make more purchases in our society (which may or may not be occurring for various possibly sexist reasons…)

    1. Physician On FIRE

      Stock trading? Gambling in an effort to earn money in a way that doesn’t rely on the pressured generosity of friends, family, or neighbors.

      Stock investing? Part of the path to wealth.

      Cheers!
      -PoF

    2. The Vagabond Post author

      I think stock trading (individual stock trading, anyway) is unnecessarily risky and your statistical odds of beating the market are near-zero the longer your timeframe. I still strongly advocate index-based investing given the durable and historically excellent returns.

  7. Physician On FIRE

    My wife is conveniently busy 100% of the time she gets an invite to one of these. As a doctor’s wife, she’s frequently targeted.

    The best is when someone sells a bunch of overpriced goods to their reluctant friends and acquaintances, then posts a bunch of pictures of themselves in a tropical paradise, thanking the MLM company that provided the goods they sold. No. You should be thanking the people that bought the expensive products you offered them. There may not be a hard sell at the “party”, but the pressure is there in the air.

    Best,
    -PoF

    1. The Vagabond Post author

      Agreed, PoF. The pressure is absolutely built on the existing relationships. There’s this (usually unintentional) feeling of obligation to support your friends and loved ones, even with a token purchase. Good for your wife for being strategically busy.

    2. Allison

      PoF, your wife is smart to skip the parties. But I have a friend who likes to host them, and she insists that she wants me to come and doesn’t care if I buy anything. So I’ve done this 3 times in the last 3 years – Pampered Chef, Tupperware, and some spice thing (who buys soup mix at a party??) The MLM reps always seem perplexed at the end of the party as everyone fills out their order form and I’m just chatting with another friend…they offer me a pen, ask me if I have questions, etc. I give them a “No, thank you,” and a smile. Meanwhile most of the other guests are spending $100 or more. I think women (here’s another “sexist” aspect of it for you, FV!) like the social aspect of the “parties” and feel pressured to buy something. Then they agree to host a party, not so much for the free product but again for the social aspect. It’s like Bunco night but instead of a $5 buy-in it costs $100. 🙁

      This reminds me I need to host a game night for my friends soon. It won’t cost them anything. 😀

  8. Tucker

    I cannot like this enough because I am constantly complaining about MLM schemes. I have a family member who is notorious for getting involved in this crap and it’s infuriating to have family dinners where we have to dodge the fact that, “No, we aren’t interested. Please stop talking.”

    When I was looking for a new contract a couple of years ago a neighbour was all “we are always looking for people to sell books!” Nononono. That isn’t a JOB, that’s a scam…and don’t get me started on the amount of neighbours I’ve had to ban from the community Facebook group for constantly haranguing the members to buy their overpriced garbage.

    The new thing is that people are having the equivalent of online tupperware parties so geography is no limit! When you refuse the invite they are keen to point out that you can just buy online. Well it’s not the geography, it’s the fact I am not wasting my time and I’m irritated that you are using our relationship to guilt me into supporting something I am not interested in.

    I am pretty sure these things are my #1 pet peeve. The only good that comes out of them is that it’s pretty easy to know who your real friends are when they can’t be bothered to invite you over for drinks but are super keen to have you over so you can buy some MLM garbage.

    1. The Vagabond Post author

      Hey, Tucker, thanks a lot for the comment. You summarized it pretty well- there’s this inherent conflict between the love you have for someone and your unwillingness to be a participant in something you believe to be a scam. In the end, you either have to risk the offense or fall in line, and most people are too nice and fall in line, reasoning, “I’ll just buy one thing since she’s my friend/since she went through all this trouble/since I ate at the party/whatever.”

      Technology is making it even worse, as you mentioned. You can “reach out and touch someone” instantly, anywhere. This can be great, or in the case of MLM schemes– it can be awful and exploitative.

  9. ChooseBetterLife

    I think this hits a nerve with a lot of people because we’re used to tuning out advertising but don’t know how to respond when it comes from friends and family.
    As long as people aren’t too pushy, I just roll my eyes and otherwise ignore it.
    People are entitled to make their own decisions and if they ask for my opinion I’ll give it, but with this and most other things in life my opinion usually remains unsolicited and unspoken .

  10. Pingback: Financial Traps | Ten Bucks a Week

  11. Emilie Burke

    As someone not involved in MLM, I want to respectfully disagree with you. Essential oils have changed my life. My daily morning drink of (TFV: Product name removed) helps me wake up with a high dose of vitamins and just the right amount of caffeine for my *very* sensitive stomach (I’ve had 5 surgeries). Because of friends who sell Usborne books, I get to help my friends fund their own Christmas’s while buying Christmas presents for my nephews. There are people who are overspending in MLMs, but I think a great number of people at respectable MLM companies are just buying discounted goods they would use anyway and making some pocket change.

    1. The Vagabond Post author

      Hi Emilie, thank you for your respectful tone, and I hope you’ll take my response in the same spirit. The fact is that if we’re serious about personal finance, we have to be devoted to– even obsessed with– the data, even if we don’t like what it tells us. The data shows that 99%+ of people involved in MLMs are *losing* money. Moreover, on their path to losing money, they’re alienating friends, capitalizing on personal relationships, and pushing people to spend money they otherwise wouldn’t out of pity/a misplaced desire to “support” a friend. Obviously the audience of this article is a bit self-selecting, but you’ll see that the vast majority are as uncomfortable with it as I am– not just because it goes against sound personal finance principles, but because it’s such a toxic stew of friendship and business.

    2. Joan

      I also love essential oils, morning smoothies, and children’s books. However, I have noticed that the things sold through the MLM companies, by ‘consultants’ are lower quality and much MUCH higher priced than the products I can get directly from an online retailer.

      If a friend needs money to get them through the Christmas season, I will be the first to contribute cash (not a loan). But this consumer-pressure is for the birds.

  12. Joan

    As a woman, I have countless friends/acquaintances/neighbors who are busy “building their businesses”. Interestingly, they are ALL women. Men don’t have to deal with this crap – my husband has never in his life been invited to a purchasing party, whether in person or virtually. I bet he’s never even attended one, and I’ve certainly never seen a man at any of the parties I’ve attended in the past. Another aspect of this that I haven’t really seen mentioned here is that while the company is targeting vulnerable women to “be their own boss” and their “income has no limits” and they can “work from home”, the products by and large are targeting an aspect of our culture that is insidious. The aspect of women having to be perfect. So most of these companies are things that are geared toward – you aren’t good enough on your own, you need to buy this. I.e. weight loss vitamins or shakes, makeup and skincare, clothing, jewelry, nail art, etc. These are all to make us prettier and more attractive to men. BARF.

    Now I’ve got a standard response – No thank you, I don’t attend purchasing parties. If they push a bit, like saying “it’ll be on Facebook over the course of the week, etc” I will launch into my tirade of these companies exploiting females (all of whom are stay-at-home moms, or low-paid/under-valued waitresses and teachers) to high-pressure sell to their friends and family, shilling junk no one needs for outrageous prices by telling them they aren’t pretty enough. Don’t brag to me that you are making 50% on this item that you want me to paradoxically buy and also sell. YOU ARE NOT AN ENTREPRENEUR. /endrant

    1. The Vagabond Post author

      Right on, Joan, I totally feel the same way. I think MLMs are starting to push into the male demographic a *bit* more (weight loss/fitness are the ones I’ve seen a bit of), but the vast majority definitely seem to be pitched at a female audience (in a way that makes me pretty uncomfortable). Good advice on how to avoid and deflect these things as tactfully as possible.

  13. Little Green

    To tie into a couple of the comments above – specifically about the parties and the internet! In grad school, I remember there was a personal care product/health shakes MLM going around my friends group, and I was invited to a party for these products about 4-5 times! All from the same consultant – she talked one woman after another into having a party. After the second one, I stopped going. I simply couldn’t afford $25 lotions and expensive supplements, and I felt obligated to buy something if the hostess was providing me with refreshments.

    I had a long drought of not being invited to any in-person MLM parties, until recently, and now there are a few friends doing the crazy leggings and the kids books and what have you. The books, I will grant you, seem to be an okay-ish endeavor, and the two women I know that sell them use their earnings to buy books for their classrooms (they’re teachers). Anyways, I’ve been too “busy” to attend these recently. In the last few years the trend has been to do an “online party” where it’s just a Facebook group with the consultant writing posts about the products, or it’s a “challenge group” where the consultant invites you to a fitness challenge or recipe challenge or what have you and then tries to get you to sell shakes. These offend me the most, I think, because I’m not even getting any cheese and crackers out of the deal! Ha. Anyways, MLMs annoy me to the extreme.

    1. The Vagabond Post author

      Thanks, Little Green! 🙂

      I’ll admit that when my wife and I see these invites, we too feel a lot of pressure, because they tend to be the people in our lives who are most impacted (negatively) by wasting money on this garbage. They’re people who are looking for a way out of tough financial situations, and so when a MLM rep turns up and whispers sweet nothings about how much money they’ll make in their ear, they tend to fall for it hook, line and sinker. It bothers me on a personal level, and on a basic integrity level.

  14. Mrs. BITA

    Barely a month after I first moved to this country I was meandering around Ikea in an attempt to furnish my barren apartment. A friendly seeming woman struck up a conversation with me. We kidded around about the furniture, then we started to open up a little bit about ourselves. I mentioned that I was a newbie to the country, she related, claiming to have experienced that herself not so many years ago. We walked around Ikea together for a bit, forging what I thought was the tenuous bond of what might turn into a friendship.

    Nope. She worked for Amway. F-ing Amway. And she was trying to recruit me. WT-everloving-F.
    I was so pissed and slunk right back into my introverted shell, far away from Amway-recruiting-fake-friends.

    1. The Vagabond Post author

      Wow, that would be super irritating. Sorry that you encountered that kind of thing. I’d love to say that it’s uncommon, but I think that within this crowd, there’s so much desperation to widen the pyramid beneath them that some people can get pretty shameless.

      1. Ten Factorial Rocks (TFR)

        It’s not uncommon at all. I have been approached by several people (starting more than 15 years ago, while I was in a queue waiting to tour NYC’s Empire State Building!). In all these years, one of them happened to be my close friend from college, but he had the courtesy to do only a soft-sell and leave it at that after I warned him away from it. Another one was a neighbor, and we stopped talking to each other. After 15 years in this business, my friend lost money every year, probably from buying motivational tapes and driving to events where similar people meet. Your article is spot on for me, and I am glad this came out in the open. What a scam! Now the developing countries are going through this mania as these MLM companies smell blood there after US has wizened up.

  15. Kurt

    I’m fascinated by the consistent behavioral thread that seems to run through the groupies of MLM schemes of all types. It’s as if they’ve all been abducted and programmed by an alien cult from planet MLM! 🙂

    1. The Vagabond Post author

      I myself wonder how many “true believers” there really are out there, versus indebted/financially struggling people who are just trying to keep a brave face on and using what they perceive to be good salesmanship (positive attitude, warm demeanor, enthusiasm– real or forced– about the product, etc.)

  16. Primal Prosperity

    In my workshops, what I tell people is that Network Marketing is fine to try out, but don’t expect to make money on it. I give them similar statistics of the drop out rate. I also tell them not to approach friends and family, but rather treat it like any other business. I do think that it can give someone some good selling skills, and help them learn to develop a business plan, but that’s about it. I don’t encourage it, but I also wouldn’t say don’t even bother. Also, there are just waaaaay too many network marketing companies, so it is really hard to compete.

    I have to say though, I don’t get the impression that the MLM-ers are promoting get rich quick, but rather promoting passive income. And, like you said, that can be done in many other ways.

  17. Mrs. 1500

    Honestly I think this is a secret guest post from Mr. 1500.

    I hate hate hate these MLMs. Like PoF’s wife, I am conveniently ‘unavailable’ during the time that the party is. Luckily for me, my real life friends are normal and don’t try to push this crap on me.

    My mother, on the other hand, uses, recommends and pushes Essential Oils, which are literally oil with artificial scent added to them. The company she sells refuses to submit for testing, and when the company doing the testing went out and bought them from a distributor, the company responded that the distributor must have added the artificial stuff in the bottle, because their stuff is 100% natural.

    However, when the testing company offered to retest on supplies direct from the manufacturer, they declined again.

    If you have nothing to hide…

  18. Jacq

    In my younger days I attended these parties, and co-hosted one of the food ones. I did enjoy the products and items made good gifts. I was into rubber stamping for a while and I still use the stamps I got. But I really only pull them out a few times a year. When I saw my frequency for the hobby decline I said no more purchases and have stuck to it. Rubber stamp don’t go bad, and the quality ink pads still are fine many years later.
    I wasn’t ever tempted to be a seller. In recent years I’ve perused coworkers catalogs but u don’t need fancy bags or jewelry or what notz.
    I did have a friend who was very big into an amway sub company (which if you can trace stock symbols you figured out but was amway). She swore by the make up and vitamins and even had her make up for her wedding done by her consultant friend. The cult aspects with that one were strong.
    Good luck out there!

  19. Alex

    While MLM’s have similar characteristics, they are not all the same. Some people take bits and pieces of what they hear frome their brother’s uncle’s cousin’s girlfriend’s mom, and label all MLM’s as “pyramid schemes.” So you know, “pyramid schemes” are illegal, there are laws that try to prevent these types of business’s to exist. I work for an MLM on a part time basis, and there is inventory we have to purchase. We provide services to people, that help them get their finances together so that they can be better off in in their retirement. We also help them get out of debt and make money. Who doesn’t like saving money and having more money right? People who bad talk about my company in particular do not now anything about the business, are closed minded, scared of change, lazy, or just ok with being ok. I do not force our services to friends, but I do remind theme from time to time of what I do. We were all entitled to our opinions, and I disagree with this article. Have a good day everyone. ☺

  20. EO

    I have to admit that I have bought products out of peer pressure in the past, but now only buy the things I legitimately need/want. Saying “No thanks” is really hard, especially to family or friends that you know could use the “income”.

    I think you left out an important section of this post in not talking about the gender issue in MLM corporations. Most SAHMs that I know have tried at least one MLM, if not several.
    Earning a little bit on the side while being a SAHM is the siren song of many women I know.

    Also annoying are certain finance bloggers that push their products on you with every blog post. I hate having to keep clicking “no, don’t add me to your email list” and skipping over the popups that advertise their 6 part series that will teach you how they quit the rat race in 18 months! (Present company excluded, of course) 🙂

  21. PatientWealth

    1,000 % agree. Is that possible? If it is then I agree that much. Pyramid Scheme MLM schemes suck on so many levels. Like 3 people make all the money. And the products are over-priced.

    “But they are great products!” Hey – I can get great products shopping online or at Home Depot or wherever. Most products I buy are great products. I don’t need to overpay to pay for 10 people’s commissions.

    All these MLM schemes have a slimey, strange, overly excited feel to them. I’m so sick of them. If my own mother asked me to do one I would gently and lovingly decline. We will not host your party, buy just one, or help you just by listening to your pitch.

    And lastly – I have found an incredible product made with the wax from bee hives, the root of a rare flower from Mount Everest, and Ginsing which will change your life for only $1,000 a month. And if you like the product, you may also be interested in a part-time way to increase your income…. oh wait… I’m slipping into it… NOOOOOOO!!!

  22. rob

    the questions I ask myself, but if I promote a business where 99% or 99.8% loses money as they should call me leader or con man? how do you work in an immoral system such as not knowing deceive the people and you will sell smears of expensive products that are useless and inefficient? You do not think people should stop with a law that promotes these scams people of nml?

  23. rob

    I think we should make a law that provides for the firm prison for network marketing advisors who are making money on the 99% of people who lose them, because they know that they are part of a pyramid, and they will gain only a very few people, I would call them crooks and they should be punished, what do you think, especially the leaders to those at least 30 years in prison should be

  24. Liz@ChiefMomOfficer

    YES to everything in this article. I have only one friend that I think does these kinds of products the right way-she treats it like a real business, goes to fairs and shows, and doesn’t bug friends and family to purchase. I have had to de-friend people for pushing wraps and nail designs before. No, I’m not interested. I don’t want to go to your party. I don’t want to wrap myself in plastic wrap in hopes of sweating off a few pounds. And I can’t use those nail designs at work thank-you-very-much. Plus when they’re posting on Facebook 5+ times a day and inviting you to all their events, it’s just too much.

  25. The Trustee

    Great post! I have a fascinated contempt for hucksters of whatever fly-by-night nonsense company they’re shacked up with at the moment. I recall a Facebook friend, whom I knew when I was young but hadn’t talked to in years. He wished me happy birthday over FB, which I thought was nice, and thanked him. THEN, he asked me to join his money-for-nothing-and-lose-weight-too-because-why-not scheme and I got a free lesson in how these schemes turn decent people into shameless, soulless scumbags who would sell their own grandmothers if they could clear a dime.

    Your post reminded me of other stories as well. Glad I have avoided this sleazy underbelly of society.

  26. Pingback: The Millennial's Guide to the Best Personal Finance Articles - Saving with Spunk

  27. Mlmsaredumb

    The people in MLMs lie constantly about how much money they earn. They say “I’m doing great!” and “pretty soon, I’ll be able to quit my regular job”. It’s all lies!!!! Most people earn very little or nothing at all. Even more are in debt. They have a garage full of inventory they can’t get rid of.

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