Hi and welcome back! Today, I want to catch you up on news from the MLM world. In addition to being a really predatory faux-business model, it turns out that the companies and people involved with these schemes get in trouble constantly! Maybe the pendulum is swinging back around to sanity, however. Maybe. Come with me and learn what the MLM news is lately–and see why these companies’ owners probably don’t like being in the headlines lately!
(Please see this endnote about MLM terminology if you need it.)
This Definitely Ain’t Hunbots’ Week.
Sometimes I hear a whole slew of new advances in the scientific world. At such times, I find myself reflecting,
Man, this ain’t a good week to be a Creationist.
Well, much the same thought occurred to me this past week regarding MLMs:
Man, this ain’t a good week to be hawking a predatory, oughta-be-illegal business scam.
Not that there isn’t some major overlap between those two groups, I mean. Both groups operate along strikingly similar lines, feature strikingly similar indoctrination points, cultivate the same culture of wealth- and power-lust and idolization of leaders, take advantage of existing laws to be as sketchy as humanly possible, and treat their respective members the same way. And not to put too fine a point on it, but both sound absolutely awful to work for.
No, nobody should wonder why so many Christians get caught up in these fake “home business” scams. MLMs and Christianity are joined at the hip. To untangle the one is just about to untangle the other–as I myself discovered shortly after my deconversion!
Nor should anybody wonder why popular Christian writers like Rachel Hollis, author of the wildly popular book Girl, Wash Your Face, and Christian motivational writers like John Maxwell work with MLMs and give speeches at their conventions. They do it for the same reasons that actors start doing Christian movies.
None of this surprises us. But the following items just might, a little.
Starting With LuLaRoe.
Allow me to present some MLM news, starting with LuLaRoe (LLR). It’s a clothing-based MLM. They make shapeless clothes and leggings that a lot of women thought were super-soft and comfy a few years ago, but which now suffer from a variety of quality flaws. For a while, the huns who got in on LLR early were rolling in money. But the dream didn’t last. Now, LLR circles the drain. The company has lost tens of thousands of huns, with many thousands more waiting for their refunds from the embattled company.
Vice put out a report about it that ought to get people up to speed on why that decline is 100% deserved. Meanwhile, Vox revealed last month that at least 100–and probably way more–LuLaRoe sellers have had to declare bankruptcy as a result of their MLM’s predation. While they suffer, LuLaRoe continues to seek new fall gals to LuLaCatch the hot LuLaPotato (don’t pick it up, pick it up; quick pass it on, pass it on, pass it on…).
On the plus side, the growing outcry against LLR might even stop them from trying to sue mommy bloggers who speak out against them, who knows?
Here’s the Vice report, by the way. It’s good.
Why Women Are Quitting Their Side Hustle: Leaving LuLaRoe
AdvoCare just went from being a Network marketing company to an online seller that gained it’s [sic] reputation from the people they just cut off.
Lance Smith, apparently a big name in the MLM world (?)
Another big huge news item involves an old-guard (seewhutIdidthar?) MLM called AdvoCare, which shills overpriced supplements.
In 2017, furious former sellers filed a class-action lawsuit against AdvoCare. They alleged that AdvoCare functioned as an illegal pyramid scheme because it focused way more on recruiting new sellers than on product sales. That lawsuit is still pending, apparently. (See this endnote about the distinction between legal and illegal pyramid schemes.)
But then, out of the blue a couple of weeks ago, AdvoCare announced that they were dropping their multi-level compensation scheme. They claim that secret discussions with
reptilians the Federal Trade Commission (FTC) prompted this decision.
Now their 100,000 sellers can still sell their snake oil, but AdvoCare won’t pay any commission on anything their downline does. Retail commissions will be AdvoCare’s only compensation to sellers–there’ll be no more “multi-level” commissions paid on the sales made by the sellers’ downlines. All of a sudden, recruitment doesn’t matter at all with AdvoCare! Even if a given hun has tens of thousands of sellers in their own downline, they won’t get a red cent from those folks’ sales.
That new emphasis represents a serious problem for AdvoCare’s huns, because that’s where the serious money comes from in any MLM scheme. (See this endnote about why.)
Seriously, y’all. On a clear night, weeks later, you can still hear the outraged huns’ screams of frustrated outrage.
A Quick Peek At Herbalife’s Current PR Disaster.
The big news for Herbalife, one of the big-name old-school MLMs, concerned a paper that came out last month in the Journal of Clinical and Experimental Hepatology. The paper’s writers titled it, “Slimming to the Death: Herbalife®-Associated Fatal Acute Liver Failure-Heavy Metals, Toxic Compounds, Bacterial Contaminants and Psychotropic Agents in Products Sold in India.”
“Hepatology” concerns the study of the liver, gallbladder, biliary tree, and pancreas. So you know that dis gonn’ be good.
Here’s the abstract:
Herbalife® is a global nutrition and weight management company selling and marketing nutritional and weight loss supplements. The United States Federal Trade Commission described Herbalife® in 2016 as a scam disguised as healthy living. Herbalife®-associated liver injury was reported from multiple countries in the West. India is fast becoming the largest growing market for Herbalife® products, expected to surpass the United States in sales revenue. We report the first case of a fatal acute liver failure from the Asia-Pacific region, in a young woman who consumed Herbalife® products over 2 months. We also present unsettling data that showcase heavy metal contamination, toxic compounds, psychotropic substances, and pathogenic bacterial contamination in similar Herbalife® products in India. The growth of Herbalife® in India and expansion of its nutrition clubs in major cities that promise fake health benefits portend a serious public health concern.
Basically, a young woman entered the hospital after taking Herbalife supplements. She died not long after of what I think translates into the vernacular as “her liver g0t-damned asploded on her.” The doctors got their hands on some Herbalife–not the stuff she’d taken exactly, but a bunch of other Herbalife products–and tested it. They discovered that it contained heavy metals, toxic chemicals and psychotropic drugs, and “highly pathogenic bacteria.”
And This Weird Thing About That Weird Sex Cult.
Remember NXIVM and its weird, predatory leader, Keith Raniere?
It turns out that he’s got a deep history with MLMs.
Yep! In his early years, the future leader of the infamous wellness-themed sex cult (and Ayn Rand fanboy) shilled for Amway!
Then, Raniere opened up his very own MLM back in 1990. Called “Consumer’s Buyline, Inc.,” or CBI, it signed up about 250,000 people across America. They joined some kind of buyer’s club thing. In reality, their buyer’s club operated much more like an illegal pyramid scheme.
Members paid a USD$219 membership fee each year. They usually signed up under existing members. That gave them access to what Raniere claimed was special pricing on all kinds of consumer goods. In turn, they sold memberships to new people. Those new people became their downline. Then they earned commissions based on whatever their downline purchased through the club. Raniere claimed that “the average person. . . makes under $1000 a year” in his MLM’s literature. However, he also claimed that really active recruiters might make up to $24,000 a year through downline commissions.
(Thank goodness Costco doesn’t operate like that.)
In 1992, he got in trouble with 23 states including New York, along with a couple of different federal agencies. Then, in 1996, he admitted no guilt to the New York Attorney General’s office, but did pay a USD$40,000 settlement and agree never again to operate any “chain distributor scheme.”The kicker?
After CBI shut down, Raniere immediately became a consultant for other MLMs.
For years after that legal entanglement, he stayed out of court for the most part. Behind the scenes, though, he taught his followers that Bill Clinton had been part of the huge plot to bring down Consumer’s Buyline.
The more this whole story unfolds, the more WTF it gets!
MLMs: the Perma-Blinking Turn Signal on the Highway of Life.
I’m no fan of MLMs generally. For years now, I’ve wondered when they will finally hit the wall. Will Americans return to sanity before our government finally gets the Amway-shaped stick out of its ass and starts doing its job to protect American citizens and taxpayers from their own greed, desperation, and ignorance?
These news stories, especially that last one, give me a little hope that maybe the pendulum is swinging in the other direction. At one point, in my state (Idaho), something like one in six households in the state was involved in one of these idiotic pyramid schemes. Almost nobody was actually making any money, however. That revelation fits neatly with the statistic that MLMs themselves (sometimes) put out in their official income disclosure forms as well as with other analyses that tell us two things:
- Generally, 1% or fewer huns will actually ever make a living wage on an MLM; almost everybody in fact loses money.
- If you ain’t the MLM’s founder or someone who joined an MLM right under the founder, then you ain’t ever gonna be in that less-than-1% club. Period. Guess where that leaves you?
And Maybe Even Better News.
I don’t know what the headcount is now, but with LuLaRoe about to burst into flames, Herbalife being linked to a death from impurities and contamination in its products, and now the negative press I see all over the internet about the MLM-sodden past of Keith Raniere, plus seeing how people are just sick to death already of the constant stream of solicitations on their social media, well, y’all, it makes me hope very much that maybe our days of being taken for a ride by MLMs are coming to a middle.
Years ago, I was almost recruited into Amway by a friend. In a lot of ways, I think of that experience as one that helped solidify my deconversion. See, I noticed all the similarities between Christianity and Amway–just as I’d noticed the similarities between fundagelicalism and the anti-abortion culture war as a whole.
I don’t think I’m unique in that regard, either. I think that other people notice this stuff just like I did. And I wonder what the MLM crash-and-burn will do to Christianity’s existing decline–and I wonder if that decline will, in turn, add fuel to the MLM flames.
It’s a nice thought for a midweek evening, at least.
NEXT UP: It’s about time that people might be getting sick of MLMs, because holy cow, there’s a bad trend I’m noticing lately in the MLM world. If you thought you’d seen the worst an MLM hunbot shill can do, well, get ahold of yourself because it’s going to be a bumpy ride next time. See you soon! (Until then, check these out! And this! MWAH! <3)
- MLM: Multi-Level Marketing.
- Upline: a person who has recruited other sellers beneath themselves on the pyramid. All of their recruited sellers then become their own downline. In turn, the upline is downline to someone else above them. Only the people at the very top of the pyramid lack an upline.
- Hun: a seller of MLMs, especially one looking to recruit others. They’re called that because they often open a sales pitch attempt with “Hey hun!” or the like. Also, huns tend to use a ton of emojis in their social media posts and messages. Also: Hunbot, because they use a lot of copy-and-paste from their upline, which makes them sound quite robotic. The name is just a little bit derogatory. (Back to the post!)
Legal vs. Illegal Pyramid Schemes.
- Pyramid scheme: a predatory business model that is usually illegal. It’s called that not because of its business structure, which has more and more people at every lower rung on the corporate ladder, but because it focuses on recruitment so much and has an endless-chain model of recruitment. There’s no limit to how many levels the pyramid can have at its bottom because literally any level of downline can create their own downline in turn.
- Illegal pyramid schemes: these don’t feature any products at all. They’re just an exchange of money from downlines to uplines with a heavy emphasis on recruitment. Its downlines each shift up a level with each iteration of the scheme. Finally they become the ultimate upline and get all the money invested into the scheme. (See: the Airplane Game.)
- Barely-legal pyramid schemes: usually called MLMs or network marketing. Their sellers get paid for both retail sales and recruitment. These schemes organize themselves around a pretense of selling products to retail customers outside of the scheme. Ironically, victims might have a much higher chance of making money on an illegal pyramid scheme than on the barely-legal MLM variants! If a judge decides that the scheme’s pretense of retail sales is just a front, and that huns are really buying most of the MLM’s products, then it crosses the line into illegality.
- Why in hell are MLMs even legal if they’re such obvious scams: Ask your friendly neighborhood Republican Party officials about it. Maybe they can tell you. (Democrats too, sometimes.) (Back to the post!)
Where the Money’s Kept in an MLM.
Almost all MLMs feature overpriced, substandard products that can’t possibly compete on their own on the consumer market. That means that very few huns in any MLM actually concentrate much at all on retail sales. Instead, they all chase after new blood for their downline. Huns themselves buy the vast majority of their company’s products, but they only do that because almost all MLMs require their sales force to reach a certain regular sales target in order to remain eligible for commission. That’s why, when huns quit their MLM, they also generally stop buying its products as well. Without a serious incentive to do so, almost nobody thinks these products are worth the price being asked for them.
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PS: In case anybody needs this: Do not EVER ingest essential oils, put them directly on your skin, OR, FOR THE LOVE OF SMALL ORANGE KITTENS, ALLOW THEM INTO ANY OF YOUR BODILY ORIFICES, no matter what an MLM hunbot tells you. Don’t diffuse oils or melt scented wax in a home containing small children or animals–without checking with your pediatrician/veterinarian. Especially beware of lavender and tea tree oil; they can be quite toxic to animals. Don’t take supplements without checking with your doctor or pharmacist first.