Multilevel Marketing: The day job that doesn’t pay

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Posted 19 December 2017

From TruthinAdvertising.org

When then FTC Chairwoman Edith Ramirez took the stage at the Direct Selling Association’s Business & Policy Conference in Washington, D.C. in October 2016, she did not mince words when it came to the widespread use of inappropriate earnings claims as a means of recruitment in the MLM industry. More than a year later, it appears few if any of the DSA members in attendance that day took the warning to heart.

A TINA.org investigation found more than 97 percent of DSA member companies are (or have been) engaged in marketing schemes that peddle false and unsubstantiated earnings claims to try to convince prospective distributors to join their MLM network.

​​​​​​​TINA.org has amassed more than 3,000 examples of companies and/or their distributors making inappropriate earnings claims on their websites and social media platforms. These claims range from assurances of achieving financial freedom, to making unlimited income, to being able to quit your job and stay home with your children. Use of such claims is widespread despite the fact that the vast majority of distributors will never achieve financial independence with their MLM business.​​​​​​​

Continue reading at TruthinAdvertising.org

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3 Responses to Multilevel Marketing: The day job that doesn’t pay

  1. Karen 23 February, 2021 at 4:12 pm #

    Go do your research. 20 persent of all millionares are created from MLM companies.

    • Harris 23 February, 2021 at 5:05 pm #

      @Karen
      Where is your research that confirms that 20% of all millionaires are created from MLL companies?

      In fact, there is research that shows that this is not true.

      As this research of 11 MLMs by MLM expert Robert FitzPatrick discovered:
      * 99% of all distributors earned on average less than US$13 a week in commission – which didn’t even cover the minimum purchases they were required to make in order to qualify for commissions.
      * In half of the MLMs, 70% or more of participants earned no income at all (the study found that 96% of Arbonne’s sales representatives apparently never earn any commissions).
      * People are recruited into the companies with the offer of an ‘income opportunity’, and yet statistics show that the income opportunity is virtually non-existent and falsely promoted.
      * Indeed, the 11 MLMs studied had unrealistic retail sales opportunities – the products were overpriced, meaning reps couldn’t make much money selling them.
      * Recruitment into these companies created billions of dollars of losses to consumers each year. The losses of these 99% of distributors were passed up the sales chain to the less than 1% of the people at the top as commissions.
      * Virtually no MLM companies sell significant amounts of their products to the public, which means they aren’t a ‘direct selling’ business, as they promote themselves.

      Forbes magazine also suggests the same.

      This claim that “20% of all millionaires are created from MLM companies” is used by those already in the game in trying to recruit more individuals – from which they alone directly benefit from.

    • Harris 22 March, 2021 at 8:55 am #

      “The average MLM rep earns around $400 per year in sales, not counting expenses. One study reveals that 80% of representatives earned no income at all (Best Company)(https://bestcompany.com/mlm/blog/mlm-income-disclosure-statements).

      Another shows that the average seller actually spends more than they generate (MLM Statistics)(https://mlmstatistics.org/average-income/).”

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