Why MLM Doesn’t Work

Written by Rachel

I recently read a quote from a site promoting an MLM:

To recoup your initial $570 costs, focus on enrolling two distributors into your downline and then help them also enroll two people each.

This is the problem. Right here. It’s the exponential growth caused by unlimited recruiting (what MLMs like to bill as “unlimited earning potential.”) In the midst of a lot of talk about selling the product, the real focus for leadership in any MLM is recruitment. Some MLMs push recruiting harder than others, but they all have two things in common.

Continue reading “Why MLM Doesn’t Work”

Proof That 99% Lose Money in MLMs

Robert FitzPatrick of Pyramid Scheme Alert has conducted extensive research on multi-level marketing companies (MLMs). The research can be difficult with companies like Mary Kay, which are privately owned and therefore don’t release hardly any information about the dismal earnings of the sales force. (Who would want to admit the financial truth unless forced to? And don’tcha think that if consultants were doing so well in Mary Kay across the board, that the company would be out there touting these statistics left and right?)

On the other hand, certain companies using MLM models that are similar to Mary Kay’s way of doing business, do release public information about their representatives. Robert studied figures for Amway (Quixtar), Nuskin, Nikken, Melaleuca, Reliv, Arbonne, Free Life International and Cyberwize.com. Continue reading “Proof That 99% Lose Money in MLMs”

ESPN the Magazine on Advocare

Yesterday ESPN published an article about AdvoCare, Drew Brees Has A Dream He’d Like To Sell You. AdvoCare is a typical multi-level marketing (MLM) company. It focuses on selling a “business opportunity” and uses nutritional products to make it appear as thought they’re not promoting a pyramid scheme. Unfortunately, more than 99% of participants in MLM lose money, making it a “business opportunity” that is even worse than gambling at a casino.

Mina Kimes did an outstanding job of digging into AdvoCare’s empty promises to distributors. It’s a long article, so I’m going to pull out some of the most interesting excerpts for you. Here is one of the most important things to remember: ESPN has nothing to gain from misleading you. They don’t care one way or another if AdvoCare or any other MLM is a legitimate opportunity.  AdvoCare, on the other hand, lives or dies by the public perception… they are fully invested in consumers believing that they push a good and beneficial opportunity.

On selling hope:

AdvoCare, which has used athlete endorsers and event sponsorships to cultivate deep ties to the sports world, portrays itself as a company that “offers the average American the chance to make an above-average income,” but, in truth, only a tiny percentage of salespeople ever make significant money.

Slight correction: Only a tiny percentage of MLM salespeople ever make any profits.

Read the rest of my article here.

25 Years of Failure in Mary Kay

time-is-moneyThis story comes from a reader of Pink Truth whose mother has been in Mary Kay for 25 years. For all those former Mary Kay consultants who lost money and were told they didn’t try hard enough or weren’t in long enough….

I just need a place to rant. I am 25 and my mom has been doing Mary Kay for 25 years. She just got back from seminar today. She hasn’t even been selling much of her products lately, but seminar convinced her she needed to take action by placing a big order.

So she borrowed $2,000 from my dad to make a Mary Kay order.

I just don’t understand why she can’t see or won’t accept that after 25 years, she’s not and will never make a profit from Mary Kay. Continue reading “25 Years of Failure in Mary Kay”

Multi-Level Marketing Victims Speak

Almost everyone loses money in multi-level marketing. Sure, you hear people say “I know several people who have made a lot of money in MLM.” This is nonsense for three reasons: 1. People rarely see proof for this “making a lot of money.” 2. These claims are almost always false based on the figures that MLM companies themselves release about their distributors. 3. Even if someone you know is “making a lot of money,” that money comes from an unethical business model that victimizes hundreds or thousands of consumers in order for that one person to profit.

Check out this new video featuring victims of the Herbalife “business opportunity.” They put lots of money, time, and effort into their “businesses” and ended up losing money. Continue reading “Multi-Level Marketing Victims Speak”

No Executive Income in This Mary Kay Area

Today I’m ranting again about the lack of the “executive income” in Mary Kay. Oh, I know the arguments by the Kaybots…. but what if women really don’t WANT to make an executive income.

I dunno. I heard so many women recruited with the promise of executive income and I heard so many women in Mary Kay talking about wanting to make an executive income… that I believe there are many, many women in Mary Kay who would like to be able to do it!

The fact is, almost no one is making that executive income. If they say they are, they’re probably lying. Continue reading “No Executive Income in This Mary Kay Area”

What Does Dave Ramsey Say About Multilevel Marketing

pink-pyramid-selling-scamBack in 2013, I criticized Dave Ramsey sharply for promoting the idea that multi-level marketing is a way for consumers to make a lot of money.  This article was published on his site, and it said:

Truthfully, if you have a go-getter personality, and you can follow some basic business and personal etiquette, you can make a lot of money in an MLM. The trick is to avoid all the potential pitfalls along the way.

That statement upset me because it has been proven that 99% of people involved in MLMs lose money. Dave cautioned:

MLMs can be awesome if you understand how they work, but they can also be a financial and personal disaster if you jump right in without thinking.

The sad truth is that no matter how careful you are, you are almost guaranteed to lose money in MLM. You can follow all the rules, invest lots of time and money into your “business”, and you will still lose money. Continue reading “What Does Dave Ramsey Say About Multilevel Marketing”

Where Did All the Debt Come From?

Written by Pinkpeace

How many times have we heard it or read it? “No one put a gun to your head to make you go into debt.” Well, technically Ms. Kaybot, that is a true statement. Nearly 13 years ago at my inventory talk, I don’t recall my sales director pulling out her .45, placing it at my temple, and removing the safety.

What I do recall is her insistence that the very best way to run a Mary Kay business was with a “full store.” That was a $3,600 wholesale order, and with tax and shipping, it was around $4,000. Continue reading “Where Did All the Debt Come From?”

Myth of Making Money While “At Home With Your Children”

Written by SuzyQ

The truth is that can’t stay at home with your children and make a living at Mary Kay. It takes lots and lots of time away, no matter what they tell you when they’re trying to recruit you.

You can (not) have it all.

One of the many myths of a Mary Kay business is that women can quit their horrible JOBs (often referred to as Journey Of the Broke) and stay home to raise their children and have an executive income while doing so. This is powerful motivation to hand over the $100 and get started. The reality, of course, is very different. Continue reading “Myth of Making Money While “At Home With Your Children””