On Multi-level Marketing Schemes (MLMs)

Direct selling, multi-level marketing (MLM), network marketing, affiliate marketing – these are some of the names they describe themselves. For the rest of this article, I am just going to refer to them as MLMs or scams.

Another one of these "reputable" MLMs called ‘Vestige’ has found its way to my neighbourhood. And mind you, this person has gone all-in – they’ve put up a huge banner that announces their new venture.

First of all, I find the name "Vestige" quite ironic. Vestige is defined in Merriam-Webster’s dictionary as, "a tiny often physical indication of something lost or vanished." I guess pyramid schemes were already on a way out, when this company was started, and their name was a manner of paying homage.

Incidentally, another friend of mine had asked me about the legitimacy of this company just a few days ago. A quick look at their website will tell you they are just an MLM.

Some of the other organisations that might like to give you an "excellent business opportunity" include Amway, Modicare, and Herbalife. The opportunities they offer are neither excellent, nor a business – atleast not a feasible one.

Some of the companies engaged in these schemes peddle pseudo-scientific products, making silly claims about the amazingness of their products. The common features of all these companies include merchandise that is overpriced (as compared to similar products available in the market), not available in retail and/or online stores, and usually of very low quality.

Their "excellent business plan" is multi-faceted. They offer your their merchandise at a discount. They tell you that you can use their products yourself, and save money that way, or sell it, and earn money. And what’s more, they offer you a way to make even more money. Unbelievable, right? Yes, it is – as in something you should never believe.

They tell you how you can recruit other distributors and earn a percentage of their sales. Rope in your friends and family and make more money. Simply put, screw others to get out of the hole that you’d be in.

Not enough? They even offer you travel perks, or payments towards cars, if you ever manage to buy one after losing your money to them.

Their training videos are very cringey; some of them are publicly available. Sit through one of them and you might just get some of your pending time in hell waived off. You’ll notice a pattern in these videos. They promise earnings, they give hope.

The truth is most people who engage in this "business" don’t earn money. Sources: [1] [2] [3]

The scary thing is that this industry will be more than 15,900 crores by 2021 [Source]. And the coronavirus pandemic is making it worse [Source].

Many people who have lost their jobs during or after lockdown are posting on sites like LinkendIn, asking their contacts for any references or job positions that they might know of. Scroll through any of these posts and you will find a lot of other LinkedIn users offering these "business opportunities". "Always capitalise on misery," must be their common motto, I guess.

And don’t for a moment think it is only stupid people who fall prey to these. The companies peddling these schemes are usually old, and they have somehow managed to survive. Look at Amway, from their website they look like a company peddling bad products, like any other company. But they have settled cases in the past [Source]. Though it states in the settlement that they don’t admit guilt (yes, usually companies do pay $56 million just because they can), but they did agree that "certain reforms in its business" were instituted as a result of this case .

For most MLMs, their entire business strategy seems legitimate to certain extent. After all, if you buy a protein shake from them, you will get a box filled with "protein shake". It’s their auxiliary practises that make them a problem. They don’t make money by selling their "shakes" to people who want shakes. They make money by selling their "shakes" to people who dream of being rich selling this "shake".

Stay vigilant, and keep an eye out for your loved ones being wooed by an MLM.

Want a place to learn more and have some fun at the same time? Try reddit’s AntiMLM subreddit.

PS: I am not going to argue about how YOUR multi-level marketing scheme is legit. It isn’t. Get yourself out of it and stop roping in people you know.