The Downfall of MLMs

The concept of selling a dream is faltering in today’s economic climate.

If you find yourself in your mid-30s, there's a good chance you experienced that classic teenage moment when you signed up for an MLM. Personally, I joined AIL and Primerica at one point. My college roommate fell victim to Melaleuca, missing rent because of it, while another friend sold Cutco knives until he realized his earnings amounted to about $2 an hour.

It's peculiar to reflect on, but in a way, joining someone's downline has become somewhat of a rite of passage in the United States. Is it even an American experience if you haven’t been ensnared by a capitalist scheme that capitalizes on people's desperation?

However, I sense that the U.S. is starting to lose its affection for MLMs. For over a century, Multi-Level Marketing companies formed a significant part of American culture. MLMs operate closely to pyramid schemes; they generate profits not primarily from product sales but through recruitment. Sellers earn by bringing others into the fold, and the more individuals they recruit, the more profitable they become. Joining often comes with an entry fee, which is the cost of this "opportunity."

The harsh truth is that outside of those at the top, very few individuals actually make money from MLMs. The top earners benefit from their extensive downlines, which distribute the selling workload. Thus, the scam lies in the fact that MLMs sell a dream rather than tangible products.

Even if you aren't from the U.S., you've likely heard of these companies. Interestingly, MLMs weren't always viewed negatively. In the mid-20th century, they provided some of the few job options available to housewives outside of traditional roles like secretarial work, teaching, or nursing. Companies like Mary Kay emerged as pioneers, featuring female CEOs and marketers, allowing many women to earn extra income at home.

Many of these well-known brands have become cultural touchstones, referenced in retro films, documentaries, and high-profile legal cases. Some familiar names include:

• Mary Kay
• Avon
• Cutco
• Herbalife
• It Works!
• The Body Shop
• Rodan + Fields
• LuLaRoe
• Monat

In several regions, being part of an MLM can even serve as a status symbol, indicating a supportive husband and social connections. However, many individuals join not for financial gain but for a sense of belonging.

In recent times, we've witnessed a notable decline in MLM companies, some even shutting down or revamping their commission structures. A quick online search reveals a significant transformation in how MLMs operate, with many failing to maintain their traditional business models.

For instance:

• LuLaRoe, a leading leggings MLM, has closed its doors, widely covered in the documentary "LuLaRich."
• Monat, a major haircare brand, has faced severe lawsuits and has begun to cut jobs among its top ranks.
• Rodan + Fields has transitioned away from its MLM framework to a commission-only model.
• The Body Shop ended its MLM-based Home Service this year, focusing instead on mall locations for profitability.
• Seint, a makeup company, is restructuring its commissions to eliminate the MLM aspect.
• Amway, often dubbed the king of MLMs, reported a 5% profit loss, marking its first dip below $8 billion in a decade.

These shifts underscore a significant change in the MLM landscape and signal a transformation in how companies conduct their business. The headlines clearly indicate that MLMs are falling out of favor.

But what do the statistics reveal? MLM sales have plummeted by around 40% over the last 20 years compared to retail sales in the U.S. So, what’s causing this decline?

In the first video, "LIVE CHAT - MLMs are dying! The reason isn't what you think!" we explore the underlying causes of this decline and what it means for the future of MLMs.

The Rise of Online Awareness

In the early 2000s, it was common to know someone who had been burned by an MLM, yet many managed to fake their earnings, giving them a veneer of credibility. The internet has drastically altered this perception.

Now, content creators actively inform and warn against pyramid schemes like MLMs across platforms such as YouTube, Reddit, and TikTok. A simple search will flood you with critiques regarding product quality and low commissions. As a result, when people hear "MLM," they often associate it with poor products, exploitation, and bad decisions. This negative reputation is well-founded, leading many to refuse to purchase MLM products.

A Quest for Stability

MLMs offer a paradox. They may seem enticing to those facing financial struggles, but they also repel individuals lacking resources. Many simply cannot afford the entry fees, even if they’re minimal, while others are wary of commission-based work without guaranteed income.

The word is out: MLMs don’t deliver. With the time and resources required to potentially turn a profit, many people are unwilling to invest in a business model that frequently fails.

In recent years, the reduction in commissions has prompted many successful "boss babes" to reconsider their ventures, moving away from MLMs altogether.

Competing with Retail

Historically, many MLMs avoided retail due to shelving fees, a legitimate concern in the makeup and skincare sectors. In the past, quality skincare was hard to find at reasonable prices outside department stores. Today, drugstore brands often surpass MLM products in quality and price.

The Loneliness Epidemic

MLMs thrive on social connections, requiring participants to host gatherings and tap into extensive networks. In a time when loneliness is rampant, this model poses challenges. Most individuals prefer not to risk their friendships by dragging them into a guilt-ridden sales pitch.

MLMs are struggling to adapt to the realities of modern America, where the economy is strained and many find minimum wage insufficient for survival. With rising living costs, the average person is unlikely to thrive on commission-based pay for products.

The prevailing sentiment is that people are tired of being targeted due to their loneliness. The preference now leans toward stores where consumers can shop freely, without pressure from salespeople, while seeking stable income.

The notion of working for meager commission payouts is increasingly unappealing. Individuals are also wary of sacrificing friendships for profit, especially as awareness grows around the exploitative nature of MLMs.

A Turning Point in American Values

We live in a society increasingly skeptical of the notion that hard work guarantees wealth. Public sentiment has shifted; many are frustrated with how corporations exploit individuals for profit.

At a time when people are saying “enough is enough” to stagnant wages, MLMs are more unpopular than ever. Exploiting low-paid workers is a surefire way to earn a negative reputation, which is why many are stepping away from big-box retailers and opting for local businesses.

The reality is clear: MLMs have become misaligned with mainstream American values. As discontent with corporate exploitation grows, MLMs have rightfully earned their tarnished image.

In the second video, "THE DEATH OF MONAT | Everything you need to know about 'the beginning of the end' #ANTIMLM," we delve into the specifics of how certain MLMs, like Monat, are facing their downfall.

In conclusion, the landscape of Multi-Level Marketing is evolving, and the signs indicate a significant decline. The once-prominent business model is struggling to adapt to the current economic and social environment.