“I have an opportunity that can make you tens of thousands of dollars this summer.”
“You can take control of your life and your own business.”
“Find a lifelong community that will support you at every level.”
“Girlboss, I have a career opportunity for you.”
For the average financially-stricken college student, surviving off of Maruchan ramen and DoorDashing to grapple with the exploding costs of attending college, nothing could sound more appealing.
This is part of a pitch from a multi-level marketing scheme.
MLMs are businesses that are reliant on recruiting inexperienced, non-salaried salespeople, also known as downlines, that sell products directly to consumers and receive compensation through commission. These companies’ compensation structure is organized in a manner that resembles a pyramid; the higher you are up the pyramid and the more people recruited, the larger one’s salary is. Despite having similarities to the outlawed pyramid scheme, MLMs are entirely legal and sound legitimate.
In theory, a recruiter finds a salesperson that earns a commission from selling a product to a presumably happy consumer, but the reality is far different.
Professor Walter J. Carl of Northeastern University describes it best in the 2004 Western Journal of Communication:
“MLM organizations have been described by some as cults, pyramid schemes, or organizations rife with misleading, deceptive, and unethical behavior, such as the questionable use of evangelical discourse to promote the business and the exploitation of personal relationships for financial gain."
Despite promising high incomes, financial freedom and a supportive community, according to a study done by FTC, 99 percent of salespeople in MLMs do not make any money and 95 percent quit within 10 years.
If you were to gamble in casinos as a job, you would have a higher chance of making money.
Something is definitely wrong when betting it all on black is a more financially secure decision than joining a company.
Although they are legal, MLMs are fraudulent in fulfilling their claims and are predatory to people who are just trying to achieve happiness and secure employment.
More than just losing money for these salespeople, these companies coerce their dispensable workers to manipulate their familial and friend networks to sell a product or recruit more salespeople, weathering the most important relationships of our lives.
According to a study by Lending Tree, 38 percent of millennials said MLMs have damaged a relationship with a friend.
MLMs are not a new concept either.
Initially, they targeted housewives in the 1960s selling beauty and kitchen products door-to-door. Now, companies are targeting younger college and high-school-aged students who have no experience and are eager to gain the necessary job experience to make their career. They are also not limited to a single product or good, as was true in the 60s.
Recruiters push an online persona of being a hardcore entrepreneur and achieving the “grindset”: often posting pictures of them in expensive suits, on luxurious trips and driving high-end cars.
The luxuries on Instagram and Snapchat displayed seem to be a foreign concept to the average college student just trying to make it by.
When nearly 60 percent of college students say worry about having enough money to pay for their education, it becomes easier to get roped into the facade.
Despite the rise in public awareness of their scandalous tactics and unethical reputation through countless public lawsuits, the 36 billion dollar industry is sadly here to stay.
College students have an obligation to stay vigilant of the signs of being recruited into a multi-level marketing scheme. Pitches to join sales teams can be from close friends or family members and incorporate buzzwords about the potential for success but do not let this confuse you from the detriment at stake.
There are many great positions out there that will provide experience that can give your post-college career a trajectory
If something sounds too good to be true, it probably is.
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