Not all MLMs are scams, there are some very long standing companies that do well with it. Melaleuca comes to mind, has been around for 30+ years and has a billion in revenue.
And virtually nobody makes any money at it. Their profits are from people becoming 'distributors' having to buy overpriced products. Consider the following:
- The nonprofit Consumer Awareness Institute analyzed available data published by the MLM companies themselves. Of the companies surveyed, they reported the least successful was Amway/Quixtar where 99.99% of distributors lose money, and the most successful was Herbalife, where 99.42% of distributors lose money.
- They also surveyed 200 tax preparers in three counties in Idaho and Utah, where 6% of residents are active network marketing participants. From over 300,000 tax returns, not a single one reported significant profits from network marketing activities.
- In a Wisconsin lawsuit, the tax returns of the top 200 of 20,000 network marketing participants were examined by the Attorney General. The average income of this top 1% was -$900.
- Newsweek found that less than 1% of MonaVie distributors ever qualified for any commission at all, and less than 1 in 1,000 recovered the cost of their required monthly purchases.
- On average, 99.95% of network marketers lose money. However, only 97.14% of Las Vegas gamblers lose money by placing everything on a single number at roulette.