Multi-level marketing companies and the disinformation they sell
This rebroadcast originally aired on September 30, 2021.
But for many people who sign up, they quickly discover a problem.
“Their entire industry is founded upon disinformation,” Amanda Montell says.
And that disinformation is metastasizing into conspiracy theories.
Jessica Hickson, former It Works distributor.
Transcript: Jessica Hickson On The Perils Of MLMs
Jessica Hickson runs a successful YouTube channel where she shares about her experience with multi-level marketing schemes (MLMs), and warns others about the perils of MLMs.
When she left It Works in 2020, she lost everything: her income, friends and daily routine. In January of this year, with encouragement from her neighbor, she began sharing her experience on YouTube. Below, she tells her story:
My name is Jessica Hickson. I am 30 years old. I currently live in St. Louis area and I was a part of It Works for five years.
[Tape from Jessica’s It Works marketing videos]: “Hey guys, I just wanted to make a quick video and tell you guys my why. Why I decided to join It Works and why I do what I do.”
It Works sells a variety of … what they call health and wellness products. They were initially known for their skinny wrap, is what they call it. So it’s just a wrap you put on that allegedly contours you.
[Tape from Jessica’s It Works marketing videos]: “Anyway, so I tried this wrap and in the morning I took it off and I was like holy crap. It works. It really works!”
I actually didn’t know what an MLM was before I joined one. I just saw my friend posting about it and she was talking about money that she was personally making. At the time, my husband had just gone to active duty and we were at our first duty station and so we were sharing a car.
I was nannying here and there, but other than that, it was really hard for me to work outside of the house with his schedule. So I thought, if this is my friend and I know her personally and she’s making money with it, then I might as well give it a shot because I can’t work outside of the house really anyway. I was like, all right, let’s do this. I’m going to do whatever it takes. I did research on how to be successful.
I think the difference in my story and other people’s stories when they were in MLMs is that the majority of people we know lose money. But the difference with me was that I was bringing in more money than I could have ever imagined bringing in with a regular job. And so that was a large part of me … sticking it out. Because I thought if I’m making this amount of money, other people can, too.
I saw red flags along the way. But when you’re surrounded by everyone who believes the same thing, you’re taught to turn off that voice inside your head that it’s telling you these are red flags, you need to run away.
We didn’t actually have to, like, carry an inventory, which is one of their big selling points. However, with that being said, we were highly encouraged to keep product on hand in case someone wanted to buy it off hand or to show that you were using the products. And a lot of leaders wouldn’t even speak to someone beneath them if they weren’t running their monthly auto shipment.
The compensation plan was structured in such a way that if you weren’t maintaining ranks, you weren’t getting bonuses and you weren’t making a significant income. So a lot of people had a huge incentive at the end of the month to buy a bulk order of products in order to maintain that rank so that their paycheck wasn’t cut in half the next month.
The biggest thing with the products is that they’re all made out to be a quick fix. I have a before and after photo that is floating around, it works because I did have good results with the products. But the problem with it is that they are leaving out huge details about my weight loss. So in the before photo, I had just had my daughter. And I had two babies in two years.
And I wouldn’t go as far as to say that I had an eating disorder in the photos that are circulating of me right now. But I would say that there were times that I went a little more hungry than I should have or I worked out far too much, you know, just to have those before and after photos to show people that my products are working.
My husband was deploying. And at the time I had, I think, a two and three year old. And so the months leading up to his deployment, I just wanted to spend with my family. I didn’t get on any of our team calls, which we had one weekly. And so my husband ended up leaving.
I was talking to my upline shortly after. She had called to do like a check in on me and just say, how are things going? And at that point it was very fresh and new, him leaving. So I was a wreck. I was just crying. I was like, I don’t know how I’m going to do this.
And then at the end of the call, she just said, OK, well, I just wanted to let you know that I have removed you as a leader in our team page because we need someone who’s going to lead by example. And you’re not doing that right now.
Everything that someone above me said was taken as fact.
[ARCHIVAL TAPE] It Works promo video: “It always works. Everything about our company works. The compensation plan works. The people work, we work, the products, all of the above. I love this company.”
So even if I truly in my heart believed that it wasn’t true, I had to portray it in a way that it was true for my team. And then once you do that so much, you start to believe it yourself.
[ARCHIVAL TAPE] It Works promo video: “The biggest obstacle everybody needs to overcome is your belief in yourself.”
MLMs would not exist if they weren’t able to tell any lies at all.
What are MLMs?
Amanda Montell: “MLMs, which stands for multi-level marketing, also known as relationship marketing, direct sales, I often refer to them as the legally loopholed fraternal twin of the pyramid scheme. They are these pay-and-recruit organizations powered not by salaried employees, but by coaches, affiliates, distributors, international business owners, whatever sort of euphemistic label the organization chooses for its recruits who are lured in with the promise of this amazing opportunity to become a ‘mompreneur.’
“As often non-working wives and mothers are the target for most of these MLMs, they can earn a full-time living with part-time work. All they have to do is pay a buy-in fee and then meet certain monthly quotas. … They need to unload product. It doesn’t matter on who, they could buy it up themselves. And they also need to recruit their friends and family to become sellers themselves.
“The problem is that when you have so many people constantly recruiting, recruiting and recruiting, the market floods exponentially with the dearth of too many sellers. And you find a very small group at the top of this pyramid shape that are making money at the expense of a screwed over mass at the base.”
How are MLMs today different from MLMs of the past, such as Amway or Mary Kay?
Amanda Montell: “MLMs are expert rebranders. And so while groups like Amway and Mary Kay and Tupperware, their sellers were the sort of Suzy Homemaker type that you might picture in the ’40s and ’50s when MLMs were promised to be the best thing that happened to women since they got the vote.
“Now, MLMs exploit the sort of Pinterest feminism and natural, holistic, organic proclivities of a younger audience. MLMs will have chicer, updated packaging. They will use language like Girl Boss, Boss Babe, Fempire, SheEO. They’ll capitalize on whatever trendy pseudo-feminist buzzwords are resonating with people at the time.”
On the ‘cultish’ behavior behind MLMs like LuLaRoe
Amanda Montell: “There was a lot of language at play here that made the company so much more than a company and so much more than a scam. So MLMs are not just your average financial scam. They are these complex and life consuming organizations with a language and a culture of their own. They have these strong and pervasive ideologies that are missionary in character. And they have these founding leaders that that recruits come to worship on the level of a spiritual guru.
“These leaders are thought to be all-knowing, charismatic, enlightened. And there are measures in place to make sure that you do not question them. Everyone in the company is uplifted with labels to make them feel like they’re superior to everyone else in the economy. And there are labels there to lambast everyone who’s not involved with the business.
“In fact, recruits are encouraged to either get people they know involved or sniff them out of their life. So incredibly co-dependent relationships form within these groups, especially because financially you’re depending on the selling and recruiting of everybody above and below you. So under that type of pressure, things can get quite cultish.”
On how MLMs can spread conspiracy theories
Amanda Montell:“Think of a Venn diagram with MLMs in one circle. Anti-vaxers, wellness warriors, new agers in another circle. And classic conspiracy theorists, say QAnoners, flat-Earthers, Holocaust deniers and the like in the third circle. The convergence there is a deep mistrust of mainstream institutions. Whether that’s bureaucratic business, the mainstream media, the government, the health care system. During times of social crisis and turbulence — and I think we’re in one of those times right now — alternative affiliations tend to spike.
“We saw that in the late ’60s and ’70s with the Vietnam War and the civil rights movement, the Kennedy assassinations. And now with so much ideological separation and political turbulence, the pandemic and certainly the internet, there is now a cult for everyone. And if you’ve lost trust in these mainstream institutions, if you’ve internalized a message of sovereignty — the idea that you should take your own health, your own life, your own career into your own hands — you’re going to be able to find others who believe the same.”
On solutions to stop the spread of disinformation from MLMs
Amanda Montell: “MLMs are legally loopholed because of a precedent-setting case involving Amway from a few decades ago. The government is incentivized to keep their ties with the direct selling association because they have very strong political ties and donate handsomely to mostly Republican presidential candidates coffers. So there is this sort of toxic symbiosis between the direct selling association and the government there.
“The government is not really motivated to completely shut down the direct selling association or MLMs in general because they benefit from the industry. I also want to comment on the commenter from before that not every MLM will employ equally cultish tactics. However, the direct selling association in general is its own sort of pyramid scheme.
“Because let’s say you get involved with one MLM and it doesn’t work for you. Odds are the pattern shows that you’re going to get involved with another one. That’s what a lot of people do. And just because one given MLM may not have negatively affected you, it doesn’t mean it didn’t negatively affect lots of other people. I often like to make an analogy to toxic one-on-one relationships, abusive relationships. You can have a very good relationship with someone who used to abuse other people. So it’s all about perspective.”
From The Reading List
Bustle: “LuLaRoe Isn’t Just A Scam — It’s A Cult” — “I first learned of the ‘leggings cult’ in the small hours of a 2017 winter morning. I was approaching the event horizon of a Facebook black hole when I came across a post that sent shivers down my spine: my former high school English teacher was trying to shill a scam to her hundreds of digital ‘friends.'”
BuzzFeed News: “Gen Z Moms Are Building Their Brands Around QAnon” — “Last June, Alexis, a 23-year-old mother of two from Tennessee, created an Instagram account aimed at sharing the bogus narratives tied to QAnon, which she had recently discovered.”
This article was originally published on WBUR.org.
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