I was a few episodes into a new Netflix series last night when the subject of MLM businesses came up, and not in a positive light. I was not surprised, as MLMs (short for multi-level marketing companies) are often a topic of ridicule and scorn. But every time I hear the negativity, I am puzzled anew. I have personal reasons for that, as you'll see when you read on.
I have had a successful side hustle/job since 2010 which is considered a hybrid of direct sales and MLM. The fact that my job is any derivative of multi-level marketing almost prevented me from becoming associated with it in the first place. At the time I was extremely leery of companies using that business model. Very very leery.
That negativity was fueled by some past personal experiences, and magnified by the vitriol toward MLMs in the public discourse. The reason I eventually joined my company (Thrive Life) is a story for another day (spoiler alert: there was no pressure and no promise of success - I did it out of genuine love for the product, curiosity, and with one foot already out the door).
After 14 years of involvement, everything in my experience with this company has been positive in every single way. Surprisingly so. It is authentic, enriching, and contributes in several substantial ways to my family's well-being and success -- including financially. So why the negativity?
I'm convinced that one reason people are skittish about MLMs is because they confuse them with pyramid schemes and other scams, when in fact legitimate ones are notably different. But again, there is unmistakable contempt and derision in almost every article I was able to find, even from seemingly unbiased and official sources.
It is deeply bewildering to me, and warrants a rebuttal, in my opinion. This post is a defense of at least one direct sales company/MLM that is not only legitimate in an official sense, but has earned a reputation for integrity, quality, fairness and success: Thrive Life.
Bad Apples
Just to be clear, I acknowledge that there have been some disastrously predatory MLM companies that have existed, and that have magnified the poor reputation of the industry in general. I think there are also some that have just done things poorly and failed. But many, if not all, sectors of the workforce have had some bad apples as well and yet are not labeled with quite as much hostility.
I believe there are actually quite a few stellar products and companies that practice this business model, to the benefit of the companies and the distributors. But because I'm not specifically familiar with those other companies, I'm just going to present the facts according to my experience and a little research, in the hopes of defending the industry just a bit.
Legitimate MLMs Are Not Pyramid Schemes
From Forbes: "A pyramid scheme is a scam where a so-called marketing company promises to help you earn big profits in exchange for recruiting new participants into the scheme.
On the surface, a pyramid scheme appears to be a legitimate company selling products or services, but the core goal is always to grow the number of participants in the scheme rather than grow product sales. New participants are typically referred to as investors, salespeople, agents or distributors, or some variation on these titles.
In a legitimate business or an MLM, salespeople are compensated for selling products or services. The compensation structure [of a pyramid scheme] tends to reward participants for recruiting an ever-growing number of new participants—not for growing product sales.
Typically, pyramid scheme participants are charged membership fees and commissions, and must buy set amounts of product inventory every month in order to remain in the company. Little attention is paid to actually marketing and selling products."
Pyramid schemes are illegal in the US and most other locations. They eventually, without exception, collapse, and the original or "first" investors are the only ones who make any money. MLMs, if legitimate, are not pyramid schemes.
Legitimate MLMs Are Product Based
Now let's look at a definition of multi-level marketing. Here's a description from the US Federal Trade Commission's consumer advice section:
"MLM companies sell their products or services through person-to-person sales. That means you’re selling directly to other people, maybe from your home, a customer’s home, or online.
If you join an MLM program, the company may refer to you as an independent “distributor,” “participant,” or “contractor.” Most MLMs say you can make money two ways:
by selling the MLM’s products yourself to “retail” customers who are not involved in the MLM
by recruiting new distributors and earning commissions based on what they buy and their sales to retail customers
Your recruits, the people they recruit, and so on, become your sales network, or “downline.” If the MLM is not a pyramid scheme, it will pay you based on your sales to retail customers, without having to recruit new distributors."
Pretty straightforward. My job as a Thrive Life "consultant" entails advertising and demonstrating a legitimate product I am enthusiastic about, both in-person and online.
I am paid a commission for every sale of that product.
I also invite interested individuals to become consultants like me, and then support those individuals with training and troubleshooting as they too earn commissions sharing the product with others.
In a simple sense, I am a manager of a sales team, as well as a direct salesperson of the product. In turn, I earn a percentage of the sales volume of my team, paid to me by the company. My team earns the same commission from their own sales that I do from mine.
Because consultants on my team are also free to build a sales team, the structure can resemble a pyramid, which may be one of the reasons people shun direct sales companies, or MLMs.
Some Facts That Matter -- A Lot
Here are the facts from my experience:
Thrive Life was never presented to me as a "get-rich-quick" scheme, nor have I ever represented it to someone else that way. It is simply a side hustle that could generate many different levels of income, depending on how hard or smart I work. That has proven to be absolutely true. It is even possible to make a career-level income as a Thrive Life consultant, which I know to be true because I have.
Thrive Life has never required fees or dues from me for participating. It is a straightforward sales agreement. I sell product and I get paid for it.
I have never had to buy product to sell or distribute to customers. I simply find interested people, send them to the company to buy directly, and get paid for doing so.
It is possible for people in my downline (sales team) to get paid more than I do, based on their own efforts. Thrive's commission structure doesn't favor the "people at the top". We get to avail ourselves of the same opportunity together, and are compensated according to individual efforts.
Never at any time have I been encouraged or pressured to spend money for marketing, business expenses, training opportunities, team support, or anything else -- or to incur debt or purchase product or materials I couldn't afford, or that couldn't be paid for with growing commissions. On the contrary, that is actually discouraged. Thrive Life practices frugality and thrift as a company, and encourages it in their consultant base as well.
I am not required to recruit other consultants or support a team to get paid. That is simply an option available to me if I choose.
I have never been pressured or shamed into selling more, recruiting a bigger team, or attending events or trainings. I have been a free agent in every sense of the word.
The Benefits Continue
I mentioned earlier that being a Thrive Life consultant has improved my life in truly significant ways. Here are a few:
The flexibility is very real and very appreciated. As a mom and grandma, I have relished the privilege of setting "work" aside any time I want and focusing on things I deem more important.
Even though I work from home, I've had the opportunity to expand my mind, my social skills, my leadership skills and my confidence by interacting with corporate executives, other consultants, customers, and my team.
The world has become more accessible to me as I've enjoyed humanitarian experiences abroad, earned incentive trips, and connected with people all over the world through my business. These are opportunities that would not have been available to me in most other occupations under my circumstances.
I have found the financial compensation to be fair and generous, enabling me to contribute substantially to my family's regular expenses and some lovely extras for our family as well. I understand that that isn't the experience everyone has, but it is no different than any other income-producing opportunity. The results are never the same because of varying determining factors.
I have enjoyed a product that has been literally life-changing for me in terms of health and peace of mind.
Conclusion
Perhaps you can see why I am so deeply disappointed by the haze of misunderstanding surrounding legitimate MLMs. The fact is, there are good ones and they do offer real benefits to those who desire or need the flexibility and the opportunity to be self-employed, but with the mutually beneficial partnership of a corporate entity that does the heavy lifting of running the company and manufacturing the product.
It is something I'm passionate about because it changed the very trajectory of my life. I am not overstating that. The point is, I got to give it a try. And for me it works. My only regret is that the reputation of this business model almost scared me away. I believe that should change. We need not paint all MLMs with the same broad brush.
This is an excellent article, Jenny! Do I have your permission to share it with my customers? Thanks!