Us millennials are most definitely ambitious. We want it all and are willing to work for it. We thrive through the hustle and are generally very resourceful. However, our generation has also proven its tendency to be too trusting and at a times, naive. This naivety makes millennials easy targets for the “pyramidsters”, as I like to call them, or individuals involved with Multi-Level Marketing schemes. Now, pyramid schemes and MLM’s weren’t born yesterday, created solely to prey on us youngsters. In fact, the existence of these types businesses date back to the early twentieth century. However, it seems as though more and more “sales representatives” are popping up among my social media friends and followers every day. I feel like I am dodging sales pitches left and right with each log into Facebook. A friend of a friend wants me to be a “model” for their “portfolio”, just as my 2nd grade classmate is urging me to take part in “a new business venture that will change my life”. Don’t get me wrong-- the idea of earning $500 overnight and “working any hours I choose" definitely appealed to me. As for that, here is a word of advice-- if it sounds too good to be true, it probably is. As a business student, I did my research into the various MLM companies and found some not-so-pleasing insight.

The reason that Multi-Level Marketing companies are nicknamed “pyramid schemes” are because of the earning distribution, which resembles a pyramid. There is a small fraction of sales people at the top who do in fact make the money the company claims to provide, while the large portion of new representatives at the bottom make very little or even lose money. This is in part due to the fact that these businesses are chain-based-- you earn more money as you bring more people in with you. Think of it as a spider, spinning a web of body wraps and off-shore stock trading tips, bringing in as many insects and other spiders as possible to further grow their web. In the end, the giant web still belongs to the original spider, who only has room for a small area of real estate for each of the other bugs, who were of course originally promised an acre at least. The key to succeeding as a representative in these companies is less the ability to sell the merchandise to consumers, but more the ability to lure in as many new “distributors” as possible.

MLM’s continuously attempt to break away from the negative description of a “pyramid”. However, most of these companies operate exactly the same. Claims about money-making potential are often fabricated, making the ways existing reps recruit newbies deceptive. Often, a large purchase of “inventory” or some other investment must be made by a distributor when starting. And unfortunately, many reps never see much, if any, return on this hefty initial investment. In fact, according to MLM-thetruth.com, a site which displays research done on these businesses, “virtually all MLM’s result in losses suffered by approximately 99% of participants.” It is a fact that these businesses are purposely engineered with the cards stacked against those who newly get involved. Funny enough, you actually have a better chance at earning money at a casino (which sounds way more fun anyways). This is one of the many shady business practices that pyramidsters employ to effectively bait-and-switch innocent individuals who are just trying to make a buck. Unfortunately, a full novel could probably be written explaining all of the unfair practices that are constantly committed by these MLM businesses.

I can advise nothing more than to use discretion when getting involved with businesses like these. Do your due diligence and be well-versed to avoid being a part of an organization that you do not believe in, or one that will not deliver what it promises to. Understand that the many YouTube videos and blog posts that rave about these companies are often created by affiliates themselves. According to the Federal Trade Commission, it is imperative that an individual researches both the company and the product it sells thoroughly before ever even thinking about signing the dotted line. I hope this information will prevent at least one of my fellow millennials from falling victim to these admittedly tenacious MLM “sales associates." And as for me, let this be my polite, yet definitive, “no” to any offer of joining or purchasing from any multi-level marketing company, from any single “distributor," at any point in time.

For more information regarding the reality of MLM and studies that have been conducted, visit http://mlm-thetruth.com/.