Many social media feeds showcase individuals displaying their wealth while claiming that achieving it required minimal effort. Posts often feature luxurious cars, beautiful locations, and large homes, with the suggestion that these were obtained after leaving a traditional job for financial freedom. These so-called “Boss Babes” and “Bros” boast about their easy income and encourage others to join them, promoting slogans like “Work from anywhere. Get paid daily. No experience required.” However, a closer examination frequently reveals a different reality. Many of these self-identified entrepreneurs are involved in multi-level marketing (MLM) or pyramid schemes, which some liken to cults. Some even promote unusual products, such as a ‘magic water’ marketed as a disinfectant.
An online community dedicated to critiquing MLMs has emerged, known as Anti-MLM, which aims to protect people from these businesses that they believe exploit friendships. The group warns that individuals in these schemes either help to build an unsustainable model or face severe financial consequences. A collection of posts has been compiled to highlight the issues surrounding these enticing but risky business opportunities.
On the surface, the concept of being your own boss and working anywhere sounds appealing, but it may not be the complete truth. MLMs, also known as network marketing or direct selling, generally involve promoting products to friends and family and recruiting others to do the same. The U.S. Federal Trade Commission (FTC) has indicated that some MLMs might actually function as illegal pyramid schemes.
MLM companies market their products via direct sales. Joining an MLM means you’ll likely be selling items directly, whether from your house, at customers’ places, or online. Thus, the promotion of “work from anywhere” applies. Beyond the title of Boss Babe, participants are usually called independent “distributors,” “participants,” or “contractors.” The FTC states that there are typically two ways to earn money in an MLM: by selling products to customers who are not involved in the MLM, or by recruiting new members and earning commissions based on their purchases and sales.
The FTC clarifies that if an MLM is not a pyramid scheme, it should compensate you based solely on your sales to retail customers, without needing to recruit others. However, it cautions that most people involved in MLMs do not earn substantial income, and many even lose money. In certain situations, individuals might believe they have joined a legitimate MLM, only to discover it is an illegal pyramid scheme that results in financial loss and debt.
As these issues come to light, discussions about the reality of MLMs continue. What do you think about the experiences shared by members of the Anti-MLM community?
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Source: Bored Panda, by Laura Radavičiūtė