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Published: Mar 31, 2019
By: Randy Alcorn
The Benefits and Pitfalls of Multilevel Marketing in the Christian Community
MARCH 28, 2019 BY RANDY ALCORN
Hundreds of thousands of Christians have at one time or another been part of multilevel sales organizations. Here’s how the Federal Trade Commission defines multilevel marketing:
In multilevel or network marketing, individuals sell products to the public — often by word of mouth and direct sales. Typically, distributors earn commissions, not only for their own sales, but also for sales made by the people they recruit.
In referring to multilevel marketing practices, I don’t mean “pyramid schemes” based on the multilevel chain-letter approach where others are enlisted to send in their money in hope of rising to the top and receiving huge profits. Although there is a pyramid element to some multilevel sales companies, pyramids per se are illegal, whereas legitimate multilevel sales organizations are not.
The Positive Benefits
First, some clarifications are in order. There is absolutely nothing wrong with selling products or making a profit. Every Christian needs to work for a living, and sales is a legitimate and respectable profession. There are multilevel sales organizations, both Christian and secular, that offer good products at a fair price.
Furthermore, I recognize that many committed Christians are only nominally involved in multilevel sales, or if they are very involved, are very careful in their approach. Personally, I have friends who are part of multilevel marketing companies, but have never once made Nanci and I feel uncomfortable. In fact, in most cases they’re very careful not to even bring it up.
There can be great benefits for some people, especially moms who desire to stay home and care for their children while still supporting their families. One blogger involved in a MLM business wrote:
I lead several women whose sole purpose in building a business is so that their husbands can give up second jobs and others whose purpose is to stay at home with their children. These are goals which will benefit their families. My own husband is preparing to exit the retail company he started 25 years ago, where he has worked 60-70 hours per week to earn roughly three times the income that I earn in a tenth of the hours. I’ve watched many husbands leave jobs or cut back on hours in order to join in partnerships with their wives. This is not a bad thing! It is also worth noting that I know of one case of a family who has come off welfare due to the mother’s involvement in our business!
Many of those who are heavily involved in multilevel marketing are innocent of the kinds of attitudes and actions I will address in the rest of this blog. There are great examples of people who balance these things well. But just like anything else, being involved with such a business comes with its own unique set of temptations and challenges.
In sharing potential pitfalls, I’m sure to tread on sensitive territory, and no doubt some readers will be offended by what I share. Nevertheless, I ask that you consider what I have to say with an open mind. (What follows is a much edited and updated section from my book Money, Possessions, and Eternity.)
Consider the Finances
I’ll start with a word of caution about the financial side of engaging in multilevel marketing. Besides the well-known larger multilevel sales organizations, there are numerous smaller ones that have come and gone through the years. Some garages are filled five years later with products that were supposed to “sell themselves.”
Many of these organizations entice new prospects by touting extravagant incomes. But the statistics and disclosure statements of many such companies tell another story. In his article Ten Big Lies of Multilevel Marketing, Robert L. Fitzpatrick writes, “Fewer than 1% of all MLM distributors ever earn a profit and those earning a sustainable living at this business are a much smaller percentage still. Extraordinary sales and marketing obstacles account for much of this failure, but even if the business were more feasible, sheer mathematics would severely limit the opportunity. The MLM business structure can support only a small number of financial winners. ”
In their article “The Divine Rise of Multilevel Marketing,” Christianity Today focuses on one company and explains that by some estimates, less than 1% of sellers earn a profit, and more than 90% of the company’s consultants stay at the lowest level. This means they earn less than $600 in a year, beforebusiness expenses and taxes.
CBS News reports that 2015 disclosure statements from another popular multilevel marketing company revealed that the average commission their representatives earn is just $85 per year.
It’s true some people sign up as consultants for a company only to get a discount on the products they themselves would like to purchase, and aren’t necessarily concerned about making a profit. Others do so because they truly believe in the products and genuinely want to help others. But for those who hope to make a sustainable living selling them, it’s wise to be realistic about what you can expect to earn.
An article for Crown Financial Ministries (an organization I highly recommend) says this:
Those who enter an MLM business because they love the product and enjoy the association do fine. Those who enter to build a business with income potential need to realize that just like any business it is very difficult and can require years of hard work. If you enter thinking this is a “get rich quick” idea you will be disappointed. The Bible warns against being motivated by or eager to “get rich.”
When the Motivation Is More Than Just Friendship
I’ll move on to another serious concern that can happen with multilevel marketing. Picture this: Someone is warmly approached by a fellow Christian who appears to be genuinely interested in friendship, in person or even through social media. Typically, these people will work something into the conversation about their involvement with a particular line of cleaning products or vitamins or cosmetics, then make a pitch to enlist the other’s involvement.
Over the years, many people have told me similar stories of their experiences with multilevel marketers, with varying degrees of hurt or anger. I’ve experienced it enough times myself to know that it really happens. I’ve received “the call” from a fellow alumnus from Bible college or seminary. First, he’ll ask about me and my family, saying pleasant and flattering things, before he finally moves on to his real reason for calling. When I politely say no to his proposition, sometimes he’ll persist and I must get firmer. Suddenly, all his interest in my family and me is transferred to the next person on his contact list, which consists of every person he has ever met whose name he can remember.
The Danger of Seeing People as Objects
The distinctive element of some multilevel sales organizations is that people are not just potential customers but also potential distributors who would come “under” their recruiter (who from that point forward would receive a percentage of their profits). Not only is every occasion a potential sales pitch and every person a potential sale, but every person is a potential salesman, making money for the “upline.” People can naturally become objects, not subjects, and interest in them can easily become primarily utilitarian.
I know a man and woman who were invited to dinner by two close friends who’d recently become involved in multilevel sales. Before dinner was served, the man noticed out of the corner of his eye that his host had deliberately tipped over the gravy bowl, spilling it onto the tablecloth. Saying something like “clumsy me,” he marched into the kitchen and then reappeared with a bottle of cleaning fluid. He proceeded to demonstrate its amazing ability to get gravy stains out of tablecloths and then launched into a sales pitch for his organization and its wonderful products. The visiting couple was deeply hurt and shaken by this deception and manipulation. It wasn’t only the end of the evening, but the end of a long friendship.
The Potential for Ulterior Motives
Years ago a woman visited our church one Sunday, took a church directory, and immediately started calling people straight down the list, offering her services with a particular multilevel sales company. When she called my wife, this woman shared how much she enjoyed our fellowship, saying that her family had decided ours would be their new church home. After some more pleasantries, she tried to sell her product. When my wife politely said she wasn’t interested, the woman’s previously sweet tone changed. She asked if there were others in the church already selling her product. When my wife said, “Yes, there’s a number,” there was a quiet “Oh,” and the conversation ended. So did the relationship with our church.
Unfortunately, some multilevel marketing lends itself to ulterior motives. Because an up-front and to-the-point sales approach may be quickly dismissed, in some cases, covert strategies are often adopted. Instead of openly relating as brothers and sisters in Christ, people come with hidden agendas and unspoken purposes, calculating how to produce a desired response. People become targets and strategies are developed to overcome sales resistance.
As people start catching on to these indirect sales strategies, a loss of trust occurs. Nobody likes to find out that an apparent friendship is nothing more than a sales strategy. How many of us, due to our past experiences with such people, now instinctively ask, “Why is she being so nice to me? What’s her angle?” or “What’s he leading up to?”
Marketing in the Church
Although there’s nothing wrong with businesspeople having customers from their own church—this is natural and healthy when it develops on its own—it’s another thing for salespeople to use church contacts to actively recruit customers. When that occurs, something ugly starts to happen to people and their view of others. They begin using the body of Christ to further their own purposes for financial gain. (It’s particularly regrettable when pastors and lay leaders use their contacts with people as a platform for their personal financial growth. These conflicts of interest can undermine the integrity of an entire ministry.)
The Church is often an ideal climate for marketing because there’s already an established level of trust—“He’s a good churchgoer” or “She’s my sister in Christ”—and a well-established network of people (sometimes known as contacts) who are already linked by having something important in common (Christ and the Church). So how does the multilevel marketing phenomenon work out in the Church? Sometimes, no doubt, it works out just fine. But sometimes it produces people who use the body of Christ for personal gain.
There are cases where people use church social gatherings and home Bible studies to share their “testimonies” of how this company or this product has transformed their lives. (I’ve heard such testimonies myself.) Sometimes people move from church to church to get more customers, exaggerate their profits, and go into debt to pursue materialistic lifestyles as proof of God’s “blessing.”
To protect their members, one church wrote out an official policy on multilevel/network marketing (there are probably others churches who’ve done the same). I appreciate this section:
Thank you for helping us “keep the main thing the main thing” here at Crossroads. The reason we’re here is to “connect people to God and one another.” Not for business purposes or personal profit. Rather, so that we can reach as many people as possible with the gospel of Jesus Christ and make a difference for Him in our world before He returns.
Loving Our Neighbors
Sometimes, deep involvement in multilevel sales changes people, and not for the best. Some end up fueling the greed of their brothers and sisters in Christ, tampering with their priorities, and encouraging them to pursue a path of materialism. Some go so far as to restrict their friendships to those who work under them or over them, or buy their products, or are useful in some other way. Some become evangelists for their company and their products, anxious to pass on “the good news” of their wonderful organization and moneymaking opportunity. Sadly, sometimes, their “gospel” becomes a cheap substitute for the real gospel.
All of these are very real cautions. But do I think multilevel marketing can be done well, in a way that honors the Lord, fosters love for other people, helps families, and encourages Christlike generosity? It will require biblical wisdom, but yes, it absolutely can be done. I agree with Courtney Reissig, who writes this in her article How Not to Do Multi-Level Marketing:
With millions of people involved in multi-level marketing and direct-selling, this way of working and making money isn’t going anywhere. Instead of writing off the idea completely, we—as Christians who believe all work has value—can provide a different way of thinking about it that doesn’t throw the baby out with the bathwater. Whether your job is selling beauty products out of your home or something else entirely, the motive for our work remains the same—loving our neighbor.
Resources for Further Consideration
How Not to Do Multi-Level Marketing – The Gospel Coalition
Multilevel Sales Programs – Crown Financial Ministries
Mind Your Own Business – Crossroads Church
The Divine Rise of Multilevel Marketing – Christianity Today