The hidden pitfalls of Network Marketing in the UK
A cautionary tale about MLMs for Remote Work seekers
Working remotely brings lots of opportunities and benefits but it’s not all rosy in remote work land. There’s a plague, a cheery emojifest of ‘opportunities of a lifetime’ spread by ‘boss babes’ and ‘huns’ all over your favourite social networks. You can’t escape them, they are network marketers, otherwise known as multi-level marketers which are otherwise known as MLMs.
Their offerings seem shiny and hard to resist, they promise you incomes of tens of thousands by working your own hours, from your own home, yet they don’t tell you about the pitfalls that go along with this awesome new lifestyle. We’re here to do just that for you.
Understanding Network Marketing
Network marketing is when a business sells products, it could be make-up, utilities, books, or holidays, the lists are endless, but they also need to recruit people to join as distributors. The promise of earning not just from personal sales but also from the sales made by recruited team members is a core appeal. However, this structure is where the complications begin. The products themselves are often wildly over-priced, leaving little or no profit for the sellers, which then leads to the necessity of recruiting a team of people, who you then take a commission from.
Frequently distributors are encouraged to buy and hold volumes of stock as well, to maintain their status (or that of their upline who recruited them.)
1. The Saturation Challenge
In the UK, as in many parts of the world, market saturation is a significant hurdle. The MLM model relies heavily on continual recruitment. However, as more people join, the market becomes oversaturated, making it increasingly difficult to sell products or recruit new members. This saturation often leads to diminishing returns for most people, other than those at the very top of any new venture. And increasingly, people simply prefer to buy direct or online, the idea of people purchasing things through their local connections is antiquated in 2024.
2. The Financial Reality
Contrary to the often-advertised potential for high earnings, the majority of network marketing participants earn little to no profit. According to a study by the Federal Trade Commission, over 99% of people who join MLMs lose money. There are often hidden expenses and on-going costs that you’re not told about at the offset and by the time you realise, you’re already in too deep.
3. The Time Factor
These ‘opportunities’ are sold as being able to make you vast amounts of money, working hours to suit your lifestyle, when in reality the time commitment can be substantial. Success in MLM often requires not just selling but also building and maintaining a network, which can be time-consuming. You not only have to promote your products, you have to recruit your team, manage your team, constantly encourage them to promote their products and recruit their team, it’s never ending. This investment of time, with no guaranteed return, is a significant risk - when you could be doing a job for an hourly rate, or building a business you actually own.
4. Impact on Personal Relationships
How many of you have friends or relatives that you’ve had to unfriend or block on social media? How sick are you, of having your friends constantly badgering you to buy their stuff or join their team? And what is your immediate reaction when someone you haven’t seen since you were at school together years ago, suddenly sends you a connection request? (It’s funny how all these schemes use the same playbook…)
Network marketing strategies often encourage tapping into personal networks for sales and recruitment. This approach can strain relationships, as friends and family may feel pressured to make purchases or join the network. Such practices not only affect personal relationships but can also lead to a negative reputation, both personally and professionally, even severe mental health concerns.
5. Regulatory Scrutiny
In the UK, MLMs operate in a complex legal landscape. They are legal but closely monitored to ensure they do not cross into being pyramid schemes, which are illegal. The fine line between a legitimate MLM business and a pyramid scheme can be a source of concern for participants, especially given the strict regulations against fraudulent business practices.
6. Lack of Professional Development
Unlike traditional remote job opportunities that offer career progression, skill enhancement, and professional growth, network marketing often lacks these elements. The skills developed in MLMs—sales and recruitment—are specific to the industry and may not transfer easily to other career paths.
Deceptive language, deceptive practice
If you’re seriously looking into doing this kind of work, it's crucial to approach network marketing with a healthy dose of scepticism.
Research, due diligence, and a critical assessment of the risks and rewards are essential before embarking on what might appear as a great option for working from home. There are lots of alternative remote work options that offer more stable income potential and career development without the inherent risks associated with network marketing. And if you’re tempted, then google and find their realistic earning disclosure statements. This will tell you a lot more about what really goes on, than your old school friend’s posts about how amazing it is to be a stay at home mumpreneur or whatever.
To sum up, while network marketing may present itself as an easy path to success and financial independence, especially in the realm of remote work, the reality is often very different. The challenges that we have talked about above make it a precarious choice. Aspiring remote workers in the UK are advised to consider these factors carefully and explore more reliable and sustainable work options.
Remember, when it comes to career choices, informed decisions lead to more fulfilling paths. All of this is why we don’t allow MLMs and network marketing posts into our remote work groups, they may seem to be all glitter and pound signs, easy work for easy money, but there is a darker side to it all in reality.
We would much rather help you find REAL remote work instead, or start a business which is actually YOURS - network marketing offers neither, despite the deceptive messaging.
