Self Employed Vs Employed

Let me give you an example: a friend of mine (let’s call her Hannah) worked for Anne Summers. I say ‘worked for’, but that is not strictly speaking true. MLMs work on the basis that people who sell for them are self-employed, and therefore not entitled to basic employment rights, like sick or holiday pay, or indeed a minimum wage. Anyway, Hannah became a ‘Party Organiser’ and quickly worked her way up to become a ‘Unit Organiser’. Not by selling, but by recruiting other people to sell under her.

MLMs work on the structure of ‘the more people you recruit under you and the more they recruit, the more it adds to your sales’. Recruits are known as ‘downline distributors’, as you take a percentage from their orders from the MLM. So you get paid for other people’s hard work. At first it went OK, the parties were fun, especially if you held one in a pub. Hannah tells me that at one such party she sold around £800 worth of stock. She even went part-time from her other job to concentrate on the parties. But these good days did not outweigh the bad. She admits too often having a drink after working, which would cut into her profits. At many parties, people were late, or not many (if any) turned up.

“My heart would sink if I turned up to someone’s house [to run a party], and only three people were there”, she says.

She told me that she went to a monthly company event in which her achievements were recognised. But, when she (rightly) said her sales targets were down, to the organisers under her, she was meet by some frosty stares from the other, more senior ‘Unit Organisers’. In this meeting, the organisers were not reimbursed for expenses — they had to cover their own travel and food/drink costs. MLMs offer no real work benefits, no expenses for work related costs, no sick or maternity pay, and no real flexibility. To make money you must be working all the time.

“Did you make any money?” I asked. “No, but you got badges! That kept you going”, she replied.

Turns out that she would get a badge if she hit a target. Badges such as a Love Potion badge, or a Rampant Rabbit badge, which moved her up the ladder. Many MLMs have some form of bogus ‘progression’ system, and have different ways of marking it.