Only a select few on this planet have the true financial freedom of not having to worry about making rent – or even the next meal. The rest of us mere mortals watch the coins tumbling in and out of our pockets with the beady gaze of kittens. Young adults of the 21st century struggle to obtain a ‘good’ education so that they have a better chance of getting a ‘good’ job which would make them ‘good’ money: enough for them to eat and pay their rents, indulge in a little treat now and then, and hopefully save a little for some much needed rest before passing on to the great beyond. Deep in our hearts however, we all hold on to that secret fantasy of making enough money that would not so constrain our dreams. And so we scroll through social media, hungering for the lives some individuals seem to lead: of a life where price tags seem to impart irrelevant information, a life where a holiday doesn’t have to be earned, rest doesn’t have to rationed, and where we can treat our loved ones to the finer things in life. These hunger pangs are what makes us vulnerable to the machinations of influencer scams, they are what drives us to want to be influencers ourselves, because who would rather choose a desk job when you can get paid to appear on a yacht somewhere next to a cool-looking shampoo bottle?
The truth is that it’s very difficult to emulate the lifestyle that social media influencers portray on social media, even for social media influencers themselves. The content influencers post are very deliberately constructed to evoke the very hunger for the lifestyle that it creates. The influencers make their money off of it of course, but where do all the hungry consumers go?
As with all kinds of hunger pangs, the desire for financial freedom creates desperation in people, and this desperation is sometimes – generally always – enough to blind the other forces we exert when we make decisions about our day to day life, such as critical thinking. This desperation often drives people straight into the arms of those waiting to profit off of their drive to somehow achieve an emancipated life.
MLM schemes are one of the most popular schemes that look to profit off of people looking to make some extra cash through a side hustle or are for some reason, unable to commit to full time employment.
What are MLM schemes?
MLM, or multi-level marketing is a business model that depends on a network of distributors to act as sales points. These distributors are individuals who earn money by selling products, or – recruiting individuals. The problem is of course immediately clear. Any individual who is given monetary incentive to recruit anyone into anything will try their best to do so. The new recruits, in turn will try their best to approach more new recruits and since the number of individuals on their level is greater than the number of recruiters who signed them, they will naturally have access to an even larger subset of the population. As the scheme progresses, a startling picture emerges: one that is suspiciously triangle shaped.
Another name for multi-level marketing is pyramid selling, a model which has been around for quite some time. These masquerade as innocent opportunities for people to make some cash on the side by selling an innocuous product to your social circle. Once this circle has been exhausted in terms of sales, the ‘product representative’ is then motivated to keep the money coming by recruiting their friends and family into the scheme, and so on, and on. It’s a story that has been played over countless times in the past century alone.
Some companies shorten the journey by ensuring the products they supply are virtually unsaleable. Low-quality make-up, over-priced skincare, and dictionaries are just some of the products offered. Incidentally, these are also all goods that can be bought at any convenience store in the neighbourhood. Often at a better quality, and for a lower price. Representatives who would already have had to dip into their savings to buy the minimum requirement for inventory to ‘set up shop’ would be further incentivised to start recruiting, for which the rewards offered are generally greater.
MLM’s then and now
The MLMs of yesteryear were characterised by parties and social gatherings which were used as opportunities to either push product or recruit members. There were thank you cards in the mail and phone calls with greeting and thanking messages. The access any single ‘representative’ had to the general public was limited, and the pyramid nature of the scheme would quickly run its course in towns and cities. The MLM schemes of today, with both would-be and established social media influencers are a very different kind of beast altogether. The funnel between selling products to recruiting individuals is even shorter.
MLM brand representatives nowadays are more direct in the fact that they are selling a certain lifestyle, rather than a product. They market a ‘glamorous’ lifestyle supposedly obtained by becoming the representative of the brand or company they are a part of. The access they have to potential new recruits is also larger than MLM representatives of old. The power of social media means that they speak to a global audience and the process of recruitment is as simple as getting their audience to click on a referral link. The ploy is a tried and tested one: selling for a commission is painted as the gateway to a comfortable life. It’s just that what constitutes a comfortable life has changed. Financial security now is indistinguishable from symbols of wealth such as designer bags and luxury getaways. This ensures that the idyllic fantasy that people crave for remains as far beyond them as ever.
Fighting the MLM pandemic
Fortunately, social media is large enough that it encapsulates the solutions to the very problems it creates. Social media helps platform the messages of those who were disillusioned about the scheme they became a part of, or content creators who create content around revealing the fraudulent actions that MLM schemes mask. These spread far and wide, and because of the algorithm, often mostly to where the scheme is most prolific. Social media also helps victims of MLM schemes find community and support to extricate themselves from the financial hole they find themselves in. The internet brings all these communities together, keeps them engaged, and raises awareness through their mere presence.
So what is the main reason these triangular schemes are so difficult to stamp out?
The predatory way in which these schemes play out manages to amass a great deal of wealth for its founders and the associates closest to them. For an opportunist, this is simply too great an attraction to ignore. The victims themselves can hardly be blamed, for the fantasy being sold to them is as enchanting as ever.
(Theruni Liyanage)