Date: September 17, 2021 06:57PM
The truly unfortunate thing about MLMs is that most of their consultants don't understand even the most basic of accounting concepts. So for instance, consultants tend to crow about their sales without subtracting their expenses. And most do not take their hourly labor into account.
Almost all MLM participants end up losing money. It's normally above 90-95% of them. "The Finance Guy" does a good job of analyzing the earning potential of various MLMs. In this 2018 article, he notes,
"Before we look at the above table, notice that 72.63% of Lularoe retailers did not qualify so earned absolutely no commission at all in 2016. Another 27.33% Earned less than $45,000. In other words 99.96% of Lularoe Retailers earned less than a full time income in 2016."
He also notices that LLR's own income disclosure agreement, which the company is required under law to provide, doesn't add up. I don't think I've ever seen this in any other MLM. At least on the Income Disclosure Statements, they tend to be honest.https://www.finance-guy.net/streetonomic/money-lularoe-review
ETA: I should add that lying and "flexing" is a huge part of MLM culture. Consultants are urged by their uplines to exaggerate or outright lie about their earnings and lifestyle. That picture of their supposedly new Mercedes or Lexus? -- it was probably taken on the car dealer's lot. As an aside, the consultants are 100% responsible for the leases on their cars, and if they don't continue to make their numbers, they become responsible for the lease payments on a car that they perhaps cannot afford. The business trips that they brag about are largely financed by themselves. Consider that anything a MLM consultant brags about might not be at all true.
Remind you of a church and church culture that you know?
Edited 1 time(s). Last edit at 09/17/2021 07:04PM by summer.