Originally published at: Multi-level marketing schemes thriving around beauty products | Boing Boing
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MLM companies drive me to drink and undermine my faith in government. It is so plainly obvious that they are crooked pyramid schemes that do not benefit society and should not exist. They are multi-billion dollar crime rings operating in plain sight with their names on skyscrapers. Why are they allowed to exist?
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(╯°□°）╯︵ ┻━┻
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The short answer: their willingness to survive and ability to hire lawyers that tied the government prosecutors in knots, thus wasting government money, forcing the government to “negotiate” toward a settlement where they gave up some bogus concessions and keep on going. Or put it even more simply… Their willingness to survive and negotiate surpasses government’s willingness to prosecute to fullest extent of the law.
Look at Amway… They came up with “Amway Safeguards”, which with some “reforms” was able to stop FTC from prosecuting it as a pyramid scheme. The safeguards are then ignored by most of the industry while paying only lip service. (Look up the “10 sales a month” requirement, only token enforcement like requiring associates to “self-certify” their compliance, or even randomly telephone associates and asking the same question.)
Or more recently, Herbalife. Their settlement with the FTC a couple years back was stuff of legends, as their negotiated terms even PREVENTED the FTC spokeswoman from ever mentioning the words “pyramid scheme”. They got fined a few million, but they have annual revenue of BILLIONS.
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Excellent summary, thank you!
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They also have a lobby group, DSA, plus individual lobbying firms hired by various companies, that obviously wanted to twist the law into supporting them rather than controlling them.
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I remember some friends of mine got infected by Amway many years ago, and forced my girlfriend and I to sit through a presentation about how great it was. We were all, like, ‘umm, you know we sell drugs, right? Which kinda works the same, but people, you know, want them?’
They didn’t really have an answer for that. Or any money to buy drugs, for that matter
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The “genius” of MLM is cult-think doublespeak. They make their believers think “buy=sell”, “poor=rich”, and “black=white”.
Instead of selling the products, they were told to BUY the products would be building their business, thus “buy = sell”.
Instead of focusing on helping people with the bottom line (i.e. making money), the recruits were told instead to build up their network, which will make them rich. Thus “rich=poor”.
And finally, MLM doesn’t want the truth to be told. Herbalife recently sued a science journal into UNpublishing some research that did not make them look good. The paper was not retracted. It simply “disappeared”. The science was indisputable. The journal publisher Elsevier simply caved. Thus “black = white”.
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The additional evil of it all is that is acts like a pressure valve making people believe that there are employment opportunities when there aren’t, thus undermining the demand for stronger social welfare state. They are an IV drip access for “you wouldn’t be poor if you had tried harder” propaganda. It’s no wonder that specifically female-targeted schemes are blossoming at a time when a pandemic has forced women out of the workforce in record numbers.
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I have a handful of friends who here and there, over the years, have been sucked briefly into Amway’s orbit. Spat back out a year or three later, wiser and poorer and usually a bit embarrassed. I tell them I don’t blame anyone who got conned by professionals.
So watching “On Becoming a God in Central Florida” was surreal. It’s hard to keep track its wanderings: satire and documentary. I saw each of my friends in these characters. Chilling.
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Great podcast from a couple of years ago was The Dream:
(First season was about MLMs.)
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MLM are shockingly popular in Japan. To the point where you’ll hear about an Amway guy trying to recruit somebody, only to be told, “Sorry, I’m already in NuSkin.” They often prey on people who did not go to high school (which is not part of compulsory education here) and therefore have few career options. It’s not as cultish here, but there is a lot of pressure. I signed up for fun and then made a point of not spending any money or recruiting anyone until I stopped getting invited to parties, which actually took quite a while.
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What’s worse, the narrative is used to shame the participants into NOT reporting or complaining.
“Oh, you’re not succeeding? You must have not hustled hard enough! It’s obviously YOUR fault! It can’t POSSIBLY be the system or me!? How DARE you think that?! Repent!”
Or the more insidious, “how could you let us down” narrative…
“Oh, you want a refund and get out of the biz? How could you?! You are letting us all down! Think of all the people you will be disappointed at the next meeting. What would ____ say? How about _____? You just ruined their next monthly target!”
There is no “no questions asked” refund in MLM. ANY refund will trigger an intervention from the upline because they will face commission clawbacks, and obviously they don’t want that. So they will basically group-shame the person into staying.
Luck and system fairness was never part of their narrative. Yet nobody talks about how the various “success clans” in MLMs are all from the same family. It’s not because they are great sellers. It’s probably because they have insider connections.
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FWIW, Amway Japan was founded in 1979.
Bit of a funny… got a guy 5 years ago who threw a bunch of “alternative facts” at me trying to convince me I’m wrong, like claiming Amway Japan was founded in the 1960’s and is “the biggest company there (in Japan)”. Lots of tall tales. They often end up with figures that are couple 0’s off. And when you call them out on their BS, they start to sling mud.
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The Amway and NuSkin guys in Japan will always say, as like the first thing that they tell you, that Amway/Nuskin have the highest possible “AAA credit rating” according to the main credit rating agencies.
The word for credit in Japanese (信用) also means “trust,” so they proudly claim that this means that the company is extremely trustworthy. When I point out that the credit rating is just an assessment of their ability to pay back debts based on their solvency and previous credit history, they seem a bit bemused.
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Marketing by adjacent social proof.
In the US, it’s usually done by “we have a lawyer, he said we’re okay, so we must be legal!”
Then came ZeekRewards (which ruined the careers of SEVERAL prominent MLM attorneys, who got sucked into endorsing it, not to mention several MLM “advocates” who were later revealed to be receiving a monthly stipend to “neutralize” any criticism or questions in the public.)
But then, MLMers are fond of finding any sort of positivity they can use to market, even if it’s just barely related. I’ve seen someone who claimed to have been on a 7-year “hair journey”. The truth: she joined Monat 3 months before the post. 
And when they can’t find any, they will invent something outright. Couple years ago, one Nerium associates claimed actor Ray Liotta improved his skin through use of Nerium. Ray Liotta sued both Neium and unnamed number of associates who repeated the claim. I think they settled out of court.
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Why can I only like this once??!!!?
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Tis a sad fact of life that you have but one heart to give.
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