The Problem With Network Marketing Isn’t Recruitment — It’s the Hype

Here’s an opinion that will probably annoy quite a few people in network marketing.

Recruitment isn’t the problem.

There. I said it.

The word “recruitment” has become almost a dirty word whenever people criticise network marketing.

You’ll hear:

“It’s all about recruiting.”

“You only make money by recruiting.”

“It’s just a pyramid scheme.”

But I think that misses the real issue.

The biggest problem with network marketing isn’t that companies recruit people. It’s that some people sell the opportunity with ridiculous expectations attached to it.

And that distinction matters.

Recruitment is a normal part of the model

Let’s take the emotion out of it for a moment.

A network marketing business uses people to sell products or services and, depending on the compensation plan, may also reward participants for introducing additional people into the sales organisation.

That’s the model.

Recruitment is not some accidental feature that mysteriously appeared.

It’s fundamental to network marketing.

The real question is whether the business provides genuine products or services, whether the compensation structure is lawful, and what participants are actually told about the opportunity.

The FTC itself distinguishes between legitimate MLM structures and illegal pyramid schemes, focusing on how the compensation structure operates in practice, including whether incentives primarily encourage recruitment rather than sales to genuine end users.

So simply saying “they recruit people” doesn’t prove anything.

Of course they recruit people.

That’s how network marketing works.

Here’s where I think the industry gets itself into trouble

The problem starts when recruitment becomes wrapped in fantasy.

You know the sort of thing.

“Quit your job.”

“Financial freedom.”

“Build passive income.”

“Make six figures.”

“Work from your phone.”

“Create generational wealth.”

“You can do this part-time and replace your salary.”

And then someone posts a photograph of themselves beside a car, on a beach or at some expensive-looking event.

That’s where I think the industry deserves criticism.

Not because someone recruited another person.

But because the person being recruited may have been given a completely unrealistic picture of what success looks like.

The numbers are uncomfortable

This isn’t just an anti-MLM talking point.

In 2024, FTC staff reviewed publicly available income disclosure statements from 70 MLMs.

Their analysis found that most participants in the MLMs reviewed received $1,000 or less per year, and in at least 17 of the MLMs, most participants received no payments at all.

The FTC also found that many disclosures failed to make low or zero earnings sufficiently prominent and often didn’t account for participant expenses.

That’s a serious issue.

But here’s where I disagree with some of the conclusions you see online.

Those numbers don’t automatically prove that network marketing itself is fraudulent.

They do tell us something much more useful:

Joining a network marketing company is not the same thing as building a successful network marketing business.

And those are two completely different things.

Joining is easy. Building is not.

This is something that rarely gets said loudly enough.

Someone can join an MLM in ten minutes.

That doesn’t mean they know how to sell.

It doesn’t mean they know how to generate leads.

It doesn’t mean they know how to create content.

It doesn’t mean they understand advertising.

It doesn’t mean they know how to follow up.

It doesn’t mean they understand conversion rates.

It doesn’t mean they can build a customer base.

And it certainly doesn’t mean they’re going to make money.

The same is true of almost every other business.

Buying a website doesn’t make you a successful e-commerce business owner.

Opening an Etsy shop doesn’t guarantee sales.

Buying a trading course doesn’t make you a profitable trader.

Registering a company doesn’t make you an entrepreneur.

Joining is the easy part.

And this is where the industry needs more honesty

If you’re going to promote network marketing, tell people what they’re actually getting into.

Don’t tell them it’s easy.

Don’t tell them everyone can make a fortune.

Don’t show the exceptional performer and quietly imply that they’re representative.

Don’t pretend the business requires no selling.

Don’t hide the costs.

Don’t pretend that recruiting ten people automatically creates passive income.

And don’t tell someone who’s never sold anything before that they’re about to become financially free.

The FTC has specifically raised concerns about misleading or unsubstantiated earnings claims and, in 2025, proposed an MLM-specific earnings rule addressing such claims.

And in 2026, the FTC has continued taking action against high-level MLM participants over alleged deceptive earnings claims.

So this isn’t a theoretical argument.

It’s an issue regulators are actively examining.

But here’s the controversial bit

I still think network marketing can be a legitimate business model.

Yes.

Even after everything I’ve just written.

Because I don’t believe a business model should automatically be dismissed because many people fail at it.

Lots of businesses have high failure rates.

The question should be:

What are you selling?

Who is buying it?

Why are they buying it?

What does it cost to operate?

How does the compensation plan work?

Where does the money actually come from?

And what does the typical participant actually earn after expenses?

Those are much better questions than simply shouting:

“It’s a pyramid scheme!”

Here’s my position

I’m actually more comfortable with someone saying:

“This is a sales business. You’ll have to learn how to generate leads, make offers, follow up and sell. Most people won’t make much money, but here’s exactly how the compensation works.”

than someone saying:

“Join my team and I’ll show you how to achieve financial freedom.”

The first person might struggle to recruit.

But at least the prospect knows what they’re buying into.

The second person might recruit much more effectively.

But if the claims aren’t supported by evidence, they’re selling an expectation rather than a business.

I’d rather see fewer recruits who know exactly what they’re getting into than thousands of people joining because they were sold a dream.

And here’s why I think this could actually help network marketing

Ironically, more honesty could make the industry stronger.

Stop trying to convince everyone.

Stop pretending everyone is an entrepreneur.

Stop pretending everyone will become a top earner.

Stop using the lifestyle of the top 0.1% as though it’s the expected outcome.

Instead, find people who actually want to learn sales and marketing.

People who are prepared to generate traffic.

People who are prepared to follow up.

People who understand that building a customer base takes time.

People who want a business rather than a lottery ticket.

Those people might be harder to recruit.

But they’re probably a lot more interesting to work with.

So I’ll take the unpopular side

I’m not anti-network marketing.

I’m anti-hype.

I’m anti-unsubstantiated income claims.

I’m anti-making the exceptional look normal.

I’m anti-telling people that success is easy when you know it isn’t.

But I’m not anti-recruitment.

Recruitment is part of the model.

The real test is whether you’re recruiting someone into a business opportunity with their eyes open.

If someone understands the model, understands the work involved, understands the costs and still wants to have a go?

I don’t see a problem with that.

And perhaps that’s the conversation network marketing should be having.

Not:

“Is network marketing a scam?”

But:

“Are we telling people the truth about what it actually takes to succeed?”

That question is a lot harder to dismiss.