How to Say No to Joining an MLM Scam
Imagine this:
You’re scrolling through your social media feed as you normally would, and out of the corner of your eye, you spot a fun video. You share it, move on to the next post, and go on living your life reading my blog.
Suddenly, a message notification pops up.
Just as you would normally react, you press on the notification and are taken straight to a conversation window where you find out it’s a message from an old classmate from high school asking how you are doing.
Normally, this wouldn’t be too out of the ordinary, but you haven’t talked to them in a few years. Yet, you carry on the conversation to be polite.
While things might seem innocent enough as it is, let’s say that your friend brings up how they’re living a beautiful life with cars and properties, all because of a certain business model that they’ve been doing for a few years.
While success stories aren’t uncommon in any way, a certain line catches you out of nowhere:
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You’re intrigued, but you also feel a little infuriated and jealous all at the same time. How did they do it? Why are they so successful?
You decide to ask them how they did it, and they take you on a short narrative through how their business works. It all seems to be going well until your brain kicks in and starts noticing key terms like “downline”, “upline”, “minimal buy-in”, “commissions…”
Suddenly, you realize your high school classmate is part of an MLM scheme, and you’ve made the mistake of absent-mindedly asking about their business without picking up a hint of suspicion.
You can try to look for the panic button to escape the conversation without being too rude – and then they ask you if they could meet you for some coffee to explain further.
Yikes.
Although you already know that you’re about to be pitched to, you don’t have any way to suddenly drop out of the conversation and get back to minding your own business. Their insistence has you trying to decide if it’s worth accepting just to get the conversation over with, but you ultimately decide to decline.
But, how do you politely say “no” to joining their MLM?
“No thank you, I don’t want to get scammed today!”
“Sorry, I think my mom’s friend’s sister’s dog’s brother’s owner’s father has a party that day!”
“Bug off!”
“On the count of three, I’m going to end the conversation and pretend this never happened…”
While you probably think that any of these answer are right, and you might be tempted to use them – sometimes all at once – there is actually a RIGHT WAY to politely decline your friend’s “tempting” MLM invitation.
In this article, you’ll learn how you can politely decline joining and MLM, as well as several ways to answer the question “is this an MLM?” when searching for new work from home opportunities.
What Is An MLM?
A multilevel marketing company, also known as an MLM, is a business model that companies use as a way to keep profits moving up the line. (1)
The recruited “distributors” “salespeople” or “business owners” are encouraged to recruit new people into the company’s business model, and a percentage of each sale the new person makes is received by the recruiter.
Eventually, all this profit makes its way up to the top, where the real earnings are. It’s extremely difficult to make a real living by joining an MLM company unless you are willing to dedicate time to it like a real entrepreneurial endeavor.
Even then, there are better ways of making money.
The Reason Why MLM Companies Are So Widespread in the First Place
With multi-level marketing evolving far beyond its Ponzi scheme roots on social media, it’s near impossible to go through your social media feeds without coming across a #success post showcasing wads of cash and some sort of sketchy-looking product.
As lucrative as these business opportunities may seem, it’s important to note that these social media advertisements and posts are all just rehashed extensions of an MLM scheme.
You probably have a few people on your friend list who are staunch members of a multi-level marketing operation like Ring Bomb Party due to the sheer force of these company’s social media advertisements.
It’s inevitable that one of them will message you with the same hokey message.
So, why are they still so widespread despite the bad reputation?
You might have noticed that more women sell these products than men. For stay-at-home mothers, it’s not hard to understand the appeal.
Most MLM companies boast the ability to create your own hours – or at least maintain a flexible schedule – while still earning enough to make a lavish salary. This opportunity seems like the perfect fit for a new mom who can no longer spend all her time at work.
When supporting a newborn, moving to a new area, or trying to make a living working from home, every penny count, and MLM schemes can seem like that big break you needed to really achieve success.
Best of all, MLMs are so widespread because they’re easy to start. Stock some product, create a pitch, and start selling the American dream.
Not before long, you have salespeople who keep recruiting new people. Each person buys stock (guess who the stock comes from? Yup, you!) and sells it on their own time.
Does your MLM model take a commission from sales or recruitments? Well, that goes to you, too. There’s little risk to you if you’re the one who started the business – all you have to do is market it.
Unfortunately, MLMs are also a hotbed of legal issues. For the lower-tier salespeople and recruiters, they can be difficult to get out of as well.
How Do MLM Companies Work?
MLMs work by recruiting individuals to sell a product. Often, the product is simple and can be purchased wholesale, such as clothing, supplements, oils, or beauty products. These products are then marketed to “distributors” or another term synonymous with a salesperson.
This distributor’s job is not just to sell the product, but to also recruit other salespeople. These salespeople would then buy the product, sell it, and try to recruit even more people.
These salespeople become your “downline” and they are the primary way you can make money in an MLM company.
These salespeople are motivated to keep you onboard and making sales as long as possible, because you being there makes money for them. Each sale you make earns them a commission, so they’re highly motivated to keep you in the company.
Yes, you can still make money through direct sales, but the more recruits you have, the more salespeople you have working under you to sell the product directly. With each sale members in your downline make, you earn a commission.
Each new member buys stock from the company, sells it, and the commission trickles up. With enough recruits, you can make a lot of money, but it takes a lot of marketing and recruiting to get there.
Very few MLM members actually make a successful career out of their efforts, despite the fact there are thousands of members in any given company.
If you find yourself asking “is this an MLM?” then chances are, it probably is. Most MLM companies will have a greater focus on product sales than they will recruitment, while pyramid schemes have a greater focus on recruitment.
Why Are MLM Companies So Dangerous?
MLMs are dangerous because most people who join wind up investing a lot of time and money for a payoff that never comes.
They sell the American dream – a chance at a lavish lifestyle with little effort and flexible hours – while pushing you to inventory products you can’t afford.
If you’re lucky, you’ve avoided joining any pyramid scheme ‘til now, and you’re trying to find a way to say no to your friend who was recently recruited into one.
For those with moderate luck, you’ve been recruited into a scheme and managed to make a decent amount of cash with it.
Unlucky recruits are those who found their way into a scam or pyramid scheme without realizing it.
It can be difficult to tell whether the company you are dealing with is legitimate or not. Is this an MLM scam, or a legitimate business?
Pyramid schemes are an illegal business model similar to MLMs which the Federal Trade Commissions has issued a warning against joining. While they have cracked down on many of these businesses, more and more pop up every day.
There are many illegal pyramid schemes that recruit people under the guise of being an unassuming MLM company. If you join a pyramid scheme without realizing it, you can kiss your investment goodbye. The best you can do is to avoid getting too deeply in debt and get out as soon as possible.
Can You Get Rich With MLM?
If you manage to join a legitimate company with a decent business model, there is a chance that you could make a decent amount of money.
Rich, though subjective in amount, is an entirely other ballpark and rare to achieve with an MLM.
To make any substantial amount of money from a business model like this, you need to dedicate the time and effort to work at it like a real business. Only a tiny percentage of MLM distributors or representatives actually make the high earnings the company promotes.
How much time it takes to make this money will be much more than you’re led to believe at first, as well. Less than 25% of all members typically make money back, and they aren’t able to pay themselves an hourly rate for all of their network marketing efforts. If you count time as a resource, then the percentage falls ever lower.
Most people don’t make any money at all with their endeavors, and about half of all recruits who join will lose money as they are unable to offload the product they initially purchased.
If you are serious about joining the program, it’s important to do your research. Understand that it’s not a cakewalk, and it will take real dedication on your part – the type of dedication it takes to start your own business and make it successful.
Is this an MLM Scam? Learning How to Spot Any Scheme
First, when you are pitched on a new business opportunity, ask yourself, “is this an MLM or a pyramid scheme?”
Spotting the differences is critical to assessing whether the endeavor is a scam or not. Pyramid schemes are very similar to MLMs and can be difficult to tell apart.
With a little investigation, however, you’ll find that pyramid schemes are built around recruiting new members, rather than selling a product.
Other red flags that can help you spot a scam are as follows:
- Low-quality, overhyped products.
- No products to sell.
- You’re required to stock up on the product first.
- You’re required to pay to join or pay for training.
- They can’t answer direct questions and revert to sales jargon.
- They aren’t interested in the program being a great fit, they just want you to join.
These are all signs that the program you are joining is not legitimate, and you should avoid it.
Then, ask yourself whether this scheme is worth the risk over more legitimate business models.
How to Say No to an MLM
No matter how many excuses you make, these MLM practitioners know better than to give in to a phony piece of dialogue which can make saying no difficult.
In fact, most MLM recruits are trained to deal with fake excuses and carry out the art of continuous pressure. They are instructed on how to circumvent any sidelining and misdirection because their only goal is to get you to sign up for their “work from home business.”
You signing up to become part of the miserable process is the most effective way for them to make money in a scheme like this.
When contacted by a distant friend about a “great opportunity” to join an MLM, it’s important that you stick to the actual reason as to why you don’t want to join. Tell them straight-up that you have no interest in joining but want to thank them for their time.
The process of denying your friend’s advances should really just comprise of a swift “sorry I’m not interested,” and a “but I really appreciate what you’re doing” to sprinkle in some compliments, then close the conversation as politely as possible.
This way, you get to step out while preserving the friendship.
Let’s be clear: your goal is not to soften the blow of the refusal by giving them an excuse.
If you give an MLM recruit an excuse, they will do their best to circumvent it.
Your goal is to tell them “No, I’m not interested,” and move on. No excuses, nothing to fight back against.
Now, they may still try to ask after your reasoning, and it’s important to provide excuses they can’t fight back against.
Saying “I don’t have enough time” is one of the worst responses you can give, because that opens them up to a new range of pitches they can use. They will try to help you figure out how to make time for the MLM, or give you reasons why this MLM is different and won’t take up as much time as you think.
Stick to your irrefutable defenses.
“It doesn’t fit what I’m looking for.”
“I’m just not interested.”
“I’d rather focus on xyz.”
These are all excellent responses to continue shutting down the conversation.
Eventually, they’ll give up and pitch someone else.
References:
- Casey Bond, How to Politely Say ‘No’ to Your Friend’s Multi-Level Marketing Pitch, https://www.huffpost.com/entry/say-no-mlm-pitch_l_5f4d61d7c5b697186e39eaa1
I buy and review courses so you don’t have to. Sometimes, I even find courses that are legitimate and worthwhile; and that’s how I accidentally came across one that led me to building a 6-figure business in a little under 5 years. Now, I still review courses because it’s my favorite hobby. 🙂 Learn more about me here.
