The COVID-19 pandemic could be leading more people to join multi-level marketing companies, a controversial business practice that can result in sellers making negligible amounts of money, or none at all.
Multi-level marketing companies rely on person-to-person sales, often with salespeople buying their own inventory and selling products to their friends, family and other acquaintances.
Sellers are encouraged to recruit new salespeople — also known as downlines — to begin selling products as well, with a percentage of their sales going to their uplines.
Products can range from beauty items like cosmetics, skincare and haircare — such as Avon, Arbonne or Monat — to essential oils and scents, like doTerra and Scentsy. Others sell things like smoothie and juice mixes, housewares and home decor and clothing.
The sale of these products, once confined to door-to-door sales and demonstration parties, are now happening largely through social media, often with sellers touting the effects of the products and promising work opportunities.
A ‘thin line’
During COVID-19, which has led to mass layoffs and an economic downturn, people may be looking for extra ways to make some cash, said Ed McHugh, a business professor at Nova Scotia Community College.
McHugh says there’s nothing inherently wrong with multi-level marketing, but there are some things prospective salespeople should be wary of.
“Multi-level marketing, in itself, can work. It’s fairly good for some…