I don’t know if it’s because I wrote an MLM take down post one month ago today (it’s definitely not), but MLM pro AND con posts are popping up everywhere. I’m sure you’ve seen your MLM supporting friends posting this one: The Brutal Truth about those Pyramid Schemes (PS: the author is part of an MLM).
I’d venture to guess that the sudden influx of voices of dissent and support of MLMs is because:
A) people are getting fed UP with the auto-adds to groups selling leggings and requests for “catch up over coffee” with the girl you never really liked in the first place and FINALLY speaking out
B) those who think that is an appropriate way to “grow their small business” just want to be heard.
In continuing with our series “Everyone hates your MLM,” this week I delve deeper into the issue of the “Small Business Problem.” (Missed the first post and don’t know what an MLM is? Start here)
Is an MLM a Small Business?
No.
Moving on….
Just kidding. But seriously. No. A small business is defined (in the US) as a company with under 500 employees (for manufacturing) or less than 7.5 million in receipts for all other types. So why doesn’t an MLM qualify? Well, for starters, because the SBA (Small Business Association- aka Uncle Sam) doesn’t consider you one.
From what I can tell, and I read a shockingly amount of pages on a government website, MLM participants are considered good ol’ independent contractors. They do not qualify for SBA loans from Uncle Sam. I did some research into why from this friendly looking lawyer guy and learned that not only are SBA loans not allowed, but a company can’t even advertise MLM or multi-level marketing on FACEBOOK. The reason for both rules are the same: It’s too hard to distinguish a “legitimately annoying-the-f*ck-out-of-your-sphere-of-influence” MLM” with a pyramid scheme. So they’re just not allowed.
But! I’m small! And I’m a business!
Do you set your own pricing? Do you control the product development or distribution or decide which technologies to implement into your manufacturing process? No?
But I sell it! I talk about it on Facebook!
Yes, yes, you do. I’ve seen the memes. You’re a salesperson- for a business or corporation who makes all the decisions for you. You’re in marketing and implement the strategy designed by the in-house marketing team at the major corporation. It’s widely understood that a business has to control the product, pricing, and distribution. Anything else is likely not a business.
But moms! And Small Businesses!
Just a mom hard at work at her “small business”
I’m not a mom, but I see mom-shaming all the time. I cannot imagine how much worse it would be if my circle was full of more moms. “Won’t you support the stay at home mom just trying to bring in extra income?” Or, from the post referenced above:
“There is no comparison to the hustle and work ethic of a mother trying to provide for her family.”
Ugh.
I am so amazed at the mothers I know who kick ass at whichever type of momming they do. Whether it is staying home full-time with the kids, working part-time out of the home or managing a full time career while raising kids (or, hell, a full time business that they own, while raising kids), and I am in full support of whatever a mother chooses to do that is best for her, her children and her family.
But gosh darn it, that doesn’t mean I’m buying your lipstick. Because I can buy lipstick at Sephora. And if I choose to, I’m not “supporting a big corporation” any more than if I bought it from you. Because you are a sales person for a big corporation.
Guess what the lady I bought that lipstick from at Sephora is? A mom. Just trying to support her family. Just like you. So don’t shame me because I want to buy NARS and not something you tried on your face during a badly lit Instagram Story. It’s no different than buying at a store. You’re the store. You get a commission. If you worked at Sephora, you’d get an hourly wage. It’s no different.
I do support my friends. And the small businesses they own. I just prefer to support the ones who are actually choosing the lipstick to put on their shelves* and deciding which prices they can charge while still paying their overhead.
*actually I have no friends who own a lipstick store, but I’m in the market.
Get your Tax Shelters!
I about LOST it when I saw this Instagram post from an MLMer (I do not know this woman)
This could not be LESS true. Can you write off that $400 buy in… yes! Can you write off the expenses incurred to make the extra $75 you will maybe make from your efforts? Sure. Can you write off hundred and thousands in taxes if you aren’t making hundred and thousands in income (and expenses DIRECTLY RELATED TO YOUR BUSINESS) Fuck no. (IN case she removes the Instagram post because she gets audited from the IRS, here is an image)
But my MLM wants to support small business owners like me!
No. They don’t. They just want to sell a lot of product. Why can’t you find Rodan and Fields on the shelves in stores?
“Because they want to encourage business owners to have better lives”
NO THEY DON’T! That’s just a good selling tool. They know that the majority of their “small business owners” will fail. But THEY reap the benefits. Of free marketing. It is FREE marketing. They don’t pay you to get out there and talk about your business to your friends. They ONLY pay you when you SELL and you better believe the cost of the product, the Research and Development, the markup plus your potential future car are covered BEFORE you get a single commission. They know this model is one where they can financially excel, without the huge marketing costs they need in order to compete with other products, just like theirs, sitting on the shelves in retail stores.
Some companies choose the traditional retail market and the big advertising budget that comes with it. Other (Doctors) sell products through TV advertisements and infomercial shows like QVC. And others decide instead of the big ad campaign, to invest in a program that pays individuals a commission for sales- the direct marketing model.
That is what you are doing when you participate in an MLM. It is not your company; It is not your product; They are not your decisions. You are not an entrepreneur with a new idea with huge potential that will disrupt the XYZ industry
Do you hate me?
A Small Business. Also a very hipster store
No! I don’t. And I like some of your (Tupperwear and Pampered Chef) products.
But I do hate seeing people shame their friends into supporting their friends with products they didn’t ask to buy or really need.
And I do hate seeing people selling and marketing another corporation’s products calling themselves a “small business.” Mostly because I’m a small business owner myself and have the product, pricing, service, distribution nightmares/success stories/failures to prove it. Hearing a hard working MLM participant call themselves an “entrepreneur” while peddling the products of a successful corporation is offensive to the hard working small business people of the world creating and designing their own products and services.
This has been a small business lesson from your neighborhood snarky biatch. Next time on Everyone Hates your MLM, we’ll discuss the MLMs we LOVE.
