Soon, way too many people in one area, or with the same group of friends, are selling the same thing. How soon? Well, if one person starts out and recruits two people, and they each recruit two people, etc., it would only take 28 recruitment cycles for virtually EVERYONE IN THE USA to be selling the same product.
Hulton Archive/Hulton Archive/Getty Images
And there is no guarantee that you will look like this.
Take a moment and think of the poor people of Utah, who know this all too well. Forget Mormonism -- because of looser laws on MLMs, Utah is the Promised Land for these companies. According to one report, in a single county, 56 percent of households had been approached to join an MLM in the past year. Only 4.6 percent of those people joined, but that still meant that there were four sellers for every person that actually ended up buying something from one of these businesses.
Even if you live in a relatively large town (and outside Utah), it won't take long for the market to be overrun by people selling your product. And since you don't determine the price and usually can't offer discounts to undercut your competition like a normal business would, you are all on a level playing field. Except it is a crappy playing field, where there are 100 people on a side and no one wins anyway. That is because ...
Hand on heart, no matter how many amazing stories you read online about people making thousands and their spouse retiring and sending their kids to private school, I promise that you will not make money from these companies.
Here, let's make a bet. If you are an agent for one of these schemes and you make money out of it after, say, a year, I will give you $100. But if you lose money, you have to give me $100. For simplicity's sake, I'll let 100 of you get in on this bet. Do you know how much money one government report says I will have after that year? $9,800. That's because 99 of you will have paid me, and I will only have to shell out to one of you. So basically, by sitting on my ass and gambling, I will have made almost $10,000 more than anyone who worked their butt off for a year for one of these companies. According to that report, even ACTUAL gambling that isn't heavily stacked in my favor would still be a better bet (pun intended) than joining a MLM scheme.
Me rolling around in your terrible life decision.
Herbalife, the company getting lawsuited all over the place that we discussed above? Of all their sellers, 99.92 percent lose money. And that is just when you are a part of the scheme. When I asked friends about their experiences working for these types of businesses, most of them said they had hundreds, even thousands of dollars' worth of stock left after they finally got out. The companies were not about to buy that back -- they just had to add the loss to their other ones.
I get the attraction. You can stay at home with your kids and go off to girly get-togethers at night and drink wine, and it seems like the perfect way to supplement your income. That's why these things have been around and popular for almost 100 years. But there are flexible part-time jobs, even work from home jobs that pay regularly and don't require you to invest your own money.
So, please. Learn from the mistakes of those who went before you. There is no get-rich-quick scheme that works, and these companies virtually always leave you worse off than before.
Kathy wrote a very funny book called FUNERALS TO DIE FOR and you can buy it here. Or follow her on Facebook, tumblr, and twitter.
For more from Kathy, check out 5 Eerily Familiar Things Animals Do When They're Drunk and 4 Everyday Things That Caused Huge Panics When They Were New.
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