If you ask just about anyone around you – friends, colleagues, family members, a stranger on the train – if they’ve ever lost someone in their life to the cult of multi-level marketing, there’s a pretty high chance they will answer “yes”. Also known as direct selling or network marketing, MLM companies have been around for decades (think: Avon, Tupperware, Thermomix and Amway to name just a few). Though they’re often confused for pyramid schemes because of their recruitment structures, MLMs are perfectly legal in Australia because – unlike pyramid schemes, where money is taken in exchange for an unguaranteed promise – MLMs involve the exchange of tangible products or services for money.
Tupperware, Thermomix and Amway are all popular MLMs. Credit: AFR But unlike the majority of other forms of employment, MLMs often require would-be consultants to front up thousands of dollars before they’re on the payroll (purchasing display sets, testers or starter kits, for example), and wages are 100 per cent commission-based. Most people who have experienced the MLM friend will tell you that it starts innocently enough.
A conversation about how they’re finding their new job, or perhaps how much better their skin is feeling since they started using some new products that were recommended to them. Then comes the suggestion that you should buy whatever it is they’re selling, that you should spread the word of how great whatever it is among your own network. This then .