Being an affiliate and MLM

[hannah1992]

I follow some accounts on Instagram and one of them had a huge rant on her stories about MLM companies and how they suck people in and people have lost thousands of pounds to them. I know nothing about MLM apart from my friend who does Avon. She asked me if I wanted to do it. I would have had to pay £15 for a starter pack. I didn't because I don't have the time but if I did I stood to lose £15 so how do people lose thousands?

It also got me thinking that this person affiliates for Amazon and few other brands so isn't she doing more or less the same thing? She's promoting things on Instagram and they pay her commission for doing so.

Maybe I'm just being thick because I know nothing about MLM or being an affiliate but from what she was saying it sounded as though she does more or less the same thing just with a different name?

MLM is where the money you make comes mostly from recruiting other sellers rather than selling a product.

There is an excellent podcast called The Dream if you want to know more.

It's not the same as she is doing.

ellebeaublog.com/2017/02/01/chapter-1-getting-reeled-in/
If you want to know about how MLM's work you should read this.

Affiliates are a whole other kettle of fish. MLM preys on the vulnerable and sells a lifestyle that can’t be achieved.

Affiliates promote products they think their followers would love and earn a commission for doing so.

MLM’s make money from recruiting sellers who pay money for stock - not from selling the stock itself. Your initial outlay might have been £15 but for many of these schemes you have to spend a lot more, and you’re aggressively encouraged to keep spending, always with the promise that success is just a few steps ahead. Not everyone will lose thousands, but these schemes target the vulnerable for a reason.

Affiliations are different. You don’t have to sell the product, just promote it. You’re paid for the advertisement regardless of whether anyone then goes on to buy the product.

Oh I see. I wasn't aware of that. Glad I didn't take up the offer then.

I see quite alot of adverts on Facebook but I didn't realise what was what.

My friend must have been "recruiting" then

£15 is just the initial payment - you would get asked for plenty more soon enough.

not many individuals lose thousands - most don't have thousands to lose, but everyone except the very few at the top of the pyramid loses some, and the ones who make it to the middle levels of the pyramid may eventually make back what they lost and just about break even (but only by hoodwinking plenty of others into losing their money, which is an awful thing to do)