WJR Business Beat with Jeff Sloan: MLM Industry Surging During COVID (Episode 164)

Good morning, Paul.

While the COVID crisis has decimated certain business sectors, it is accelerating many others right before our eyes. And one of those sectors growing significantly, it’s known as multi-level marketing or MLM, as it’s also known. You know the ones: Tupperware, Mary Kay cosmetics or Herbalife, just to name a few by way of example.

The same factors throwing many retail businesses into turmoil, that is, people stuck at home, booming online shopping, those kinds of factors are empowering quite a surge for multi-level marketing companies, driving the growth while many people are unemployed, they’re facing instability and they’re looking for opportunity wherever they can find it.

Sixty three percent of companies reported to the Direct Selling Association, the industry’s main trade group, that they’ve seen a positive impact on their U.S. revenues since the start of the pandemic.

In fact, multi-level marketing has gained so much traction that even more established brands are beginning to dabble with this model as a way to generate more sales.

For example, The Body Shops opened an MLM division and it’s doing extremely well, contributing roughly a third of all sales to the company during the past year.

Now, if you’re thinking about pursuing an MLM opportunity for yourself, make sure you do your research about the claims of magical success, because typically they’re just not there in reality.

And while there are companies that offer a legitimate opportunity to be in the MLM space, according to the Federal Trade Commission, despite the glorious claims made of fortunes being earned by participating MLM agents, most people who join even legitimate MLMs make little or no money, wrote the FTC.

You see, even though there is this boom in MLM companies right now, it’s the parent companies that are making all the money, while many of the agents make little or no money at all.

Here’s what I recommend: start a business of your own! Start an eBay or Etsy or Shopify store online and do the hard work necessary to grind out real success rather than pursuing the easy path to what could be likely failure.

I’m Jeff Sloan, founder and CEO of StartupNation.com, and that’s today’s Business Beat on the Great Voice of the Great Lakes, WJR.