That revenue and enrollments of some multi-level marketing companies have increased during the government-ordered shut-down and quarantining is yet another proof that “MLM” is not “direct selling.” Under pandemic conditions there could be no “parties”, personal demonstrations, or “person-to-person” persuasions. Everything is online. So what added value could “MLM” provide consumers that non-MLM online selling does not already offer?
In 2013, the “Direct Selling” Association proclaimed this definition of “direct selling”:
“Direct selling is a business model that offers entrepreneurial opportunities to individuals as independent contractors to market and/or sell products and services, typically outside of a fixed retail establishment, through one-to-one selling, in-home product demonstrations or online.”
This is not happening during the pandemic, yet some MLMs show revenue growth and surges of “consumer interest.”
Despite no advertising, commodity products, higher pricing, less convenient buying, limited offerings, and brands that almost no one has ever heard of, MLM has tried for years to argue its “sales” force offers special value, based on “one-to-one” contact and hands-on product “demonstrations.” This makes no sense in the era of Costco, Wal-Mart and Amazon.com. It is irrelevant for ordinary products that do not require personalized selling. MLM “salespeople” are not trained and some have no knowledge or experience with the products. Adding to the “direct selling” nonsense is the inconvenient reality that most MLM “salespeople” quit within a year of getting enrolled, and stop buying the products themselves. So, the question inevitably arises: If not “direct selling” what is going on in MLM?
The answer becomes obvious to anyone who attends just one MLM event. It is the famous “unlimited” income proposition, aka pyramid recruiting. During the pandemic, income stopped or was drastically reduced for millions of people. MLMs began flooding social media with claims that MLMs offer an alternative income source “from home”. In fact, 99% of MLM enrollees never make a net profit. MLM is deceiving vulnerable people while they are experiencing fear and insecurity. Some MLMs add to the insult by also falsely claiming their potions-and-lotions prevent or cure Covid-19.
Dangerously false health claims aside, MLM revenue in the time of Corona reveals it is not and never has been “direct selling.” The identity of MLM is fake, a con for luring people into MLM’s income-opportunity scam. The very name of MLM’s lobbying and PR organization, the “Direct Selling” Association is part of this con.
The pandemic has revealed many weaknesses and flaws in our economy. One of these revelations, for those who still do not know, is that MLM is only wearing the costume of “direct selling” to propagate its real mission – selling the deceptive and harmful “endless chain” proposition.