In Quarantine, now more than ever I see the emergence of these work from home scams.
Couple years ago I was scammed into letting the presenter present for wellness event, just to find out they were not even close knowledgeable about the subject and just wanted to sell products as a cure.
There is various types of pyramid schemes, fitness, wellness, beauty, clothing … But I have to say I have seen the most of them pop up in wellness and beauty realm. Please avoid it and say directly to the recruiter they are being sold a fake dream. If you’ve not sure, just tell them you are not interested in direct sales. The truth is nobody wins at these MLM schemes. They are built onto failing bottom people.
At some point, you’re sure to scroll past pink and blue balloons, watch vertical videos of couples shrieking at Disneyland, and receive the dreaded “Hey girl, or Hey long lost friend..!” message from a high school acquaintance you haven’t spoken to in years.
The Securities and Exchange Commission notes three hallmarks of a : There’s heavy emphasis on recruitment, a promise of high rewards in little time, and an insistence that the participant can quit their day job to “work from home.”
More often than not, “investors”—who usually pay to participate—make money not from their product revenue, but from getting others to participate as well. As Jim from The Office pointed out to a lost Michael, the foundation of participants and layers of recruiters eventually starts to look like a pyramid.
Pyramid schemes are illegal, but multi-level marketing technically isn’t. Also called pyramid selling, network marketing, and referral marketing, participants typically buy product in bulk and then sell it individually to customers. Think companies like LuLaRoe, which sells clothing; Herbalife, which sells supplements; or Rodan + Fields, Beauty Counter, which sells skincare and make up. Instead of a traditional retail store or site, customers can only buy products by going through “certified” or “registered” sales reps. The problem is that these sellers are not proper businesses owners, or experts in those fields that they are selling in. For example, skin care is very personal product, recommendations need to be not taking too lightly, because it cold cause skin damage. So going to a licensed esthetician, spa or dermatologist is always better.
Also preying on people when the sales are for wellness and wellbeing is easier, because people want to feel good and sometimes will buy and buy anything available to solve their problems. But the dream is false.
In other words, you can only get your heinously patterned legging fix by buying directly from someone who had to buy them wholesale in hopes of shilling them to friends and family.
As the Federal Trade Commission reports, less than one percent of MLM participants make a profit. That’s right: More than 99 percent of participants lose money instead of making it. Most of these companies target vulnerable women like stay-at-home moms and military wives who don’t tend to be financially independent anyway.
The 2011 report states that out of 350 MLMs analyzed, every single one was recruitment driven and top-weighted. Those at the top made the most profit “at the expense of a revolving door of recruits.”
“This is after subtracting purchases they must make to qualify for commission and advancement of the scheme,” the report continues. “To say nothing of minimal operating expenses for conducting and aggressive recruitment campaign — which (based on the compensation plans) is essential to get into the profit column.”
Spend money to make money? That sounds sketchy.
MLMs have been around for decades, but the universal adoption of social media has only fueled them. At the same time, they’re so widely hated that MLMs even have a subreddit dedicated to complaining about them. On r/antiMLM, Reddit users warn others of the toxic MLM “hustle” and mock the “huns” who get sucked into it.
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When old acquaintances hit you up again after years of silence, it can mean one of two things: They genuinely want to rekindle your friendship, or they’re trying to sell you essential oils.
MLM huns often use a pre-written format to reach out to potential customers. Sometimes they flub it, like in this post from r/antiMLM. If the message you get seems a tad robotic, it’s probably only a matter of time before they launch into their pitch about working your own hours and being a small business owner.
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As Quartz reported in 2017, MLMs only pushed people further into debt because of the pressure to buy inventory. The “buy in” investment for LuLaRoe, for example, will cost you $5,000. While the company claims that participants, which it calls consultants, can profit from spending less than $5,000, Business Insider obtained data in 2017 that showed more than 80 percent of consultants made less than $5,000. A total of 10,834 sold nothing at all, and the average revenue was about $3,387. Based on a LuLaRoe consultant’s numbers, one blogger estimated that consultants would have to spend at least $15,000 on inventory and mark prices up 40 per
Just look it up
Got an offer that sounds too good to be true? Google it!
Jaded ex-participants who managed to escape the crushing jaws of MLMs have taken to the internet to warn others. Elle Beau, a former Younique representative, wrote a detailed blog about her “Poonique” journey. She, along with others determined to prevent vulnerable people from falling into the trap, formed the “Anti-MLM Coalition” and compiled a master list of known scams and direct selling schemes.
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