Intro
In this episode of the Financial Feminist podcast, host [Host Name] interviews Emily Lynn Paulson, a former top seller in a multi-level marketing (MLM) company who now advocates against predatory practices and shady business dealings. Emily shares her personal story of being pulled into the world of MLMs and exposes the insidious and exploitative practices employed by these companies. Join us as we delve into the dark side of MLMs and discuss the importance of supporting women business owners in ethical and sustainable ways.
Main Takeaways
The Dark Side of MLMs
- If you care about your friend, who is in an MLM, do not buy her products and do not join her team. The people who are profiting off of this are not your friend.
- MLMs are sketchy and secretive, and we’ve all received messages from acquaintances trying to sell us products.
- MLMs prompt sellers to use their own personal stories, such as cancer diagnoses, to sell products.
- MLMs are not a legitimate business and exploit women’s unpaid labor.
- MLMs uphold systems that oppress women, white supremacy, and patriarchy.
- MLMs are a scam and not a good form of women’s empowerment.
- Examples of MLMs include Mary Kay, Beachbody, Avon, Rodan and Fields, and more.
- MLMs often advertise on social media and promote products.
The Cult-Like Nature of MLMs
- MLMs are similar to cults in the way they target susceptible individuals.
- MLMs often target stay-at-home moms who feel unfulfilled.
- MLMs can create a sense of community and belonging for people who feel unfulfilled.
- MLMs use cult-like tactics such as love bombing and offering a new identity to make people feel like they belong to something.
- MLMs offer dopamine hits through gifts and shoutouts to keep people engaged.
- MLMs make it easy to hit the first promotion to rope people in.
- Love bombing is a powerful tactic used by MLMs to keep members seeking recognition.
- The sunk cost fallacy prevents people from leaving MLMs even when they are losing money.
- MLMs promote a meritocracy where personal development is emphasized, making it easy to blame oneself for failure.
- MLMs use classic cult behavior to keep members trapped and isolated from outside perspectives.
The Illusion of Success in MLMs
- 99.7% of people fail in MLMs, but the fallacy of the 1% makes people believe they can still succeed.
- MLMs are not treated like a lottery, but rather as an opportunity to be part of the elite few who succeed.
- MLMs are a bastardization of the American Dream and a meritocracy where only those who can spend money can make money.
- Stories of success in MLMs are amplified on social media, but only a few people out of hundreds of thousands actually make money.
- MLMs use cross-sections of different backgrounds with rags to riches stories to make people feel like they could be successful too.
- Earning a million dollars in commissions in MLMs does not necessarily mean financial success.
- MLMs require huge expenses, such as buying products, paying for trips and conventions.
- MLM success is not solely based on one’s own work, but rather the work of people at the bottom of the pyramid promoting those at the top.
- Saturation and changes in the social media landscape can hinder success in MLMs.
The Manipulative Tactics of MLMs
- MLMs often use vulnerable stories, such as personal tragedies, to promote their products.
- PPP loan fraud is a prevalent issue in MLMs.
- Using a personal tragedy as a marketing tactic in an MLM may not result in all profits going to charity, as the upline and parent company may still receive a cut.
- Fundraisers can be a positive way to support a cause, but it is important to ensure that profits are going to the intended recipient and not just the MLM hierarchy.
- MLMs perpetuate the myth of a “free car” but in reality, qualifiers have to hit certain metrics and buy their own luxury car before receiving a stipend from the company.
- MLMs involve financial manipulation and are a bigger problem than just feeling like something is scammy.
- MLMs are not about the product, but about recruiting people into the system to continue to dump more money into the system.
- The thought-stopping cliche that pyramid schemes are illegal is not true, as illegal things happen all the time.
- MLMs use myths to make people believe they can succeed if they work hard enough.
Leaving an MLM and Moving Forward
- Don’t feel judged or ashamed for being involved in an MLM, but do a profit loss statement to see if you’re losing money.
- Ask yourself why you joined in the first place and if there are better ways to achieve those goals.
- Look at the level of harm you are inflicting on others by keeping them in the system.
- Give yourself grace and empathy throughout the process of leaving an MLM.
- MLMs are often perpetuated as good business opportunities for women and people of color, but they are truly just scams.
- It’s important to have empathy for those who have left MLMs and those who give advice to leave.
- When talking to friends who are running an MLM, be a soft place to land and don’t buy their products or join their team.
- Most people quit MLMs before a year, but those who try to make it work usually last about four years.
- Emily Lynn Paulson’s book, Hey Hunn, is available wherever books are sold and she offers support for sober moms at sobermomsclub.com.
Summary
The Dark Side of MLMs
MLMs are exploitative and deceptive business models that prey on vulnerable individuals, often targeting stay-at-home moms. They promote products through sketchy and secretive practices, using sellers’ personal stories, such as cancer diagnoses, to sell products. MLMs exploit women’s unpaid labor and uphold systems that oppress women, white supremacy, and patriarchy. Examples of MLMs include Mary Kay, Beachbody, Avon, Rodan and Fields, and more. It’s important to understand the true nature of MLMs and support women business owners in ethical and sustainable ways.
The Cult-Like Nature of MLMs
MLMs employ cult-like tactics to create a sense of community and belonging for vulnerable individuals. Love bombing, offering a new identity, and providing dopamine hits through gifts and shoutouts are some of the tactics used by MLMs to keep members engaged. MLMs make it easy to hit the first promotion to rope people in, and the sunk cost fallacy prevents many from leaving even when they are losing money. MLMs use classic cult behavior to trap members and discourage seeking outside perspectives.
The Illusion of Success in MLMs
MLMs perpetuate the myth that anyone can succeed if they work hard enough, but the reality is that only a small percentage of people actually make money. Stories of success in MLMs are amplified on social media, but the majority of participants end up losing money. MLMs require significant expenses, such as buying products and attending trips and conventions. Success in MLMs is not solely based on one’s own work, but rather on the work of those at the bottom of the pyramid promoting those at the top.
The Manipulative Tactics of MLMs
MLMs often use vulnerable stories, such as personal tragedies, to promote their products. PPP loan fraud is a prevalent issue in MLMs, and fundraisers may not always ensure that profits go to the intended recipient. The myth of a “free car” in MLMs is debunked, as qualifiers have to hit certain metrics and buy their own luxury car before receiving a stipend from the company. MLMs involve financial manipulation and are focused on recruiting more people into the system rather than selling products.
Leaving an MLM and Moving Forward
If you find yourself involved in an MLM, it’s important to evaluate your financial situation and consider the harm you may be inflicting on others by keeping them in the system. Give yourself grace and empathy throughout the process of leaving, and seek support from resources like Emily Lynn Paulson’s book, Hey Hunn, and her website, sobermomsclub.com. Have empathy for those who have left MLMs and offer a soft place to land for friends who are running an MLM, without buying their products or joining their team.
Conclusion
The world of multi-level marketing is filled with exploitative practices, deceptive tactics, and false promises. MLMs prey on vulnerable individuals, particularly stay-at-home moms, and perpetuate harmful systems of oppression. It’s crucial to educate ourselves and others about the true nature of MLMs and support women business owners in ethical and sustainable ways. By understanding the dark side of MLMs and empowering ourselves with knowledge, we can protect ourselves and our communities from falling victim to these predatory schemes.
