After seeing countless posts on Facebook promising people can “work from home” and “be your own boss”, usually on For Sale groups, and posted by people that live half way across the country, we thought it appropriate to do a little research.
Almost all of these posts promise to give you a stable income that you can fit around your home life, while taking care of your kids, and your own hours.
It sounds amazing. Unfortunately, like most things, it really is too good to be true.
These companies are known as Multi Level Marketing, or MLM, companies.
But what is MLM?
There is a growing number of MLM companies globally, some you may already know the name of. Many you will have never heard of.
Perhaps the most well-known MLM company in the UK is Avon.
The key difference between a regular business and an MLM is the way in which you purchase from the company.
Their business doesn’t (usually) have shops or any direct ordering methods; all orders are made through their “Distributors”.
Why the sudden rise in popularity?
With the job market difficult to enter, and with a growing number of those needing a second income, MLMs have stepped in.
You will usually see the people posting about the “amazing opportunity” targeting stay at home parents.
The next reason is due to the huge rise of Social Media. There’s no doubting Social Media takes a lot of people’s time now.
More often than not their posts will include getting “paid to post on Facebook”.
The Good, The Bad, And The Outright Lies
It would be unfair of us to say that nobody succeeds in MLM companies. However, those that do are those much higher up in the company.
We will use Avon for the following example.
You’ve just signed up and are getting ready to get some customers. Your brochures have arrived and it’s time to go deliver some.
Next step is working out where hasn’t had brochures delivered already, There’s already a distributor close by? I guess that’s more opportunity lost.
Now you’ve got your booklets out there, you go out and collect the brochures. That’s already perhaps 7 hours of work.
Success! You got £100’s worth of orders! Time to send those orders off, pay, and do your accounts. (Another 2-3 hours)
You’ve got the good ready for your customers, time to go out and deliver them. That only took 1 hour this time.
So you get home, ready to spend that promised time with your kids, and check how much you just made.
For around 10 hours of work you made £20. So £2 an hour. But wait, there’s more!
Avon charges £16 to sign up. £10 from your first “campaign” and £6 from your second.
So that £2 an hour just halved to £1 an hour.
So how do I make more money?
In the MLM world the only true way to make more money is to get more people to join.
Each person below you in your “team” earns the basic commission rate. You also earn a small commission rate of their orders.
If they recruit people then you also get a smaller percentage of those recruit’s commission too.
This sounds easy? According to Jon M. Taylor, MBA, Ph.D., of the Consumer Awareness Institute the average cost of a recruitment campaign is over £1,500 ($2,000). 
In every single MLM company he investigated over 99.5% of those recruiting more members lost money.
Can I make money?
The answer is yes. You can make money from a MLM. But, only a very few do.
Over 85% of Nu Skin (another growing UK MLM) distributors made £0.
That’s over 65,000 distributors that made absolutely no money (profit) for a year of work.
In fact, only 788 people made over £12,000 a year from Nu Skin.
In short: 99.997% of people working on behalf of Nu Skin made no profit or, more importantly, made a loss.
So why do so many people sign up?
The main reason, we believe, most people sign up to these MLM companies is false promises.
Who wouldn’t like to “earn extra money for Christmas”? Or “buy a new car”? Or even “buy a house”? (These are all quoted directly from mutiple posts we’ve seen)
The reason they want to get you to join their team is simple. As we said above they gain money from your sales.
Unfortunately the Advertising Standards Authority doesn’t have the time or resources to get individual, self-employed, business owners to not tell blatant lies on Facebook.
Then there’s the signup fee. Some don’t charge, others charge you upwards of £50 to sign up. In some cases this money goes (as a percentage) to the person signing you up. I’m sure you can now see why it’s lucrative to get people to join.
Should I Sign Up?
In short: no.
In slightly less short: Absolutely no way.
If you’ve read this article you’ll be able to see by now why signing up to a MLM company is almost always a bad idea. There’s almost zero chance of success. Almost every person signing up does the work for much less than minimum wage would be for the same time. You’d be better off buying penny stocks (note: this is also a bad idea).
How do I know it’s a MLM?
First thing’s first: They never offer a wage. Any company that wants you to pay them to join (or even if they don’t) and you only make a commission from the sales you make for them is a MLM.
The next way to tell is that they’ll mention “stay at home mummy” at least once in the post. It happens every time.
You’ll be able to spot these posts by counting more than 3 emojis in the post. Usually it’s a long line of the same emoji.
Finally: They won’t tell you anything about the business or the product. They’ll ask you to message them about the opportunity (talk about being lazy!).
Names To Look Out For:
Some names of well known MLM companies include:
- Nu Skin
 Position titles vary between companies and are decided by the person the rung above them.
 Source: https://www.avon.uk.com/frequently-asked-questions 25/10/17