MLMs and COVID-19: Inside the ‘almost predatory’ business model that thrives during tough times

Industry data shows participation in direct selling -- the umbrella term for the sales industry that includes MLMs -- grew by 20 per cent in 2020 as the COVID-19 pandemic hit.

It usually starts with a message: “Hey hun!”

The sender has a friendly tone. They pepper their messages with pet names. Maybe it’s a friend, a distant cousin, or someone you haven’t spoken to since high school.

But the real reason for their message becomes clear when they finally ask: have you ever wanted to be your own boss?

That was the kind of message Anna Lange, who lives in Missouri, had been turning down for months. But then COVID-19 hit. Lange had an 11-month old baby at home. The self-described workaholic had become a stay-at-home mom after having just graduated college. She was living in a new city. She was lonely, and she wanted to help her husband by bringing home some extra cash.

She said yes. And today, Lange is still recovering from it financially and emotionally.

The business opportunity she pursued was with a multi-level marketing company, also known as an MLM. She paid to buy products to sell. She paid for marketing materials. But the sales just didn’t come. By the time the dust settled, Lange was about US$5,000 in debt. 

And she wasn’t alone. Industry data shows participation in direct selling — the umbrella term for the sales industry that includes MLMs — grew by 20 per cent in 2020 as the COVID-19 pandemic hit.

“I saw a lot of recruitment posts, ‘because it’s COVID, people are working from home,’ they’re like, ‘now’s the perfect time to join in because we’re going to have this boom,’” Lange said.