WHAT IS AN INCOME DISCLOSURE STATEMENT?
If you’re new to the anti MLM movement, you may not know what an Income Disclosure Statement is. A lot of anti MLM content creators on all platforms discuss different income disclosure statements so this is something that you should be familiar with. An IDS provides the income of MLM reps and at what rank they’re currently at. As great as this sounds, it’s still not an accurate representation. These are based on the income of MLM reps, not profit. Which means that these don’t include taxes, fees, expenses, etc. Income Disclosure Statement’s are usually only showing the commissions that reps receive from their teams or bonuses, not the actual sale of a product. The reason why this is an issue is because some reps will argue that you can absolutely make money off of just selling the product and that the IDS’s don’t show those figures.
Those MLM reps are correct, however, why would the MLM company only compile data from team commissions and bonuses and not include sales? Shouldn’t it be mostly about sales if it’s an MLM company? Could it possibly be because the income is significantly higher if these reps build a team? One website I stumbled upon stated that for many MLM companies this is time consuming and takes a lot of effort.
As someone who used to do reporting for our entire company at the end of the month, quarter, and year, may I suggest if you’re using Excel to create macros? Don’t get me wrong, it was time consuming because I’d have to stay late to finish running the report once everyone was done with their portions. However, it didn’t take a lot of effort, it was more so tedious than anything else. Technology is a beautiful thing when it works.
Related: New to anti MLM? Read this post.
REPS MISREPRESENTING EARNINGS
The website I just spoke about also tried to say that these income disclosure statements are able to be a rebuttal towards arguments or claims that the MLM company is misrepresenting the typical earnings. You see, these types of companies and their uplines still misrepresent typical earnings. A very alarming amount of MLM reps I’ve come across don’t even know what an Income Disclosure Statement is. I’ve seen so many income claims, and clearly there has to be a lot if the FTC sent MLM companies warning letters regarding this. Even with all of this in place, MLM reps pitch the opportunity by creating this lifestyle of living the dream.
An MLM company having an income disclosure statement doesn’t provide the transparency some pro MLMers think.
Related: How to decline an MLM pitch.
MLMS AREN’T REQUIRED TO GIVE AN INCOME DISCLOSURE STATEMENT
One of the most common questions I get in my DM’s is, is it required for MLM companies to provide an income disclosure statement? The answer is no. It makes it a little bit easier to guestimate what kind of possible earnings there could be if you see an IDS. However, it’s not required and as I mentioned earlier, these IDS’s still aren’t an accurate representation of earnings. Sometimes it does take a little more digging to find an income disclosure statement than usual, but other times you’ll come up empty.
Related: Why MLMs are called predatory.
ALL IDS’S SHOW THE SAME THING; THE MAJORITY DON’T MAKE “FINANCIAL FREEDOM” TYPE MONEY
While each income disclosure statement will differ, at the end of the day, they all show the same thing. These IDS’s show that the majority of consultants don’t even make a minimum wage. At the time of typing this post, the federal minimum wage in the U.S. is $7.25/hour while Florida’s state minimum wage is $8.56/hour. I did recently see a sign that Whataburger in the next town over was hiring for $17/hour. Back to MLMs though. Most MLM reps don’t even make $7.25/hour.
There is a video that I posted on my youtube channel of a rep admitting to making false income claims. In that, a Le-Vel rep stated that prior to joining Le-Vel, she was in another MLM. While she was in her previous MLM, she lied in all of her posts and videos stating she had financial freedom, but she was actually losing money. That financial freedom that reps are constantly chasing after, is most likely non existent.
LIST OF IDS’S
I will update this post as time goes on because there is no way that I’ll be able to link every single income disclosure statement in one sitting. That would probably take me weeks, so if you don’t see an income disclosure here, it doesn’t necessarily mean that the MLM company you’re looking into doesn’t have one. It might just mean I didn’t have enough time to add it. If you’d like to look it up yourself, all you have to type into Google is the name of the company and the words income disclosure statement.
Plannet Marketing/Inteletravel
Related: I was targeted by a Monat Rep for my hair loss & how to report to the FTC & FLAG.
Disclaimer: This is all based on my opinion and research I have done. Please do your own research and fact checking. Section 107 of the Copyright Act provides the statutory framework for determining whether something is a fair use and identifies certain types of uses—such as criticism, comment, news reporting, teaching, scholarship, and research—as examples of activities that may qualify as fair use. Second Disclaimer: Anything said in this post is for entertainment purposes, and my opinions.
Great resources to further your research and education:
Jon M Taylor’s (MBA, PhD) Study: The Case for and against Multi Level Marketing
AARP’s Study of Multi Level Marketing: Profiling Participants and their Experiences in Direct Sales
Steven Hassan’s BITE Model
FTC’s article of a Pyramid Scheme vs MLM
The rest of my anti MLM Mondays posts can be found by clicking this link.
My Anti MLM Educational & Commentary content on Youtube.
