Are the Girl Scouts an MLM? A Scam?
Anyone who spends any amount of time on social media will eventually either be contacted directly or see a generic post of someone trying to recruit you to their Multi-Level Marketing (MLM) company. Some popular ones are Beach Body, Tupperware, Pampered Chef, Norwex, Juice Plus and so many more.
In a recent post I saw on Facebook they mentioned that MLMs are no different than the Girl Scouts, so there is nothing to worry about when joining or supporting an MLM, is this true? No.
The Girl Scouts are not a multi-level marketing company, they are not a scam and they are not a pyramid scheme. The Girl Scouts are a registered 501(c)(3) nonprofit organization. The sale of Girl Scout cookies should not be compared to MLM sales.
As a reminder, I have an MBA, I am a Certified Public Accountant (CPA), and have almost 15 years working in finance and accounting. These are my opinions based on researched facts and my understanding of those facts. However, this is not legal, financial, or tax advice. If you need legal, financial, or tax advice, you should reach out to a professional for a 1:1 chat! All opinions are my own.
Facebook Post:
Girl Scouts are the ultimate Direct Sales model and none of us are hating on them. Upcharging those little boxes of deliciousness, and we gladly accept it. We line up for some Thin Mints and Samoas like we lining up for black Friday sales. We strategically plan our errand route because we know THAT corner store always has a troop set up and selling this time of year. For cookies y’all. I can buy Keebler Coconut Dreams for half the price at Walmart, but dang those cute girl scout smiles. And ‘Yes honey, I’ll buy 10 boxes of thin mints to show you that working hard and asking again after you’ve heard “no” over and over is what separates the successful people in this world. So keep pushing forward sister, and take my money… And add 3 boxes of do-si-dos while you’re at it.’
People, why do we love girl scouts and their cookies so much, but hate all other form of direct sales? We encourage our girls in this form of entrepreneurship, then bash grown women or men who attempt it through adulthood. Why?
Think about it, please, the next time you find yourself in the candle section at Target, or at the Make up counter in Dillard’s. Why does every fiber of you resent the woman who asked if you’d like to try her lipgloss, yet you happily accept it from the rep behind the counter at Macy’s? They are both doing the same thing!
Our mindset on this has to change.
This year, consider supporting your direct sales friend with your words just as much as (or more than) your wallet. Direct sales has a bad rep when it comes to grown women/men in the industry, and ideally, I’d like to help see that change.
How do Girl Scout Cookie Sales Work?
Unless you’re living under a rock, you know about the Girl Scouts and their delicious cookies (Team Thin Mints and Samoas!). How do cookie sales work? The Girl Scouts buy the cookies from either ABC Smart Cookies or Little Brownie Bakers. They sell the cookies for more than they buy them for, creating a profit margin. The profit made from selling the cookies is the fundraising aspect of this. The additional funds they make above the cost of the cookies can then be used by the Girl Scouts to fulfill their mission.
How do MLM sales work?
Multi Level Marketing (MLM) sales are COMPLETELY different than the Girl Scout cookie sales described above. In MLMs, the salesperson is trying to make sales, but most importantly, they are trying to recruit a salesperson under them. That is because, the more people they recruit, the more bonuses and commissions those MLMers make. In order to reach the top ranks of MLMs where the only people who are making real money are, you absolutely have to have a downline.
Therefore, if the Girl Scouts were like an MLM, each little Girl Scout instead of spending time selling cookies, would be trying to find other little girls to join them. They would convince them to buy a certain number of boxes to get in on the opportunity. Then, they would encourage them to go out to try to resell, and they would get a “cut” of all of their sales or get bonuses based on how many cookies their downline bought for themselves or sold to customers. If the downline didn’t sell any cookies, they would be stuck with the cookies they bought, but the original little girl would get “credit” for the boxes purchased by those that they recruited.
Why Would MLMs Want to be Compared to Girl Scouts?
The Girl Scouts are a well-known, nonprofit organization. People love the cookies, and it might be because they are actually good – but also some people like supporting the cause. MLM companies would love to be compared to Girl Scouts because right now, more than ever, MLMs are getting a bad rap. MLMs are being compared to pyramid schemes and their tactics are under fire. The Anti-MLM culture is expanding – you can see more about that in an article I wrote here. With this Facebook post, they are hoping to confuse the reader into thinking that network marketing/MLM sales are no different than the innocent Girl Scouts to capitalize on that.
How is Buying from an MLM Different than Shopping at the Store?
The Facebook post also draws your attention to shopping at Target and being more open to MLMs. Why is shopping at Target different than shopping with MLM? Well first off, the products at target are probably more fairly priced. Second, MLMs are predatory. Approximately 99% of people in MLMs will not make money according to this study published by the FTC. The people working at Target are trading their time for money. The individual in the MLM is most likely losing money while trading a lot of time. The business model is flawed, and only very few benefit from these companies. It can be hard to not support people who you love in an MLM, I’ve had to draw the line myself. But I refuse to spend money with an MLM to give anyone encouragement to continue in these businesses.
Wrap Up
In short, this Facebook post above is a marketing tactic to try to gain some positive momentum for MLMs. Buying Girl Scout cookies is nothing like buying from an MLM. Buying from Target doesn’t make you a bad person. Your friend’s MLM is not a small business, and you should not feel pressured into buying from them. However, be kind to the MLMers, I do feel most of these women do not know how predatory the business model is. They don’t realize they’ve been taken advantage of and are being encouraged to take advantage of others.
If you think I got something wrong, please let me know!
