Do you want to be the person at the party everybody avoids?
Do you want to alienate your friends and acquaintances in just a few quick weeks?
Do you want even your family to stop returning your calls and texts?
Then multi-level marketing is for you!
Cindy, my boss, asked the staff to meet her at Panera Bread to learn about a business opportunity that could really pull us out of the dire straits we had been in. Mind you, she was co-owner of a company that provided medical, tactical, and explosives training to military and police personel around the globe. In conjunction with the FBI, our company trained the first Iraqi SWAT teams after the invasion in 2004. We were good. Really good. Now she was calling us to a Panera Bread for a business opportunity?
The pitch was from ACN. They primarly broker cellular and TV services. They were also pushing their video phone – a hulking black plastic lump to sit on your desk. They bragged about how Donald Trump had endorsed them on The Apprentice. Their pitch was for each of us to sign up at $200 for the priviledge of hocking their services to our friends and family. ACN really pulled out all the stops for this one-day event. They had flown in their Diamond Elite (or whatever) sellers who bragged about how they mostly sat on the beach in the Bahamas counting their money.
I sat across the table from this guy, taking in his tan, custom-tailored yet still ill-fitting shirt, and gaudy diamond earings. I listened to him pitch how he made hundreds of thousands of dollars. He relayed from the mouth of God how video phones were the way of the future and we could get in on the ground floor. It was an brand new exploding market – you just had to say “yes” to particpate and get rich! (after writing a $200 check, of course) In just the next breath he explained how everyone was buying these same services anyway, why shouldn’t people buy them from us? When his prepared material finally wrapped up he had identified me as a “hard case” in the group. I had held his eyes, level, unflinching through the whole thing. He saw the lack of spark and excitement, the failure to drool over his lifestyle. I had showed him the calm hard eyes of a skeptic.
Naturally he confronted this by asking me “So what are you most excited about?” – a sales cliche so obvious and worn out I imagine Egyptians rolled their eyes at it from hearing it too often. “I’m not excited.” I replied, letting the ensuing silence hang in the air like the alien mothership hovering over the White House in a made-for-TV sci-fi movie. My colleagues at the table, mostly admin staff and one of our police trainers, all stared at me. I held his gaze. “Do you not want to work for yourself?” “No, I already do.” In truth, I ran an autonomous department within the company, but it was close enough for this situation.
Cindy, piped up “I’ve already signed up! I already got 3 of my neighbors to sign up too so I’ve already broken even.”
“Do you have a business card?” I asked him. “No, actually, I don’t” he flustered, his hands involuntarily patting his breast pocket, then his over-priced jeans. “Well, here’s mine. I run a real business. I sleep at night knowing I provide real value. You call me when you want a real job.” I stood up and walked out.
My immediate cohort, the first guy I hired to join my department, hustled to follow me out the door. We got in my Jeep and peeled out of the parking lot.
I was pissed. I was scared. “I can handle working for someone else. I’m happy enough being crew on someone else’s ship.” I blurted, “But what am I supposed to do when the captain of the ship is drunk? That’s what this feels like.”
The company had, in fact, navigated rough waters in the past year. We were chasing big contracts, but none of them had come through. We hadn’t lost, but neither had they been awarded. We were stuck in limbo. The week before Christmas we had an all-hands meeting at which Kevin & Cindy, husband and wife owners, told us they couldn’t make payroll that Friday. If any of us needed to quit on the spot, they’d understand. We had to take care of our families.
We all nodded quietly and filtered out of the room. Over the course of the next 24 hours, each of us individually approached Kevin or Cindy and told them how long we could work without pay. For me it was 6 weeks. Others were shorter, most were longer. We were that kind of crew. We looked out for each other. The loyalty ran deep. Over the following months things improved somewhat. Backpay was caught up, but we all knew things were tight. Too tight.
Multi-level Marketing companies prey on weaknesses. They know just how to shake a cocktail that tastes like hope, but is fueled by your own insecurity. Don’t you want freedom from your crappy job? Don’t you want to live a better life than you have? Isn’t everything you have not enough?
The saddest part to me is that they can be wholly defeated with simple skepticism and critical thinking.
Kangen Water, pH adjusted to help you live longer by avoiding oxidation in your cells? Press them for exactly where in Japan the studies were done. Ask for the studies themselves. Even just the name of the institution. Any concrete detail, really. They can’t provide it. I know, I’ve been on the phone with their national director of sales. All I got was well-crafted deflections that broke down into outright frustration and hostility when I wasn’t detered from seeking documented facts. I watched a 30-year clinical psychologist on the verge of retirement pour his life’s savings into their scam in just over of a year.
Herbalife? Simply Google the myriad of lawsuits, in particular the ones championed by billionaire Bill Ackman who has made it his personal mission to thwart their ongoing predation on our most vulnerable neighbors.
Amway. Organo Gold Coffee. Legal Shield. doTerra. Anything Big Pie Marketing cooks up. (It looks like they are, thankfully, not still around.) All of these.
Big Pie’s audacity really bowled me over. They had a particularly thinly veiled trick. They released a whole new product every year. And utterly abandoned the last one. “Simply turn your downline onto this new opportunity and they’ll forget all about the other one. It’s so last year anyway. We have to keep up with what’s new!” How is that for a guise over an unsustainable, sell-new-sign-ups dependent, empty shell?
Yes, some people make literally millions of dollars at this. That’s why these companies keep re-labeling themselves and coming back around. There’s so much money in it they settle major lawsuits and get right back to business. It’s like taking candy right out of a kid’s mouth and just as heart-breakingly wrong.
That national sales director for Kangen Water tried to convince me that multi-level marketing was the same as any business – they just cut out the other layers and replaced them with one-on-one marketing. Right, so the classic Manufacturing, Distribution, Retail, and Marketing layers were all replaced by Marketing, Marketing, Marketing, and Marketing. They definitely weren’t just exploiting the technical loopholes to keep their nose legally clean, avoiding the “magic words” and entry fees that would identify them as what they really are – a pyramid scheme. Pyramid schemes are illegal, and for good reason. MLM has simply found a way to skirt the regulations by a pixel or two and continue to exploit hopeful souls who lack the intelligence, education, or confidence to resist their charms.
Truly, I cannot fault the individual. It is frighteningly easy to get sold. You are approached by someone you know and trust. They say all the right things, have all the pre-conceived and memorized rebuttals to your objections. In a matter of minutes – maybe an hour – they have you sipping the Kool Aid, then snorting it, then dealing it yourself.
The products themselves are often decent. It’s the morally bankrupt scheme you buy into that’s the problem. In fact, having a tangible product is a critical defining factor between illegal pyramid schemes and multi-level marketing.
That’s the difference right there. Have you noticed who is not on my list? Tupperware. Cutco knives. These are *Direct Marketing* companies. One-on-one sales isn’t the hallmark of doom. The mark of the beast is when you’ll make more money by signing up your friends to sell beneath you, pushing you higher up the pyramid, than you would selling the product or service itself.
I found out just yesterday that a friend of 10 years is “Really excited to share that she is starting her own business in Health and Wellness. It’ll allow her to spend more time at home with the baby. And of course, she’ll be able to help you with your health and wellness too.” My alarm bells were going off even before her Facebook Live announcement. The grandstanding leading up to it over the past couple days reeked of fish all by itself.
My heart breaks for her. They just moved from Denver to my town. They miscalculated their budgets in the course of the move – a simple enough mistake to make. So upon arriving in town, with a newborn, she had to pick up a part time job to balance the books. It’s no surprise somebody whispered the “magic words” in her ear – not the ones that would bring legal trouble for the company, but the magic words that spoke to and exploited her precise yet all-too-common situation. I need just a little more money. I wish I had more time for my family. I see people who run their own businesses and the perks they have.
I’m heartbroken and worried because she has already swallowed the bait. I heard the tone of performance. Regurgitating memorized lines in her video that was meant to look casual. I saw the hope – that thin hope that if she just keeps doing what she’s taught it will work out. She’ll be ushered into the promised land of Scrooge McDucking in money without lifting a finger. It’s a hope founded on desperation and insecurity. It’s the cousin of the same hope and desperation that drives people to join cults and gangs. A feeling of inclusion. Hope for the future. A path out of the situation you’re in.
The reality of the situation, however, is grim. I have lost friends who got involved in MLM’s. There is only so much you can tolerate when they come over to a party at your house – a party you invited them to. A party with other friends they haven’t ever met. They ask if you have just 20 minutes to watch this really cool video. While you’re watching an over-hyped sales pitch, they shoot off a text. Then their phone rings. It’s their upline. Their handler. Calling to coach them through the objections you would already be making if they hadn’t just stepped outside. Everybody is awkward. Your other friends wonder if you just suckered them into a timeshare sales pitch. You’re mortified of what your other friends think. Often nobody has the Old West Cowboy backbone to stand up and say “Stop the video. Wait a minute. This is not what we’re here for.”
I didn’t make up that story. This happened between two fraternity brothers of mine. Their relationship died that night. They don’t hang out. That was 7 years ago. I didn’t happen to be there, but I was invited.
Yes, it is possible to beat the odds and make a living at multi-level marketing. A handful of people even get rich. So when a friend looks me in the eye and says “What? You think I can’t beat the odds and be one of the success stories? You don’t believe in me?” My answer is simple:
“No. I believe your efforts are better spent practically anywhere else than helping to perpetuate such a thinly veiled evil scheme.” Hell, I’d prefer you go full-time into politics, pouring your heart into championing the exact opposite of what I believe in. At least you’d be participating in a worthwhile conversation by comparison.
I do run my own business. A real business. I provide a skilled service to my clients. It’s the same business that used to be an autonomous department of the training company. I took it over as my own and since have grossed $1,000,000. I’m not bragging. As a business owner, I know that “gross” means I don’t actually have a million dollars. I know first-hand the brutal hardship of entrepreneurship and I am disgusted by these dream-peddlers.
Get a real job.
Stay away from my friends.
Loveland Business Coach says
So does that mean you aren’t coming to the “party” I invited you to?
JK. I too get frustrated with the hopium addicts. Even more frustrating to me personally are the small business owners that get involved in a MLM and market the MLM more than they market their own business.
No joke. For me, another forefront frustration is at networking groups being pitched the MLM “business opportunity” rather than the product. I’ll hold my tongue if you want to pitch the product, but the moment you start pitching the business to the *other business owners* present, I draw the line.
Jamie Leben says
Agree with your many good points, post is borderline tl;dr though 😉
I did a few years in Amway in my early 20s getting involved for the reasons you state. Agreed that the hard questions usually cause the conversation to fall apart.
I also firmly believe that if you work on any other business as diligently as you’re expected to in an MLM, you’re more likely to be successful in the other business. This is due to the requirement of really having to identify and meet a market demand yourself, and having to adapt based on the feedback of those potential customers, rather than pushing someone else’s one size fits all agenda.
A good point… How would you phase a TL;DR?
Perhaps “This is my case against MLM’s. If you are involved in one, stay away from me and everyone I know.”?
I will have to tell you my quixtar story sometime. Painful to say the least. And, no, I never joined.
Tim Washburn says
You may be my new best friend, but not the type that I invite over for a new opportunity!
Thank you for taking the time to write this blog.
Kris Maloy says
Well written sir–always enjoy reading your essays!
Perhaps you know about this but if you have a pyramid scheme that requires 6 new signers to advance you, that can only happen up to level 12 before you’d need (drum roll)–more than the entire population of the earth to sign up!
Yes, these things are a dead end and sadly they prey upon people who are desperate and through subtle slight of hand convince them that their friend base is nothing more than a business opportunity and when you treat your friends that way you wind up not only with financial hardship but without the support of the connections of your loved ones and support network.
Preach on and maybe a handful of people will hear you, mate!
Indeed I did know that! …but only because I had just watched John Oliver’s glorious piece on the matter: https://www.youtube.com/watch?v=s6MwGeOm8iI
Yes, it’s a half hour. And it’s worth every minute.
Chris Mospaw says
I used to have friend get suckered into MLM stuff all the time. The sly “party” invites, the “conferences” etc. Some companies even had high level “distributors” who were supposed to be famous athletes. They would get trotted out to tell everyone hos [Company X] made them millions. I never cared about sports and never heard of these people, so no draw for me.
After a handful of fishing expeditions where I was the fish, I developed my defense against MLM. It has been 100% foolproof for me.
When asked if I’m ready to sign up, I always answer “yes”. And then I tell them my conditions:
– I will sign up in one year and not a day sooner
– The person inviting me must still be involved with [Company X]
– If in that year I am invited to another [Company X] event, either overt or covert, I will not sign up
Nobody has ever lasted the year. And for at least ten years, I haven’t even been approached. At least that I remember. I suspect my sense of impending MLM invitation is strong enough that I’m able to simply avoid it before it starts.
MLM is evil and my heart goes out to the people you mentioned. At best, it’s a job you have to pay to get. And you should never pay to get a job.
Well written post. I admire your bold honesty- both in the story, and in your writing on the subject.
That experience with the fake man trying to be Mr. Charisma and win you over sounded revolting, irritating, and straight outta 1994 (which was when I had my first AMWAY ‘friend’ approach me). Lame and laughable, until, as you experienced, its promises take hold of a desperate friend. Well done on the article, and for standing your ground, and for doing your civic duty to call Shenanigans! on a clear criminal BS artist trying to prey on people looking for hope.