Your best friend calls: She got a new job and you’re so beyond thrilled for her. But she’s not working in an office or at a retail store. She’s selling essential oils online, and she just got a huge shipment of tiny glass bottles sent to her house. A few weeks later, her Instagram and Facebook accounts are filled with invites to “diffuser parties” and links to lavender oil that you can buy on her website. And then she starts gushing to you about how amazing her new job is and tries to convince you to join her business too. It sounds like your friend is deep into an MLM, or multi-level marketing scheme. Is this legit, or too good to be true? Here’s how to find out, and what to do if you think your friend is being scammed.
Hang on, what’s an MLM?
You’ve probably already heard of multi-level marketing, even if you weren’t sure of the term. An MLM is a business strategy that allows companies to make money through their sales force. The business attracts unpaid workers by offering them two revenue streams. In order to be compensated, “consultants,” as they’re usually called, must buy and resell the company’s products, then recruit more consultants into the business. These companies, whether they’re peddling yoga pants or weight-loss aids, are actually making money by convincing their consultants to buy wholesale items. Yep, they’re MLMs.
And what’s so bad about an MLM, exactly?
While not technically illegal, MLMs have their fair share of critics—including the U.S. Federal Trade Commission. According to a study conducted by the FTC, 99.3 percent of people who join MLMs lose money. And of those workers who are making money, more than half made less than $5,000, the AARP Foundation says. (Eek, we don’t like those odds.) “Not all multilevel marketing plans are legitimate,” the FTC explains. “Some are pyramid schemes. It's best not to get involved in plans where the money you make is based primarily on the number of distributors you recruit and your sales to them, rather than on your sales to people outside the plan who intend to use the products.”
Now that you know what an MLM is, let’s figure out how to help your friend.
She says: “Hey, want to come to my leggings party?”
Ooo, a party. Her invite sounds innocent enough—even kind of fun. And while your friend will assure you that no purchase is necessary to attend, by the time you’ve stuffed yourself with free mimosas and croissants, it’s going to be tough to leave her apartment without feeling obligated to take home a pair of leggings. Home parties are a common MLM strategy that’s used to drum up business, and while it might seem like a great excuse to get together and meet new people, their prime purpose is to convince you to spend money (and maybe even join the MLM yourself). Don’t feel bad about gently saying, “I’m busy, but maybe another time.”
If this is a really good friend, it might be tempting to launch into a diatribe about how MLMs are bad news and try to convince her to quit. But this course of action isn’t likely to be helpful, cult deprogrammer Rick Alan Ross (best known for his work exposing the notorious MLM and cult NXIVM) explains in his book Cults Inside Out. Often, these businesses already have a name for you: “dream stealers.” Before you even say a word, your friend might have been been primed to believe that you’re just jealous and trying to stand in the way of their goals. So if you get a vibe that your friend might shut down if you’re too blunt, hold off for now.
She says: “I’m doing so well selling this stuff, and I know you could use some extra money. Want to come to a meeting?”
Your friend has gone from trying to convince you to buy her stuff to trying to recruit you into the MLM. Why is she hustling so hard? Because she gets a cut of each of the sales of any member that she recruits makes, and the more people she recruits (aka her “downline” distributors), the higher up in the company she’ll rise. If it sounds like the makings of a pyramid scheme, that’s because it is.
It’s easy to make an excuse to not attend (“Sorry, dentist appointment!”), but that will leave the door open for your friend to continue to needle you. Instead, a firm but polite, “no thank you, I’m not interested,” is the best approach here. Even though it might seem like there’s no harm in attending the meeting, if you ultimately don’t want to be involved in your friend’s MLM drama, it’s best to keep it as separate as possible from your friendship. Ross’s mantra? “When in doubt, don’t.”
She says: “I’m in so much debt, I don’t know what to do. Can you please buy some essential oil?”
Here’s where things start to get dicey. Your friend is so deep into the MLM that she doesn’t realize what a financial mess it’s gotten her into. While it might not seem like a huge deal to just buy a few bottles of essential oil to get her off your back, financial support is not the answer. Instead of blaming the structure of the MLM for her debt, your friend is probably blaming herself for not being a good enough salesperson. Because of all of the widely publicized success stories that are shared within the company, she might feel like a failure for not being able to figure out how to make the business work for her. If you buy items from her, it will only put a Band-Aid on the problem and give her hope that you might give her more financial support in the future.
The other thing you should never do? Fly off the handle. Ross recommends staying as calm as possible to make sure your friend doesn’t cut you off and go even deeper into the MLM. If she’s open to it, give her a copy of the book Influence: The Psychology of Persuasion by psychologist Robert Cialdini. While not exclusively about MLMs, the book explains exactly how smart people can fall for the persuasive tactics that these companies use. If that doesn’t work, reach out to her family and other friends. If you all agree that your friend is in too deep, it might be time to stage an intervention with a professional interventionist.
But while this approach might seem extreme and confrontational, Ross, who devotes a section of Cults Inside Out to MLM interventions, notes that the best interventions feel more like deep discussions that gently challenge your friend’s beliefs while also keeping her interested in the conversation. “The ultimate purpose of any intervention is to stimulate independent thinking by engaging in an educational process that includes critical analysis,” Ross says. “The person for is the focus of the intervention must be personally engaged and interested, or no meaningful exchange of ideas will occur, and the effort will fail.”
The good news? Interventions are often successful—75 percent of the time, according to Ross—and can help your friend realize, ultimately, how loved she is. Even if you always hated those stupid essential oils.