The Unexpected Sales Pitch
"Hey, Girl!" the message began.
I blinked. I hadn't heard from Kara in almost a decade, but I knew from social media that she was now a military spouse.
She wanted me to buy skin care products, she explained, at least once a month for the next five months. Kara, along with three other friends selling the same brand, assured me I would love it so much that I’d want to sell it, too. They said I could make substantial income—as long as I didn't mind spending quite a bit upfront.
My social media feed was flooded with posts about this company, along with ads for nutritional supplements, essential oils, cleaning products, leggings, and children's books.
What is Multi-Level Marketing (MLM)?
The products that suddenly took over my social media feed came from Multi-Level Marketing (MLM) companies. MLMs operate through direct, person-to-person sales, with distributors typically selling products to family, friends, and acquaintances.
However, what sets MLMs apart from traditional businesses is recruitment. Distributors don’t just sell products—they recruit new salespeople to work under them. When they do, they earn commissions from both their own sales and the sales made by their recruits. This structure creates what MLMs call a "downline."
While MLMs are legal, they can be controversial because they share some similarities with pyramid schemes—business models that rely more on recruitment than product sales.
What is a Pyramid Scheme?
The biggest difference between a legitimate MLM and a pyramid scheme is how salespeople make money.
✅ In a legitimate MLM, income comes from selling products.
❌ In a pyramid scheme, income is based on recruitment—not sales.
Pyramid schemes pressure distributors to constantly recruit new people constantly, who pay upfront fees or buy starter kits. The money from these recruits funnels up to those at higher levels.
📌 Key Red Flags of a Pyramid Scheme:
- Emphasis on Recruitment – You’re pushed to sign up new members rather than sell actual products.
- Large Upfront Investment – You’re required to buy expensive starter kits or inventory before earning anything.
- Forced Purchases – Distributors must regularly buy products, even if they don’t need them.
- No Real Customers – Income comes from signing up people, not selling to actual customers.
Pyramid schemes collapse when recruitment slows, leaving those at the bottom with financial losses. According to the Federal Trade Commission (FTC), most people in pyramid schemes lose money.
MLM vs. Pyramid Scheme: A Quick Comparison
| Feature | Legitimate MLM | Pyramid Scheme |
|---|---|---|
| Main Focus | Selling products | Recruiting new people |
| How You Earn Money | Commissions on product sales | Commissions from recruitment |
| Upfront Costs | May require a starter kit | Often requires expensive buy-ins |
| Product Sales | Necessary for success | Often irrelevant |
| Sustainability | Can last long-term | Eventually collapses |
Why Do MLMs Target Military Spouses?
Many MLM companies actively recruit military spouses (MilSpouses). They promote themselves as flexible opportunities that allow spouses to balance childcare, frequent moves, and household responsibilities while earning income.
However, statistics tell a different story. According to the FTC, 99% of people in MLMs don’t make money—many actually lose money or go into debt. Unfortunately, military spouses can become prime targets for these misleading promises.
One Military Spouse’s Experience
To understand MLMs from an insider’s perspective, I spoke to Jessica, a former service member and military spouse from Virginia.
Jessica started selling supplements for an MLM seven years ago. Unlike many, she actually makes a small profit, averaging between $500 and $1,000 per month part-time. However, she recognizes that success stories like hers are rare.
Jessica credits her success to starting early—before too many distributors flooded her market. She also doesn’t buy excess inventory and focuses on preorders to avoid financial risk.
However, she warns that making serious money in MLMs isn’t easy.
"If someone is making $5,000 a month in an MLM, it’s not a side hustle. They’re working full-time hours—if not more. Some people work 18 to 20 hours a day. That’s not passive income."
Red Flags to Watch For in MLMs
Jessica also shared major warning signs that an MLM might be a bad deal:
🚨 Big Upfront Purchases – Don’t buy large amounts of inventory unless you have confirmed buyers. Many MLMs have strict no-return policies, so you might get stuck with unsold products.
🚨 High-Pressure Sales Tactics – Beware if your upline (sponsor) pressures you with unrealistic sales goals or constant recruiting demands.
🚨 Telling You to Target Friends & Family – Jessica warns:
"If your upline tells you to message your mom, dad, or sister just to pitch the business—run. That’s a huge red flag."
🚨 Daily Quotas & Forced Messaging – If you're required to message 10 people a day, regardless of context, it's a predatory strategy.
How to Evaluate an MLM Before Joining
If you’re considering joining an MLM, do your homework first:
✔ Research the company – Look up reviews, lawsuits, and complaints on sites like the Better Business Bureau (BBB) and the FTC.
✔ Read financial statements – Legitimate companies disclose earnings reports—if they don’t, that’s a red flag.
✔ Talk to multiple distributors – Ask about their actual profits, workload, and expenses.
✔ Check the refund policy – Ensure you can return unsold products without major penalties.
Key Questions to Ask Before Signing Up
- How much do most distributors actually make?
- Is there a buy-in or required inventory purchase?
- Are sales emphasized over recruitment?
- What percentage of distributors make a full-time income?
Final Thoughts: Should You Join an MLM?
Multi-Level Marketing is a controversial industry. While some distributors find success, most people do not make a sustainable income.
🔹 Best-case scenario? You earn some extra cash if you’re good at sales and join early in a growing company.
🔹 Worst-case scenario? You end up stuck with unsold inventory, lose money, and damage relationships by pressuring friends to buy.
If an MLM’s business model relies more on recruitment than sales, stay away—it’s likely a pyramid scheme in disguise.
Do your research, ask tough questions, and protect yourself from financial risk.
