MLM’s - what’s the deal? (Multi-level marketing/aka pyramid selling)

[Thecatsmother]

Been meaning to post this encounter here for days!-
I was in the park with my 2 year old for about half an hour, when this women comes up to me and starts waving an usbourne books catalogue in my face asking me to take it! She hadn’t even bothered to say hello to me!

who even takes marketing material to the park with their kid? Weird as duck. Was also a bit offended she hadn’t even tried to smooth talk me

 

[Lolly505]

It's been mentioned a couple times on here but ElleBeauBlog (Elle's #Poonique story) is a great read. Best bit of advice she gives, if you are doing or interested in joining one of these 'businesses', is to keep an expenses list of all your ongoings and outgoings - you might be surprised how much money you're spending vs the 'profit' from your commissions.

Luckily I've not been too badly harassed by MLMs I did have a lassie I met at a student halls' party in like 2015 (and literally haven't spoken to since getting her safely back to her room that night because she got pretty steaming) add me to her Ann Summers' Facebook group last year in the hopes of shilling me some sex toys Like babe, if I really wanted some, everyone knows you go to Lovehoney (with that 20% student discount ) discrete to your door - rather than awkwardly and inconveniently via someone who vaguely knows you
I did feel bad seeing she'd got involved after I found out it was a MLM because she was a young single new mum who'd dropped out of uni and didn't have the best mental health before that (as she told me while drunk) and these schemes definitely prey on those who are more vulnerable like that. I do think she got out fairly quickly though and doesn't seen to have gotten into anything else - which is probably the best outcome.

 

[Casperron]

Been meaning to post this encounter here for days!-
I was in the park with my 2 year old for about half an hour, when this women comes up to me and starts waving an usbourne books catalogue in my face asking me to take it! She hadn’t even bothered to say hello to me!

who even takes marketing material to the park with their kid? Weird as duck. Was also a bit offended she hadn’t even tried to smooth talk me

Pretty sure that illegal unless she has a licence to be a street trader

 

[GoLando]

Been meaning to post this encounter here for days!-
I was in the park with my 2 year old for about half an hour, when this women comes up to me and starts waving an usbourne books catalogue in my face asking me to take it! She hadn’t even bothered to say hello to me!

who even takes marketing material to the park with their kid? Weird as duck. Was also a bit offended she hadn’t even tried to smooth talk me

They must be on a big push because I’ve seen sponsored Facebook ads from random people flogging their books! Lovely books but if you’re pestering me on Facebook, I’ll never buy.

 

[Barb]

The most hilarious one is Kangen water. A MLM for a £3k+ water machine

Apparently regular water is BAD for you, poisonous, dehydrating, ageing etc and only this magical water machine provides you with good water. People use this water instead of moisturiser or skincare, instead of HAND SANITISER, (big overlap of people who buy into this and people who doubt the pandemic), instead of any cleaning products, cures cancer...

The list is as funny as that shampoo one, one of the "pros" over regular old water is just LIVING

Yes! It's the same people posting about how woke they are, antivaxx, no mask, juice plus will keep them safe. It would be sad if it wasn't so bloody dangerous.

 

[Falkor]

Success Inspired Limited (Claire & Keith Spencer) - directors loan account has gone from just under £10,000 in 2014 to £205,000 in the most recent accounts to June 2019.

Residual Wealth Management Limited (Natalie Heeley) - 2019 accounts should have been filed at the end of June and weren't. The 2018 accounts show a directors loan account of £753,802, up from £631,746 in 2017. Earliest filed accounts in 2014 show no directors loan at all, so that's a LOT of money taken out in four years.

Emma Cooper Global Limited (Emma and Shaun Cooper) - 2019 directors loan account stands at £402,232, the earliest filed accounts for 2016 show no directors loan at all, so again, a lot of money taken out in the past few years.

Basically the lifestyles are being propped up by enormous amounts of money taken out of the business. Crucially you don't pay tax on them if they're repaid to the company within 9 months of year end, but if you fail to repay there's a corporation tax charge of 32.5% - that would mean, in Natalie's case, a tax bill of £244,985.65. Each of these three companies is showing the previous year's loan paid back and a new, bigger one taken out, this is known as bed and breakfasting and if HMRC can prove the loans haven't been paid back, but simply rolled into a new one, they can treat it as if it was unpaid and levy the tax charge anyway. I should think some of the directors have had some pretty sleepless nights with the levels of bonus cheques in recent years.

There's something interesting going on with these directors loans now. Both Natalie Heeley and the Coopers have recently filed annual accounts for their companies. Natalie Heeley's accounts show an increase in the amount owing for taxation and social security of £114,548 on last year. For that to be corporation tax on extra sales, her taxable profit would have had to have gone up by roughly £600,000, so her turnover by even more than that, and I think that's unlikely with the way Forever's sales are currently going in the UK. However, that £114k is very close to the amount of tax that would be due on the directors loan of £331k she had in 2017. The Coopers have reduced their directors loan significantly from £402k to £28k. They share the same accountants. I'm thinking HMRC has fired a warning shot across their bows by calling in the tax on Natalie Heeley's loan, the Coopers have quickly responded. I'll be very, very interested to see what happens with the Spencers next accounts, but they don't have to file them until June next year (though they normally do by March at the latest).

 

[Eltonjohnsflorist]

I used to work with a guy who sold Arbonne and because I wore lots of makeup and worked in sales, he basically got it into his head that I would be the perfect recruitment candidate.

“All you need to do is give it the time you use watching telly in the evenings”

What really annoys me is that he is really rich but he implies it was because of the business he built with arbonne. No mention of his corporate job with an IT company where he was top salesman for 10 years!

If he was really rich from his job why would he need to do something like Arbonne? Seems weird

There's something interesting going on with these directors loans now. Both Natalie Heeley and the Coopers have recently filed annual accounts for their companies. Natalie Heeley's accounts show an increase in the amount owing for taxation and social security of £114,548 on last year. For that to be corporation tax on extra sales, her taxable profit would have had to have gone up by roughly £600,000, so her turnover by even more than that, and I think that's unlikely with the way Forever's sales are currently going in the UK. However, that £114k is very close to the amount of tax that would be due on the directors loan of £331k she had in 2017. The Coopers have reduced their directors loan significantly from £402k to £28k. They share the same accountants. I'm thinking HMRC has fired a warning shot across their bows by calling in the tax on Natalie Heeley's loan, the Coopers have quickly responded. I'll be very, very interested to see what happens with the Spencers next accounts, but they don't have to file them until June next year (though they normally do by March at the latest).

IME directors loan accounts always end in disaster. Hmrc aren’t in any hurry but they’ll always get the money- there just needs to be enough owing to wind up the company

great analysis though @Falkor

 

[Vidyagaymes]

Ugh yeah! That Usborne MLM is shady as!

My dad got into MLMs when i was about 11 or something... still doing it. definitely not really making money. still pressures us to get involved... It was Kleeneze at the time but that company totally collapsed recently (shows these folks that it isn't "their own business"I guess!) and he only went and found a new one...

Gah. he's so gullible it hurts. and he isn't even very good at the people side of it... he's the most awkward, socially unaware person ever...

MLMs are just awful. Really have scarred our family anyway...

 

[Thecatsmother]

They must be on a big push because I’ve seen sponsored Facebook ads from random people flogging their books! Lovely books but if you’re pestering me on Facebook, I’ll never buy.

They are lovely books but at this point I’ll never buy mlm anything out of principle

 

[Cloff]

If he was really rich from his job why would he need to do something like Arbonne? Seems weird

I know! It was so strange... I think he was just hooked on the challenge of working his way up. Maybe he enjoys the gamification of it.
He would probably tell you that he loves it because he “makes peoples dreams come true”

 

[CoffeeMamma]

Right dont shoot me but I do Body Shop- I have a fb page which people are free to join or not. I have been really open since day one that if people aren't interested thats absolutely fine- the last thing I want to is be a pain in the arse and alienate my friends. I have done really well so far as it is a trusted company and people do use it anyway so are happy to buy through me. However I am a qualified Beauty Therapist and make up artist and I think this makes a huge difference. My "upline" is a friend from work (we are both managers for "proper" Beauty Counters in a big Department store so people know we know what we are talking about.)
I would never approach random strangers or walk around with a brochure in my bag to leap out on unsuspecting strangers! But Im enjoying doing online skincare and make up consultations with people who approach me and ask for it

Body Shop consultant here too!
only signed up because I was already using the products (which I was buying from the shop at full price) so I get a discount and a chunk of my money back. Family are also big Body Shop users so that’s where I make 90% of sales. Not in it for the money, genuinely like and use the stuff and saw an opportunity to get some money back have never hassled or recruited anyone, most people don’t even know I do it.

 

[Lottiedooda]

I wouldn't buy from MLM company simply because if they can afford to pay so many people up and down a line then they're obviously making such a huge mark up on their product.

 

[YoungHollywood]

Sorry if already discussed, but I don’t understand the “high street” MLMs. Are they actually run by, for example, Body Shop? I just don’t get why they do it - it’s proven they aren’t good money makers (even for those at the top it is very precarious), plus it really cheapens the brand! So many people see through these schemes now, they actively avoid the products. I don’t shop at Body Shop anymore because I have seen what the MLM has done to a couple of friends, and I love Usborne books and have bought some in the past from Amazon but I’m really put off buying them now knowing they are part of all this.

 

[Lolly505]

Sorry if already discussed, but I don’t understand the “high street” MLMs. Are they actually run by, for example, Body Shop? I just don’t get why they do it - it’s proven they aren’t good money makers (even for those at the top it is very precarious), plus it really cheapens the brand! So many people see through these schemes now, they actively avoid the products. I don’t shop at Body Shop anymore because I have seen what the MLM has done to a couple of friends, and I love Usborne books and have bought some in the past from Amazon but I’m really put off buying them now knowing they are part of all this.

You got me thinking about this but there's not been a lot of research done on it specifically (at least not that I could find via Google Scholar and the like). However I did find these Quora answers helpful. https://www.quora.com/Why-do-compan...es-rep-method?ch=10&share=0f5f4a9f&srid=ixhqo

Using what I know from advertising, it seems to be that the power of word-of-mouth still leads to an increased awareness of the brand, especially in the age of advertising 'clutter' as it's known in marketing. And these schemes do generate income for the company but they also arguably can generate more brand loyalty for the customers.
While it's not a guarantee that you'll buy a product you don't need just because your friend or your neighbour is selling it, you may be more likely to buy something you do need (say it is sexy underwear) from a 'representative' you do know (like a friend who Anne Summers) instead of going directly to a competitor.

Plus it's also v. cheap labour for them. The company is getting all the sales and the marketing pitches, exposure, etc, without paying an hourly wage - and all these people are not only lining up but they're often paying for the privilege of volunteering, which in capitalism is basically the dream.

 

[YoungHollywood]

You got me thinking about this but there's not been a lot of research done on it specifically (at least not that I could find via Google Scholar and the like). However I did find these Quora answers helpful. https://www.quora.com/Why-do-compan...es-rep-method?ch=10&share=0f5f4a9f&srid=ixhqo

Using what I know from advertising, it seems to be that the power of word-of-mouth still leads to an increased awareness of the brand, especially in the age of advertising 'clutter' as it's known in marketing. And these schemes do generate income for the company but they also arguably can generate more brand loyalty for the customers.
While it's not a guarantee that you'll buy a product you don't need just because your friend or your neighbour is selling it, you may be more likely to buy something you do need (say it is sexy underwear) from a 'representative' you do know (like a friend who Anne Summers) instead of going directly to a competitor.

Plus it's also v. cheap labour for them. The company is getting all the sales and the marketing pitches, exposure, etc, without paying an hourly wage - and all these people are not only lining up but they're often paying for the privilege of volunteering, which in capitalism is basically the dream.

Yes good points. People are definitely getting a lot wiser to these schemes though and I think it’s only a matter of time before it’s harmful to a brand to be a part of them!

 

[Foxycoxy]

I know people pushing you to buy from fm world too for knock of perfumes?

The perfumes and aftershaves are actually really good but as you call it “knock off” you obviously haven’t tried it.
The other stuff well yeah... hmmmmm

I bought an FM perfume from a friend and loved it. I bought flowerbomb and it smells the same as flowerbomb. I bought more and my mum and my sisters bought to so I signed up. It didn’t cost me a single penny to join. It cost me time interacting with people on Facebook. I put one post on my personal Facebook and I got orders for 28 bottles and instantly made over £100. Some of that I put back into my business to buy packaging, thank you cards, sweets and samples. I didn’t approach one person. My next order I treated myself to the sample kit. You do not have to buy this I chose to and it’s helped me. I’ve just started my 4th month and I’m just over £1000 in profit. I have signed up two girls, both had bought a product. People should not tar all network marketers with the same brush. You can legitimately make money out of this.
Most of the people that are anti FM haven’t actually tried it. My friends boyfriend has taken every opportunity to belittle me for selling it. He had never smelt it. I gave him a bottle and he’s now ordering from me and so ate his friends.
I have a full time job. I do FM in my spare time. I’m saving to buy a house and the money I have earned so far will help me make my deposit that little bit quicker.
I can sleep at night knowing I have earned that fair and square

 

[LittleBitAlexis]

Some of that I put back into my business to buy packaging, thank you cards, sweets and samples. I didn’t approach one person.

To be clear, you don't have a business. Genuinely glad that it's working out for you, though.

 

[hnoz]

The perfumes and aftershaves are actually really good but as you call it “knock off” you obviously haven’t tried it.
The other stuff well yeah... hmmmmm

I bought an FM perfume from a friend and loved it. I bought flowerbomb and it smells the same as flowerbomb. I bought more and my mum and my sisters bought to so I signed up. It didn’t cost me a single penny to join. It cost me time interacting with people on Facebook. I put one post on my personal Facebook and I got orders for 28 bottles and instantly made over £100. Some of that I put back into my business to buy packaging, thank you cards, sweets and samples. I didn’t approach one person. My next order I treated myself to the sample kit. You do not have to buy this I chose to and it’s helped me. I’ve just started my 4th month and I’m just over £1000 in profit. I have signed up two girls, both had bought a product. People should not tar all network marketers with the same brush. You can legitimately make money out of this.
Most of the people that are anti FM haven’t actually tried it. My friends boyfriend has taken every opportunity to belittle me for selling it. He had never smelt it. I gave him a bottle and he’s now ordering from me and so ate his friends.
I have a full time job. I do FM in my spare time. I’m saving to buy a house and the money I have earned so far will help me make my deposit that little bit quicker.
I can sleep at night knowing I have earned that fair and square

Sorry if something actively tries to rip off the scent of an established product how is it not a knock off?

 

[Hello Kitty]

I remember when I was doing SW, an old friend of mine was like 'you shouldn't eat so many potatoes, pasta ect as it bloats you, you should try juice plus'. I didn't and carried on with SW. I didn't have loads to lose and ended up reaching target quickly. The juice plus girl gave up selling about 3 months later, no idea why but I doubt it was that great.

Is RWL a MLM? It feels like everyone on instagram are giving away codes for it.

 

[Slowcookersaddo]

Actual strawberries from
Italy

Who gives a flying f if there’s real strawberries in their shampoo

Someone I’ve been friends with for over ten years started selling body shop earlier in the year ,pre lockdown .She immediately asked me to ‘join her business’ I politely declined and explained I had enough on my plate with my current job ,child and baby on the way.I also already had two cousins flogging it (didn’t use those words) and don’t have a great deal of friends and those I do have would be mutual friends on social media.Since then each time we’ve contacted each other the conversation turns into her asking me to join her business and it’s started to make me feel really crappy As if that’s the only reason she talks to me .The conversation I’ll go something like ,ask how each other is ,ask how each other’s children are ,agree we need to catch up in person soon followed by ‘You should come and do body shop for me ‘