🔥 99% lose…So why do they join?

How MLMs use Psychology, Community, and a Dream of Freedom to Reel People In and Keep Them Stuck.

We’ve all gotten that text.

Maybe it was from a high school buddy or a distant relative (once removed).

They say they’ve found “something amazing.”

They’re “finally working for themselves.”

And, they just know you’d be PERFECT for it.

At first, it sounds like a great opportunity. You get flexible hours, unlimited income, a chance to “be your own boss,” and basically everything you’ve ever dreamed of.

But, as you look closer, it starts to feel more like a trap wrapped in glitter.

We now know this as a Multi-Level Marketing scheme or MLM. 

Now let me be very clear: MLMs are an ultra-predatory business model.

They prey on financial insecurity, social bonds, and the deep human need for meaning, often leaving people worse off than when they started.

But here’s the twist: their tactics work. Not on everyone, but on a whole lot of people. 

And, that makes them worth studying.

It’s important to UNDERSTAND what they do. 

Because MLMs aren’t the only ones who deploy these moves.

Brands, influencers, cults, politicians, all dip into the same toolbox. You name it. 

Some might say that MLMs do it the best. 

Let’s break down the MLM. 

Welcome to the Dark Arts of Marketing. Like the robe?

Now what exactly MAKES an MLM an MLM?

Marketing Bestie, I’m glad you asked. 

At a glance, it might look like a regular company with a quirky product and a very excited salesforce. 

But here’s what sets MLMs apart:

1. They don’t just sell the product. They sell the OPPORTUNITY to sell the product.
Recruiting others is central to the business model. In fact, it’s usually the main way people try to make money.

2. They earn money not just from what they sell, but from what they get recruits sell.
Welcome to the “multi-level” part. A cut of the downline’s sales, and their downline’s sales, and so on. Like a triangle (hold on to that thought).

3. The dream is always bigger than the data.
The Marketing is all about financial freedom, personal growth, and “being your own boss” (whatever that means) but most participants lose money. Again, this is predatory. 

Like A LOT OF MONEY.

According to the Consumer Awareness Institute and the FTC, 99% of MLM participants LOSE money with the average participant making less than $1,000 A YEAR. Ouchie. 

When you factor in how that time could be spent learning a new skill, the cost is innumerable.

Now, at some point, you may have said “oh, so it’s like a pyramid scheme, right?”

If your pitch ever starts with “It’s not a pyramid scheme” then it’s 100% a pyramid scheme (via Yarn)

…Kinda.

MLMs and pyramid schemes are near-identical in structure, but there’s 1 big difference. 

Pyramid schemes are illegal. MLMs are not. 

Why? It mostly comes down to this technicality: MLMs sell a product and pyramid schemes don’t.

That’s it.

So if that’s the legal line… the products must be pretty good, right?

You’d think.

But in most cases, the product is just a prop.

Something to make the business model LOOK legit while the real money flows through recruitment.

Which brings us to the 1st MLM strategy:

. They Sell an Outcome

MLMs don’t just sell products.

They sell a future.

The State of Washington used this ad in their case against LuLaRoe. LuLaRoe lost and had to shell out $4.75 MILLION. (via ATG.WA.gov)

A vision of what could be if someone just commits, believes, and recruits 5 of their friends.

Between the person and those steps is the future they’ve always wanted to be. 

That’s how they get ’em.

They don’t sell what is.

They sell you what might be.

This leads us into our 2nd strategy that MLMs deploy:

. Cult Community is Core

MLMs don’t just sell to customers.

They recruit believers.

Before they even understand the product, they’re added to a Facebook group, invited to a party at someone’s house, or welcomed onto a “team call.”

Don’t shoot the messenger, but yes, Tupperware started as an MLM (via CNN)

There are nicknames. Hashtags. Daily affirmations.

They’re not just buying something, they’re JOINING something.

Because in MLMs, community isn’t a feature.

It’s the hook.

Surrounded by people chasing the same dream, repeating the same mantras, posting the same “rise and grind” selfies.

And that kind of environment rewires people.

They start thinking:
“If they can do it, I can too.”
“If I quit, I’m letting them down.”
“If I keep going, maybe I’ll finally break through.”

That’s the trap. 

Products don’t create movements.

People do.

Which leads us into our last strategy:

. Weaponize Testimonials

MLMs run on stories, not stats.

(And for the record, you can look up these stats in documents called “income disclosure statements.” Happy hunting!)

But, if you’ve ever seen their materials or been to a meeting, it’s the same story told a hundred different ways by the same 5 people.

It’s always some variation of this:

“I was just like you. Broke. Stuck. Tired. And now? I’m thriving. Making money from my phone. Living my best life. Here’s how you can do it too.”

That shape looks…triangular (via /r/AntiMLM)

These stories are polished, emotional, and endlessly recycled…

Everyone loves a rag to riches story. 

They tap into something core to the American spirit: That anyone, from anywhere, can make it big if they just want it bad enough.

And in MLM-land, that dream gets repeated so often, so convincingly, that people stop asking if it’s actually working for most.

Because it worked for someone. 

And that’s enough to sell the next person in line.