After leaving the workforce to raise her five children, Emily Paulson found herself feeling overworked, overwhelmed, and lonely. So when a high-school friend reached out to invite her to a beauty event at a nearby bar, the promise of a night out was enough to convince her to go. “I was like, sign me up, whatever. I don’t care what you’re selling or what we’re doing,” she said.
At the end of that night in 2014, Paulson, now a 44-year-old sobriety coach and author who lives in Oregon, walked away with an armload of beauty products for herself and an “initial business kit,” which contained skincare products to sell to others. The $1,000 kit, the most expensive one offered that evening, was Paulson’s entryway into a new community that would come to dominate her life. She had been sucked into a multilevel-marketing scheme.
“From the outside, it seemed to check all the boxes,” she told me. “There was a community connected with it, there was a potential to earn income from it, and it seemed very possible and lucrative.”
Paulson was involved with the MLM company for six years. Her earnings peaked in late 2017, when she was making about $40,000 a month. But the money she made wasn’t from selling skincare products. Most of her income came from recruiting other people to join the group — who then recruited even more people. “The products are just really kind of the way to get people in,” she said.
Over the past few years, MLM companies have been under increased scrutiny. Critical documentaries have highlighted the industry’s most predatory practices. Social media is flooded with MLM “horror stories,” while others have flocked to the antiMLM subreddit, a group with over 800,000 members that markets itself as a community designed to “stop MLM schemes from draining your friends dry.”
Anti-MLM groups often focus on the people selling the products — 76% of whom are women — calling them “huns” in reference to the way sellers often start their reach out messages with “Hey, hun.” But while lambasting the people shilling products with formulaic and intrusive messages can feel cathartic, the blame doesn’t lie entirely with the salespeople: MLMs thrive by targeting people who are seeking a community and economic stability. Instead of blaming or ridiculing the women who are lured in by a chance to gain a stronger financial footing, the ire should be directed at the companies built around exploiting an economic system that undervalues women’s work.
Misplaced target
The MLM model — made famous by brands like Tupperware, Mary Kay, and Amway — has been around for decades. Also known by names such as network marketing, pyramid selling, social retail, and referral marketing, the model involves selling products to people you know and recruiting them to sell the products as well. Recruiters get a percentage of the sales from people they add to their network, known as their “downline,” while those higher up the chain are known as the “upline.” Given this structure, it is much more lucrative to add people to the network than actually sell the end products.
While the business model of MLMs is a timeworn tradition, the tactics used by salespeople have come a long way since the Tupperware parties of the 1960s. Facebook provided an easily accessible network of high-school acquaintances to target, and Instagram gave recruiters a space to show off their extravagant lifestyles as a kind of FOMO marketing. Despite TikTok banning MLM content in 2020, marketers still find sneaky ways to captivate users on the platform.
“On TikTok, because the video format is so short and concise, they can get away with very misleading content or content that doesn’t tell the whole story,” Jennifer Rajala, an MLM whistleblower who uses her TikTok account to warn people about the dangers of MLMs, said. “For example: ‘I just made enough $ to take my family on our dream vacation. Ask me how.’ There’s no mention of the MLM so people reach out because they are genuinely curious.”
While social media can help boost MLM content, it has also opened up new avenues to alert people about industry practices. But a lot of the online vitriol toward MLMs is targeted at participants, who are often portrayed as stupid or selfish for getting involved. Mary Wrenn, a senior lecturer of economics at the University of the West of England, and the author of an upcoming paper on MLMs, explained that calling out sellers can be cathartic for the anti-MLM crowd.
“There is the straightforward Schadenfreude you might feel if a girl from high school who wouldn’t give you the time of day suddenly appears in your DMs,” Wrenn said, adding that the “boss-babe and lifestyle posts are cringey and sometimes quite obviously faked.”
But behind the surface-level critiques, Wrenn said that the “manipulation and opportunism that distributors are encouraged to use in order to sell and recruit” is what causes a lot of anger. For example, sellers might invite people to a party and “surprise — it’s an MLM demo!” Or sellers may pitch products inappropriately, such as in response to someone asking for medical advice on social media.
But those tactics don’t stem from the sellers themselves — it’s the companies and people at the top of the companies who encourage these approaches. Paulson, who discusses her experience as an MLM marketer in her upcoming book, “Hey, Hun,” described the women who get roped in as “victims that become perpetrators.”
Selling a dream
Many MLM participants genuinely think they are doing something helpful by asking people to join them. Jo Stimson, a 54-year-old self-employed sales specialist in the UK, was struggling financially and looking for ways to lose weight when her friend suggested she join Herbalife, an MLM company that develops and sells dietary supplements. Stimson thought the friend was earnestly trying to help her improve her life.
MLM companies largely appeal to those who are disconnected and looking for a way to get on solid financial footing
At first, Stimson felt optimistic. She was convinced that she was helping other people earn extra money and lose weight. She even talked her family into lending her £20,000, or about $25,000, to invest in Herbalife products and build out her network. “It was encouraged by the upline to borrow money and buy stock so you could attract more people into your downline. Obviously, I now know because it earned everyone above us money,” she said.
Meg Conley, who researches and writes about power, money, and the home, told me that MLM companies largely appeal to those who are disconnected and looking for a way to get on solid financial footing — in particular, they target caregivers like stay-at-home parents or people looking after elderly loved ones. In 2021, AARP estimated that caregivers provide $600 billion in free labor each year in the US. MLMs offer caregivers validation, Conley told me, and a path toward financial independence that their unpaid work may not provide.
“Most MLMs are very, very good at saying, ‘I see the work that you’re doing. The work that you’re doing is real work and it’s really valuable. We don’t have a way to pay you for that as a society. But we — the MLM — have created this neat hack where you can still do the care work that you have chosen to do or have to do,'” Conley explained.
These companies have also co-opted the language of female positivity, solidarity, and empowerment, Wrenn told me. By playing on these themes, MLMs promise a sense of community that they rarely deliver. Instead, MLMs encourage social disconnection and competition between members. “All of the individual distributor’s relationships transform into potential transactional exchanges,” Wrenn wrote in her paper, adding that turning every interaction into a possible sale is “amplifying the alienation” people already feel.
In the initial stages of her MLM career, Paulson felt weird about trying to sign up family and friends. But when she told her recruiters that she felt uncomfortable messaging people to try to recruit them, those in her upline told her she should push herself out of her comfort zone. According to a recent AARP survey, feeling awkward pitching friends and family is the most common reason people leave MLMs. It wasn’t until she became sober in 2017 that Paulson began to realize how the MLM mindset had warped her interactions with those close to her. “Once I was no longer drinking, the first thing I noticed was, ‘Oh gosh, I can’t say these things anymore,'” she said.
Sinking slowly
In addition to a sense of community, MLMs sell themselves with the promise of freedom. In many cases, the companies encourage their members to look down on those who are “stuck”‘ in corporate America, Wrenn said, and paint their salespeople as entrepreneurial spirits.
“They just give vague platitudes, like, ‘You go, girl,’ or ‘Boss babe building her empire,‘” Wrenn told me.
Meanwhile, the companies push all the typical retail-overhead costs onto members by requiring them to buy a certain amount of products to theoretically sell to customers.
“The distributors are responsible for their own marketing, sales, and the distribution of their downlines. They have to create their own giveaways, discounts, sales drives, and inventory storage, and they are charged for website maintenance fees,” said Wrenn.
They just give vague platitudes, like, ‘You go, girl,’ or ‘Boss babe building her empire’
Those costs eventually add up, and if participants can’t sell enough products, they end up in a deep hole. A 2017 report for the Federal Trade Commission found that 99% of downline MLM participants lose money. And a 2018 AARP survey found that just 25% of MLM participants made a profit. And by subtly shaming women for being unable to “have it all,” MLMs manage to convince them that they’re failing because they aren’t working hard enough, distracting them from the fact that they’re part of a rigged system.
As the front-line sellers struggle to make ends meet, the MLM corporations themselves are able to make money hand over fist. US direct-sales companies, which include MLM companies, earned $42.7 billion in retail sales in 2021, according to the Direct Selling Association — a 21% increase from 2019. That same year, the global direct-selling industry was valued at $189.7 billion.
Stimson started off optimistic because she saw how successful others had been, but then she had a hard time selling her products. She found it difficult to recruit other people, because she didn’t want them to spend lots of money buying excess stock like she had.
After two years, Stimson reached a breaking point. Her mounting debt made it clear that Herbalife was not going to help her make money, so she decided to quit. To pay her family back, she had to take on additional part-time retail work alongside her sales job. “It was a hard lesson to learn, and while it taught me some sales skills, it’s something I wished I hadn’t embarked on,” she said. After leaving Herbalife, Stimson never heard from the friend who had introduced her to the program.
Paulson was one of the rare MLM participants who made a lot of money from the model, but she began to realize that wasn’t the case for other people she was recruiting. That “gradual collection of red flags,” as she described it, was what made her leave the industry. “I realized that I had been selling this dream that maybe was being fulfilled for me, but nobody else who I’d recruited,” she told me.
Breaking free
The increased pushback on MLMs from documentaries, TikTok, and YouTube videos can be misdirected — but the criticism may also be helping to turn the tide against the industry. A growing number of MLM salespeople are becoming disillusioned: According to the AARP survey, over half of participants said their company’s representation of achieving financial success was “not too accurate” or “not at all accurate.” And two-thirds of MLM participants said that “knowing what they know now, they would not join the same MLM company again.”
The vast amount of information available about how predatory MLMs work means that Gen Zers are less likely to get sucked in, the anti-MLM TikToker Rajala explained. “Anti-MLM has become such a large movement more recently than in generations past,” she said.
It’s not just social media that’s turning people away from MLM schemes — government agencies are also taking action. In 2022, the FTC ramped up efforts to “combat bogus money-making claims” by MLMs. It also sued two companies — Herbalife, for over $200 million in 2016, and Advocare, for $150 million in 2019 — for “alleging they promoted high earnings even though most participants made little or no money.”
But ultimately, breaking the sway of MLMs and other predatory companies, Conley said, will require wholesale changes to the ways society compensates care work and treats financially disenfranchised people. Instead of blaming MLM “huns,” we should direct our anger at the companies that are knowingly putting so many people in debt and alienating them from their communities. And we should focus on building a system that empowers and supports everyone.
“If we could make sure everybody is at a baseline and that they’re not just surviving — which we also don’t have in America right now — but thriving,” Conley said, “then we can reach a point where there will be fewer predatory things like MLMs that make their way into our homes.”
Aimee Pearcy is a freelance tech journalist based in the UK. She covers digital culture and the creator economy.
