Sep 4, 2019

It may look attractive, but beware the toll of 'MLM' on friendships

Catherine Bouris
The Sydney Morning Herald
September 4, 2019

Rachel Liddell was a new mum when she was roped into selling products from Younique, a US-based cosmetics company, via a local "buy swap sell" Facebook group in her small New South Wales town.

“I am very into makeup and didn't actually want to sell at all: I just wanted the kit because it seemed like a good deal," she says. "The lady I signed up under pushed me into doing live videos and selling because [she said] ‘I wouldn't have to go back to work’.”

Rachel Liddell was a new mum when she was roped into selling products from Younique, a US-based cosmetics company.
Photo: Supplied

Molly Murray signed up at one of the parties.

“I got recruited as a consultant without the lady actually telling me that I was signing up as a consultant," she says. "She added the business builder kits to my order form after I had signed it.”
Now, Ms Liddell and Ms Murray have come away with little to show for their employment except a desire to ensure other women aren’t put in a similar position.

Multi-level marketing (MLM) is a method of selling a product through a network of distributors, who receive financial incentives for recruiting others. It is common for someone to make as much money from recruiting people just as from selling the actual product. Examples of companies that use this business model include Arbonne, Avon, LuLaRoe, Nutrimetics, and Mary Kay.

Dr Máire O Sullivan, a lecturer in advertising and marketing with a focus on gendered consumption at Edge Hill University, has previously referred to MLMs as “legal pyramid schemes”.
“I think that the structure itself is flawed and as soon as recruiting becomes the focus, you are entering pyramid scheme territory," she says, adding that she believes the only way to properly regulate them is to prohibit the incentive to recruit.
Many women pay to sign up just to receive the product discounts offered to distributors, or to get the enticing start-up kit that contains everything a person needs to advertise the products to others. Unfortunately, it often isn’t as easy as buying one kit and getting out with your dignity intact.

Does direct selling still work in the internet era?

Multi-level marketing companies encourage pushy sales tactics, and to play up specific angles – the work from home angle, the being your own boss angle, the financial independence angle – to convince their friends, family members, and random Facebook acquaintances to sign up.

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