12 shocking MLM statistics everyone needs to know
Thinking of joining an MLM? Don’t! As you’re about to discover, your chances of success are shockingly slim.
In fact, research shows that you’d be financially better off heading to Las Vegas and playing roulette than you would joining an MLM. This is just one of 12 statistics that we think should be essential reading before anyone signs up to a networking marketing or direct sales company.
Because as you’re about to discover, the REAL truth about MLMs, based on independent research and their own data, is shocking. (Almost as shocking as learning that mental health advocate Fearne Cotton was booked to speak at an Arbonne event.)
Here are 12 statistics about MLMs that we think everyone should know.
1) 99.6% of participants lose money
Let’s start with the statistic that, to us, is the most shocking of all. According to research published on the Federal Trade Commission (FTC) website, on average 99.6% of people who join an MLM will lose money once business expenses are taken into account.
2) You are 268 times more likely to win at roulette than make money with Amway
The same research calculated that you are 268 times more likely to win from a single spin of a roulette wheel in Las Vegas than you are to make money with the MLM Amway.
And your odds aren’t just apparently terrible with Amway. The research also showed that you are 44 times more likely to win at roulette than earn money with Nu Skin, and 22 times more likely to win than make money with Melaleuca.
Clearly, in general MLM is a bad bet.
3) Up to 90% of Herbalife distributors leave every year
in 2005, Herbalife admitted that it had a turnover rate of 90% of distributors who were not supervisors, and 60% of supervisors.
In fact, it is estimated that 1 distributor drops out of Herbalife every 16.7 seconds. Herbalife admit that “There is a high rate of turnover among our distributors, a characteristic of the network marketing business.”
Given that their own income disclosure statements show that as many as 88% of Herbalife distributors make no commissions, we’re not surprised.
4) Women in an MLM earn an average of $0.56 an hour before deducting expenses
According to research conducted by MagnifyMoney, overall women in an MLM earned a median of $18.18 per month, which translated to $0.67 an hour. Women came out worse than men, with an hourly median wage of $0.56 compared to men’s $0.92.
And remember, this is BEFORE deducting business expenses, which are considerable with an MLM as you often need to meet a minimum sales (or purchase) requirement every month to remain with the company.
5) The top 200 Amway distributors in Wisconsin LOST $900 a year
State tax returns obtained and used by the Office of Attorney General for the State of Wisconsin in a 1980 suit against Amway revealed that the average net income (after subtracting expenses) for the 200 top Amway distributors in Wisconsin was approximately minus $900.
Yes the TOP Amway distributors actually LOST money once their business expenses were taken into account.
6) Beachbody shares dropped by 765% in just 19 months
Many critics are delighted to note a general downturn in the MLM industry. So it’s not surprising to us to see the dramatic difference in Beachbody’s share price over time.
In January 2021, the opening share price for MLM Beachbody was $11.24. Just 19 months later on 19 August it had plummeted to 1.47:
7) LuLaRoe paid $4.75 million to settle a lawsuit that accused it of being a “pyramid scheme”
On 2 February 2021, Washington State Attorney General announced that LuLaRoe had paid $4.75 million to settle their lawsuit against the company, accusing it of being a “pyramid scheme”.
In their announcement, Washington stated that “LuLaRoe tricked Washingtonians into buying into its pyramid scheme with deceptive claims and false promises… As a result, thousands lost money and two individuals made millions from their scheme.”
8) The median Leadership Compensation Earnings of all LuLaRoe Retailers in 2020 was zero
As part of their agreement with Washington State, Lularoe are required to produce an annual income disclosure statement. Their 2020 statement showed that the median Leadership Compensation Earnings of all LuLaRoe Retailers in 2020 was zero.
The same income disclosure statement noted that the expenses of these retailers “can be several hundred dollars or thousands of dollars annually”, meaning these people would probably have made a significant loss.
Interestingly, after people like us publicised this fact, LuLaRoe changed how they presented their statistics on their 2021 income disclosure statement. On examining the figures though, nothing appears to have changed.
This isn’t the first time an MLM has attempted to hide the truth. Over the years, as they have come under greater scrutiny we’ve seen most MLMs remove incriminating data from their income disclosure statements. And even go as far as taking down pages on their website when their possible recruitment lies are exposed – as they did here after we shared a video.
9) There are more than 74 million people selling MLM in Asia Pacific
According to data from the World Federation of Direct Selling Associations, in 2021 there were 74,527,937 MLM distributors in Asia Pacific. Sadly they were vastly over-represented in the region’s poorest countries.
In fact, there are more MLM distributors in Indonesia, a country where the average annual income is just $3,870, than there are in the USA, the home of MLM.
We often see MLMs doing well in countries where people are desperate to find a way to feed their families. Sadly, most of these people will just end up poorer, according to statistics from the MLMs themselves.
10) Body Shop reps are told to friend request five people every day
Ever had a friend request or unsolicited Facebook message from someone you don’t know? The chances are they are in an MLM and desperately trying to recruit. We’ve heard from many reps from different MLMs that they are told to bombard people in an attempt to make money from them.
And this list of 100 things you are supposed to do when you join MLM like Body Shop at Home shows just how much time and effort you are expected to put in – most likely with (as we know from the many statistics above) no financial return.
11) Arbonne consultants work between 520-780 hours a year for FREE
Speaking of which, according to MLM Arbonne, “Most people invest about 10-15 hours per week, on average, when they start their business”. Yet their own income disclosure statement shows that “most people” (88%) earn nothing from their Arbonne business in a year.
This means that the vast majority of people who join Arbonnne must work between 520-780 hours a year for free!
12) The top 1% of US MLM reps earn less than a foreign language tutor
It’s the dream of pretty much every MLM recruit to make it to the top of their pyramid-shaped earnings table. But what REALLY happens once you get there?
We know from interviewing this former Black Presenter (the top rank of MLM Younique) that things aren’t as rosy nor as lucrative as you may expect. But even we were shocked to work out that the top 1% of US MLM reps earn less than a foreign language tutor – while undoubtedly working much harder. You can see how we discovered this here.
The facts don’t lie – MLMs don’t work
Over the many years we have spent investigating MLMs and talking to victims and experts, we’ve come to the conclusion that MLMs just don’t work. Yes, they do make some people rich: the people who start the business in the first place.
But we believe that their wealth comes from creating a system where the odds are stacked against the people at the bottom – the people whose money pays the people at the top. There’s a reason why MLM income disclosure statements look pyramid-shaped!
So please, if you are considering joining an MLM, our advice is to steer clear. Based on our research, you are more likely to lose money, time and quite possibly your emotional wellbeing, than you are to make money.
Read more about MLMs
If you’d like to learn more about MLMs, and why we believe they are so harmful, we recommend reading these articles:
- The 10 ugly truths MLMs don’t want you to know
- Is it REALLY possible to make money in an MLM? We do the sums
- Are MLMs really pyramid schemes? Why you can’t make money selling their products
- Seven lies an MLM rep will tell you – and the REAL truth you need to know
We also recommend reading the experiences of some of the former MLM reps we have interviewed here:
- What’s it REALLY like as an MLM rep? We interview one to find out
- Thinking of joining an MLM like It Works? Read this cautionary tale first
- How much can you earn as an It Works distributor? How one woman lost £3,239
- Look into the bad reviews… then run!” One former rep shares her experience with MLM It Works!
- The complete lowdown on MLM Juice Plus+ and how it cost one woman £68 a month
- How much can you earn with MLM Valentus? And how even the company admits that ‘most reps’ lose money
- Why MLMs like Younique apparently don’t even work for the top reps