The Stigma Against Direct Sales Companies and How To Fight It

If you’ve joined a multi-level marketing company, you’ve likely heard all sorts of comments about the industry in general. Some people may be very optimistic about your choice, but you may hear many harmful comments as well. 

It’s no secret that there’s a stigma around the multi-level marketing industry. And with all the misinformation and misunderstandings about the direct sales/MLM structure, it’s no wonder people are confused and quick to dismiss it. For those who have seen the positive effects of this business model, tolerating this stigma is frustrating. 

If you’re ready to stand up for the direct sales business model, learn more about the stigma it faces and how you can fight against it. 

To understand the stigma surrounding direct sales companies, it’s essential to realize that MLMs have changed a lot over the years, and not all companies are the same. For example, requiring associates to purchase a minimum amount of stock used to be typical, and some companies have better policies for associates than others. 

But of course, it’s the controversial, illegitimate companies that make the news. A multi-level marketing company working ethically and without scandal is unlikely to make the front page of newspapers and magazines. That would be boring. 

However, every time an MLM makes the news for having a controversy, this feeds into people’s natural confirmation bias. Anyone who previously had any misgivings about the business model has their fears confirmed by one news article. However, they don’t go out of their way to look at legitimate companies that disprove their theories. 

The stigma around MLMs primarily stems from the idea that they aren’t legitimate but rather pyramid schemes. Despite the FTC drawing a clear line between legitimate MLMs and pyramid schemes, critics quickly name a few bad apples as examples. 

With all the stigma around MLMs, some may wonder if they should even get involved. Let people think what they want, right? 

However, there are many reasons to stand up against the business model’s stigma. The truth is that hundreds of companies rely on direct sales practices for their company. As the stigma spreads and strengthens, these companies may change their business structure or even go out of business. This would mean a loss of income for millions of people. 

There are benefits for companies and associates alike to continue the direct sales model. So by defending the practice, you’re helping to ensure that these benefits remain accessible. Discover below examples of how associates and companies benefit from the model and why MLMs are worth defending. 

The 9-5 structure works for many people. But for many, the rigidity of this type of career is too restrictive. With an MLM, an associate can usually work from anywhere, determine their hours, and their income depends on the sales they make. 

Some want to travel the world while they’re young while still earning an income. Others are parents who are facing skyrocketing childcare costs. In that case, it makes more sense for a parent to stay home, but they’d still like to make some money. Others want to see their paychecks directly reflect their efforts rather than a set wage, like seeing their paychecks increased for more sales. 

For many reasons, people want or need the flexibility that direct sales companies provide. 

Companies spend millions of dollars in marketing and advertising every year. However, the traditional form of marketing doesn’t work for some companies. This might be because their product or service is new to the market, and consumers aren’t willing to buy things they don’t understand, or the product or service varies so much from the standard that it is unappreciated. 

For these reasons and many others, throwing money at a marketing team may not be enough to get consumers to buy into what a company offers. In this case, consumer education is essential to share what a product or service can do for its users. And that’s where associates come in. 

Associates know the products better than anyone. Through word-of-mouth marketing and hands-on consumer education practices, they go beyond ads to meet consumers where they are and share their expertise. Rather than spending more on marketing, companies can then simply pay out commissions to their associates. 

You’re passionate about the benefits that the direct sales model provides, and you’re ready to get out there and defend it. But how should you do it? Here are some tips for handling a situation where you’re supporting the practice.  

Knowing where your opponent is coming from can help you better understand the reason for their criticisms and how to respond. 

Some people are simply parroting what they’ve heard from others. If that’s the case, then questioning their stance further and providing the facts may be enough to deter them. 

Others are coming from a place of hurt, either because they or their loved ones feel that an MLM has wronged them. Here, it’s best to show empathy to remind them that you’re not upset with them, just trying to have a discussion. Then, you can ask them about their experience and point out that not all companies are the same, and one incident doesn’t negate the model as a whole. This way, you’re not invalidating what they say but pointing out the fallacy of relying on anecdotal critiques alone. 

By treating all critics the same, you may alienate people, and you’ll find that it’s more like talking to a wall than having a productive conversation. 

We, humans, are emotional creatures. But when you begin yelling or speaking with more emotion than reason, this could result in more negativity than your desired result. The best way to respond to criticism is to stay calm and focus on the facts. If you emphasize fact over emotion, you make a stronger argument and increase the likelihood of success. 

Now you know how to respond, but what are the facts, and what should you say when you’re confronted with stigma? If you speak with enough MLM opponents, you’ll quickly see that there are few unique critiques. While this makes for tiring conversations, this also means there’s a basic script you can expect, and you can easily learn how to respond to the typical talking points. 

Here are several that you should know. 

“People Lose Money in Direct Sales/MLM Companies”

Acknowledge that joining an MLM isn’t risk-free. Because income relies on sales made, there isn’t an earning guarantee. Joining an MLM isn’t a get-rich-quick scheme — it’s a business. 

Just as small businesses only have a 30% success rate over ten years, sales aren’t guaranteed. Additionally, not everyone who starts with direct sales has the personality or skill-set to succeed as a salesperson. 

And if all of this isn’t enough, there’s one significant factor skewing the statistics of MLMs: people who join for discounted products. Of course, associates who are onboard only to enjoy the products themselves with no intention of turning a profit will appear on paper as a failure. 

Business is never a guarantee. But just because some people don’t find great success in their entrepreneurial pursuits doesn’t mean the business model is illegitimate. 

“It’s All about Recruiting”

Organizations that rely on recruiting alone are pyramid schemes. However, MLMs rely on selling products and services. When an associate refers their friend to the company, they may earn a referral bonus or a portion of their commissions. However, their profits are still determined by sales, not recruitment. 

“All MLMs Are the Same”

With hundreds of direct sales companies worldwide offering a variety of products and services to their customers, different compensation plans, and varying policies, saying that they are all the same is simply a lie. 

This is the equivalent of saying that every hamburger joint is the same. But if someone has a bad experience working at McDonald’s, they may find that working for Shake Shack is an entirely different situation. The understanding that similar companies aren’t the same is a courtesy that should be extended to all business models, including MLMs. 

“Direct Sales/MLM Products Are Poor-Quality”

For direct sales companies to succeed, they need to fill consumer demand. If MLM products or services were extremely low-quality, they wouldn’t survive in the marketplace. 

Providing high-quality products will look different depending on the company or MLM. This might mean rigorous clinical testing, sourcing high-quality materials, or working with experts to develop the best formulas. Because the FTC doesn’t allow any misleading claims about products, you can always take a look at a company’s verified product claims to be sure of its quality.

It’s easy to get discouraged with the bad faith criticisms and harmful remarks about the industry circulating. After all, someone’s career is an integral part of their daily lives and how they support their families. It’s hard not to take constant stigmatization personally. 

However, understanding how to fight the industry’s stigma effectively could be the best thing you can do for your company. And with the proper response, you may turn your critics around to loyal customers. 

So keep your head held high, and you can make a difference in strengthening and protecting the industry that has changed so many lives for the better.