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Hey there. I just saw an ad for an upcoming documentary about LuLaRoe, and now I want to talk about MLMs. MLM stands for multi-level-marketing, sometimes called pyramid schemes. A couple of years ago, the Washington Post published an article about how MLMs are hurting female friendships.
A few thoughts from the article:
According to a report by Jon M. Taylor of the Consumer Awareness Institute posted on the Federal Trade Commission’s website, less than 1 percent of MLM participants will profit, a far worse rate than for “legitimate small businesses,” of which 39 percent are profitable over the lifetime of the business. “MLM makes even gambling look like a safe bet in comparison,” the report states.
While the financial dangers of getting involved with an MLM are well-documented, the personal ones are harder to quantify but just as real. Namely: You could end up alienating every Facebook friend you ever had.
18.6 million Americans are involved in direct sales, and a staggering 74 percent are women.
These women are not setting out to annoy their friends. Many want and need flexible work options because of family or other responsibilities, but it’s challenging to find a standard job that fits within school hours or an unusual schedule, especially if you’ve been out of the workforce a few years to care for a child or relative. MLMs exploit many fault lines around women and the economy — women remain underpaid in the workplace and undervalued as stay-at-home mothers. MLMs promise instant success, camaraderie with other women in a “team” environment and a career identity, trappings that standard jobs typically require years to develop.
My own experiences with MLMs:
- Growing up, my parents definitely gave me the impression I should steer clear of getting involved with anything that had a whiff of downline, though I feel like they were also careful not to complain about MLMs or mock them. I assume they were careful because they knew people who were involved with MLMs.
- When I was a kid, my aunt and uncle sold Amway for awhile, but eventually stopped. I didn't live near them, but remember hearing about it. When I was older I asked them about it and they said they had no regrets — they loved the encouragement and sales training they felt they received.
- One of our wedding gifts was a screwdriver set made by Amway (from one of my in-law's friends, not my aunt & uncle). We still have it and use it.
- When I lived in Provo, going to BYU, I did freelance design work, and at one point designed an annual report for Usana, a Utah-based MLM that sells supplements.
- When our oldest kid, Ralph, was a baby, an acquaintance from our church congregation came over to pitch me and Ben Blair on Amway. We knew that's why she was coming over, and we knew we weren't interested, but we didn't want to be rude, and figured she could practice her pitch on us.
- A ton of MLMs are based in Utah — and therefore automatically connected to the LDS church and the Mormon population. I don't really understand the history of that but it makes me sad and uncomfortable.
- I've been to dozens of parties for all sorts of MLM products. Whenever I can, I try to be supportive and buy something that I would really use. I don't feel like I've ever been recruited to a downline at these parties. I've just felt peer pressure to buy something.
- One of my neighbors in New York was an Avon lady. She would drop off a catalog and I would order things once in awhile. Again, there was never a mention of recruiting me to sell. She was not a Mormon, and I don’t associate Avon with Mormons (maybe because it’s not based in Utah?). I mention this just to acknowledge that MLMs are popular across lots of communities, not just Mormon ones.
- I'm regularly approached by women who sell MLM products and hope I'll mention them on social media. But I feel MLMs are damaging to women and have tried hard not to promote them. It seems like not-promoting them would be easy to do, but I can think of a few times where I didn’t know that a company was an MLM — it’s not always obvious.
My questions about MLMs:
- Is there such thing as a legitimate MLM? Is there one that's widely respected? Do they make the Fortune 500 lists? Are investors wary of MLMs?
- Is there a significant difference between direct selling and MLMs? Someone told me recently that Mary Kay counted as an MLM and I was surprised. I don't know why — I don't really know anything about the company and don't personally know any Mary Kay reps. I guess I just never heard about a Mary Kay downline, so I thought it was more about selling than recruiting.
I suppose I think the same thing about Avon and Tupperware; I think of those companies as focused on selling products, not focused on developing downlines. Am I way off here?
- It seems widely known that MLMs have sketchy reputations, and based on the numbers quoted in the article, it sounds like product sales aren't very successful in the longterm. So to me, it seems confusing why someone would create a product and then create an MLM structure to distribute that product. It seems like such a bad long-term business policy. I'm unclear on why so many companies choose to do business this way.
I feel a conflicted when I purchase and enjoy using an MLM product.
When I lived in Oakland, I enjoyed using a particular nail product — it's basically a nail sticker but it's made out of nail polish. I really liked how long the product lasted on my nails, that I could apply the decals whenever — even late at night — and didn't have to disrupt my work day with a manicure appointment. I also liked that I could remove them with regular nail polish remover.
I wished the designs were better. In fact, I thought about reaching out and pitching them to do a Design Mom product series just so I could have options that I would love the look of. But I learned they're sold through a downline, and I changed my mind about reaching out.
The woman I know who sold them is awesome — a friend from church. She's never approached me about them or tried to push them on me. Instead, I approached her whenever I wanted some. I bought about 10 sets of them, and I guess I felt okay about it because I know I actually liked the product. But yes, I would have much preferred if the company decided to restructure with a more traditional, non-MLM setup.
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What about you? What are your experiences with MLMs? Have you ever bought an MLM product? Have you ever sold MLM products? Have you ever seen relationships damaged from MLMs? Do you agree with the Washington post article? Will you be watching the documentary about LuLaRoe? I'd love to hear your thoughts.
On Design Mom Lately
-Dinner on the Grill: Moroccan-Spiced Chicken Kabobs with Whipped Feta Sauce
-Make it! Embossed Folders Using Recycled Cereal Boxes
-A thoughtful and happy home tour in Austin, Texas
Here Are A Few Things I’ve Wanted to Share With You
-'Lying Flat': Tired Workers Are Opting Out of Careers and Capitalism. This is an article in the NYTimes. I’m very interested in the changing nature of work and careers.
My own work has been affected by the pandemic in a big way. My primary income for the last several years was Alt Summit, an in-person conference held in the first quarter of each year. But I couldn’t hold Alt Summit in 2021, and may not be able to hold one in 2022 either. So I’ve got some big decisions ahead of me.
-Related, I’m thinking about this tweet:
-A Twitter thread featuring an ICU nurse at one of the biggest hospitals in the Bay Area (click through to read the whole thing):
-"Moms have spent about 3x more per day than fathers on child care during the pandemic, and reduced their time spent working by 4-4.5x more than fathers did because of child care." We are so far from gender equality.
-The river that supplies water to 40 million people in 7 states, irrigates +5 million acres of farmland, supplies Las Vegas with 90% of its water, Tucson with 82%, San Diego with 66%, and large portions of LA, Phoenix & Denver, is running dry.
-The funniest thing on the internet lately are the responses to this tweet. You could easily spend a very enjoyable hour seeing what people come up with for each character. I’ll include one example.
-“When two men who recovered from COVID-19 later sought surgeries to treat erectile dysfunction, researchers…analyzed their penile tissue and found the virus was still present months after infection.” It was only a small study, but spread the word! From what I understand, men really enjoy erections. Maybe this news will convince them to get the vaccine.
-Graphic bodycam video kept secret for 2 years shows a Louisiana trooper pummeling a Black motorist with a flashlight as he screams "I'm not resisting" — leaving him with a broken jaw, wrist and ribs. Police didn't investigate the attack for 536 days.
-Wall Street Is Squeezing Out First-Time Homebuyers. I’m starting to see headlines about this and want to learn more. Here’s another story about this in the Atlantic. Are you following this at all?
-The Right-Wingers Who Admire The Taliban. The Proud Boys, Boogaloo Boys, MAGA crowd, Tucker Carlson, etc., all embrace the same pro-patriarchy, anti-woman sentiment as the Taliban. As Shannon Watts points out: It’s this ideology that’s made women in the US 21 times more likely to be fatally shot than women in peer nations.
-I heard from a few people that wanted to see our Family Portrait video, but aren’t on Instagram. So Ralph kindly put it on Vimeo:
-Ben Blair is back in France (he was in California for a week helping Ralph get settled at Berkeley), and he brought the Photosynthesis Board Game in his suitcase. We’ve been enjoying it so much! (And it’s gorgeous.)
-Hahahah!
-No tweet has ever been more true:
Feel free to share your thoughts in response to anything above. I hope you’re having a lovely week.
kisses,
Gabrielle
I think the difference between an MLM and a company like Avon or Mary Kay is that with an MLM the seller is required to purchase a lot of the product upfront. I believe that Avon and Mary Kay don’t work that way. The seller just places the orders she receives. I’m not 100% sure of this, but I think it’s correct.
There is a podcast by one of the women (Roberta Blevins) in the new documentary called, "Life After MLM." She goes over the way Avon and Tupperware used to be different, more sales of products vs building a downline, but today function more like MLMs. It's a fascinating podcast and covers so many of your questions!