Inside the World of “Ethical” Multilevel Marketing Companies

Inside the World of “Ethical” Multilevel Marketing Companies

“Hey girl!”

The message sitting in my Instagram inbox was upbeat and strangely friendly – for a few moments I wondered if I actually knew this person, if they were someone I had met at a party pre-COVID and forgotten all about. I didn’t recognise the smiling, perky profile photo.

“I love your account!” the message continued, sprinkled with emojis of hearts, suns, and lipstick kisses. “I have an empowering business opportunity for you. What would you say to working from anywhere in the world, choosing your own hours, and becoming an independent entrepreneur?”

What’s an MLM?

This type of message would ring familiar to many of my contacts when I mentioned it to them. Over the last few months and maybe even years, so many of us have been exposed to the aggressively cheerful and suspiciously insistent messages from strangers belonging to multilevel marketing (MLM) companies. These brands – which sell anything from makeup and clothing to fitness programmes and sometimes even nutritional health supplements – focus on direct selling. Their business model is built on the rep offering the products directly to end consumers, most of whom they reach through social media. But another side to the business can see distributors incentivised to recruit other sellers to feed a pyramid – or binary compensation commission structure – and earn a percentage of the sales made by recruits (so-called “downlines”, whereas the person above you in the pyramid, often the one who recruited you, is referred to as an “upline”).

Some MLM distributors are incentivised to recruit other sellers. Photo: Tima Miroshnichenko.

Creating the #BossBabe Persona

Alice, a former MLM distributor, shares her story: “I was training to become a health coach, and to be able to earn some money, a fellow health coach approached me about Juice Plus health supplements. I had no idea what an MLM was. I went along to an event, where it was presented as a ‘business opportunity’.” Alice loved the products, and signed up to be a distributor to make additional money during her studies. She soon found that the reputation of MLMs had already spread around her contacts – the very people she was meant to be selling to. “I was met with ‘Oh my God, I can’t believe you’re selling Juice Plus’.” But any doubts were soon dissipated by the persistent toxic-positivity tactics employed by typical MLM higher-ups. “My upline was a very skilled people person, and everyone on the team was getting into the excitement around the product – it was almost like a cult-like feeling. The sales training was very, very pushy.”

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In the age of Instagram, distributors face pressure from their uplines to create a persona that attracts potential recruits. Often, they share posts that depict an idealised lifestyle of “empowerment”: financial freedom, travel, and luxury to entice impressionable people to follow their lead. Sometimes they are parents and set out to impress upon other parents that “network marketing” – another name for MLM sales – is the way to obtaining more financial freedom while also being able to spend more time with your kids. In reality, the statistics around the earning potential of MLMs are quite dire: 2018 research shows that most reps don’t even make a minimum wage, and according to the Federal Trade Commission, an astonishing 99% of recruits lose money. This loss is often partly due to the “investments” that MLMs require recruits to make, whether that is stock, product packages, or, as in the case of the MLM company Enagic, water-filtering machines to the cost of thousands of dollars.


For more information on Kangen water distributor Enagic and their network-marketing company Breakaway Movement (whose reps often tout their work as promoting “sustainability”), there’s YouTuber Anna’s Analysis’ impressive, extremely detailed two-hour investigation into the scheme, which reveals that sometimes, prospective recruits are encouraged to take out loans or credit cards to be able to afford the machines. Those who aren’t approved for credit cards are sometimes told to write down their “dream” salary on the application form, giving the impression that this is the amount they are currently earning (which amounts to fraud).

Ethical – But Is It Really?

The rep contacting me had done her research – she knew I was vegan and an animal rights activist, so she was quick to point out that her company was vegan and cruelty-free. Whether they sell makeup, skincare or supplements, many companies now market themselves are cruelty-free and vegan. But is that true? While there isn’t anything officially governing the use of the term “vegan” and technically those products could very well be, “cruelty-free” is a whole different story. In order to be certified as cruelty-free (and hence tell potential customers that your brand is cruelty-free), you need to have undergone a verification process with one of the organisations that certifies cruelty-free products. Just claiming that “we don’t test on animals” is not enough. Blogger Elle Beau, a former distributor of MLM company Younique, has shared conversations with a distributor who claimed that the brand was cruelty-free, without it holding any official status. Years later, the brand still had yet to obtain cruelty-free certification. This year, vegan blogger Ethical Elephant contacted the company for an update, and their responses were still very inconclusive.

Even when MLM brands do have cruelty-free status, those who have made it their mission to promote ethical living can make a point of distancing themselves. Blogger Suzana Rose, who has created many resources for cruelty-free cosmetics (including an extensive cruelty-free brand list) on her blog Cruelty-Free Kitty, has refused to include MLM companies, even if cruelty-free, among those she promotes. “Bloggers like me make prime targets because we have a big audience,” writes Rose in her post. “So we can keep recruiting more and more women. These MLM representatives are always looking to add more representatives under them, because that’s how they truly make their money.”

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Photo: Samantha Sophia.

Ruining Relationships

Alice also recalls the damage that the MLM’s tactics did to her relationships.“Because it requires the reps to go to their inner circle for sales, it has a toxic effect on relationships. You stop seeing people around you as people, and start viewing them as potential sales.”

Elle Beau echoes this, sharing a chapter on her (quite addictive) blog where she encounters a difficult situation with her mother- and sister-in-law over Younique sales. Overall, it appears that attempting to make a living from selling products to your own friends and family is a tricky road to go down – and this is partly why, just under the three-month mark, Alice realised that “it was very problematic and did not sit well with me at all,” leading to her exit from Juice Plus. “I understand why people do it,” she concludes. “But I think that the culture is dehumanising – your upline sees you as someone they will make money from, and you start seeing the people in your life the same way. I now encourage people to stay away from MLMs.”

What makes the set-up even more potentially damaging is the rhetoric used by many MLM uplines – and this is ever so evident in some chapters on Elle Beau’s blog – that if those around you voice concerns about the MLM, or simply refuse to buy your products, that means they are unsupportive, or jealous, and ultimately unworthy of your friendship. The rift this can cause in relationships can lead to damage that may be difficult to repair.

In a time when job security is scarce, many may be tempted to buy into the “financial freedom” narrative constructed by MLM companies – but Alice, who now is out of multilevel marketing for good, concludes with words that any potential recruits should take to heart: “It wasn’t fun. It didn’t feel good. And it was actually quite disempowering.”

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Cover image by Tima Miroshnichenko.

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