Beware: Stories Recommending MLM Companies Are Everywhere Given This Economy

In just the past few weeks I’ve come across more and more stories in the media regarding starting your “own home business.”

First NPR glorified Mary Kay.

Then just recently, All You magazine did a several-page spread about it.

Apparently people are considering joining these companies because of the tough economy in hopes of making some extra money. Unfortunately, the likelihood is greater that they will add to their debt rather than aleviate it.

And I wonder…had anyone stopped to think about who might be buying these frequently overpriced products from these new “consultants?”  With most everyone being cautious with their spending and many losing their jobs, just who is buying all this Mary Kay and candles and jewelry and superduper juices that these companies hawk?

Mary Kay Director Tells NPR “A new rep. working full-time can expect to earn close to $50,000 in a year.”

It’s true. And I nearly laughed myself out of my chair when I heard it.

NPR’s Morning Edition on January 27th, 2009, did a story on how, supposedly, companies like AVON and Mary Kay are seeing big increases in sales.

Reporter Gloria Hillard interviewed Mary Kay director Linda Klein. Says Hillard in the story, “Klein says a new rep. working full-time can expect to earn close to $50,000 a year.”

Really? Can I see some numbers somewhere that substantiate this claim, Ms. Klein? Because I don’t know of any AVERAGE Mary Kay rep that earns $50,000 a year.

Even directors, who flash those big checks around, aren’t really making as much as you think. They rarely tell you the expenses involved, including time, required to receive such commissions. And they hardly ever tell you that those commissions aren’t based on the sales of the consultants they recruit but rather the orders for inventory that those consultants place with the company. Lots of that inventory winds up in the basement or at garage sales when the women who join realize that the earnings claims are overstated and the time commitment grossly underestimated.

You can listen to the complete story here: http://www.npr.org/templates/story/story.php?storyId=99898912

As is predictable, many Mary Kay consultants have shown up on the NPR site to leave their positive comments about the company.