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Lifestyle MLMs provide entrepreneurship, irritation

MLMs provide entrepreneurship, irritation

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Photo by Meghan Fuller

When full-time general manager Elizabeth Stewart* heard that a woman she followed on social media was making $10,000 a month selling Arbonne, she knew she wanted to give it a try.  

Arbonne is a wellness company that prides itself on being a green, multi-level marketing scheme. MLMs like Arbonne rely on consultants to not only sell the product but also to recruit people to join their sales team.

Marketing professor and Direct Selling Education Foundation Fellow Joanne Cao, Ph.D., said the top 20 largest direct selling companies account for about $14 billion in sales. She credits this popularity to a path to micro-entrepreneurship.

“I think people choose direct selling for several reasons, including being their own boss, flexibility, earnings in proportion to efforts, a lifestyle change or earn extra income or simply being advocates of the products or services they love,” Cao said.

Although Stewart did not feel qualified to sell the products, she said her up-line was supportive. All that her up-line required of her was to use social media and host recruitment parties at her house.

“I really loved the people selling with me, and I seriously loved the products,” Stewart said. “It felt good to promote and sell something that truly helped people better their lives. The only thing I really felt was difficult was reaching out to people who I knew probably did not want to participate and not being able to balance it with my current job.”

Women are often recruited through social media with direct messages, posts or stories, and the recipients of these messages have joked about the consultants on social media.

Senior elementary education major Brandi Bond tweeted, “there needs to be a spin-off of shark tank called snake pit but instead of investors buying into businesses it’s all girls who mocked you in high school having to pay you money for your suffering using whatever profits they’ve made from their mlm scheme of the month.”

While Bond said she does not have firsthand experience with MLMs, she said she believes “they are extremely predatory” after doing her own research.

“They target young mothers by promising them more time with their families, but 95% of MLM participants lose money in the long run,” Bond said. “It can spread like wildfire, and the false promises given by MLMs should truly be outlawed by the [Better Business Bureau].” 

Research published on the Federal Trade Commission website found that 99% of MLM participants lose money.

Cao said she believes MLMs get a bad reputation from moving one step beyond the direct selling model through recruiting tactics. Cao said this leads to the misconception that some companies use the MLM business model to create pyramid schemes, which are illegal.

“They provide no value to the customers as these companies make money off customers and not off selling the products or service,” Cao said.

When the FTC determines if an MLM has an unlawful compensation structure, the staff considers whether the MLM encourages consultants to purchase products for reasons other than to satisfy demand.

Cao said she enjoys moderating debates about MLMs in her principles of marketing class. 

“Students do have fruitful discussions regarding direct selling and MLMS, and I enjoy being on both sides of the coin when debating if MLMs offer value,” Cao said. “Despite its criticism and negative connotation, direct selling is a business model guided by a code of ethics and commitment to consumer protection.”

Junior media and entertainment arts major Anna Richardson said she was introduced to Arbonne through a girl she graduated high school with and began selling the products in college. 

“The girl who sold me Arbonne was super sweet, but I do find myself getting annoyed at Arbonne consultants’ constant social media promotions,” Richardson said. 

Richardson said consultants from MLM ItWorks! have also tried to recruit her multiple times.

“Each recruiter followed me on Instagram and then followed up by direct messaging me at a later time and date. In the direct message, most of the recruiters started by complimenting either my physical appearance, style or feed then moved on to telling me about how they were looking for girls to ‘mentor’ to sell products and make money ‘right from your phone,’” Richardson said.

Stewart said she was encouraged to utilize polls in Instagram stories. Stewart said she enjoyed this method because it allowed the customers to make themselves known instead of her seeking them out. Still, she thought the members of her team were too aggressive with their sales pitches.

“I know some consultants will reach out to people, and they will say no,” Stewart said. “Then they will message them again asking if they had changed their mind. I feel like that is a little too much and not really my personality.” 

Stewart quit after two months. Although Stewart never received a $10,000 paycheck, she said she still loves the products and is interested in selling it again in the future. 

“I truly have loved every product I have tried with Arbonne, and I will probably use it forever.”

As for how she feels about posts claiming MLMs like Arbonne are pyramid schemes, Stewart said she just laughs.

*Name has been changed to protect identity.

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