Multi-level marketing: Gold mine or scam?

(Photo from motherearthliving.com)

BY JUSTINE POLANIC

In the digital age, students are finding more ways to make extra money, and multi-level marketing is becoming a popular option.

Multi-level marketing is a sales strategy that involves consultants not only making money off of a product they sell, but also the consultants the recruit. Examples are Avon, Mary K and more recently, Arbonne.

Arbonne sells a wide variety of products, including makeup, skin care and nutrition. Many Arbonne consultants say they love that instead of having to support several different companies, they can now shop for their everyday needs at a discount from their own business.

One area manager for Arbonne, Sarah Davidson, says she is happy,

“I have no dislikes. I love everything about it.” Many Arbonne consultants speak highly of the business,
“We live a cleaner, healthier and debt free life because of these products and this business,” says Davidson, “I love the flexibility and time freedom it gives to me and my family, and of course the financial freedom as well.”

The business is often described as being “life changing” and having an “amazing community”.

Review from an executive district manager on indeed.ca

Review from former area manager on indeed.ca

In order to work up to Davidson’s position at Arbonne, the employee must first pass three previous levels. To get to her area manager position, she needed to have 20,000 qualifying volume (QV) in sales, and at least 10 independent consultants that she has recruited to join her team. Each of these consultants must have a QV of 150 in their start month. Davidson makes money off of her independent consults, district managers, and executive district managers. In order to reach the highest level of employment, executive regional vice president, Davidson must have 60,000 QV and 30 independent consultants on her team. She will then make money off of many different employees, earn a higher cash bonus, receive a Mercedes-Benz and get a life insurance plan, according to arbonne.com.

Hearing employees talk about their experiences with Arbonne can be inspiring, and it’s easy to get drawn in by the business. Especially for college students, who are desperate for extra money where they can get it. Being able to “work your own hours” sounds perfect for student life.

However, multi-level marketing companies, including Arbonne, are often frowned upon by the public, and are seen as scams or pyramid schemes. Former Sheridan student Joel Desjardins took a course about pyramid schemes, and he strongly believes that Arbonne, as well as most multi-level marketing companies are scams used to lure in students and other desperate people.

“A pyramid scheme is an investment where you make returns primarily on recruiting others, but they will almost always collapse,” says Dejardins. “Multi-level marketing is very similar, but they sell real product. There are some legitimate MLMs, but most are scams.”

After doing research about the company, Dejardins believes Arbonne is most likely a pyramid scheme as well.

Review from former area manager on glassdoor.ca

Review from former independent consultant on indeed.ca

Davidson chooses to ignore the critics,

“Well, people can say and think what they want. I’ve done my research and I know network marketing is a proven business model that works, and I don’t have to defend it,” she says,
“I know it’s a business of the future, and more people should take a look at Arbonne.”

Many people argue that if these companies were pyramid schemes, they would be shut down. Not according to Desjardins,

“Pyramid schemes are hard to catch, or have a case for,” he explains. “Many are disguised as being multi-level marketing companies, and it’s hard for the police to find proof of malicious activity.”

Although there are many successful people involved in network marketing businesses, there will always be skeptics as the industry continues to grow. Desjardins is one of them,

“It’s a get rich quick dream. Poor students love to hop onto anything that can give a quick buck. Feed them with false hope, and you can steal the little money they have.”