With people losing their jobs and having trouble finding new jobs, you’ll see various MLM or multi-level marketing companies (sometimes called network marketing) trying to recruit the desperate to sell their wares. Many of these companies are targeting women desperate to bring in some extra cash to their household. COVID has not slowed these companies down at all, and in fact, the uncertainty has them stepping up their efforts. What’s worse is that they often prey on women looking to bring in some extra cash while still having time to balance childcare and household duties, which fall more on women than men. People often “invest” thousands of dollars into these businesses by running up credit cards or borrowing from friends. There’s a variety of reasons never to get involved in one of these.
No one quite knows when the MLM company started. The origins of network marketing stretch back to the 1920s and 1930s. Makeup was one of the first products to be sold this way. Avon is one of the oldest companies. Avon’s strategy was simple: recruit homemakers to sell to their friends and relatives. Avon started with perfume but quickly expanded to a wide range of makeup products that were becoming more common at the time. After World War II, more companies popped up, including the eponymous Tupperware. Tupperware parties became a fixture in homes across America in the 1950s as the popular plastics company introduced their products to help keep food for longer. MLMs are not a new concept, and companies continue to use the system to get hundreds of people selling their products for free. Because people in the network are independent distributors, they aren’t employees and only get paid on commission. It’s the perfect way to get people selling a product with almost no overhead. However, product sales aren’t the focus; it’s getting people to spend money on starting up their new “business.” Multi-level marketing is called that because not only do people make money from the sales they make, but they get a small cut of any sales from people that they recruit. The more people who are selling, the more money is made. And this is why they are often called “pyramid schemes” because the only people who really make any money are at the top. After all, they are getting a small cut of all the sales from all their recruits.
There are a variety of products and services that are sold using the network market system but the most common are vitamin supplements and personal products. Although there are companies that also sell everything from vacations to coffee. One of the more modern incarnations of network marketing is in clothing retail. Women buy most of the clothes in America and because women have always been the targets of MLMs, clothing is a perfect fit. Most likely you’ve already been approached by someone in your friend group trying to sell you some leggings or other clothing.