Let's talk about MLMs.
If you've spent any time on social media, you've probably seen women promoting wellness products, skincare, supplements, beauty products or the latest business opportunity promising financial freedom.
You've probably also seen the matching outfits, luxury holidays, inspirational quotes and posts about being your own boss.
And honestly? I understand the appeal.
I've been involved with multi-level marketing (MLM) businesses myself, so I'm not speaking from the outside looking in. I've seen the appeal, the community and the promises of what life could look like if you just worked hard enough.
But I've also developed some pretty strong opinions about the industry.
Personally, MLMs are one side hustle I would think very carefully about before getting involved in again.
This isn't a hate post. It's not an attack on individual consultants, and it's certainly not a suggestion that every product or person involved is terrible.
It's an honest conversation about a business model that I think deserves a lot more scrutiny, particularly when it's marketed to mums and people who are looking for a way to improve their financial situation.
Why are MLMs so appealing?
I think one of the biggest reasons MLMs attract people is that they don't just sell products. They sell a dream.
The dream of working from your phone. Being your own boss. Having flexible hours. Spending more time with your children. Paying off debt. Going on holidays. Building a business without needing a traditional job.
For a mum who wants to earn money around school drop offs, childcare and family commitments, that can sound incredible.
For someone who is unemployed, struggling financially or desperate to find a flexible way to earn an income, the promise of a fresh start can be particularly attractive.
And I don't think there's anything wrong with wanting those things. Wanting financial independence, flexibility and a better life is completely understandable.
The problem is when the dream being sold is very different from the reality most people experience.
Social media often showcases the people who appear to be thriving. You see the rank advancements, the incentive trips, the big sales months and the success stories.
What you may not see as clearly are the people who make very little, the money spent on products and business expenses, the hours spent prospecting or the people who quietly leave.
A business opportunity should be judged on what participants are likely to experience, not just what a small number of people have achieved.
The money question nobody seems to want to talk about
Let's get into the part that matters most: the money.
One of my biggest concerns about MLMs is how easy it can be to focus on the earning potential without properly understanding the likely financial outcome.
You'll often hear about people earning thousands of dollars, reaching impressive ranks or building incredible teams.
But what does the average participant actually earn after expenses?
That's a very different question.
In September 2024, the US Federal Trade Commission published a review of income disclosure statements from 70 MLM companies. Its staff found that many participants received no payments from the companies, while the vast majority received $1,000 or less per year, before accounting for expenses that could further reduce their earnings. These findings relate to the companies reviewed in the United States, not every MLM operating in Australia.
The report is available from the US Federal Trade Commission.
That doesn't mean nobody makes money from MLMs. Clearly, some people do.
But it does make me question why the most successful stories are often so much more visible than the ordinary financial outcomes.
There's a big difference between what is possible and what is probable.
Before joining any business opportunity, I'd want to see transparent information about typical earnings, how many participants make no money and what expenses people incur.
I'd want to understand what I could realistically expect, rather than being encouraged to imagine the best case scenario.
Are MLM products overpriced?
This is another area where I have mixed feelings.
Some MLM products can be genuinely good. There are products that people love, use regularly and feel are worth buying.
I'm not going to pretend that every product sold through network marketing is bad simply because of the way it's distributed.
However, I do question whether some products are priced higher than comparable alternatives because the business model needs to accommodate commissions across multiple levels of a sales network.
That's my concern, not a claim that every MLM product is overpriced.
When I consider buying something, I want to know what I'm paying for. Is the product worth the price compared with similar products? Would I buy it if there were no business opportunity attached? Would I still want it if nobody told me I could earn money by selling it?
Those are reasonable questions to ask.
The Australian Competition and Consumer Commission distinguishes legitimate MLMs, which involve selling genuine products or services, from illegal pyramid schemes that rely on recruitment payments. It also warns that pyramid schemes can use products of inflated prices or limited value to disguise their underlying structure.
You can read more through Consumer Affairs Victoria’s guide on pyramid schemes.
I'm not saying that every expensive product is part of a problematic scheme. I'm saying that consumers should feel comfortable questioning the price and comparing their options.
The pressure to recruit, recruit, recruit
Another thing that makes me uncomfortable is the emphasis on recruitment.
Some MLM participants genuinely enjoy selling products to customers. Others find that much of their time and energy goes into building a team, approaching potential recruits and encouraging other people to join.
That can create a difficult situation.
If your income depends partly on the sales activity of people you recruit, there's an obvious incentive to keep bringing new people into the business.
And when everyone is encouraged to recruit from the same pool of friends, family members, social media followers and acquaintances, it can become exhausting.
Your personal relationships can start to feel like business opportunities.
You might find yourself wondering whether someone is genuinely interested in catching up or whether they're about to pitch you a product or business opportunity.
And if you're the person doing the selling, it can become difficult to separate your friendships from your sales strategy.
I don't think every MLM consultant behaves this way, but I do think the structure can create pressure that people should understand before joining.
But what about affiliate marketing?
This is where I think it's important to look beyond the labels companies use.
Affiliate marketing is often described as earning a commission by promoting another company's products or services. In a straightforward affiliate arrangement, you refer customers and receive a commission when they make a qualifying purchase.
However, some companies use the term affiliate marketing while operating MLM-style compensation structures.
These opportunities may involve recruitment, downlines, multiple levels of commissions or earnings connected to the sales activity of people within a network.
Calling something affiliate marketing doesn't automatically mean it's a simple referral arrangement, nor does the label alone tell you whether the opportunity is financially worthwhile.
Before signing up, look at how the compensation plan actually works.
Are you earning a commission for referring customers directly, or can you also earn money through a team of people you recruit? Are there multiple levels of commissions? Are you expected to purchase products, pay ongoing fees or recruit others to progress?
None of these details should be overlooked simply because a company uses more appealing terminology.
Look at the business model, not just the marketing language. Understand where the money comes from, what you're required to spend and whether the opportunity makes financial sense without relying on recruitment.
Why I think mums and jobseekers deserve extra honesty
This is the part I feel particularly strongly about.
When someone is already financially comfortable, spending money experimenting with a business opportunity might be a manageable risk.
But when someone is unemployed, struggling to pay bills or trying to find a way to support their children, that same expense can be much more significant.
Imagine being told that you can work from home, choose your own hours and build an income around your family.
You might pay for a starter kit, purchase products, invest in training and spend months trying to build a customer base.
If the income doesn't eventuate, you can be left with expenses, unsold products or a lot of time invested without the financial result you hoped for.
That doesn't mean every person who joins an MLM will experience this. It means that people considering one should have access to realistic information before making a financial commitment.
Australian consumer law requires businesses to avoid false or misleading claims, including claims made through social media. You can find more information through the ACCC's consumer guidance.
I want people to feel empowered to ask questions, examine the numbers and make informed decisions without being made to feel that their lack of success would simply mean they didn't work hard enough.
But what about the boss babes who are absolutely killing it?
I want to make something very clear.
This is not hate towards women who run MLM businesses.
There are some incredible women involved in network marketing who work hard, support their customers, build communities and achieve results they are genuinely proud of.
I can respect their work ethic and their achievements without agreeing with the business model.
Both things can be true.
I'm not interested in tearing down another woman because she has chosen a different path. I'm not going to assume that someone is dishonest simply because they sell MLM products, and I'm not suggesting that everyone involved has had a negative experience.
Some people genuinely enjoy the community, the products and the business itself.
My criticism is directed at the structure, the expectations and the way the opportunity can be presented to prospective participants.
I also think we need to stop treating criticism of a business model as a personal attack on the people working within it.
You can question whether an opportunity is financially worthwhile while still respecting the people who participate in it.
What I would ask before joining an MLM
If someone approached me with an MLM opportunity today, I'd want answers to a few questions before spending a cent.
What do typical participants actually earn? Not just the top earners, but the full picture, including people who earn nothing.
What are the total costs? Include starter kits, ongoing purchases, subscriptions, events, training and marketing.
How much of the income comes from genuine retail sales? Understand how recruitment and team commissions affect your earnings.
Do I genuinely want the products? Would I buy them at that price without the business opportunity?
Can I leave without being stuck with expenses or unsold stock? Read the contract, return policy and cancellation terms.
Would I recommend this opportunity to someone who couldn't afford to lose the money? If not, I would take that seriously.
I'd also look for the company's official income disclosure statement, if available, and check how it calculates earnings. Gross commissions are not the same as profit, and neither necessarily represents what you take home.
These questions aren't about being negative. They're about making a decision with your eyes open.
So, would I choose an MLM as my side hustle?
Honestly? No, it's not a business model I'd choose for myself.
Having been involved in MLMs previously, I would rather explore opportunities where I have greater control over my pricing, costs, customers and business model.
That might mean offering a service, creating my own products, building a small online business or picking up flexible work.
None of those options guarantees success, either. Every business involves risk, and finding customers takes effort.
But I personally prefer the idea of building something where I can clearly understand what I'm selling, what it costs me to deliver and how much I earn from each sale.
I don't want to feel that I need to recruit a team or convince my friends to join an opportunity to make the numbers work.
And I certainly don't want to spend money chasing a lifestyle that looks amazing on Instagram without knowing whether the financial reality stacks up.
My final thoughts on MLMs and network marketing
If there's one thing I hope you take away from this article, it's this: you don't have to buy into somebody else's dream to build a better life for yourself.
Wanting financial freedom is not naive. Wanting to work around your children is not unrealistic. Wanting to build a business is not a bad thing.
But you deserve to make those decisions based on honest information, realistic expectations and a clear understanding of the risks.
If you're involved in an MLM and genuinely love it, I'm not here to tell you what to do. If you're considering joining one, I encourage you to research the opportunity carefully and look beyond the success stories.
And if you've decided MLMs aren't for you, there are plenty of other side hustles and business models worth exploring.
For another perspective, you might also enjoy the Big Business podcast episode about MLMs, which prompted me to think more about the industry and the promises often attached to these opportunities.
I'd love to hear your thoughts, too. Have you been involved in an MLM, had a positive experience, or decided it wasn't for you? Let's have a respectful conversation.
And if you're exploring ways to earn extra income but aren't sure where to start, feel free to contact me. I'm always happy to share a few free pointers, help you think through an idea or point you towards things worth researching.
You don't need to spend money on an expensive opportunity just to start exploring your options. Sometimes, a conversation and a little research are the best first steps.