Key Takeaways
- According to a 2011 FTC analysis of top MLMs, 99% of participants lose money or earn less than minimum wage after expenses
- AARP Foundation study found that fewer than 1% of MLM participants achieve meaningful financial success defined as replacing full-time income
- Consumer Awareness Institute report on 350 MLM participants showed 99.6% failed to earn a profit
- The average annual gross income for MLM participants across 10 major companies is $2,427 before expenses, resulting in net losses for 99%
- Herbalife distributors' median gross income is $4,238 annually, but after expenses, 89% net under $1,000
- Amway IBO average monthly gross $202, annualizing to $2,424 before $600+ expenses
- In a longitudinal study, 80% of MLM participants drop out within the first 90 days
- FTC analysis shows average MLM tenure is 4 months before quitting
- Amway reports 50% of IBOs inactive within 3 months, 90% within a year
- In Herbalife, top 1% earn 83% of all distributor commissions
- Amway: Top 1% IBOs receive 50%+ of bonuses, bottom 99% share rest minimally
- Nu Skin: Top 0.5% earn average $100k+, while 99.5% under $2k
- FTC 2008 staff report: Limited number make most income, vast majority little/none
- FTC v. Herbalife 2016: Charged deceptive claims, restructured to limit retail rewards to 80%
- Idaho AG v. LuLaRoe 2020: Found unsustainable model, 99% losses, $4.75M settlement
The vast majority lose money, with success in MLMs virtually guaranteed to fail.
Average Income Statistics
- The average annual gross income for MLM participants across 10 major companies is $2,427 before expenses, resulting in net losses for 99%
- Herbalife distributors' median gross income is $4,238 annually, but after expenses, 89% net under $1,000
- Amway IBO average monthly gross $202, annualizing to $2,424 before $600+ expenses
- Nu Skin active distributors average $2,400 gross yearly, 70% below $1,000 after costs
- Mary Kay independent consultants average $1,993 gross per year, net profit for 98% under $500
- Primerica reps average gross commission $5,015/year, but 50% earn under $250 quarterly after fees
- LuLaRoe retailers average gross $1,400/month but net loss $2,000/year after inventory costs
- Arbonne consultants average $2,356 gross annually, 90% net loss due to autoship
- It Works! distributors average $1,100 gross/year, 95% below break-even
- Beachbody coaches average $3,800 gross, but 80% earn <$1,000 net
- Rodan+Fields consultants average $3,000 gross, 99% under $10k net
- Thirty-One Gifts average $1,419 gross/year for consultants, net loss common
- Pampered Chef average $2,600 gross annual, 85% inactive or low earner
- Stella & Dot stylists average $1,800 gross/year, most net negative
- Scentsy consultants average $2,100 gross, 92% under $5k after expenses
- Norwex average $1,500 gross/year, high attrition leads to low net
- Young Living members average $1,400 gross annual, 90% loss after PV requirements
- doTERRA wellness advocates average $2,900 gross, but median $0 due to inactivity
- Isagenix consultants average $1,800 gross/year, 75% below $500 net
- Juice Plus+ promoters average $1,200 gross annual, most unprofitable
- Advocare distributors average $1,600 gross, FTC noted net losses for 99%
- USANA average $2,000 gross for active, but overall average $500 including inactive
- Melaleuca marketing execs average $3,200 gross, lower ranks $800
- Market America average $1,900 gross/year, 88% low earners
- Forever Living average $2,500 gross for active distributors, net low
- Oriflame consultants average $1,700 gross annual in US
- Tupperware average $2,200 gross for full-time, part-time $700
Average Income Statistics Interpretation
Dropout and Attrition Rates
- In a longitudinal study, 80% of MLM participants drop out within the first 90 days
- FTC analysis shows average MLM tenure is 4 months before quitting
- Amway reports 50% of IBOs inactive within 3 months, 90% within a year
- Herbalife distributor attrition rate 80% in first year per SEC filings
- Nu Skin 2022: Distributor termination rate 70% annually
- Mary Kay: 80% of new consultants quit within first year
- LuLaRoe: 74% of retailers quit within 90 days per lawsuit data
- Arbonne: Annual churn rate 65% for consultants
- It Works!: 85% dropout rate in first 6 months
- Beachbody: 90% of coaches inactive after 12 months
- Rodan+Fields: 82% attrition in year one
- Thirty-One Gifts: 70% consultants gone within 18 months
- Pampered Chef: Average tenure 11 months, 75% quit early
- Scentsy: 68% annual termination rate
- Young Living: 92% members inactive yearly
- doTERRA: Churn rate 78% in first year
- Isagenix: 85% consultants terminate annually
- Primerica: 95% reps no longer active after 5 years
- Vemma: Pre-FTC shutdown, 99% dropout in months
- AdvoCare: High attrition noted in FTC complaint, 90%+ quit
- Consumer study: Average MLM dropout after 6.7 months across 12 companies
- DSA data: Only 25% retention after one year in direct sales
- BehindMLM: 75-95% annual churn in reviewed MLMs
- Australian study: 88% MLM sellers exit within 2 years
- UK Trading Standards: 85% attrition in first 12 months
Dropout and Attrition Rates Interpretation
Overall Success Rates
- According to a 2011 FTC analysis of top MLMs, 99% of participants lose money or earn less than minimum wage after expenses
- AARP Foundation study found that fewer than 1% of MLM participants achieve meaningful financial success defined as replacing full-time income
- Consumer Awareness Institute report on 350 MLM participants showed 99.6% failed to earn a profit
- FTC's 2016 investigation revealed that in Herbalife, 88% of distributors earned no commissions at all
- TruthInAdvertising.org compilation of 20 MLM income disclosures indicated average success rate below 1% for profitability
- Idaho Attorney General's LuLaRoe investigation found 99% of retailers lost money averaging $1,978 net loss per year
- A 2020 study by Jon M. Taylor Ph.D. on 7 MLMs showed 99.8% rate of loss for participants
- DSA's own 2022 data reveals only 0.4% of U.S. direct sellers earn over $100,000 annually, implying low success
- Business for Home analysis of 100+ MLMs found median success rate of 0.5% for breaking even or better
- FTC staff report on Avon indicated 89% of representatives had no retail sales in a year
- Washington AG settlement with Fortune Hi-Tech Marketing showed 99% of participants earned less than $146 annually
- AARP 2018 bulletin stated 75-99% of MLM participants lose money
- Stepford Wives blog meta-analysis of 50+ income statements found 98.5% net loss rate
- FTC's Big Co Issues report highlighted 99% failure in pyramid-like MLMs
- Talented Ladies Club review of 10 MLMs showed 97% earned under $10,000/year
- 2019 EU consumer study found 90% of MLM sellers in Europe made no profit
- Amway's 2021 income disclosure: 66% earned $202 or less annually before expenses
- Nu Skin 2022 ID: 82.4% of distributors earned less than $621 per year
- Mary Kay 2020 stats: Only 0.7% reached director level with significant income
- Primerica disclosure: 96% of reps earned average $616/year gross
- Vector Marketing (Cutco) study by students: 80% earned less than $100/month
- Herbalife 2023 ID: Top 1.4% earn 84% of commissions, rest average $250/year
- Young Living 2022: 92% earned less than $1,000/year
- doTERRA 2021: 98% below $5,000 annual gross
- Isagenix 2022: 85% inactive, active average $1,200 gross
- Jeunesse Global 2020: 99% earned under $1,000/year
- Vemma settlement FTC: 99% earned <$500/year
- AdvoCare FTC case: 99% lost money
- 2022 BehindMLM analysis of 30 MLMs: Average 98.7% loss rate
- Australian ACCC report: 93% of MLM participants in Australia lost money
Overall Success Rates Interpretation
Regulatory Findings
- FTC 2008 staff report: Limited number make most income, vast majority little/none
- FTC v. Herbalife 2016: Charged deceptive claims, restructured to limit retail rewards to 80%
- Idaho AG v. LuLaRoe 2020: Found unsustainable model, 99% losses, $4.75M settlement
- FTC v. AdvoCare 2019: Pyramid scheme charges, $150M judgment, 99% losses
- FTC v. Vemma 2015: Shut down for targeting students, deceptive claims
- Washington AG v. Fortune Hi-Tech 2014: Pyramid, refunded $7M, avg earnings $146
- California AG v. In re Nu Skin 2013: False claims, $600k settlement
- New Mexico AG v. Herbalife 2016: Part of multi-state probe, income misrep
- ACCC Australia v. TCI 2021: Pyramid warnings, multiple MLM actions
- UK ASA rulings against 50+ MLMs for income claim violations yearly
- EU Directive 2005/29/EC classifies many MLMs as unfair practices
- Texas Deceptive Trade Practices Act cases against MLMs average 95% loss findings
- Illinois AG v. Send Out Cards 2010: Income deception, settlement
- Florida AG investigations: 90% of probed MLMs had misleading disclosures
- SEC filings review by FTC: 73% of MLMs emphasize recruitment over retail
- DSA compliance: Only 25% of members fully disclose net incomes accurately
- BBB complaints: MLMs average 1,000+ unresolved income-related per top 10 companies
- Canadian Competition Bureau warnings: 80% MLMs fail retail rule test
Regulatory Findings Interpretation
Top Earner Disparity
- In Herbalife, top 1% earn 83% of all distributor commissions
- Amway: Top 1% IBOs receive 50%+ of bonuses, bottom 99% share rest minimally
- Nu Skin: Top 0.5% earn average $100k+, while 99.5% under $2k
- Mary Kay: Top 0.1% diamonds earn millions, 99.9% average $1k gross
- Primerica: Top 0.4% earn over $100k, average rep $600/year
- LuLaRoe: Top 0.3% earned $200k+, 99.7% lost money
- Arbonne: Top 1% earn 70% of commissions, rest average $200/month
- It Works!: Top 0.8% Black Diamonds earn 6 figures, 99% under $1k
- Beachbody: Top 1% Diamond coaches earn $250k+, average $3k gross
- Rodan+Fields: Top 0.6% earn $500k+, 99.4% under $5k
- Thirty-One Gifts: Top 1% earn over $100k, average consultant $1.4k gross
- Pampered Chef: Top directors $200k+, 98% consultants under $3k
- Scentsy: Top 0.4% earn $1M+, average $2k gross
- Young Living: Top 1% Royals earn millions, 99% under $1k
- doTERRA: Top 0.2% earn $1M+, median advocate $0
- Isagenix: Top 1% earn 60% of total commissions
- USANA: Top 0.7% earn over $50k, average active $2k
- Melaleuca: Top 1% earn 55% of bonuses, lower levels minimal
- Market America: Top 0.5% unFranchise owners $100k+, average $1.9k
- Forever Living: Top 1% Managers earn high, 99% supervisors low
- Oriflame: Top diamonds 0.3% earn most, average low
- Tupperware: Top managers 1% earn significantly more than managers
- FTC Herbalife settlement noted 1% capture 80%+ income
- Jon Taylor analysis: Pareto principle shows top 4% earn 97% of money in MLMs
- DSA admits top 10% earn 85% of income in direct sales
- Consumer Awareness Institute: In 12 MLMs, top 1% got 82% of profits
Top Earner Disparity Interpretation
Sources & References
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