The High Failure Rate of a Pyramid Scheme

I was 22 when I was first approached by a multi-level marketing (MLM) company that shall remain unnamed. The opportunity was presented as such: work part-time, on your own schedule. Convince three of your friends to join, and you won’t have to do much work. Be in control of your own time and determine your own future. Retire by the time you’re 30 (or 35, or 40, they all promise young retirements and lives of extreme luxury).

The particular opportunity that presented itself to me sounded okay, and the woman trying to recruit me was convincing. My only real hangup was that I didn’t want to sell fairly useless shit to my friends, family, or even adjacent acquaintances. Multi-level marketing companies are also known as pyramid selling, network marketing, and referral marketing. MLM’s make money through a non-salaried workforce that sells the company’s products or services, builds and/or “mentors” a team of sellers beneath them, and thus earn money through a pyramid-shaped, or binary compensation commission system. Some of the most popular MLM’s out there include Amway, Mary Kay, Herbalife, Avon, and Infinitus.

Obviously, these companies have been around a while so the structure must work. What nobody says when recruiting members though, is that the structure only works for a tiny percentage of folks at the very top of the pyramid. If the MLM pyramid…