Skip to main content

Thinking about paying to join a multi-level marketer (MLM)? Have you been promised that you could make lots of extra money if you join? Think again. Most people who join MLMs make little or no money or lose money. How do we know? A new FTC staff report reviewed public data from dozens of MLMs and did the math for you.

For the MLMs reviewed, the report found that most participants made $1,000 or less per year — that’s less than $84 dollars per month — which may not account for expenses. In at least 17 MLMs, most participants didn’t make any money at all.

Agency staff also found that most of the publicly available MLM income disclosure statements used all the following tactics:

  • Emphasizing the high dollar amounts made by a relatively small number of MLM participants.
  • Leaving out or downplaying important facts, like the percentage of participants who made no money.
  • Presenting income data in potentially confusing ways.
  • Ignoring expenses incurred by participants — even though expenses can, and in some MLMs often do, outstrip income.

So, before joining any MLM company, do some research. Your time and money are too valuable not to. Here’s what to know and do:

  • Any company that tries to pressure you to join — is one to avoid.
  • Some MLMs are pyramid schemes. If the MLM is not a pyramid scheme, it will pay you based on your sales to retail customers, without having to recruit new participants.
  • Consider what it will cost you to run the business and whether you want to be a salesperson.
  • Before joining, research the company and check out the company’s products.
  • Ask someone you trust — who is not affiliated with the company — to review the paperwork you will need to sign.

  • Read the FTC’s resources for evaluating business opportunities, including multi-level marketing business opportunities.

    Image
    Most MLM disclosure statements reviewed by FTC staff used all these tactics.

It is your choice whether to submit a comment. If you do, you must create a user name, or we will not post your comment. The Federal Trade Commission Act authorizes this information collection for purposes of managing online comments. Comments and user names are part of the Federal Trade Commission’s (FTC) public records system, and user names also are part of the FTC’s computer user records system. We may routinely use these records as described in the FTC’s Privacy Act system notices. For more information on how the FTC handles information that we collect, please read our privacy policy.

The purpose of this blog and its comments section is to inform readers about Federal Trade Commission activity, and share information to help them avoid, report, and recover from fraud, scams, and bad business practices. Your thoughts, ideas, and concerns are welcome, and we encourage comments. But keep in mind, this is a moderated blog. We review all comments before they are posted, and we won’t post comments that don’t comply with our commenting policy. We expect commenters to treat each other and the blog writers with respect.

  • We won’t post off-topic comments, repeated identical comments, or comments that include sales pitches or promotions.
  • We won’t post comments that include vulgar messages, personal attacks by name, or offensive terms that target specific people or groups.
  • We won’t post threats, defamatory statements, or suggestions or encouragement of illegal activity.
  • We won’t post comments that include personal information, like Social Security numbers, account numbers, home addresses, and email addresses. To file a detailed report about a scam, go to ReportFraud.ftc.gov.

We don't edit comments to remove objectionable content, so please ensure that your comment contains none of the above. The comments posted on this blog become part of the public domain. To protect your privacy and the privacy of other people, please do not include personal information. Opinions in comments that appear in this blog belong to the individuals who expressed them. They do not belong to or represent views of the Federal Trade Commission.

Return to top