Which companies am I talking about? Here's a list of MLM brands in the beauty, personal care, and wellness industries:
- Mary Kay
- Nu Skin
- Young Living
- Forever Living Products
- Rodan & Fields
- 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: