Since I started this blog I’ve done around 50 reviews on different network marketing companies, some good and some bad.
Over this time there’s been one niggling question on my mind and it really sets the theme for this article: Why on earth are so many mlm companies specialising in health and wellness?
I decided to do some research into this and after looking at almost 150 of the most well known mlm’s I found that over 60% of them were in this niche! All of them claim to have the answer to our optimal health and wellbeing. Is it pure coincidence that the very people responsible for discovering some of the worlds ‘best kept health secrets’ decide to launch mlm companies? Is there truth in what they are telling people or is it all just a bunch of BS?
I’m going to give you my opinion on this topic and show you what I’ve found, but I’m very interested to hear your thoughts in the comments below. Yes, even if you’re a zealous mlm health rep!
Before I get started I want to be clear that I am not claiming to be a health and nutrition expert or some kind of mlm guru. This is not about trashing anyones opportunity or flagging mlm as some kind of scam either. This is about exploring the correlation between health and wellness and multi level marketing companies.
Three Reasons They All Have The ‘Magic’ Formula
I believe there are 3 main reasons this niche is so popular:
#1 It’s An Evergreen Niche With Massive Growth
Most people would agree that the search for optimal health and wellbeing has and probably always will be of great interest to the world. This is what qualifies it as an ‘evergreen’ niche, the fact that many people will continue to be interested in this topic for the foreseeable future.
Then there’s the very real growth of the dietary supplements industry as a whole that makes it even more appealing for mlm’s to get involved in. Dietary supplements is the closest industry match for the kind of products mlm’s are producing that I could find. It includes vitamins, minerals, proteins, herbs and others designed to ‘supplement’ a persons existing healthy diet.
According to one source, the industries global revenue in 2015 was estimated at over US$123 Billion and is predicted to reach double that inside the next 10 years at over US$252 Billion.
It also states that Herbalife and Amway are among the top players and that North America constitutes an estimated 32% slice of this pie.
A 2014 survey conducted by CRN shows that 68% of all people living in the United States take dietary supplements for one reason or another, primarily for their overall health and wellbeing.
So without crapping on about statistics all day long I think it’s safe to say one of the key reasons it’s a popular choice for mlm’s is because it’s a damn good niche all round!
While this certainly is a totally legit reason why so many mlm companies are in this niche , is there more to it?
To answer that question let’s dig a little deeper…
#2 No Need For Proof
It’s no secret that there’s a considerable shortage of scientific research validating the health benefits of taking dietary supplements overall. To make matters worse a lot of companies are getting away with marketing these products in a less than honest way due to some pretty loose regulations.
Of course it would be reasonable to assume that some are great products but on the same token it would be grossly naive to think they all live up to their lofty health claims.
But people are still consuming them despite this lack of evidence…
In fact, an estimated 20% of all supplement takers in the US make their purchase based on a friends recommendation as oppose to a medical professional of some kind. This is despite not knowing for sure what they are taking is even working or if it’s been proven to work.
After looking at the facts it appears there’s a few things happening here:
- There’s a huge debate on how effective a lot of theses supplements are
- The regulations in place are pretty loose
- People are continuing to buy these supplements at a steady rate regardless
The very nature of a product like this (before even thinking of mlm) opens the way for anyone with the right marketing strategy, business acumen and funding to create something super convincing that people will buy into. I mean, as long as they can convince people that these products are of the absolute highest quality and superior benefit then they stand to make money.
Is this what mlm’s are doing?
From what I have personally seen there’s a lot of mlm’s with some kind of ‘amazing ingredient’ that sets them apart from anything else on the market. They often combine this ingredient with some well known vitamins and minerals and put them all together in the form of a proprietary blend. Most of the time there is little proof backing up their lofty health claims.
What do the regulators have to say?
The FDA are responsible for making sure these kinds of companies list their ingredients and follow strict manufacturing guidelines while the FTC makes sure they don’t make unsubstantiated health claims. This is why you see the disclaimers plastered all over their websites and product brochures etc.
Here’s the thing though…
Neither of these regulators actually require manufacturers to prove any effects on health that their products may or may not have. To make matter worse the FDA has a very limited budget which means they can only spot test approximately 1 in ever 65,000 supplements hitting the market!
The FDA does, however, have the power to pull products from shelves if they find them to have an adverse effects on a persons health.
In other words, the regulations on these so called ‘amazing supplements’ are not as strict as you might think, not by a long shot.
Since this is the case, mlm’s are pretty much free to follow a few basic guidelines and present their products in a very favourable manner. Very few people have the time or knowledge to objectively research the legitimacy of each product these companies produce and many use them because it’s essential to staying active as a distributor.
When these reps are so full of excitement in chasing their dreams, who cares about the scientific proof, third party research and all that boring stuff right?
Another thing I noticed is that a lot of the top performing companies have some kind of ‘scientific advisory board’ to add credibility to their health claims. That’s great and all but most, if not all, of the members on these advisory boards stand to gain something in one way or another.
Yes, they do have professionally recognised qualifications and I am not disputing that but anything they say is clearly skewed in favour of the company! The moment any one of them said anything controversial I can almost guarantee they’d be booted and have their credibility publicly questioned.
In my opinion it really should be called the “scientific paid to endorse our company board”
Almost none of these companies engage credible third party research to verify their health claims from what I have seen. Admittedly, some are better than others and actually do provide some evidence to support their claims but they are by far the minority.
#3 Mindset of The Target Audience
One really unfortunate thing I’ve come to learn about mlm is that the success rate is very low, often between 1-3% at best. When I say ‘success’ I mean people actually achieving a full time income or higher, the kind of income the majority of people sign up to achieve. Every single time I’ve seen a company good enough to share their income disclosure on their website this has been the case- every single time.
Here’s a couple of examples to show you what I mean:
Note: I always recommend doing your own research before making any decisions since this is based on my research and opinion and may contain errors.
Young Living- Some 99.6% of ALL distributors for this company make $0-$7,404 per year on average. Out of those people, almost all are earning about $1 per month on average which means most people are for a fact losing money. This is because it costs about $100 per month or $1200 per year! In other words, the overwhelming majority are losing money according to the company’s own income disclosure.
Zrii- Less than 1% of ALL distributors make it to earning a full time income or above and 86.64% are barely covering their costs to be involved on average.
Granted, success with anything in life or business is the result of consistent effort and hard work, no one ever achieves anything worthwhile easily and mlm is certainly no different.
So how does this relate to target audience and why does it matter?
If Billions of dollars are being spent on supplements every year with little credible research backing up the product’s health claims, it make sense that these same people are much more likely to buy into an opportunity marketed as incredible without actually considering the underlying facts.
In other words, this consumer profile is generally more likely to buy into the opportunity out of some kind of ‘belief’ as oppose to relying on fact based reasoning. Have you ever been to one of their conventions? Hype and motivational speaking to get people believing in the company pretty much sum up the entire event without
I’m certainly not asserting that everyone taking health supplements will buy into anything they are presented with, of course not! There are good supplements out there and everyone is different. What I am saying is they are ‘generally more likely’ to buy into an mlm opportunity than someone that is more driven by the facts.
It IS a good thing to believe in something, get healthy and chase your dreams! Just so long as you aren’t being deceived by a shady company in the process.
The bottom line is that people buying health supplements are more likely to be doing so out of belief rather than fact, and those are exactly the kind of people that buy into mlm opportunities. Plain and simple.
The other factor here is that consumers are already investing in their optimal health and the opportunity is about optimal wealth which is very closely related. Just like those interested in the kind of ‘opportunity’ mlm presents are much more likely to be interested in optimal health because they’re looking to get the best out of life and business. The two really do go hand in hand.
Customer= perfect candidate for business opportunity
Distributor= perfect candidate for health and wellness products
The above formula is actually essential for these companies since the overwhelming majority of their product sales come from the distributors themselves! The company MUST provide these distributors with a product that interests them personally, a product they are going to be happy spending thousands of dollars on over time.
Think about it… if they were approaching people about a half decent opportunity but it required them to buy stuff they couldn’t personally consume each month and/ or didn’t interest them, how many people would join?
Here’s how it really is: Distributor=Customer
So we know that:
- The target audience for health and wellness mlm’s are probably people that are more likely to believe rather than base their decisions on fact and careful research
- Just like health and wealth go together, so do distributors and customers since they are normally the same thing
There’s nothing really wrong with that on it’s own IF the products are actually legit in the first place and the opportunity is not massively overhyped. That is a very big if from what I have seen…
To Sum It Up So Far
Before I conclude here’s a quick summary of the main reasons I’ve found as to why so many mlm’s are in this niche:
- The ‘dietary supplements industry is booming with a long future ahead- legit reason
- They can make a killing as long as people ‘believe’ in their products and they follow some very basic guidelines- red flag
- Health and wealth go hand in hand so these products and the opportunity fit well together- legit reason in itself
So I’ve established 3 likely reasons as to why they are in this niche, but to answer if most of these companies are in this niche for the right reasons or not begs this fundamental question:
“How genuine are the products and how worthwhile is the opportunity in each company?”
In all fairness I cannot answer this conclusively for all mlm companies, I’ve got a lot of reviewing to do before I can answer that and even then it’s still just my opinion.
This is something that YOU need to decide for yourself, without some mlm guru breathing down your neck and without just listening to a bloggers perspective on the matter.
Two Scenarios To Put Things In Perspective
I think the best way to conclude this article is to illustrate my thoughts by way of an example, this way you can see both sides and work out what you think is more likely happening.
Here’s two very different scenarios in which the above three factors come into play:
MaxMyLife (made up name) creates a genuinely great product that is backed by credible third party research and the prices are fully justified given the level of value being offered. They don’t place heavy purchasing quotas on reps trying to build their businesses and those buying are doing so because they love the product and get genuine value from using it. The company has a real emphasis on selling these products and a large number of their customers are converted into reps since they like the idea of an equally great business opportunity. The opportunity is fair, rewarding and the company is very transparent in it’s operations. They comply with industry best practice and do not hype things up to mislead people, they are running a truly ethical operation. Not everyone makes great money but that’s ok since the majority of people joining were not led to believe this would provide them with an extravagant income. Those that do make tons of money are happy since they are part of something that genuinely helps people and they can leverage the mlm business model in doing so. Sounds like a great company!
MaxMyLife buys a ton of cheap ingredients from who knows where, throws in some kind of ‘magic berry’ and markets this product as the best thing since sliced bread with no credible proof whatsoever. They don’t have to ‘prove’ that these products are genuinely working, they just need to get people to believe that they do. This is easy for them since they are very good at what they do and understand their target audience well, not to mention they have a top notch marketing team behind them. As long as they can market things in such a way as to increase the ‘perceived value’ of these products and use other ways to boost credibility, such as hiring doctors, scientists and nutritionists then they will sell product. They also use a lot of hype and hide a lot of the finer details to trick people into thinking it’s going to be a truly life changing business for them. People are so excited after seeing the presentations, conventions and trainings that they sign up and spend their days chasing family and friends to do the same. They keep on buying these products even though they know they are overpriced and aren’t really helping them, they want to change their lives so they just keep on pushing! Eventually they realise that they are filling their garage up with a bunch of stuff they neither want or need and everyone they know is avoiding them for fear of being ‘presented to’ again. They haven’t even made enough money to cover their costs and after 12 months of this they decide to give up, feeling very disheartened they didn’t achieve what they thought they would in the beginning. Their sponsor and others in the company tell them they just ‘don’t have what it takes’ and ‘aren’t cut out for being an entrepreneur’ and that ‘they should just go complain somewhere else’. This company has been making it’s millions successfully marketing ‘snake oil’ to a group of believers who zealously proclaim the company’s greatness in the hope of achieving their dreams. It really is that simple.
Whether you’re a fan of health and wellness mlm’s or not is entirely up for you to decide. If you’ve found the best company ever then I’m truly happy for you, I wish you the very best of success with your endeavours!
Personally, I’m not a big fan of unsubstantiated hype and I’ve found it all too often with mlm’s in this space. One of the main reasons I created this blog was to shed light on as much of the BS getting sold to people about home business as possible. I believe people should be given both sides of this story rather than just what is being presented in the trainings, conventions and seminars led by mlm gurus.
Does this article somehow assert or attempt to prove health and wellness mlm’s are all scams? Not at all! Does it present some interesting points and give you some food for thought? I hope so 🙂
Thanks for reading guys and I wish all of you the very best of success in whatever venture you pursue. Let me know your thoughts on this topic below!