Many people continue to be persuaded by new versions of network marketing and multi-level marketing schemes, even when these organisations closely resemble pyramid structures. The promise is nearly always the same. Individuals are encouraged to believe they can earn an excellent income by selling specialised products or joining a unique business opportunity. Yet the model usually depends less on selling products and more on recruiting new members, creating a system in which only a very small number of people at the top have any real chance of profit. Two researchers, Claudia Groß from Radboud University and William Keep from the College of New Jersey, have examined how these business models are treated in academic writing. They found that many scholarly publications, especially in marketing, describe MLMs in surprisingly favourable terms. Their findings, published in the Journal of Marketing Management, raise questions about why risks are often downplayed.

Companies such as Herbalife and Tupperware are commonly associated with this sales approach. The way people are recruited has changed in recent years, particularly through social media platforms like TikTok and Instagram. Influencers and online mentors now present MLM involvement as a path to financial freedom, personal development or entrepreneurial success. They may promote online trading, dropshipping, or expensive coaching programmes. The marketing is usually polished and highly persuasive, presenting stories of dramatic success and independence. However, most participants do not earn a significant income. In fact, many lose funds by purchasing products they cannot sell or by investing in training or advertising that yields little return. Groß warns that young people are especially vulnerable, as they may be unfamiliar with how business models work and easily impressed by glamorous online lifestyles.

Groß and Keep reviewed both legal and marketing scholarship to understand how academics discuss MLMs. From the legal publications they examined, they noted that the risks of MLMs are clearly recognised. These works often describe misleading income promises, the structural similarity to pyramid schemes, and the financial disadvantage most participants face. A recurring point is that profit mainly comes from recruiting new members rather than from selling products, making the system unsustainable for the majority. Legal studies also highlight the questionable claims sometimes made about the products themselves, such as supplements claimed to cure serious illnesses. These legal analyses make clear that MLMs can create financial harm, spread misinformation, and exploit trust.

However, the marketing research they reviewed told a very different story. Many marketing articles presented MLMs in a positive light, focusing on themes such as personal growth, empowerment, and potential earnings. Instead of addressing financial losses, structural problems or misleading statements, these publications often emphasised success stories or motivational aspects. Some papers even included claims that appeared to minimise the risk or dismiss the typical pattern of financial failure. This contrast between legal and marketing scholarship was striking. It suggested not only a difference in research focus but also in tone, interpretation, and underlying assumptions about what MLMs represent and how they affect participants.

Groß and Keep found a likely explanation for this difference. Out of the 68 marketing publications they reviewed, 40 had direct ties to the MLM industry. This included research funded by lobbying organisations or authors who held fellowships or advisory positions with groups that promote direct selling. Although the exact nature of these connections was not always clearly described, the links were significant enough to suggest that industry influence may shape how MLMs are presented in academic writing. The researchers argue that this influence can create a misleading impression that MLMs are safer, more profitable, or more empowering than they actually are, especially for the majority who lose money. This situation resembles past cases in other industries, such as the tobacco industry’s use of sponsored research to downplay health risks.

The concern raised by Groß and Keep is not only about MLMs themselves, but about how financial interests can shape academic research. Suppose marketing scholarship repeatedly promotes a positive view of MLMs while legal scholarship highlights the harm. In that case, it becomes difficult for the public, policymakers and potential recruits to gain a clear understanding of the real risks involved. Industry influence makes it easier for MLM companies to claim legitimacy and to argue that no additional regulation is required. As a result, harmful practices can continue with limited oversight. The researchers suggest that greater transparency in funding, more independent studies, and stronger consumer education are needed to prevent vulnerable individuals from being misled. Their work invites readers to question not only the promises of MLMs, but also the sources that appear to endorse them.

More information: Claudia Groß et al, The law and consumer harm in multi-level marketing: a review, Journal of Marketing Management. DOI: 10.1080/0267257X.2025.2578617

Journal information: Journal of Marketing Management Provided by Radboud University Nijmegen