We need to talk about multi-level marketing. While I am thankfully not bombarded (any more) with direct messages sounding like: “You would fit perfectly into my team” or “Would you like to make an income working from home?”, I still see some Multi-level marketing ladies out there luring others into a, for most of the people not very lucrative, business model.
I am not neglecting the fact that some people earn a steady income while having joy in their work, but at what cost? Personally, I have lost friends to these schemes because I couldn’t bear the continuous attempts to “have me in their team”. And no, I am not talking about a once-in-a-while mention of their products but about an irritating elevator pitch whenever a possibility came up. I was on the lookout not to fall into one of these traps – but is that really friendship when you are perceived as some business asset waiting to be recruited?
There are some psychological phenomena that keep me up at night—understanding cult tactics and brainwash are two of such phenomena. Having watched hours of videos and reading dozens of articles, I came to the conclusion that MLMs (Multi Level Marketing) do share some similarities with tactics used in Cults.
What are Cults?
Cults are often shrouded in mystery and intrigue, but their core characteristics and psychological manipulation techniques are well-documented. Cults typically have a charismatic leader who demands loyalty and promotes an ideology that is regarded as the ultimate truth. Members are sometimes isolated from the outside world, creating a closed echo chamber where the cult’s beliefs cannot be challenged. Psychological techniques such as love bombing, fear tactics, and mind control are employed to maintain a tight grip on members, often leading to a loss of personal autonomy and critical thinking.
Multi-Level Marketing: A Structural and Psychological Parallel
Like cults, MLMs often have charismatic leaders or top earners who embody the success stories that lower-tier members aspire to achieve. These leaders use motivational speeches and training materials to perpetuate the MLM’s ideology, which usually revolves around themes of financial freedom and personal empowerment.
The recruitment process typically involves love bombing, where prospects are showered with attention and promises of support to entice them to join. Sadly, this is often times just what those entering these schemes need. A supportive community, i.e. of other mothers hoping to be able to earn money on the side to support their families.
The Financial Mirage: Data and Dangers
The financial outcomes for individuals in MLMs are often less than promising. Statistics reveal that only about 25% of MLM participants make a profit, with the average annual earnings ranging significantly. Some earn as little as $1,054 annually, while others may reach up to $22,500. However, these figures do not account for expenses incurred, which can lead to net losses for many.
Moreover, the failure rate is high, with a 7% chance of participants going bankrupt after joining an MLM. Despite these sobering statistics, MLMs continue to grow, with social media playing a role in recruitment and sales, regularly blurring the lines between personal and professional relationships.
Blame and Ethical Predicaments
The culture of blame that MLMs promote raises more ethical issues. When members fail to achieve the promised success, they are often held responsible for “not wanting it enough” or “not working hard enough.” This victim-blaming is psychologically damaging, leading to stress, lowered self-esteem, and strained relationships.
MLMs often target vulnerable populations, making unsubstantiated claims that exploit individuals’ hopes and dreams. The resulting disillusionment impacts financial stability and erodes trust within personal networks.
Against MLM Advocacy
In light of the structural similarities to cults, the data on financial outcomes, and the ethical concerns, advocating for MLMs becomes problematic. The blend of psychological manipulation, financial instability, and ethical grey areas creates an environment that is ripe for exploitation and harm.
The promise of MLMs is a mirage for the vast majority, and the cost—financial, emotional, and relational—is too high a price to pay. The inherent design of MLMs benefits those at the top of the pyramid at the expense of a large base of individuals who are often left worse off than before they joined.
While MLMs can legally operate and may seem like a path to economic empowerment, the reality is that they frequently function in ways that are parallel to the coercive practices of cults. The data on financial outcomes is disheartening, and the ethical implications of the blame placed on individuals are troubling.
It is clear that MLMs are not a sustainable or ethical avenue for achieving financial success and are not recommended for those seeking a stable and empowering career path. Yes, you can get lucky if you start early and are ambitious. But that is not the rule – the sad reality is that most people don’t start in the beginning, and the expenses (both in money and time) are more often than not justified. Especially not for those who need to make money in order to support their families.
If you’re interested in the psychology of MLMs, I highly suggest you to listen to Podcasts by ex-MLM members talking about their experiences. One such Podcast is called “The Dream”, but you will find an abundance of experiences also from “Sounds like a Cult”, “Cultish”, and others. Dive into this fascinating world – and protect yourself from undue influence.