Which companies am I talking about? Here's a list of MLM brands in the beauty, personal care, and wellness industries:
- Arbonne
- Mary Kay
- Avon
- Nu Skin
- Young Living
- Forever Living Products
- Beautycounter
- Younique
- Rodan & Fields
- Maelle
- Amway
- Herbalife
- Oriflame
- Aloette
- Nerium
- Monat
- Jeunesse
- doTerra
- BeautiControl
- Melaleuca
- Natura
- LipSense
- Scentsy
- Neal's Yard Remedies
- Tropic Skincare
MLM stands for Multi-Level Marketing. Instead of being sold in stores, these companies let their representatives do all the work. On the surface, an MLM representative appears to be selling you products. But what they're really trying to do is recruit you to be a representative under them, so they can profit from it.
Bloggers like me make prime targets because we have a big audience, so we can keep recruiting more and more women. These MLM representatives are always looking to add more representatives under them, because that's how they truly make their money.
In order to join an MLM an be a representative, you need to pay a fee and purchase inventory. This can cost anywhere between $50 up to thousands.
This is why MLMs are pyramid schemes: they're making money from recruiting other people. But in order to start out as a representative, you need to pay a large fee and purchase inventory.
Many MLMs also force or encourage their representatives to purchase more and more inventory, even though they're unable to sell it all. This is why 99% of MLM representatives end up losing money, while only the 1% at the top of the pyramid are making ridiculous amounts of money.
The average net income (after subtracting expenses) for the 200 top Amway distributors in Wisconsin was approximately minus $900. (The Case (for and) agaist Multi-Level Marketing)
In case you missed it, that's -$900. The top 200 Amway distributors lost an average of $900.
On top of this, MLMs use lies and manipulation to recruit their people. They give the false promise that you can "be your own boss", "work from home", and become loaded beyond your wildest dreams by joining the MLM. Remember that 99% of representatives LOSE money, making this is a big fat lie.
So far, regulatory agencies have not required honest and understandable disclosure of essential information to MLM prospects. I have examined the compensation plans of hundreds of MLMs and found that virtually all hide the near-zero odds of making a profit, and in fact almost certain loss after subtracting purchases of products necessary to qualify for commissions and advancement in the pyramid of participants. (The Case (for and) agaist Multi-Level Marketing)
One aspect of big MLMs I loathe is that they're preying on minorities and on those who struggle financially. As an immigrant myself, I find this heartbreaking and deplorable. MLMs love to expand to developing countries and exploit the hopes of the underprivileged. They're easy targets because they're not doing well financially, yet they'll do anything to get out of the hole they're in. When you're in that vulnerable position, it's easy to fall victim to their "live your dream life" propaganda.
Low-income immigrant neighborhoods offer pyramid-schemers the additional advantage of recruits' higher likelihood of ignorance about local business practices, which can make them easier to sell on wild business plans. When you're new to a country, everything might seem a little off, a little strange and unexpected. Therefore, you may be more likely to push aside that voice that says "this doesn't seem right" or "this seems too good to be true" than if you were in your native country. This is especially true among low-income groups, including non-immigrant minorities who might be more desperate for upward mobility than wealthier groups, which means they are willing to put in work or even invest their own money for a shot at the American dream. (Multilevel marketing companies target women, immigrants and low-income minorities.)
At their core, MLM companies are based on an unethical business model. While a few of them have gained cruelty-free certification, I choose not to include any MLM brands in our list of cruelty-free brands for this reason.
As of December 2019, our brand directory now has an "MLM" feature. MLM brands will be added and marked as MLMs as a warning for those who want to avoid these companies.
If you want to learn more about MLMs, I highly suggest you watch this John Oliver segment on Last Week Tonight:
Which Brands Are Cruelty-Free?
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Hello ,
you need to do your homework more thoroughly and update your copy and paste knowledge on how MLM’s work .
Joining a Network marketing company is around £30 (UK) …. commissions average 35% plus come packed with tons of other bonus opportunities, incentives, travel, and more. Then on top of that you are ALSO earning residually aka when that customer orders again, you’ll continue to earn a paycheck from it.
There is a website where your client can access after consultation and recommendation , purchase the products themselves.
Its your business .. as in all business if you work hard the results are fabulous- you are NOT required to buy and hold stock
Influencer commission generally ranges from 5-15% and it’s typically only paid out on someone’s first order. After that, you usually don’t get paid another dime if that customer continues to purchase more products from the company.
I see countless influencers doing almost the same thing I do yet they’re earning SO much less because of the simple mathematical difference in pay structure.
Suzana,
To set the record straight: Arbonne representatives are not only not required to purchase inventory, we are not allowed to stock inventory to resell. We do not “prey” upon anyone, especially low-income individuals and immigrants. We are not monsters. We are not even part of a pyramid scheme. We sell through our individual online Arbonne sites to ensure product freshness and authenticity. I was impressed with your site until I read this anti-MLM rant. All MLM’s are NOT the same. I can’t speak for other companies, but Arbonne was way ahead of the game in what is now called “clean cosmetics.” Many of the vegan, CRUELTY-FREE formulas created in Arbonne’s labs show up in other product a year or two after Arbonne brings them to the market. We do not use preservatives, which, as you should know, are required for products on store shelves in the USA. The MLM model allows us to provide our clients with high quality plant-based products that have no harmful preservatives. As for being an Arbonne representative, some choose to build a team, but I work alone, driving business to my online store and supplementing my teaching income very nicely. I pay a small annual fee (far less than $100) for my web store, training, and a major discount on my own products. In exchange, I make money, use effective skin/body/hair care products that I trust, and feel good about helping others go cruelty-free. I am disappointed that an ethical beauty blogger such as yourself would post something so off-base, uninformed and blatantly biased. Please do your research and get your facts straight before posting your opinions on such a broad topic.
Hi Suzana,
I know this is an old article so I’m not expecting a response, but out of curiosity why is The Body Shop not on this list? They have a separate arm known as The Body Shop at Home which is absolutely one of these awful predatory MLMs.
I can’t get over all the butthurt Huns in these comments defending their MLM pyramid schemes lmao. They always try to pretend like somehow their MLM is “different” and it’s definitely not a “pyramid scheme”. Newsflash: if you have to work that hard to try and convince somebody that what you do isn’t a pyramid scheme, then it’s probably a pyramid scheme. Heck, even the FTC itself has warned against joining MLM’s and compared them to pyramid schemes. And like the author noted, over 99% LOSE money when it’s all said and done. Actually 99.6% do…meaning only .4% make a profit. You have a better chance at making a profit from gambling than you do from an MLM and this is a fact backed by actual research and studies.
And I am so sick of hearing the same old tired “but every business model is a pyramid” argument. No, hun, that’s not it. No matter how hard you try to convince people – that is not it. And at an ACTUAL job with a company – you are guaranteed to profit and guaranteed a wage. Oh, and I didn’t have to pay for a “starter kit” for my job. The hiring process wasn’t based on buying my way in, I don’t have to dump my own money into it to stay “active” or anything like that.
Also, if you got sucked into an MLM please stop saying you own your own business. No, you do not. You are a sales representative for a large company/corporation. If you were the owner or CEO, not only would your name pop up when somebody googled “CEO/owner of xyz”, but you’d have a say in the products, the packaging, the price, etc. Again all you are is an sales representative – one who works only on commission and isn’t even paid an actual wage, by the way. And YOU are usually your own biggest customer.
Here’s a little test: try googling “pyramid scheme examples” and see what companies come up. It’s a bunch of MLM’s. That right there shows you that MLMs are glorified pyramid schemes. Sorry that the truth hurts lol
I’m so sad that you feel like MLMs are bad (I agree, some are) and especially sad that you include a few of the truly honest companies in your slam. There are SO many untruths in what you have written here that it makes my heart that others believe you. It is clear that you have not really done the homework you claim. Please be kind and take time to really comprehend what and who you slam before you put it out there. What you have written is a DISSERVICE not a service.
I really like this post. I was researching potentially sustainable market brands that I could sell without negatively impacting the environment. I am really glad this post showed up in my searching. Your input is not only valuable and reputable (I have loved your blog for a long time and it is my go-to for cruelty free products) but you also shed a well-sourced light on a really critical issue: a company isn’t cruelty-free if it is hurting the people affected by it. You are well within your rights to make a moral stand that goes past harm on animals and includes the harm done to people – and I am glad you have done so. I am sorry to see the vitriol in the comments, but I think the back lash shows that you hit on a problem that needed to be addressed. Thank you for standing by your morals and only promoting companies that have the highest of standards.
This is good to know.
I’m deeply upset that you feel Aloette is not a worthy company. Have you investigated this company, do you understand how it works? Yes Aloette is a MLM, BUT IT IS NOT !!!!!! A PYRAMID SCHEME. Yes, we do recruit, but my business does not rely on that fact. If I want to move into being a manager then yes you actively recruit to build your team. But here’s the kicker, I don’t not get paid by those who are beneath me on my team. I get paid by my franchise to be their coach, the individual consultant does not pay me like some other companies. We do not carry inventory, I do not deliver, and I don’t package the individual orders or parties and my hostess does not either. I put a deposit on my kit, that they held, and I earned my kit FOR FREE and that deposit cheque, RIPPED UP. It cost me nothing to start my business.
There are some very horrible un reputable companies out there who’s one goal in life is to get your money and hang you to dry with no support, back up or guidance. They take your money and say have a nice life.
Not only is Aloettes products second to none, but their payment levels are fair and the best in the business and we treat our hostesses with respect and reward them well.
Please investigate, before you negatively lump us with the others.
Respectfully. Debbie Burke
How is an MLM any different than a typical company that sells products? Both are *technically* pyramid-like structures with a CEO and / or company owner at the top and inside and outside sales representatives below, some higher level managers and some lower level new sales people. In the case of a product based company that uses non-mlm marketing, the lower level sales people are still always the branches on the ground and legs funneling the money up to the top forming a pyramid where the people at the bottom do the most work. Without lower level sales people NO product-based company would ever be able to compete in the mainstream product market. On the surface mlm’s and traditional product based companies may look different but ultimately, the pyramid-like structure with sales people (in this case often ‘chained to a desk’ with little freedom) is what is eventually formed by any large product-based company. In the case of Both mlm and non-mlm the sales representatives get bonuses / rewards for expanding the distribution and knowledge of the brand. (The truth is many if not most mlms do NOT require sales representatives to carry or buy any inventory today especially in age of virtual sales so again, no difference there.) In the case of a non-mlm product driven company company, the sales reps don’t get bonuses for recruiting other sales reps But instead but instead, the CEO / company owner reaps all the benefits. That is a difference, yes.. but it can be taken as either a positive or a negative depending on how you look at it. If you’d rather spread the benefits of expanded reach around to ‘the little people’ rather than just to a CEO , an MLM model actually better allows for that. In addition, something many don’t consider is advertising dollars and big media benefits. While non-mlm product driven companies typically spend Very large budgets on marketing and advertising via mainstream media, companies that use the mlm model don’t have to do that and therefore have the potential ability to spread product education without spending big media dollars by way of the grass roots / word of mouth model. This technically can help level a playing field. There are many positives to the mlm model if the product is ethical. I would conclude that the pyramid like structure of an mlm is, in it’s basic essence, once you dig deeper, no different than any typical product based company… only, in the case of mlm’s sales representatives are independent and trade more freedom for the guarantee of base pay. Depending on what one values in life, that should be their choice and I trust them to make their own choice on that.
I’m still confused though…is Avon cruelty free or not? They claim they sold their China division but the Avon USA is cruelty free…what’s the deal ..two separate companies but only one is cruelty free?
Yes, it’s a loophole. I would not consider them to be cruelty-free.
You considering them not to be cruelty free is stupid. Do they test on animals (and don’t sell in China)?
If the answer is NO then they are cruelty free.
Many like Arbonne are recognised by PETA and in its 41 year history have always been vegan and never tested on animals.
Such a shame you’re so closed minded.
People are still making money through MLM whether you write hate blogs about it or not so I am not really sure what this achieves.. oh my mistake – nothing lol.
Tell me you got sucked into an MLM without telling me you got sucked into an MLM
It’s not a loophole. They are two completely separate companies with practices that reflect the countries in which they sell. Also – and you fail to mention this at all – there are regulations and laws in place still in several countries that require animal testing. I don’t personally agree with this! But you can’t hold it against a company for having to comply with law. Also, your example of Amway’s net income average shows your lack of business tax knowledge. Some of the most lucrative businesses in the US show a relatively low net income for tax purposes yet have net worth in the millions or billions. I’m not saying this is right, but it is the way business taxes work. As far as your personal views on MLM’s, I think it’s clear you’re against them. Your research is heavily biased and unfortunately reflects your views more than actual fact. Not all MLM’s are created equal! But apparently neither are all researchers; yours is an opinion piece, nothing more.
This is why I don’t try to recruit anyone even though I’m a representative for an MLM Company and I am making money I don’t want to be responsible for someone else spending money and then losing money in the long run.
I think you shouldn’t put all the companies in the same bag.
I joined to doTerra just to use it myself I am no being forced to sell products, or to invite peopleto join… they are not even pushing me to order monthly products..
I think depends of the person and her network to be honest.
Regards
I’m in a bit of the same boat, but the thing I hate, is that I’m unable to sign on with a competing company to buy their products for the sake of purchasing the product because I’m considered a representative of the company and therefore had to agree to be “loyal” to them while I am with them and, I believe, for 6 months after I leave.
So even though some of these companies are cruelty free and actually help struggling moms willing to work hard at a business that has changed their lives … you’ll black list it ???????????????????????????????????? This post just made me not believe a word you’ve ever said . this was complete Clickbait . ???????????? at the very least check to see which companies are actually cruelty free after that research how the payment plan works after that always remember that most people aren’t pushing people to be sales consultants . You’re just so misinformed and I can only remind myself that it’s funny , you really discredit yourself in this platform here are you going on these tangents that you no nothing about .
You keep going to Sephora and target and Costco and getting all of your stuff there . Sad .
I dont agree with your article. and By the way if we look to your blog is to know about cruelty free and not about if you aprove or not MLM.
To be honest I do not see why this is not ethical to do this business. Yes the people above earn from it if you do the business, so its a win win. if you not doing anything they wont earn anything. and any job is work . there is no easy money unless you doing ilegal stuff. Also the MLM is not just about money , its about freedom , about having more time to spend withn your family and friends whever you want. and this is priceless! so MLM will works for anyone who give it work like in any other job.
What a great place to fill up my MLM bingo card! All the classic misunderstandings here, “it has a product so it can’t be a pyramid scheme” – wrong: the definition in law is that a product can exist in a pyramid scheme and if that scheme is deriving its revenue from internal purchases (members purchasing from the company and uplines earning on those PURCHASES rather than earning on downlines’ SALES to people outside the scheme) and if there is incentive to recruit which in reality is greater than the incentive to sell product, then an MLM/direct selling co/network marketing company can be defined as a pyramid scheme (see Advocare for starters).
I’ve yet to come across an MLM that does not function as above, with catastrophic loses for around 99% of all who sign up. A quick look at the DSA member companies in the US and U.K. reveals lots of “Direct Selling” companies operating as pyramid schemes (even if they have managed to obscure the truth from their sign ups who have almost always made a very poor job of doing their unbiased due diligence).
Have any of you ever seen someone do very well through product sales alone? I never have.
Have you ever seen someone rise to the top without touching the product? I’ve seen lots.
I happened upon this site to learn whether or not Jeunesse’s products are cruelty free but all I found was a bunch of ranting and raving from you about MLM’s. I’m not interested in your opinion about them. I’m interested in knowing whether they are cruelty free or not, but you failed to answer the question. Change your post title because it’s misleading.
I understand your reasoning on not wanting to add certain MLMs to your list but not all MLMs are pyramid schemes. 1st it’s illegal. 2nd to be a true pyramid schemes, like you mentioned the only way to make a profit is to recruit. With FARMASi recruiting helps BUT the payment structure makes it impossible to be a pyramid scheme. To get paid anything each rep needs to be putting in the work themselves, they cannot recruit 100 people then sit back and get paid based off others hard work. They would get $0! With the highest rated commission plan of all MLMs currently a rep for FARMASi can, and does, make a good profit without recruiting a single person. So, listen or don’t, but please be open minded to this one as not all companies, as you are aware, are the same. Not all those that claim to be cruelty free actually are. Thus, not all MLMs are bad. I 100% agree with Monat – that is a scam as their reps make almost nothing and their ingredients are not as chemical free as they claim to be.