Wellness MLMs sell real products and a business few people profit from

Key takeaways

• In September 2026, the FTC and Washington State announced a $225 million settlement with Amway, whose sellers were allegedly told they would likely earn over $40,000 a year, a level the complaint says only about 1% reached.
• An FTC staff review of 70 MLM income statements found most participants made $1,000 or less a year before expenses, and not one statement counted all expenses.
• A company can sell real, even high-quality products and still be an illegal pyramid scheme if its pay plan rewards recruiting over sales to real customers.
• When a seller says an oil or shake treats or prevents disease, the company can be held responsible, and regulators have sent warning letters over exactly these posts.
• Before you join, find the share of sellers who earned nothing, list every cost, and get the refund policy in writing.

In September 2026, the Federal Trade Commission and Washington State announced a $225 million settlement with Amway, a company that sells nutritional supplements, energy drinks and beauty products through a network of independent sellers¹.

According to the complaint, Amway and two affiliated recruiting groups falsely told sellers they were likely to earn more than $40,000 a year¹. The complaint says only about 1% of participants earned that much².

Those are allegations, and the order still needed a judge’s signature when it was announced. Even so, the FTC called it the largest sum it has ever recovered from a multilevel marketing company¹.

If you care about natural health, you have probably been invited into one of these businesses. Essential oils, protein shakes, greens powders, “clean” skin care and supplements are staples of the model, and the invitation usually comes from someone you like.

That is by design: multilevel marketing, or MLM, sells through personal ties. This guide covers the two places those ties get tested: business math that rarely works for most people who join, and health claims that sellers often make and the law often forbids.

An MLM can sell good products and still be a pyramid scheme

In an MLM, you buy products, sell them to customers and recruit others to do the same. The people you bring in, and the people they bring in, become your “downline.” You can earn from your own sales and from your downline’s purchases⁴.

A pyramid scheme looks similar. The difference is where the money comes from. In a pyramid, the money comes mainly from signing up new people rather than from selling to outside buyers. It works only while fresh recruits keep arriving⁴.

FTC staff guidance, first issued in 2018 and revised in 2024, adds three points that surprise most people³:

• There is no percentage test that makes a company legal.
• An MLM can sell real, even high-quality products and still be a pyramid scheme.
• A buyback policy does not fix a plan built on recruiting.

The key question is who is buying. If most products go to sellers who buy them mainly to qualify for bonuses, FTC staff treat that as a warning sign³.

That is why recent settlements have set floors for sales to outside customers. Herbalife’s 2016 settlement required that at least 80% of its product sales go to real end users, or seller rewards would be cut⁸. Amway’s proposed 2026 order would require sellers to resell at least 70% of what they buy from the company each month¹.

Most sellers earn little, but the companies’ own numbers say so

In a 2024 report, FTC staff reviewed 70 income disclosure statements that MLMs had posted online, collected in early 2023. Where the numbers allowed a calculation, the vast majority of participants earned $1,000 or less a year. That is under $84 a month, and it is before expenses⁵.

Of the 27 statements that showed how many people earned nothing at all, 17 reported that more than half of participants earned zero⁵.

Surveys point the same way. A 2018 AARP Foundation study found that about 1 in 13 American adults had joined an MLM. Nearly half lost money, and about a quarter broke even. Of those who made a profit, more than half made less than $5,000⁶.

Court records add exact figures:

• AdvoCare (2019): Joining cost $59. To earn every kind of pay, sellers typically bought $1,200 to $2,400 in products. In 2016, 72.3% of distributors earned nothing, and another 18% earned between one cent and $250. The company and its former CEO agreed to pay $150 million and were banned from MLM⁷.
• Herbalife (2016): More than half of its “sales leaders” got less than $300 in rewards for 2014. In Herbalife’s own survey, Nutrition Club owners spent about $8,500 on average to open, and 57% reported no profit or a loss⁸.
• Amway (2026): Most people who joined through two big recruiting groups after 2020 spent more on products and training than they earned from Amway, according to the complaint¹.

Remember that most of these figures are gross income. They come before the starter kit, monthly orders, samples, shipping, events and travel.

How to read an income disclosure statement in 10 minutes

FTC staff say these statements should include everyone who earned nothing and should not stretch a few good months into a yearly figure³. Many fall short of that.

In the FTC staff review, only 11 of 70 statements clearly included all participants. Another 29 left out everyone who earned no commission, and 59 leaned on averages that can make typical pay look higher than it is⁵.

Not one of the 70 accounted for all expenses. At least 63 said results were “not typical,” usually in smaller type than the dollar figures⁵.

Use this routine on any statement:

1. Check the date and the head count. Note the year and how many people it counts.
2. Find the zero row. Look for the share who earned nothing. If there is no zero row, read the footnotes to see who was left out.
3. Read the definition of “active.” Some statements count only people who placed an order or hit a sales level. Everyone else disappears from the math.
4. Prefer the median to the average. Picture 10 sellers. Nine earn nothing and one earns $5,000. The average is $500, but the typical seller earned zero.
5. Do the hidden-zero math. If the statement gives one average for everyone and another for people who earned something, divide the first by the second and subtract from 1. FTC staff used this check⁵. An average of $300 for all and $1,200 for earners means about 75% earned nothing.
6. Find where most people sit. Rank tables can give most of their rows to a tiny share of people at the top⁵. Look for the row with the most people.
7. Subtract your costs. Picture a seller who earned $600 in commissions. If she spent $50 a month on required orders, $100 on a starter kit and $200 on one event, she is down $300 for the year.

When a seller’s post makes a health claim, the company owns it

Under FTC guidance, an MLM can be held liable when its sellers break the law. Training and monitoring help, but staff say there is no safe harbor³. Health claims must be backed by competent and reliable scientific evidence when they are made³.

In April 2023, the FTC sent a Notice of Penalty Offenses to about 670 marketers of supplements, over-the-counter drugs, homeopathic products and functional foods. It warned that a claim to treat a serious disease needs at least one well-controlled human clinical trial. Breaking the rules could cost up to $50,120 per violation at 2023 rates¹².

The record shows why. In September 2014, the FDA sent warning letters to two Utah essential oil companies, doTERRA and Young Living, over posts by their consultants. One post said the oils could help prevent Ebola, and the letters also cited claims about cancer, autism and Alzheimer’s disease¹¹.

doTERRA said only a few distributors were involved. Young Living said it would drop consultants who would not follow the rules¹¹.

The pattern returned in 2020. In April, the FTC warned 10 MLMs about health or income claims tied to the pandemic and gave them 48 hours to report what they had fixed. The agency noted that, according to the FDA, no product had been proven to treat or prevent the virus⁹.

One social media post the FTC cited asked readers if they had the “coronavirus heebeegeebees,” then pitched an immunity boost as “this amazing deal”⁹.

Six more companies got letters that June, for 16 in all. Months later, the watchdog group Truth in Advertising reported that all 16 were still making unsupported health or income claims¹⁰. Its examples included posts saying a product had cured eczema or helped someone stop pain medicine¹⁰.

Why this matters if you value natural health

A good lavender oil or a nourishing shake does not need a disease claim to earn its place in your life. Overblown promises cheapen plants and traditions that deserve respect.

They also carry a real risk. Someone who believes an oil will handle an infection may wait too long to see a clinician. You can bring the same healthy doubt you apply to a drug ad to a friend’s post, without doubting the friend.

The promises, checked against the evidence

Ratings use four levels: strong evidence, promising but early, not enough evidence, and evidence says no.

What a recruiter may say	What the record shows	Rating
“Most people who work it make good money.”	A review of 70 company statements and a national survey found most earn little or lose money56.	Evidence says no
“Real products mean it can’t be a pyramid.”	FTC staff say real, high-quality products do not make a pay plan legal3.	Evidence says no
“This oil or shake protects you from the virus going around.”	In 2020, the FDA said no product was proven to treat or prevent the virus, and the FTC warned 16 MLMs910.	Not enough evidence
“The average pay at my rank shows what you’ll make.”	Averages hide the many who earn nothing, and most statements leave out costs5.	Evidence says no
“You’ll likely earn $40,000 a year or more.”	In the Amway case, the complaint says only about 1% of participants did2.	Evidence says no

What regulators have done, and what is still only a proposal

Several of the FTC’s biggest MLM cases have involved wellness products. Herbalife agreed to pay $200 million in 2016⁸. AdvoCare, which sold energy drinks, shakes and supplements, agreed to pay $150 million in 2019⁷. Amway’s $225 million deal in 2026 is the biggest yet¹.

Getting money back for people has become harder. In 2021, the Supreme Court ruled in AMG Capital Management v. FTC that the agency could no longer win refunds through its usual court route. It must now bring an administrative case first, then file a separate lawsuit¹⁴.

The FTC has also leaned on warnings with teeth. In October 2021, it sent a Notice of Penalty Offenses to more than 1,100 businesses, including MLMs. The notice said false earnings claims could cost up to $43,792 per violation at 2021 rates¹³.

In January 2025, the FTC released a proposed Earnings Claim Rule. It would ban misleading income claims by MLMs and their sellers and require proof for any earnings claim¹⁴. As of the government’s August 2026 regulatory agenda, it was still listed only as a proposal, which means it is not law¹⁵.

One more gap: the FTC decided in 2008 not to cover MLMs across the board under its Business Opportunity Rule, which requires a disclosure document for many other business offers¹⁴. States can step in, as Washington did with Amway².

A checklist before you sign up

Check this list before you pay anything:

• I have the newest income disclosure statement and found the share who earned nothing.
• I know the median pay, not just the average.
• I have listed every cost: starter kit, monthly orders, website fees, samples, events, travel and training.
• I know whether I must buy a set amount each month to stay “active” or get paid.
• I asked at least two current and two former sellers what they earned last year after expenses, and whether they used credit⁴.
• I asked my recruiter how much of their income comes from outside customers and how much from recruits⁴.
• I have the refund and buyback policy in writing⁴.
• I checked for complaints with my state attorney general⁴.
• I would buy this product at this price even if I never sold a bottle.
• I can afford to lose what I put in without using a credit card.
• No one is pressing me to decide today.
• I will never tell anyone a product treats, cures or prevents a disease.

If you cannot check most of these boxes, wait. The FTC also suggests having an accountant or lawyer review the paperwork⁴.

How to say no and keep the friend

In the AARP study, the top reason people quit was discomfort selling to family and friends⁶. The pressure you feel when you are pitched is often felt by the person pitching, too, so kindness on both sides helps.

Try these lines, or make them your own:

• If you don’t want to sell: “I’m glad you found something you enjoy. I’m not looking to start a business, but I’m cheering for you.”
• If you like a product: “Can I buy one bottle at the regular price, without signing up for monthly orders?”
• If the talk turns to income: “Can you send me the company’s income statement? I’d want to see what most people make after costs.”
• If a health claim comes up: “I keep health decisions between me and my practitioner. I’ll skip anything sold as a treatment.”
• If the ask keeps coming: “My answer is no for now. I’d rather our friendship stay about us.”

You can still show up for a friend’s launch, share a post you agree with, or buy a gift once. Support and signing up are two different things.

Where to report a problem

• Income promises or recruiting pressure: Report to the FTC at ReportFraud.ftc.gov and to your state attorney general.
• A seller claiming a product treats disease: Report the claim to the FTC. Save screenshots with dates.
• A bad reaction to a product: Tell your clinician. You can also report it to the FDA through its MedWatch program.
• A child swallowed an essential oil: Call Poison Control at 1-800-222-1222. Call 911 if the child is struggling to breathe or will not wake up.

Questions readers ask

The bottom line

Wellness MLMs can sell products you like, but the business side is another matter. The companies’ own income statements, national survey data and court records agree that most people who join earn little or lose money, and the few who earn a lot are rare.

Read the income statement as a skeptic, count your costs, and keep health claims out of it. Then decide, on your own schedule, whether to buy, sell or simply cheer a friend on.

Related reading

• What an influencer is legally required to tell you
• Fake reviews became illegal in 2024, yet reviews still mislead you
• Why supplement labels say ‘supports’ and never say ‘cures’
• The supplement math that changes which bottle wins
• The “was $89, now $39” price that was never $89

Sources

1. Federal Trade Commission. “FTC Takes Historic Action Against Multilevel Marketing Operator Amway.” FTC press release, September 17, 2026. ftc.gov
2. Washington State Office of the Attorney General. “WA, FTC Reach $225M Settlement With Amway Over Unfair and Deceptive Business Practices.” 2026. atg.wa.gov
3. Federal Trade Commission staff. “Business Guidance Concerning Multi-Level Marketing.” 2018, revised 2024. ftc.gov
4. Federal Trade Commission. “Multi-Level Marketing Businesses and Pyramid Schemes.” Consumer Advice, updated December 2025. consumer.ftc.gov
5. Federal Trade Commission staff. “Staff Report on Multi-Level Marketing Income Disclosure Statements.” 2024. ftc.gov
6. AARP Foundation. “Multilevel Marketing” (summary of the 2018 AARP study of MLM participation). aarp.org
7. Federal Trade Commission. “Multi-Level Marketer AdvoCare Will Pay $150 Million To Settle FTC Charges it Operated an Illegal Pyramid Scheme.” 2019. ftc.gov
8. Federal Trade Commission. “Herbalife Will Restructure Its Multi-level Marketing Operations and Pay $200 Million For Consumer Redress to Settle FTC Charges.” 2016. ftc.gov
9. Federal Trade Commission. “FTC Sends Warning Letters to Multi-Level Marketers Regarding Health and Earnings Claims They or Their Participants are Making.” 2020. ftc.gov
10. Truth in Advertising (TINA.org). “MLMs Continue to Break the Law Despite FTC Warning.” 2020, updated 2021. truthinadvertising.org
11. Deseret News. “2 Utah Companies Respond to FDA Warning Over Health Claims.” 2014. deseret.com
12. Federal Trade Commission. “FTC Warns Almost 700 Marketing Companies That They Could Face Civil Penalties if They Can’t Back Up Their Product Claims.” 2023. ftc.gov
13. Federal Trade Commission. “FTC Puts Businesses on Notice that False Money-Making Claims Could Lead to Big Penalties.” 2021. ftc.gov
14. Federal Trade Commission. “Earnings Claim Rule Regarding Multi-Level Marketing: Notice of Proposed Rulemaking.” January 2025. ftc.gov
15. Federal Trade Commission. “Regulatory Agenda.” Federal Register, August 14, 2026 (FR Doc. 2026-16617). public-inspection.federalregister.gov