MLM (Multi-Level Marketing) has a long-standing history of targeting mothers with their promises of “a better life” for women and their families and subsequently stealing their money.
Now, before the moms IN MLMs get their panties in a twist, I will concede this point: If you genuinely LOVE a product and signed up to get a discount on things you WANT, then good for you. If you make some money off selling a few things, good for you! If you are not looking at this as a get rich plan and aren’t shilling your wares in an attempt to scam others out of their money so you can make double diamond goddess status, then good for you.
But if you’re trying to convince someone to join your “team” by saying they can make $50,000 a year or more, then this article is a reality check.
You see, it all sounds very lovely; an extra $50,000 a year? And you get to spend time with your family? Who wouldn’t want that, right?
BUT there’s that pesky thing called math. You know, the kind of math that your directors probably don’t want you doing?
Well, too bad, because let me just break this down anyway: YOU WILL NEVER MAKE THAT $50,000!!!!
This isn’t me being “negative” it’s just reality and common sense. It’s only possible to get that much “passive income” if you scam thousands of people into buying products.
I did Mary Kay and fell for their little scam about 10 years ago. I didn’t do the math, but I also wasn’t really “serious” about “the business” either. I honestly just liked the makeup. I still got talked into buying inventory, which sucked, but lesson learned.
Anyway, we got 50% commission on anything we “sold” to people. But we had to place an order first, which came out of our pockets, so basically we were buying product and then getting the money back if we sold it, except half of that money had to be claimed as “income” instead of a refund where someone else pays money to take it off your hands. And if you’re placing an order for yourself, you’re getting NONE of that money back. You only make money if you sell.
Thing is, there’s a commission for your “upline”, which is when you don’t have to make ANY money yourself, someone else made the sale FOR you. Your upline gets paid that commission regardless of whether or not this order was a personal sale or you actually managed to sell something. So they’re obviously going to encourage you to buy product. The people at the top of the hierarchy make more money than those at the bottom because they are getting the commission from all the people who are placing orders.
Back to that $50k… for that to work, we are going to temporarily take out taxes and go with whole numbers.
$50k in one year, divided by 12 months means that you would have to bring in $4,166.66 in profit. At 50% commission that means you would need to average $8,333.33 in sales per month.
There are 365 days in a year. This means that you would need to make a profit of $136.98 per day, or $273.97 in sales.
So, in order to achieve that goal of $50k all on your own, you would need to work EVERY DAY to make $273.97 in sales.
In Mary Kay the average target for sales per customer was that we wanted $100 per face. That means that you would either have to convince one person to spend $2,73.97 in product, or see at least 2-3 customers AND convince them to spend $100 in product. And you would have to repeat that success EVERY DAY.
This means you would need to have at least 30-31 customers who bought something every month, or placed orders of at least $300 per month. Customers, NOT consultants. Remember, your consultants only give about 5% commission.
Don’t want to work THAT hard, right? So say you did “build a team”. You get 5% commission. Let’s even assume that the directors got more at 10% and the people at the top got 20%. I’m being generous here.
So, how do you make $50,000 in a year without actually having to work every day (or at all)? Because let’s be honest, “the dream” is that you would make money in your sleep, right?
Well, at $100 per face, you make $50 if you sell the product yourself and $5 if your consultant sells for you. If you’re a director you make $10. Higher up, $20 per sale.
$5 a day for a year is $1,825. So a 5% commission means that you would need at least ONE consultant to make a $200 order per day JUST to make almost $2k extra each year “doing nothing”. BUT you want to make much more than that, right? So you would need at least 27 consultants placing $200 orders each day. Except not everyone is going to want to place $200 orders every day, because that’s crazy! Nobody wants to work that hard all the time! So, let’s assume you only wanted those consultants placing a $200 each month. No, you would need 820 consultants under you to make a $200 order every month and give you that passive income.
As a director, you only need 410 consultants making a $200 order every month.
At the top of the hierarchy, you only need 205 consultants making a $200 order every month to make $50k without doing ANYTHING.
Are you starting to see WHY the focus is REALLY on “building your business”? Why, they don’t even NEED you to SELL product at all, they just need you to consistently BUY it from them, with the thought that if you can get just one more person on your “team” you might get that coveted car or trip. Except you won’t even get it unless that person consistently makes at least one $200 order every month!
THIS is why MLMs are predatory. What is $200 to the people at the top? It’s nothing at all. They don’t WANT you to just do a $200 order, they want you to spend a lot more. Whether that goes onto a credit card or you suckered your family and friends into spending more than they should have on things they really didn’t need, it’s all the same to them.
You are essentially SHOPPING for things that are overpriced, except you are encouraged to get other people to shop at that same online store with you and then you “make your money back” but not really, because you just spent $200 on makeup or nail stuff or essential oils and you really couldn’t afford it in the first place!
I have seen women take the money they were going to use on rent to buy into these consultant “opportunities” and here’s the thing; that starter kit cost almost $200 didn’t it? So if you sign someone up EVERY month, you make $200 for the company, but that’s not YOUR commission. YOU don’t get paid until THEY place an order, remember? And if they don’t place a BIG order (you know, because they’re BROKE and only convinced ONE person to buy a $20 lipstick) then your commission is next to nothing.
Look, if you like the products that’s fine. We all like what we like. But the grossness of MLMs isn’t the products, which can be legitimate, it’s when people sink all their money into it thinking they will get rich. It’s when people then try to convince OTHERS to sink THEIR money into joining the “team” and throw out ridiculous numbers that make NO FUCKING SENSE once you break them all down.
Yes, hun, someone in the company IS making $50k per year in their sleep, but they created the company.