…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:
- Pick the exact number a roulette wheel will land on (2.63% chance)
- Give birth to twins (1.5% chance)
- Being disabled, disfigured, or killed by a parasite (13.8% chance – wait, WHAT?)
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!
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 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.
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.
- 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.
- 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?
- 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).
- 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.
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.