After the success of the Amazon Prime series "LuLaRich," many people began second-guessing the brands they purchase from. The four-episode show focused on the brand LuLaRoe and showcased arguably predatory behaviors that left some of their sellers bankrupt and having to rebuild their lives from the ground up, according to Showbiz Cheatsheet.
Pyramid schemes are deemed illegal in the United States, according to Michigan.gov. However, that doesn't mean multi-level marketing businesses are not similarly built. MLMs operate as "network marketing," meaning you make more money by signing up other sellers underneath you. Whether these companies want to admit it or not, the end result often looks like a pyramid.
MLM companies — as seen in practice in "LuLaRich" — are essentially pyramid schemes that use different sales techniques to get around anti-pyramid scheme laws. Companies cannot generate their whole model on signing up more sellers, so they generally use product pushing and recruitment together to avoid restrictions, according to The Balance Small Business.
LuLaRoe is not the only MLM out there. If you get approached by someone to purchase or begin selling products from a company called Jeunesse, we recommend doing some research before agreeing.
Unlike LuLaRoe, you might not be familiar with a company called Jeunesse. While less well known in the network marketing world than some other companies, they are certainly an MLM themselves, according to Infinite MLM Software. The company was founded in 2009 and is known for its skincare products, health supplements, and cosmetics.
Like most MLMs, the sellers of Jeunesse make a majority of their income through recruiting others to sell product underneath them. According to Sommers and Schwartz, a law firm with locations in Michigan and California, the company is being investigated as an illegal pyramid scheme and as a private compensation plan. The latter has to do with hiding how much high-ranking representatives make while convincing low-level sellers that they will reach a similar level of success when the chances are slim to none.
Plus, the company has been accused of faking before and after pictures to sell its products and has had several lawsuits accusing them of illegal behaviors, according to Truth In Advertising. We'd say it's best to approach the company with a level of caution.
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