Multi-Level Marketing Schemes Prey on College Students | by Tiffany Rhodes | May, 2021

Hey person I haven’t spoken to since high school: get out of my DMs with a “business opportunity.”

Image of NYU Local logo, MLM tweets, empty wallet and CutCo logo.
Graphic by author.

There is a constant grind among NYU students to get that coin, network to perfection, and acquire those job prospects just in time for graduation. Oftentimes, students are approached through sketchy unmarked letters, unknown-number text messages, and aggressive DMs from hometown “girl bosses” with a sweet job opportunity. An opportunity that promises high wages, networking opportunities, and flexible hours — the perfect job, right? Not quite.

Many students find themselves approached or even victims of companies that use the multi-level marketing style of business. A company will employ a non-salaried workforce to sell products or services, and the individual worker will search for others to become a part of the business. Oh, the joys of capitalism.

An MLM scheme does not pay their employees with a salary but will usually offer two ways for employees to make money: direct sales of products and getting more people to join. In a study by AARP, roughly 1 in 13 Americans over the age of 18 will participate in at least one MLM scheme in their lifetime. Many more than that are approached, however. In a study by Radvocate, about 15% of women have been approached by a family member or friend about their MLM scheme. These companies will specifically use their current members to obtain (and oftentimes trick) new people to join, especially with promises of community.

In the U.S, 1/3 of college students struggle financially. Specifically, at NYU, College Board has found that the university meets approximately 71% of the financial needs of their students, leaving the rest for students to pay either through loans or jobs. Naturally, students will seek off-campus jobs and positions to help them live and survive at the university, especially those with financial hardship. College students are often prime targets for MLM schemes due to financial struggles that many students are already met with.

“I never would have known [it was an MLM] unless I did a little bit of research,” says Skylar Burris, a senior in the College of Arts and Sciences, while recounting her experience being approached by MONAT, a skin-care and hair-care MLM scheme. Burris was approached by an old classmate from high school, and while the representative did not call herself a “girl boss,” Burris says, it “would be iconic,” if she had.

During the interaction, the representative used a lot of “buzz words,” like “remote work,” “flexible,” “great business opportunity,” among others. For Burris, she turned down the proposition, given that business wasn’t within her academic and career goals but, with the way she was approached, she wouldn’t have known it was an MLM scheme.

Unlike Burris, Mike Zaharchenko did not turn down “a great opportunity,” for a different type of scheme.

“I responded to an ad on LinkedIn for an entry-level marketing position,” says Mike Zaharchenko, a student at Fordham University, who found himself working for an MLM scheme that was commission-based. For Zaharchenko, the job seemed promising, offering competitive pay, flexible hours, it had a rigorous selection process, and promised marketing work; he would not work a marketing job. Instead, he worked on pre-determined “‘optimal’” workdays, where he would work 12–13 hour shifts “approaching random people and harassing them to buy useless shit.” After experiencing other red flags, including a toxic work environment and minimal compensation for his work, he realized “[this is] not how employment should be.”

Unfortunately, MLM schemes, while ethically questionable, are a relatively sustainable and non-prohibited business strategy. Many will often associate the term MLM with Pyramid Scheme; however, both are different; one is surprisingly legal, and the other is not. It all comes down to the purpose of the company. MLM schemes focus on buying and selling products, like knives, shampoo, and conditioner, vitamins, etc. Recruitment is also included in the mix, and recruiters often receive a percentage of every sale one of their recruits makes, known as a downline. In contrast, the main priority of a Pyramid Scheme is to make money by stealing money from individuals who invest in the company and recruit others to lose their money well.

Regardless, both strategies tend to leave investors and workers worse off. Roughly 99% of those who work in MLM schemes will lose money or just break even. But hey, at least you got some essential oils and crystals. Right?

With all the warning signs, red flags, and sketchy practices, why are students still attracted to these strange opportunities? Frankly, most students are coerced by this opportunity due to a perpetuated toxic job and networking culture that exists at NYU and among students nationally. We live in a culture of grind and hustle, where college-aged students are constantly pressured with job pursuits and resume building. Grind culture pushes students to feel that they need to have a job or an internship secured at all times. With these pressures in mind, why wouldn’t a college-aged student be attracted to an MLM scheme?

Furthermore, given the current global circumstances and uncertain economic prospects amid a pandemic, it is becoming more difficult for students to find job offers post-graduation, especially ones that will provide a livable wage and some prospect of opportunity. Jean Hanagriff, a First-Year student in CAS, says, “MLM[s] make it seem like every person who joins has the possibility of becoming a billionaire when in reality only the people at the top make money.” It doesn’t help that MLMs mercilessly target college-aged students with the exact hope they’re looking for post-graduation.

For most who have been approached by an MLM scheme, the best advice in avoiding schemes is to be wary, do research, ask questions about positions, and inform others of schemes. According to Zaharchenko, “Control your eagerness and [don’t] let it cloud your judgment, especially… where you’re looking for your first job.”

Pay attention to the vagueness and specificity for job descriptions, especially regarding salary, the type of work, and company. Most importantly, educate people about the dangers of MLM schemes and tell people approaching you about their ~sketchy~ company that it may be an MLM. Hanagriff says, “The only way to combat MLMs is to educate on what these companies look like and why, even though it seems like it’s going to be good for them, it’s actually a predatory company.”

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