TRYP, Herbalife, Amway: What is Multi-Level Marketing and Is It Safe?

Finding a career is hard but finding a career you love is even harder. Generation Z and millennials job-hop more than any other generation.

Job-hopping isn’t a good or bad thing and there are a lot of reasons why a person decides to leave a job. Many people leave their jobs to become entrepreneurs and start their own businesses. While others decide to work for companies that allow them to work from home or create their own hours, giving them autonomy over their careers. This is where employees can end up working for Multi-Level Marketing companies.

While Multi-Level Marketing companies (MLM) make a large profit from their employees selling a product/service, most of their revenue actually comes from workers recruiting more people to work for the company. Politically known as MLMs,  the marketing strategy is widely known otherwise as pyramid schemes/selling, network marketing, or referral marketing. With more people becoming entrepreneurs and new businesses popping up every day, it can be difficult to tell if a company is an MLM or a “legitimate business.”

There are a few ways to tell if a company functions as an MLM or not. Most MLMs rely heavily on social media to sell their products and to recruit more sellers. They usually post pictures advertising not only their product but an “exclusive” opportunity to become sellers like them. Many MLMs say that their employees can work from home and be in charge of their own schedules. These tactics aren’t necessarily geared towards millennials, but they are perks that many millennials value in their work experience.

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MLMs also encourage their sellers to approach their friends, family, and associates to sell their products and recruit them. There’s nothing wrong with using personal connections to help with professional goals. This could allow you to practice your sale pitch or public speaking. But personal relationships can be put at risk if your family member is dissatisfied because they aren’t reaching the goals being advertised by the company.

You’ve probably heard some MLMs already or you might have friends and family that work for them. Herbalife, Amway, Avon, Primerica, and Mary Kay are just a few examples of popular MLMs. A new MLM in the form of a rideshare service called TRYP just launched in December. However, unlike Uber and Lyft, TRYP allows drivers to keep the entire fare and tip instead of a portion.

The prospects of TRYP do sound exciting until you learn that drivers must pay a monthly fee of $199. Despite the fairly high fee, people have already signed up to drive with the app but there’s only one problem. They haven’t even taken their first ride yet. TRYP doesn’t actually have an app. This is where things get tricky. In order for an MLM to function “legally,” they must have a product to sell. Currently, TRYP’s profits have come solely from drivers signing up and getting other people to sing up under them. They’ve encouraged drivers to recruit more people in order to receive a commission for bringing them on. Drivers would also receive money every time the driver under them takes a ride. It is difficult to say what will happen with TRYP in the future, but hopefully, they are planning to release an app soon.

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Believe it or not, people have been successful in working in Multi-Level Marketing. But the truth is, more than 99 percent of people don’t make any profit at all. MLMs will use those who have achieved success to convince others that it can happen for them too. This isn’t always true. In reality, only a few people who started with the company early on see any real profit. After years of recruiting sellers, it is possible to make a substantial amount of money early on. But eventually, you will run out of people to sign up, and since your profits aren’t really coming from your product, you’re stuck.  

Working for any company has its pros and cons but it seems as though working for an MLM might be doing more harm than good. Accused of “cult-like” practices, false advertising and other unethical tactics, it is understandable why one might be hesitant to work for them. It is important to do your research when applying to any job and you should always ask yourself if their values and goals line up with your own.  MLM companies are not legally defined as scams, but you are taking a gamble when you sign up to work for one so be careful and choose wisely. 

Jordan Bennett

"You can’t make decisions based on fear and the possibility of what might happen." - Michelle Obama

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