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It sounds too good to be true earn money selling makeup on social media. And for many, it is. What really happens when you join a multi-level beauty business?
When a Facebook friend told Lindsay about a genius business opportunity in January 2015, the Manchester-based NHS laboratory assistant was already struggling for money. She had spent the last two years caring for her elderly father, and the stress meant she frequently missed shifts at work. Unwell with chronic fatigue syndrome and struggling to pay the household bills, Lindsay was instantly curious about her friends offer.
I hardly had any money coming in, and I was looking at everything, doing all the maths, and there just wasnt enough, Lindsay says now from the red brick terraced house where she lives alone with her dog, Freya. The Facebook friend who Lindsay has never met, but added on social media because they were both fans of the musician Jean-Michel Jarre told her she could earn between 50 and 500 a month if she signed up to a beauty sales business called Younique.
I thought even if I make 100 a month, thats something I dont have a big appetite, so my food only costs 20 a week at most, if Im splurging out a bit, Lindsay says. Though she is just 36 years old, she walks with a cane and has a full head of grey hair. Her illness which is characterised by extreme tiredness and joint pain means she struggles to maintain her home. Paint is peeling from the walls, and an old mattress sits in the hallway.
After receiving her monthly paycheck, Lindsay clicked on the link sent over by her Facebook friend and signed up to become a Younique presenter. Founded in September 2012 by an American brother-and-sister team, Younique is a direct sales beauty company. Presenters sign up via the website and purchase products that they then sell on, earning a cut of the profits. Though there is no membership fee, members must regularly buy stock to retain presenter status. Lindsay paid 69 for a starter kit, and then another 125 to become a yellow status presenter. Younique has eight different presenter statuses whites, the people at the bottom, earn a 20% commission from their sales, while yellows, the next up in the scale,earn 25%.
This commissions-based model is somewhat similar to Avon, the 133-year-old company that recruits Avon ladies to sell beauty products door-to-door. Yet unlike Avon ladies, Younique presenters buy and sell through social media usually Facebook. We are the first direct sales company to market and sell almost exclusively through the use of social media, Youniques website reads, adding that its founders, Derek Maxfield and Melanie Huscroft, created the business to uplift their members. Derek and Melanie firmly believe that all women [the company targets women] should feel valued, smart, and empowered through opportunities for personal growth and financial reward! the website says. But in her three years as a Younique presenter, Lindsay lost roughly 3,000.
From 2015 to 2018, Lindsay spent 40 to 60 every month on stock to retain her yellow presenter status. Though she initially made some sales at the hospital where she worked, Lindsay was let go from the NHS in spring 2015 because of missed shifts caused by stress. She had been caring for her parents since 2011 her mother passed away from cancer in 2012, while her father had Parkinsons and suffered from three strokes before his death in 2018. Though she stopped making Younique sales after losing her job, Lindsay wanted to retain her presenter status because she was planning to go to university and hoped to be able to sell to fellow students. Meanwhile, Younique kept encouraging her to buy stock.
They would email saying, Youre in danger of your account being suspended, she says. They were worded in such a way to tell you, Oh, you only need to spend so much to keep yourself active. Lindsay says she didnt notice how much money she was spending on stock because it was a slow drip, drip, drip of payments. But then you look at it all together. I could have saved up, I could have done roof repairs on the house. In 2015, Lindsay attended a Younique training session in Glasgow where she was told not to come with excuses about being unable to sell products. It was made clear to me at that point, I had no get out clause for not making sales. Unsold makeup now sits in Lindsays car, in her cupboards, and in a large plastic container in her living room.
Younique is not just a direct sales company like Avon, it is also a multi-level marketing scheme (MLM). Multi-level marketing is a business strategy where revenue is generated from both product sales and the recruitment of new distributors. A Younique presenter can earn money by selling makeup, and also by persuading other women to join the company. Structurally, MLMs are akin to pyramid schemes once someone signs up under you, you become their upline and take a portion of their earnings. If they sign up people beneath them, you also take a cut of those profits a handful of people at the top get rich from thousands at the bottom.
Over the last five years, MLMs have become increasingly popular in Britain. The Direct Selling Association (DSA), the only recognised UK trade body for the sector, estimates that roughly 400,000 people in the UK are involved in direct selling, although many do so on a casual basis. Forever Living allows women to sell aloe vera-based drinks, gels and beauty products; Arbonne consultants sell skincare; Herbalife representatives flog weight-loss products; Juice Plus reps sell diet drinks; Nu Skin offers creams. Haircare MLM Monat is currently recruiting EU Founders.
Social media means MLM presenters now sell to and recruit from the entire world. On Facebook, posts from uplines like Lindsays friend promise rocking sales, instant pay, and the chance to run your own business.
The main distinction between MLMs and pyramid schemes is MLMs actually have a product, says Daryl Koehn, a professor of business ethics at DePaul University in Chicago. In pyramid schemes, youre just selling the opportunity to make money. Yet Koehn argues that even when MLMs have products, they become pyramid schemes if there is a high cost of entry or if presenters build up inventory they cant sell.
In 2011, Jon M Taylor, an employee at the US Consumer Awareness Institute, compiled a short ebook on MLMs for the Federal Trade Commission. After reading these chapters, the reader may wonder if it is appropriate to refer to MLM, with its inherent flaws, as a business at all, he wrote. Some who are familiar with MLMs abysmal statistics feel it is more appropriate to refer to virtually any MLM as a scam.
In theory, anyone can sign up for an MLM. In practice, Koehn says the model appeals to people who have fewer opportunities. Like Lindsay, many people who join MLMs have disabilities, or poor health, and are unable to work full-time. Those who sign up are taught to target new and single mothers. We were encouraged to pick on stay-at-home mums, people who had just lost a job, says Rachel (not her real name), a former Forever Living business owner in her late 40s. She was recruited to Forever Living in 2016 as a newly single mum very willing to try anything to make a living for my kids, who were seven and nine at the time.
Rachels upline, a trusted friend, told her to write a list of everyone she knew and profile them, listing their aspirations and weaknesses. Youre encouraged to find out what it was they really want in life and then use that to promise that [Forever Living] would fulfil their want, she says. She was also given a recruiting script that included phrases such as lifestyle-changing opportunity, control your own destiny, and earn in excess of 40k a year. She was told to avoid the word job, partly because 9-5 jobs were presented as negative by the company, and partly, she believes, because Forever Living did not offer the consistent salary, paid holidays and sick pay that a traditional job would.
It took six months for doubts to emerge, when she realised that the praise she initially received from her upline (Youre wonderful. Youre perfect for this job,) was just a standard script used for all new recruits. Still, she stayed with Forever Living for nearly two more years.
They said your business is a rollercoaster, you just have to stay on it while it goes up and down, she explains, But actually, it just went down, down, down. Rachels uplines said her mindset was to blame when business was bad linking her to seminars and success stories, and telling her that she had to attend online training sessions or she would fail. There was a lot of emotional blackmail, she says. I would feel really guilty if I didnt attend fortnightly meetings.She says her upline encouraged her to stay away from people who criticised the company, including her own family. They said if you dont work on your mindset, your business will fail, she says.