Why we’re not publishing any more MLM income disclosure statements

Business

We’ve stopped investigating MLM income disclosure statements for now. Here’s why we have made that decision. 

Over the past few weeks we’ve been looking at the MLM (multi-level marketing) phenomenon, and how it just doesn’t work for most participants.

And an important part of this has been our examinations of MLM companies’ income disclosure statements – and finding out exactly how much reps are earning with them. So far we have covered:

But at this moment, we don’t have any plans to investigate further. Here are the two reasons why we have come to this decision.

1) MLMs make it very hard for you to learn the truth

The first reason is frustrating: MLM companies work VERY hard to prevent you from learning the truth about their ‘income opportunities’.

A few do publish their income disclosure statements online. But even these hide the real figures, as their published incomes don’t take into account expenses, nor reps who earn zero in any given month (which anecdotally appears to be a LOT).

Most however, don’t even attempt this level of transparency. Instead, when asked basic questions (like: how much does the average, bottom rung rep make a year?) they side step, evade or even just reply with irrelevant statistics.

To date, no MLM company that has contacted us (and they have) has given us a straight answer. Not one. We’ve seen less slippery political exchanges than the emails we’ve received from direct selling organisations and companies.

So that’s reason number one why we don’t plan to publish any more exposes right now: it’s hard to get facts to work from. Reason number two is far more damning (and revealing) for the entire MLM industry.

2) All income disclosures reveal the same truth

Reason number two is that it’s proving to be very boring! Why? Because to date, every income disclosure statement we’ve seen (including disclosures we haven’t published) reveal the same truth: only the top tiny percent in any MLM make decent money. Or indeed any money at all.

Here’s what we have learned from EVERY income disclosure we’ve seen so far:

  • Their earnings are pyramid shaped (because that’s what they are, pyramid schemes) – the top 0.something% make very good money, but this rapidly decreases down the pyramid. The bulk of reps at the bottom of the pyramid usually make virtually nothing (or lose money) after expenses.
  • Their ‘earnings’ don’t include expenses – none of the MLMs include expenses in their earnings. And there are lots – from your starter kit, to samples needed to demonstrate or give as freebies, to catalogues and order forms. And we haven’t even started on marketing yet…
  • They don’t include reps who earn zero – these ‘average’ earnings can be reduced further when you include all reps who earned zero in any given month – which plenty do. MLM companies conveniently leave these off income disclosure statements in an attempt to make them appear less awful.

When we started investigating income disclosures we were shocked. Especially when Stella&Dot admitted that in Canada:

“The typical stylist (including inactives) during 2015 earned between $0 to $100…”

(It costs $169 to get started as a Stella&Dot stylist in Canada, so we presume this means the typical stylist loses money.)

However, three articles in, we have to admit that the shock has given way to boredom. So we’ve decided to leave our investigations there for now. But do want to emphasise that:

So far we have not come across a single MLM/network marketing/direct selling/social selling (etc) company that offers a genuine business opportunity, nor one that we would recommend. 

We also remain staunchly anti-MLM and will continue to do all we can to expose them for the scams we believe they are. So please, if you are approached about joining one, just say NO.

Read more about why MLMs don’t work

If you’d like to read more about MLMs (and why they don’t work) we recommend:

We also recommend watching this video on MLMs by Last Week Tonight with John Oliver.

Photo by maxime caron on Unsplash