Equality Check — embed — fix
It sounded too good to be true – and six months later, Amy realised that it was. In March and experiencing lockdown for the first time, the recently unemployed entertainer was approached by multiple church friends offering her an interesting business opportunity.
They told her she could make hundreds of dollars a month selling essential oils, they told her the oils could protect people during the pandemic, they told her to splash the oils on her face mask. “It was just very magical sounding,” the 24-year-old from the east coast of America says now.
Amy signed up to be part of the business – within half a year, she’d spent $500 (£360) on stock and made zero sales. The business Amy signed up for was a multi-level marketing scheme (MLM).
MLMs recruit representatives to sell their products, most commonly diet drinks, athleisure wear, oils, and make-up.
These “direct sellers” are unsalaried but get a proportion of every sale they make – they can also earn money by recruiting people to work below them, so that when these people make a sale, they also take a cut.
The structure of an MLM looks a bit like a triangle, with a few people at the top making money from a lot of people at the bottom.
According to the sector’s main UK body, The Direct Selling Association (DSA), 90 per cent of direct sellers in the UK are women.
Autumn analysis from management consultancy company McKinsey shows that globally, women’s jobs are 1.8 times more vulnerable than men’s during the pandemic.
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With many women leaving their jobs and home-schooling during lockdowns, MLMs have become more appealing – between March and June 2020, MLM Avon saw a 114 per cent “surge” in new recruits.
There are now tens if not hundreds of MLM companies across the globe: Monat, Younique, Forever Living, doTerra, Arbonne, Herbalife, Amway, Mary Kay, and Juice Plus are just a few. MLM representatives often promise new recruits that they can earn hundreds from the comfort of their homes – in reality, the results are mixed.
A 2018 survey from the American advocacy group AARP found that 73 per cent of direct sellers make no money or lose money, while an oft-cited 2011 report from the US Federal Trade Commission (FTC) claims that 99 per cent of MLM recruits lose money.
While MLM companies stress that they do not advocate this behaviour, many sellers use social media to make outlandish claims about earnings and some even claim the products they’re selling can treat or prevent coronavirus.
In June this year, the FTC sent 10 letters to MLMs warning companies not to make unsubstantiated earnings or health claims.
Social media giant TikTok last week banned MLM sellers, adding them to its "frauds and scams" section.
Amy – whose name has been changed to protect her identity – says many of the people who encouraged her to join the essential oils MLM were nurses who said the products could ward off coronavirus and even treat cancer.
“It felt like it was becoming a marketing tool,” she says of the pandemic, “I feel like I fell for a trick.”
To remain a sales representative, Amy had to buy more stock every month, eating into her savings. “I was kind of brainwashed into it, it was to the point where I didn’t even want to look at how much I’d spent.”
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Amy failed to make any sales as she felt uncomfortable pressuring her friends and family, some of whom were out of work or suffering with their mental health during the pandemic. Miranda – whose name has also been changed – lives in Wales and joined a make-up MLM this autumn before quitting after a month. The 32-year-old says her fellow direct sellers talked about recruiting people who’d been furloughed or lost their jobs.
Miranda herself was pressured into joining the company by a former colleague who knew she had left her job after giving birth. “Every couple of weeks she would message me (asking me to join),” Miranda says.
When Miranda, who is on Universal Credit, got some extra cash in the autumn, she spent over £50 to join the MLM. “I thought I’d do it just to get her off my back.”
Although Miranda did make some sales, she has never recovered the initial money she spent on stock. The stay-at-home mother was largely motivated to join the MLM because of the promise of female friendship during an isolated time.
She was added to group chats which “pinged from six o’clock in the morning” until late at night with toxic messages that told representatives to “cut off” friends and family who were sceptical about MLMs.
Amy describes her MLM experiences as “cult-y”. “It was kind of hard to distinguish sometimes if it was my friend talking to me or a sales person talking to me.” Both women left their MLMs after doing online research, but there are undoubtedly more women waiting to take their place.
Grace, a 29-year-old from the Philippines, says a number of her Facebook friends joined an oils MLM during the pandemic.
“People are stressed and scared because of health concerns, so [the oils MLM] is perfect because it banks on this fear,” she says.
“People turn to MLMs out of desperation, thinking it could be a good source of income… [Coming from] a country with low financial literacy and generally low wages, I can’t help but hate how MLMs take advantage.”
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