Network marketing plans are started by a company selling some product — fruit juice, soap, vitamin pills, water filters; anything, it doesn't matter — through a network of independent distributors who are promised exponential commissions by recruiting multiple levels of other distributors beneath them. The company is guaranteed sales because the distributors are required to make minimum purchases, on which commissions trickle upward. There's little need to actually go out and try to sell the product to anyone; money is made by building your network of distributors beneath you, and their distributors beneath them. Soon the commissions trickling up from all those monthly purchases combine into a raging torrent of cash. And if you just buy a few more shovels, you're sure to strike gold.
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As an advocate of industrial hemp, Nutiva Founder John Roulac successfully sued the US Drug Enforcement Administration in 2002 to keep hemp foods legal, paving the way for hemp foods to be sold in the United States. Roulac has authored four books on environmental topics including composting and hemp that have combined sales of over one million copies. With expertise ranging from home composting and natural healing to forestry, hemp agriculture, GMO labeling and organic farming, Roulac has founded five nonprofit ecological groups, one of which, Forests Forever, placed the California Forest Protection Act (Prop 130) on the state ballot in 1990.
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Fast forward to 2017. LuLaRoe is the biggest MLM for women. “More than 80,000 women have paid around $5,000 for several boxes of low-cost clothing and worked as much as 80-hour weeks to outfit hundreds of thousands of suburban women in multicolored polyester. But according to a report that studied the business models of 350 MLMs, published on the Federal Trade Commission’s website, 99% of people who join multilevel-marketing companies lose money. Depending on how you look at it, it’s either a brilliant business model or a predatory practice — or a little bit of both.” (FTC)