Instagram Multi-Level Marketing Schemes: A Look Beyond the Surface

Katie Dodshon

Katie Dodshon

June 24 • 4 minute read

Following on from our influencer marketing post, looking at how influencers make money via Instagram – we’re delving deeper into other ways people are making money through this platform.

On the surface, Instagram is a image sharing app where users share photos, short videos and 24hr long stories. But little do most of us know, people are really using their profiles to full money-making potential.

That’s where Pyramid schemes come in to the equation. Users are essentially buying products to sell on, to make profit. Alongside this, anyone who joins the scheme will be added to the bottom of a pyramid. The further they work their way up, the more money they can make.

To move up the pyramid, you must sell products and recruit others to join below you – therefore moving you up the pyramid. The theory of this sounds pretty simple, but users are relying on others to buy products off them to make the money.

We’ve all seen people we follow, mainly young girls promoting hair and beauty products, weight loss remedies and more in a bid to generate some sales. The same users then post stories urging you to join the team and to “get in touch to find out how to make money through an Instagram side hustle”. It can seem pretty tempting for young, vulnerable users, but the concept of it isn’t as glamorous as it seems to be.

Known as pyramid schemes, these Multi-Level Marketing businesses are quite a large investment, for success which is not always guaranteed. Companies initially ask you to buy your way in, for a price of £50 – £150. This usually covers the cost of your first batch of products you are then expected to sell. Using Instagram as the main source of finding potential customers, users then reach out to people who they feel would be interested in buying their products or even joining the scheme.

We came across a particular person who has really worked her way up her MLM business. Hannah Gallagher is just 23 years old and has became the “Youngest Triple Diamond Leader in the World”. Her Instagram feed shows her lavish lifestyle, promoting the business she is in and all the benefits she gets being at the top. The platform is also used to recruit other girls to join the company and we can see why people become so easily persuaded to join onto this phenomenon.

Essentially, users who have a large following and put hard work into their profiles to generate sales, can do pretty well here. But with the amount of people getting sucked into the temptation of a glitzy and glamorous lifestyle, it can be hard to sell products with such large scale competition. It is up to the user to keep on top of sales and make profit on the products they buy. Many see this ‘side hustle’ as an easy way to make money without having to put much work in – but posting a few promotions on Instagram simply wouldn’t suffice. According to an article from U.S. News and World Report, 80 percent of independent distributors working for MLMs gross less than $1,200 a year. That being said, take caution before you buy into schemes which aren’t always what they seem on the surface.

 

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