In a viral TikTok with over 900,000 views as of Saturday, content creator Kels (@canadiankels) walks through a craft market that highlights the handmade products of small business owners. The vendors sell mugs, jewelry, holiday-themed placemats, and other trinkets on long tables.
Kels suddenly pans to several different tables: one with a large display of cosmetic products in pink boxes and a tablecloth clearly marked Mary Kay; one with a spice dispenser of Epicure Jerk Chicken wing seasoning; and a table of Scentsy products.
The text overlay in the video reads, “Your MLM is not a small business, Karen.”
Multi-level marketing is a business model in which independent distributors sell products directly to consumers. Brands like Herbalife, Plexus, and Amway distribute their products to independent representatives who then recruit their own distributor markets—friends, co-workers, and relatives—to help sell the product. Sellers buy the company’s product and then in theory make money off of their individual sales, their recruits of other sellers (who are then considered their “downlines”), and commissions from the sales of their recruits.
But MLMs have long been controversial; while most MLMs recruit people with promises of wealth and lucrative entrepreneurship, a study by the Consumer Awareness Institute found that 99% of people who participate in MLMs actually lose money. Additionally, many from both the general public and ex-sellers call the model a glorified pyramid scheme. When it comes to those allegations, most MLMs walk a delicate line.
@canadiankels went to the “craft market” 🙄 #pyramidscheme #mlm #multilevelmarketing #antimlm #antimlmmovement #crafter #craftersoftiktok ♬ ABBY USED MY SOUND – livinonthedancefloor💋
According to Forbes, the main difference between a pyramid scheme and an MLM is where the majority of a distributor’s compensation comes from. A pyramid scheme requires a steady flow of recruitment, as the majority of wealth for distributors is generated from new recruits, while an MLM generates wealth primarily from product sales to consumers. To be a legally compliant MLM, 70% of sold goods must be purchased by outside consumers and not distributors.
In another TikTok, content creator Jen Hamilton argues against the “small business,” “be-your-own-CEO” rhetoric used by MLMs to recruit sellers.
“Multi-level marketing companies target women because we have this innate desire to support our families…but in MLM companies you’re not supporting women. You are putting them beneath you in order to succeed,” she says. “I believe in supporting small businesses. But MLM companies are not small businesses. They ruin relationships by turning friends into downlines.”
In the comments on Kels’ TikTok, users were equally frustrated with the presence of MLM brands at craft fairs and their misrepresentation as “small businesses.”
“Every time I go to a ‘market’”’ now more than half the stuff is AliExpress or MLM. I want CRAFTSMANSHIP,” one user declared.
“They have totally infested craft fairs,” another commenter lamented.
“Small business here, we hate seeing MLM at small shows. It breaks my heart seeing commercial companies buy slots at a farmers market or craft show,” came another response.
“Let me just buy my crocheted pot holders from the little old ladies without being bombarded with red light therapy and spray on makeup,” a fourth viewer shared.
One user shared a piece of advice to fellow craft makers and small business owners for future fairs: “Complain to your organizers and tell them you won’t be back if they have MLMS!”
The Daily Dot has reached out to Kels via Instagram message for more information.
*First Published: Dec 9, 2023, 1:00 pm CST
Tangie Mitchell is a creative writer, journalist, and editor based in New York. Her interests include pop culture and entertainment, poetry, and morning cups of herbal tea.
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