How Ignorance Fuels Multi-Level Marketing

Jason Dookeran
5 min readApr 23, 2021
Photo by Austin Distel on Unsplash

The multi-level marketing train (MLM) is longer than Snowpiercer, with a new scheme dropping almost every day. If you haven’t heard about MLMs, you might be one of the few people in existence who haven’t. According to Investopedia, a multi-level marketing scheme relies on encouraging people to bring in more recruits so that they can get a percentage of those recruits’ sales. This pitch direction prevents red flags from showing up immediately. However, when you look at the kind of outlandish promises of riches, most people who get sucked into MLMs do so because they hope to retire young and retire rich. The issue isn’t with MLMs themselves. They aren’t strictly illegal, as a Ponzi scheme, but they prey on the gullibility of their sellers.

The Success Rates of MLMs

It would be biased to state that no one gets rich off of MLMs. There have been several well-documented cases of individuals leveraging an MLM and its payment structure to make a bit of extra money. However, in the MLM marketing scheme, the companies use these outliers as examples of what anyone could become. Sure, they usually tell you that the average person in their organization makes like $15 a year total, but it’s generally at the footnote of a page in really small text, so they hope you don’t notice it. The Balance SMB notes that as many as 44% of people dropped out after less than a year working for an MLM. The take-away is that you can succeed, but the chances of that happening are very slim.

Photo by Michael Dziedzic on Unsplash

Relying on Public Ignorance

I decided to tackle this topic because many of these schemes rely on public ignorance to sell their products. In the older days of well-known names like Amway/Quixtar and Herbalife, companies touted revolutionary technology that made their products somehow better than the mass-market equivalents. Naturally, they used those “improvements” to sell their products at a higher price. The ignorance is still there, as these businesses still get new people to join them as “independent business operators.” Some of their products aren’t bad either, although probably not worth what you pay for them. The…

Jason Dookeran

Freelance author, ghostwriter, and crypto/blockchain enthusiast. I write about personal finance, small business blogs and freelancing