Here’s why based on my experience with the top MLM companies
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I am the perfect prey for a multilevel marketing company. It explains why I’ve been targeted by pretty much all of them.
Give me an overly hyped promise and I’m likely to succumb like butter to bread. It started right out of high school.
Three guys I knew from the football team decided not to go to university, and to become laborers. They became depressed quickly. They felt inadequate compared to their college buddies.
One of them discovered a multilevel marketing company that sold vitamin supplements. The idea spread to the two other guys. Then the idea spread like a virus through my entire high school.
I went to visit my mate who was the second to get in. We went out for drinks. It was supposed to be a friendly catch up. Then… he took out the backpack. In the backpack were samples. He started giving me the sales pitch and trying to recruit me. I felt sick.
After the catch up I tried the supplements. They made me feel sicker. I never purchased any like he hoped I would.
About two years after my initial encounter the photos on Facebook started. I am not joking. The first friend from school that got in was driving a red Ferrari and living in a house Beyoncé would be proud to own. My other two friends hadn’t done as well, but they weren’t far off. I felt like a sucker.
They’d post photos of all the famous people they met. They’d attend back-to-back annual conferences in exotic locations. Famous self-help gurus would give keynote speeches. FOMO didn’t exist back then, but I did feel it.
I wish my multilevel marketing nightmare stopped there. It didn’t.
My personal trainer was the next victim. I was a skinny guy trying to find a woman who would love me. I thought muscles would complement the BMW nicely. When you see a personal trainer they give you diet advice. You can be good at fitness, but if your diet sucks, then not much will happen.
I started by getting his protein powder recommendation. Things escalated quickly. He joined a network marketing company because, at that time, personal trainers weren’t Instagram stars driving Range Rovers. He had a few clients like me and earned very little.
He attempted to flog the products to me. When I googled them I saw another MLM company behind the smoke and mirrors. I was cautious and said no.
A year later he was driving exotic cars, had quit personal training, and owned several gyms. The FOMO was reinforced.
Then my startup went bad. I quit the gym. I quit life. Oh, and I was single.
The weekends were boring. I longed to find love. I’d go to social events thinking I might find love. Desperately hoping I might find love.
A husband and wife I met at a startup meetup invited me to an event in a fancy ballroom. Naturally, I put on my black suit and tie and went. I quickly realized the event wasn’t what I thought it was. Given my prior MLM experiences, I was a tiny bit “awake” to the industry.
Everybody at the event was overdressing. 18-year-olds were dressing and acting like they were James Bond. It was as if youth was uncool. You had to act real old to be believable with the vomit you were told to speak.
It always started with “she was broke, lost her job, couldn’t pay her mortgage. Then she discovered Ram U Our Way.”
I wasn’t sure if the speakers were paid actors or real people. There was a lot of hype. People were given these massive introductions. They had a lighting guy at the back of the room holding his finger down on the strobe button. I was completely strobed out and feeling like I had epilepsy.
Finally, dinnertime arrived. I was starving for meaning. Then the next phase of the event happened: networking.
Random people I’d never met started coming up and introducing themselves. They each had a cheesy grin. They were puppies wanting something. I just didn’t know what they wanted. I was tempted to give them food to take back to their bowls but refrained from being so blunt.
They would always start with their story. Their story was a script. You could tell they had sat with an unqualified, 16-year-old MLM life coach and written it out. Every word of their story was unsolicited. I kept eating my ice cream, hoping they’d take a hint from the fact my face was hidden in the bowl.
The speech continued. It didn’t seem to have an endpoint. They didn’t even know who I was. I could have been the king of MLM with two Ferraris at home in the garage for all they knew. At the end of the speech, there was usually a “what do you do?” question.
This is where they investigated your commitment to the MLM religion. If you hadn’t got started, you were prime meat. If you were part-time, you were an amateur who needed more selling to. If you were full-time, you made them feel good.
After the first puppy, an unintended line formed. It’s as if they had an FBI agent marking the victims and sequencing the conversations to ensure nobody was left alone.
One after another these puppies would come and try to strike up a conversation to make them richer. Thankfully it stopped when the lady running the night told everybody to sit down again.
It was time for more Oscar speeches. You could switch out the names and the story wouldn’t change. Imagine hearing the story of Rocky on repeat for an evening. This is what it was like.
I didn’t end up joining that MLM company either.
This Is What Changed My Mind on MLM
MLM nearly took my life away. I’m not joking.
A few years ago I had stomach pains. I went to my normal doctor and told him. He said it was nothing and I should take some vitamin supplements. He gave me the business card of his wife who sold them. I looked her up on Facebook and discovered both of them were flogging MLM products.
I was really upset. I did nothing about my stomach problem.
Then my ex-girlfriend forced me to see her doctor. After months of her protesting, I went and saw her doctor. He also said it was probably nothing but sent me to have further checks. It turns out I had a tumor the size of a golfball in my guts, that was extremely close to becoming cancerous if it had stayed there any longer. The tumor was removed.
If my original doctor was paying attention and not trying to flog me MLM vitamins, then he too may have insisted on further checks.
Social Media Apps Are Banning MLM
There are now millions of MLM salespeople looking for a real job. This week TikTok came out and banned MLM content on their popular social media app.
You’re still allowed to diss MLM, but you can’t promote MLM. Unfortunately, Instagram still allows it. I get loads of messages on LinkedIn, too, from MLM salespeople. They typically never tell you what they want or what they do.
I got one message from a famous footballer. He asked to have coffee with me. I’m not going to lie. I felt special. When I asked what he wanted to discuss — because I’m not that interesting — I saw a few signs of a possible MLM pitch. I checked his LinkedIn profile. Sure enough, he had recently brought an MLM essential oils company to Australia. I declined the coffee, despite my ego pleading with me to reconsider.
Honest marketing is thriving while the old industrial age marketing that takes advantage of humans is dying.
The Multilevel Marketing Bible
I’ve been around lots of multilevel marketing companies over the years because of my commitment to open-mindedness. I want to be proven wrong. I want to find one MLM company that is honest. I haven’t found one yet, although I’ll keep being the human MLM guinea pig for you (I promise!).
This is everything you need to know about MLM.
The purpose is to recruit, not sell products
This is the biggest problem with MLM. It’s not about selling a product so much. It’s about recruiting members to your team. An MLM company needs lots of fresh victims because the churn rate is high.
My friend who got the Ferrari from MLM doesn’t do it anymore. Neither do the others from my high school. (After writing this story I am going to find out why because I never asked.)
The mantra with MLM is “if you bring in the people, we will do the brainwashing for you.” When you have a group of people who believe in something, you can do a lot — both good and evil.
MLM functions like a cult
I shared a story recently of getting sucked into a religious cult a few years back. You want to know the number one occupation of the people who were part of that church? Multilevel marketing. (Nothing against religious folk.)
This is not the first time I’ve seen this. It turns out if you believe in a higher power you might believe in MLM.
MLM companies actively target churches because they’re complex and highly spreadable social networks. Just like a cult, once you join an MLM company it’s hard to get out. The other members you helped bring in will shame you for doing so.
You’ll get person after person telling you that you’re throwing your life away and if you stay for a little bit longer you’ll experience the magic.
Hold annual seminars in exotic locations
MLM is sold to you as a lifestyle. Part of the lifestyle is hanging by the pool and taking photos of your friend drinking a coconut cocktail. People don’t buy MLM products; they buy the lifestyle the products give them, regardless of whether the products being sold are rubbish.
These annual conferences cost money to attend. If you’re a superstar at MLM you might get a free ticket. But the majority of tickets you have to pay a lot of money for. Everything in MLM earns money for the MLM company.
You can’t not go to the conference, either, otherwise, your MLM buddies will hound you via SMS daily and hunt you down.
Hold lots of events
Live events are the lifeblood of MLM. Think of the model like a pyramid.
You have the annual conference at the top of the pyramid.
You have the country level conference next.
You have the state level events after that.
You have the regional level events weekly.
You have the team member events daily.
Not attending an event shows a lack of commitment. The purpose of having so many events is so you continually have the MLM message reinforced into your skull until your eyes bleed and you can’t *not* see it as being the promised land full of rainbow unicorns.
Fly in winners (because there are none locally)
The bigger events on the pyramid tend to have MLM winners from other parts of the world fly in. The reason is that there are so few people who do well with MLM.
I reckon 1% or less ever actually make six figures from MLM. This means if you make it into the 1% by some miracle, then you’re going to be continuously flying to events all year and speaking about your Ferrari life.
The number of hours is horrific
My friends who have worked in MLM are hard workers. They would typically be pitching and attending events seven days a week. They didn’t have time to start families or get married (unless it was to another MLM person) because they were always finding ways to grow their business.
Many people I’ve met along the way lost their normal jobs because they committed so much time to MLM that they had no time to do work of the paying variety using their skills.
Replace everyday purchases with MLM products
One clever trick with MLM is the products they often sell can be ones you’re already buying like supermarket groceries.
This means the sell is easier. You’re not asking people to spend more money or believe in something special. You’re asking them to buy their food or energy drinks or essential oils from a different provider. This works well for the MLM company.
If a person fails to master the business of MLM then they can always just be a customer for life and still make them money.
Teach others using the potato method
Once you’re an MLM goddess you are asked to become a teacher.
The strategy they teach you is the potato method. You bring a bag of potatoes to a live event with your team. You show the model and how it works.
You talk to one potato. That potato talks to another potato. You follow up with the potato. You pitch the potato again if they don’t believe in your potato philosophy. You leave the potato with some books to read. You invite the potato to the next event. You ask the potato how it feels. You keep discovering the objections from the potato. You bring the potato’s objections in list format to the next potato event with the team. You invite the potato to a potato conference, if all else fails, and let the Ferrari do the selling to the potato.
(The potato is a human by the way.)
The MLM model for society
MLM mimics the model for an ancient society. Those at the very top get 99% of the money. Everybody else is a slave with no chance of reaching the top. This isn’t a philosophy we want to recreate.
Products are hyped
The results you get from taking the MLM products are hyped. There are huge claims that can’t be backed up.
The list of disclaimers is longer than the Bible. Your grandma’s wisdom applies to MLM too: If it sounds too good to be true it probably is.
Secret coffees that are actually sales pitches
The problem with MLM is it’s dishonest. You’re taught to ask people to have coffee with you so you can pitch them. But the victim is never told. The coffee is disguised as something completely random.
(The coffee isn’t paid for by the MLM company either. So you could go broke by buying endless free coffees.)
Trapping people into product presentations is weird.
Mapping out how you can leave your day job on a serviette
A bizarre experience I had much later in the journey was when I went to catch up with a friend. Out of nowhere, he hit me with the MLM spiel. I listened to it so I could keep my desire to be open-minded intact.
He took out a pen and asked the waiter for a serviette. He then mapped out the exact numbers I’d need to achieve to leave my 9–5 job.
It had an average sale price, number of units, risk-adjusted outputs, and timelines. It was a finance dude’s dream. I still have that serviette in my cupboard. It was an unexpected moment, and it’s another bizarre technique taught by MLM.
You get paid in cars
This part may surprise you.
When you hit the big sales numbers in MLM you are paid in cars first. The goal of the MLM company is always to recruit, not to sell products. They know if they give you a luxury car you’re going to take a photo of it and spam it all over social media with the hashtag #BlessedLife
Your followers on social media will then start to ask you about your car. This brings in more cold leads you can use the potato method with. If the MLM company gave you cash then there’d be no social proof.
Unless you’re Dan Bilzerian, the average person isn’t going to take a photo of a pile of cash they made from MLM. Photos of cash aren’t appealing. But a photo of four wheels and a sunroof is enough to get the average punter’s heart greased and purring.
MLM Is a Hybrid Between a Cult and a Pyramid Scheme
The U.S. Federal Trade Commission says the following:
“Steer clear of multilevel marketing plans that pay commissions for recruiting new distributors. They’re actually illegal pyramid schemes.”
It seems TikTok is not the only one catching on to the MLM cult designed back in the pyramid scheme days of the ancient pyramids.
An MLM pyramid scheme dies when, according to Investopedia, “the flood of new investors (MLM victims) dries up and there isn’t enough money to go around. At that point, the schemes unravel.”
The cultish nature of MLM combined with the pyramid scheme construction makes it a very dangerous pursuit.
Even the toughest minds can give way.
There Is One Incredibly Good Thing About MLM
I’ve spent all this time telling you what is wrong with MLM. It’s not all bad though.
Multilevel marketing involves dealing with a huge amount of rejection.
The way MLM companies overcome this challenge is by flooding people with infinite amounts of self-help. There are few MLM people, for example, who haven’t read “Think And Grow Rich” by Napoleon Hill.
MLM gives everyday people access to self-help.
Even if the MLM model fails a person, they still walk away with a tonne of strategies to deal with rejection and gain a lot more resilience.
This is the greatest gift of MLM companies, despite their dishonest sales and marketing tactics. There is always a positive with everything in life.
You hate multilevel marketing because deep down dishonesty feels wrong. The tactics MLM companies use are cringeworthy because they are effective.
Clichés are the best way to sell.
That’s why the hero’s journey, human networking, social proof, and energetic events that raise your endorphins all work.
Use the good parts of what MLM teaches. Throw away the obvious bad parts. Stay an honest human.