Multi-Level Marketing Companies Are Cashing In on the Crisis - Tribune magazine

As a teenager, Amelia was desperately looking for a part-time job, handing CVs out in cafes and bars with no luck. One day, she picked up a leaflet about an 'exciting business opportunity' to become an Avon representative. Everybody knew somebody who was selling for Avon—an auntie or a neighbour. Pity-bought lipsticks rattled around the bottom of handbags and catalogues littered kitchen tables. The ubiquity of Avon created a sense of security; this 'exciting business opportunity' could be a legitimate quick money-maker. The next thing she knew, a manicured Avon representative was at the dining room table, providing tips on how to sell products and recruit a 'team'. The catalogues were swiftly binned and forgotten, with never even a nail varnish sold.

Avon, and companies like it, have tempted in millions of people, and even more have watched as people we know become part of these selling communities. Avon is one of the most common and well-known multi-level marketing companies in Britain, but over the last decade, the sector has exploded, with social media providing a perfect foil to sell products—and ourselves. Watching friends and acquaintances mix up juice-based meals and popping fruit-powder pills, filming their skincare routines, or modelling their new leggings has become commonplace. While we might roll our eyes and scroll past, the 'girl-boss' business model is sucking in people in their thousands and has only grown in the face of crisis.

At the height of the coronavirus lockdown, multi-level marketing companies were rebranding as 'social selling' and exploding across social media. Representatives for Younique, FM World, and Arbonne were hosting 'social media raffles' which offered the chance of winning big for a small entry fee. 'Social selling' rose 32% during the first quarter of 2021 as people were recruited to make their work from home businesses a reality, with society and our working lives transformed by the pandemic.

According to culture writer Kaitlyn Tiffany, these companies are a 'form of direct selling in which income comes not from the sales they make themselves but from the sales made by people they recruit'. Their structure mirrors that of pyramid schemes, but because there is a product that representatives sell, rather than solely focusing on recruitment, they are technically legitimate businesses. Despite this, in the US, the Federal Trade Commission 'estimates that only 1% of MLM members walk away without making a loss.' The real money lies in the difficult business of 'building a team', but for most people, our networks are not endless and neither is the patience (or pockets) of our friends and family.

MLMs have a long history of recruiting and exploiting women. The Direction Selling Association (the trading body for UK MLMs like Avon and Amway) states that 96% of its 631,000 direct sellers are women. In the 1950s, companies like Tupperware took a 'party' approach, wherein housewives would host friends and family to showcase the products and recruit, with the emphasis being on women's ability to independently earn money while socialising.

This gendered trend has continued to define MLMs. In the documentary series LulaRich, family and uniqueness are the vision of American clothing company LulaRoe, who want to 'empower' women through their business. The documentary shows that the leggings empire founders, DeAnne and Mark Stidham, were preying on educated, middle-class, stay-at-home mothers who were 'unfulfilled' with their lives. In 2019, a group of LulaRoe's sellers lodged a lawsuit against the company, arguing that it is an illegal pyramid scheme and has 'cult-like' behaviour at the very top.

Today, brands like Herballife, Juice Plus, and Nu Skin are enjoying immense success in the UK, encouraging women to sign up and achieve the perfect body, face, hair, and life through their 'exclusive' products. But beneath the shiny hair and 'perfect' bodies, what MLMs are really selling women is the dream of autonomy and financial freedom and the opportunity to be part of a seemingly thriving community of women at a time when many of us are feeling lonelier than ever before.

Over the past few years, social media feeds have morphed from photos of kids and pets into endless posts by friends peddling everything under the sun: makeup, skin care, candles, essential oils, hormone gel patches, leggings, tote bags, juice powders, nontoxic cleaning products, whitening toothpaste, vitamins, nail decals, nutritional shakes and gardening towers. (The Washington Post, 2019)

In 2020, mass job losses and an uptick in time spent on social media provided the perfect storm for MLMs to up their recruitment, focussing on people anxious about their financial situation or keen to make some extra cash. During Covid, the MLM sector was 'booming', with companies like Avon boasting a 53% increase in sales representative sign-ups in the first eight months of 2020. But this recruitment drive wasn't a natural occurrence: it was a direct order from the highest ranks to use the crisis to their advantage. Sellers have described being pressured by their 'uplines' (the person who recruited a distributor into the company and their recruiter, and so on) to go 'live' daily on social media to promote the MLM lifestyle. Lockdowns were sold as the perfect opportunity to seek out 'financial freedom' and transform lives.

Amid fear, confusion, and crisis, MLM representatives were working hard to capitalise on the pandemic and tout their promising and successful lifestyles. This wasn't just about the products, but also about the lifestyle they promise: an accessible #GirlBoss world where you could be working at home and raking in money, all while holding the family together. You, too, could be a #Momtrepreneur. These tactics enticed women in through a 'cult of positivity' that easily adapted lockdown orders to their benefit.

Today, the cost of living has spiralled out of control and disaster is on the horizon for more people than ever before. With energy prices jumping and the hikes in rent prices hot on the heels of a decade of austerity, there is no safety net for millions across the country. These conditions are amplifying the kinds of vulnerability on which MLMs prey: financial precarity coupled with social isolation. With this crisis being the 'worst in a generation', the poorest in society are going to be the worst affected, but middle-income families too are set to be up to £4,600 worse off over the next year as prices soar.

This is the perfect opportunity for MLMs to break new ground. The promise of 'financial freedom' has been particularly appealing to women balancing economic and domestic labour with carefully curated Instagram posts promoting the ideal lifestyle seeming to offer a solution out of both poverty and isolation—leaving out that trouble is undoubtedly to be found down the line. As the cost of living crisis leaves many people poorer, get-rich-quick schemes are there to offer a 'helping hand'. Precarity and uncertainty provide the perfect conditions for MLMs to thrive and even to be suggested as reputable sources of work.

It isn't just that MLMs are offering financial security: they are cultivating a sense of community and purpose. These companies entice sellers with conferences that could be confused for pop concerts, competitions to win 'free' luxury goods, specific language that creates an insider/outsider dynamic, and a constant stream of communication from other sellers via instant messaging group chats. Poverty is lonely, and MLMs know it. They use FOMO (fear of missing out) as a recruitment tactic and offer an escape fantasy from the intense isolation that people at the sharp end of capitalism experience.

With so many chewed up and spat out by these MLMs, it's not surprising that there is a growing backlash, with one former seller have calling their business 'a fucking cult'. Anti-MLM content is thriving, creating a counter-community of its own. On YouTube, TikTok, and Instagram, creators have built platforms dedicated to analysing the tactics and impact of MLMs and trying to warn off potential victims. The backlash has been swift and harsh, with subscribers contributing 'MLM horror stories' to be debunked, undercover reports from recruitment calls, and deep dives into specific companies. But can this anti-MLM content really protect us, or is it reproducing some of the same toxic dynamics?

Anti-MLM content regularly attracts viewers in their hundreds of thousands. Creators are active on TikTok, Instagram, and YouTube, creating a 'diffuse and disorganised' community, but one that might 'pose an existential threat' to social selling. While some of these creators are former MLM sellers, others have set up their platforms building on backgrounds in psychology and sales. The aim of these accounts is, ostensibly, to raise awareness of the dangers of MLMs, educate people about how to identify MLM recruiting, and expose the dangerous consequences of those practices.

The Anti-MLM community has, understandably, provoked a fierce reaction from people in MLMs. In part, this is due to the perception that they are 'laughing at' MLM members. One of the most successful elements of anti-MLM commentary is reaction videos, where YouTubers respond to MLM content like distributors' Instagram or TikTok posts. The thumbnails often include eye-catching images of the content creator looking shocked, with titles like 'MLM Scammers Getting ROASTED On Social Media – REACTION'. Despite the educational aspect that some videos offer in terms of recognising manipulative language and the 'cult-like' tactics of MLMs, focusing on the representatives can—intentionally or unintentionally—position them as sources of entertainment.

Positioning people in MLMs as sources of entertainment or mockery sits uneasily with claims that anti-MLM will help people leave these communities, especially when leaving is not as easy as it might appear from the outside. Not only are there the sunk costs of product, but the selling community is quick to cut off people who leave. When part of the MLM deal is a ready-made community, with intense contact and what seem like close friendships forming, leaving means a return to the isolation of the outside world.

After facing this very critique, anti-MLM content creator CC Suarez recently said: 'people I put in my videos … it's not about her … it's about what they say, how they say it, the manipulation, the misinformation.' CC's aim is to criticise the structure of the MLM, rather than the individual. Nevertheless, many 'react' videos do focus on an individual, with the comments section poking fun under a clickbait headline.

MLMs sell the dream of a life away from crushing debt and monotonous work, offering freedom instead. Want to work from a tropical island? Sure, you can sell from anywhere! Don't want to go back to the office after having children? You can sell from your phone! Want to be part of a community of girl bosses at a lonely point in your life? MLMs have it all! Anti-MLM creators argue that they make their videos to provide insight into the psychological reasons that explain how and why people get roped into these companies, akin to the true crime genre. But they often overlook the economic precarity which makes people susceptible to being sold a dream in the first place. By focussing on the idea of a 'cult', the reality of poverty, stress, and loneliness leading to MLM selling are ignored in the pursuit of 'good content'.

For anti-MLM creators, monetising content and/or receiving 'tips' for their content is important to making creation their full-time job. Clickbait titles, straight-to-camera delivery, and building a 'community' in the comments section are all vital, but nothing comes before selecting your 'niche'. Regardless of the intentions of these creators—growing a community or informing people, or a bit of both—there are ethical questions raised when these videos are monetised. Anti-MLM creator Amanda Mc said of using anti-MLM as a career trajectory that she 'can distinctly recall watching more than a handful of creators say that they were moving strictly to anti-MLM content on their channel, when they previously had a mixture of other content on their channel, because "it's what gets views".' Views equal money, and the nature of content creation problematises even the best intentions in this sector.

In recent months, trouble has been brewing within the anti-MLM community. A high-ranking Monat (haircare and wellness products MLM) distributor, Angelique Robles, was terminated by the company for doing an interview with CC Suarez. In the interview, Angelique criticised the practices of direct selling, particularly the pressures that MLMs put on relationships. After her dismissal, Angelique pivoted from selling to slamming MLMs. Although there remains some evidence of her time selling Monat, many posts have been edited or removed, with anti-MLM messages, criticism of MLM's cultlike elements, and calling out 'toxicity' made her new brand.

In a Q&A in July 2022, Angelique wrote:

'You see red flags but you ignore them. You want to believe everything is good. I legit see how people get so brainwashed in cults. You drink the sauce and when ur making loads of money, you don't [want] to believe it's bad'

When asked if she'd ever join another social selling network, she writes:

'Part of me wants to say yes but then apart of me feels like they're all the same. Maybe I just can't see the goodness right now? I've done so much work to get out … the people and company broke my heart … my life is so much less dramatic now being out'

But when pushed on what she misses, Angelique tells her followers:

'I miss certain people … but then it's like were they even my real friends??? Do real friends just drop you when get terminated from a job??? … I miss the feeling of it being real. I miss the calls with my teams – and seeing all their faces.'

Teasing further details behind her Patreon, Angelique's former business page is continuing to profit off her time in the MLM as well as getting embroiled in new critiques in the anti-MLM world. Angelique describes the 'commercial cult' of MLM, but the hallmarks of 'cult-like' MLMs, their dysfunctional relationships, and their nefarious ways of making money can't easily be separated from the world of content creation, cliques, and clicks.

People unpicking MLMs often make a distinction between them and 'real' businesses—the '9-to-5'. The major difference is that, with some exceptions, in 'normal' business, workers don't have to recruit others into the business. MLM sellers aren't 'workers', though: they are 'business owners', or so we are told. Within MLMs, a classic rebuff to people who have doubts about the company structure is to label office 9-5s as the 'real' pyramid scheme, whereas networking marketing can be done in 'pockets of time' and provide the individual with a better work/life balance. Unsurprisingly, ex-MLM sellers argue that 'location freedom isn't time freedom' and that pressure from the upline meant working every hour. Anti-MLM creator Hattie Rowe told Stylist of one particularly harrowing story:

one woman… contacted her wanting to leave the MLM she was involved in. "She told me that she was in hospital having a miscarriage, and her upline manager was messaging and calling her saying, 'Why aren't you posting on Facebook? You haven't posted anything today?' That's when it becomes clear what this is: pure financial exploitation."

Despite their seemingly noble educational aims, in anti-MLM discourse, there is sometimes a lack of acknowledgement of the shared ideological foundations at the heart of any business: the myth of meritocracy is at the heart of both capitalism and direct selling, systems wherein those at the top benefit from the labour of those at the bottom. These same ideas, that 'followers' support 'creators', are as prevalent in the content creation of anti-MLM influencers as they are in MLMs themselves, albeit in a different gradation of exploitation.

Anti-MLM creators are keen to point out the benefits of 9-5 positions, such as a reliable schedule and paid sick leave, which can sometimes overlook and downplay the exploitation of many 'real' jobs, and the very real impacts that 'normality' has on our health, our relationships, and our society. For example, in 2014, a Sports Direct employee gave birth in the toilet of one of the company's warehouses, after claiming that 'she was so terrified that she was going to lose her job' if she did not attend her shift. Prior to the pandemic, the Guardian reported that 7.1 million people in the UK—one in five workers—are in precarious employment, with little choice in shift patterns or even the kind of work they might do. Some might argue that these examples are not reflective of the salaried, office-based, 9-5 roles that MLM distributors critique, but do these jobs even exist today for the vast majority of people?

The promise of MLMs is that we can succeed without having to feel that we are working. Work can look like beach holidays, hanging out with friends, and being beautiful. But as ex-MLM sellers have attested, this simply doesn't exist. Instead, labour seeps into every aspect of people's lives and homes. Perhaps most disturbingly, MLMs demand that people marketise their closest relationships, turning family and friends into potential 'clients'. This idea of friends and families as consumers puts strains on relationships, but the MLM promises shiny, new, readymade friendships.

This method of recruitment and promise preys on people who feel they are without community, at isolated periods of their life (like new motherhood). But MLM networks aren't really friends: they are hypercompetitive and conditional on remaining in the MLM. In a post-pandemic period where isolation and loneliness are escalating, and the cost of living crisis is pushing people to desperate measures, MLMs are thriving by promising that individuals can get ahead by twisting the desire for a community and stability into something dangerous and destructive.

However, we would do well not to forget that the alternative isn't serving most of society particularly well either. Taking a 'deep dive' into MLMs reveals that most of us are striving for something different, and if we are to learn anything from their success, it is that at the heart of this vulnerability is a problem caused by capitalism itself: isolating, atomising, and impoverishing us as individuals, workers, and communities.