Also people say they ruin lives, how?
In: Economics
ELI5 answer (I hope)
MLM stands for multi level marketing. This means that instead of going to a job and getting paid by the big boss, the worker pays money to get the job in the first place and all the bosses above them get a cut of that money. The worker then tries to sell products, but there are a lot of other workers trying to sell the same products, so they are very hard to sell. The bosses above them take the majority of the money from the products, so the worker gets little or no money for themselves, and many actually lose money. Then the worker tries to be a big boss themselves and “hire” people under them so they can take a cut of their money too. But the problem is less than 1 in every 100 people will ever make enough money to support themselves like a real job. The workers do not get salaries.
You can spot a multi level marketing company by spiels such as “be your own boss” “work from your phone” “side hustle” “retire early” “bossbabe” and “I’ll PM you”.
MLM companies are bad because nearly >99% of people lose money and most of the rest do not earn a living wage.
Bonus round: some MLM companies promise perks like a brand new car which sounds pretty special. What this actually means though is the worker has to sell a LOT of products every single month and only if they sell that amount will they get a pay check for that car. If they don’t sell enough then they have to pay for the car all by themselves, which probably again means that they are losing money.
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