Do you know the psychological tactics MLMs use to exploit people?
In a quest for financial independence, have you ever thought about making some extra money or finding a new job? If so, you might have come across multi-level marketing (MLM) companies. These companies often make big promises. They will say you can earn lots of money quickly and easily. However, most MLMs are actually pyramid schemes. This means the main way people make money is by getting others to join, not by selling real products.
There are some MLM businesses that sell actual products. These ones can be considered as more legitimate. However, even with these “real” MLMs, most people barely earn any money. They usually earn less than $100 a month. This gives rise to a question. Why do people keep joining MLMs when people hardly make a decent income from them?
The answer is that MLMs are good at marketing. They use smart psychological tricks to make people believe that they can succeed, even when the odds are against them. The following are the five psychological tactics MLMs use to exploit people.
1. They Target Vulnerable People
MLMs attract people who are struggling. People who join MLMs (multi-level marketing companies) are often sold a big dream. They are usually given the idea that they can be their own boss, work whenever they want, and make lots of money. These companies tend to focus on people who are struggling to find work or those who need extra money. They do this because those who are in tough situations are more likely to believe in the promises being made.
MLM recruiters often make their lives look perfect. They talk about how they do not worry about bills, how they go on fancy vacations, and live a luxurious lifestyle. They paint this alluring picture and still say they get all of that while only working a few hours a day.
These stories especially appeal to stay-at-home parents who want to earn money from home and immigrants who may not have access to regular job opportunities. MLMs use people’s struggles to convince them to join. They make it very appealing and hard to ignore, even when there are warning signs that things might not be as good as they seem.
If you have ever felt drawn to an MLM, it might be because you were going through a rough time, both financially and emotionally. That is exactly the kind of moment these companies count on to get you to sign up.
ALSO READ: 10 Essential Money Hacks for Startups in 2025
2. MLMs Use “Lovebombing” to Recruit
Some multi-level marketing companies use a strategy called “lovebombing” to attract people. This means they overwhelm you with lots of positive attention and praise. An MLM representative might tell you how talented or special you are and how you are perfect for success in their business. They will often share stories about their own success. They will mention awards they have won or bonuses they have earned. All of this is to make their opportunity seem more convincing.
They might also invite you to conferences or events where everyone seems excited and happy. There, they will talk about how amazing their lives are because of the MLM. At these events, people may compliment you a lot. This might make you feel like you belong and that joining is a smart decision.
Some MLMs also encourage their members to recruit friends and family. Because these are people you already know and trust, you might not want to say no to them. You might even listen out of affection or politeness.
3. They Might Make You Feel Pressured
When a multi-level marketing (MLM) company catches your interest, they often try to pressure you into joining quickly. If you attend one of their meetings, you might find yourself surrounded by enthusiastic people who will push you to sign up right away.
They may even offer you a special deal, like lower prices on their products. However, this “kindness” is not free. You will need to pay for them upfront. If you are already feeling desperate for money, this kind of pressure can be really hard to resist.
ALSO READ: How to Fix and Maintain a Healthy Sleep Schedule
4. They Will Hide the Truth
People trying to convince you to join a multi-level marketing (MLM) company will often talk a lot about how successful you could be. They will say this but leave out important details. Most MLMs have complicated payment systems, so it is hard to know how much money you can actually earn. Recruiters might brag about how much money their team has made but would not mention that the money is split among everyone. This will make it seem like there is more to go around than there really is.
MLMs also use tricky ways to hide the real numbers. A study by the Federal Trade Commission (FTC) showed that MLMs often focus on a small number of people who make a lot of money. They ignore the fact that most people either make very little or lose money. They leave out significant details, like how many people make nothing at all, and they do not talk about the costs of being in an MLM, which can make the income seem better than it really is.
5. Bootstrapping
One trick that multi-level marketing (MLM) companies use to convince people to join is the idea of “bootstrapping.” Bootstrapping mindset suggests that success is all about working hard and pushing through challenges. In a world where hard work is often seen as a good thing, this can sound convincing. They suggest that if you are willing to work really hard, you can still achieve the “American Dream” of financial success.
This strategy works because it gives people a reason for not making money at first. If you work really hard during the early months of an MLM but do not see much profit, that is fine. They will tell you it would be tough at the beginning. They will encourage you to keep working hard, and eventually, you will reach the point where you make the money they promised you.
Many people often find multi-level marketing businesses attractive because they promise the chance to earn money without constantly working. They promise financial freedom and an opportunity to become your own boss.
These ideas can sound exciting, but it is important to understand the strategies MLMs use to get people involved. Knowing these tricks can help you be less likely to fall for their promises and make smarter choices about whether or not to join.
