Why I Won't Sign Up for an MLM
by Maurie Backman | Published on Aug. 5, 2021
Multilevel marketing businesses are all the rage. But I'm not at all interested.
As a parent, I understand that raising children is expensive. I also understand that sometimes, the cost of childcare can virtually wipe out any salary you'd bring home from a full-time job.
It's for this reason that a lot of the parents I know have opted to take a very extended career break and focus on raising their children instead. For some, it's actually not worth it financially to work full-time.
But these parents still want to contribute to their families, and a number of them do so via multilevel marketing (MLM) sales. If you're not familiar with the concept, MLMs enlist individual sales consultants to market and sell their products directly to consumers like me and you. Only it doesn't end there. Those salespeople are then encouraged to recruit other salespeople to build their own mini organizations of sorts. Those who recruit junior salespeople then get a cut of those people's profits, too.
Now to be fair, I know people who have done pretty well for themselves with MLMs. But here's why I refuse to sign up for one.
1. The products tend to be overpriced
A few years back, one friend started with an MLM that sold beauty and skincare products. In an effort to be supportive, I agreed to attend one of her sales parties. After a 45-minute product demo, those of us who attended were treated to an array of snacks and beverages. It was clear that my friend put a lot of work into the event, so I felt obligated to buy at least one or two things.
What I was not expecting, however, was for a tiny bottle of face cream to cost $72. As someone who barely owns lipstick (and buys it for $5 or less at the drugstore), that was just way outside my financial comfort zone.
And that's just one example. Through the years, friends have tried to convince me to buy $40 candles, $20 bottles of vitamin water, and $200 sweatshirts. As much as I want to be a supportive friend, I can't bring myself to spend that much on items I know I can purchase for much less. And if I can't justify the price points on these items, I can't very well sign up to sell them myself.
2. I don't have the personality to be a salesperson
Some people have no problem asking other people to buy things. I, however, can barely get it together to ask friends to purchase a $5 box of Girl Scout Cookies from my daughters. I'm just not comfortable with the idea of pushing products I know aren't essential, and I definitely don't have a pushy enough personality to do well in sales.
3. I hate the idea of making money off of my friends
Some people I know who do these MLMs mostly market to their friends and acquaintances. That's not something I feel good about doing. The idea of making money by having my friends spend money is unsettling, especially when I know that some of them can't really afford to be plunking down $23 for a bottle of nail polish when they have credit cards they can't pay off.
I can totally see how MLMs might serve as a good side hustle for parents who need a flexible gig and only have a few hours a week to put in. And to be clear, I have friends who do, in fact, make decent money from them. But MLMs just aren't for me, and the way I see it, if I'm not even willing to buy the products, then I'm certainly not the right person to sell them.
Alert: highest cash back card we've seen now has 0% intro APR until 2024
If you're using the wrong credit or debit card, it could be costing you serious money. Our expert loves this top pick, which features a 0% intro APR until 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee.
In fact, this card is so good that our expert even uses it personally. Click here to read our full review for free and apply in just 2 minutes.
About the Author
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.