"If I wanted to sell a product, the last thing I want is my next door neighbor to sell the same product," said FitzPatrick.

Turnover rates are high. But as salespeople fail, more are recruited to take their place.

Herbalife, for example, had a 52% retention rate for its top salespeople, in 2011, according to the company's annual report.

Industry supporters counter that multilevel marketing presents a viable full-time business opportunity for those who put in full-time hours and effort. But most salespeople only work part-time to make extra cash or to get a discount on their favorite product.

"Most people sell for only a few hours out of every week. They don't spend a lot of time on this," Mariano said. "That's the beauty of the business."