Why MLMs Love To Target Women

Have you ever gotten a message on Facebook that looks something like this? “HEY GIRL, I HAVEN’T SEEN YOU IN A WHILE, YOU LOOK AMAAAAZING. DO YOU WANT TO LOOK EVEN BETTER AT YOUR NEXT EVENT? BUY MY MASCARA AND I’LL THROW IN A FREE GIFT. BUT HURRY, SALE ENDS AT MIDNIGHT.” Yeah…those messages. 

While it may be easy to brush these off, roll our eyes, and hit delete, a surprising number of women in America are caught up in these businesses, known as multi-level marketing schemes, or MLMs.  

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While it may be easy to roll our eyes and say we would never get caught up in an MLM, the truth is a surprising number of women in America are involved in MLMs, and are selling everything from essential oils and weight loss shakes to the promise of true love… But the overwhelming majority of people —99.7% to be exact — who join an MLM make no money or actually lose money, and wind up stuck with inventory they can’t sell to recoup their losses.

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Jane Marie, author of: “Selling the Dream: The Billion Dollar Industry Bankrupting Americans” defines multi-level marketing companies as pyramid-shaped — people at the top are constantly recruiting until the top thins out while the bottom continues to grow. “The way they make money these days is charging a fee for entry to get in on the bottom, and sometimes you get a little bit of product,” Jane Marie says. “Those folks at the bottom have very little to no success, and rotate in and out very quickly. But there are enough people wanting to replace them that the money keeps flowing upwards.”

According to the DSA, 75% of MLMs target women and the majority of MLMs sell things traditionally known as women’s products. Jane Marie says this goes all the way back to the 1940s when people were going door-to-door hawking Tupperware and Avon. 

“People were much more comfortable inviting a woman into their house, and women had very vast and deep social networks of other people that would want to join,” Jane Marie says. “And I think that kind of started us on this trajectory of what we’re going to sell in MLMs is makeup and jewelry and diet shakes, but also, women have remained a population where upward mobility is much more difficult, especially in communities where women are supposed to stay home and take care of the children.”

Listen to the HerMoney Podcast to learn more about why MLMs target women, the signs to look out for to know if you’re being targeted by an MLM, and what to do if you’ve already lost money. In Mailbag, a listener asks how to find the best low-cost brokerage account, and we do the math on whether ‘becoming a millionaire by retirement’ is feasible for everyone. In our news of the week, we talk about Donald Trump’s new stock, the end of swipe fees on Visa and Mastercard, and the passing of behavioral economist Daniel Kahneman.

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