Pink Cadillacs and Pipe DreamsHow Multi-Level Marketing Companies Scam Women

The Dream (Courtesy of Stitcher)

From Avon and Mary Kay to friends selling makeup, leggings, and other products on social media, multi-level marketing companies (MLMs) have always attracted women who face challenges working outside of the home. In the first half of the 20th century, MLMs were presented as a way for these women to earn an income, and the gender balance is still skewed: Women throw 92 percent of in-home sales parties, according to the Direct Selling Association. Yet, it remains unclear if women can ever earn real money from MLMs. A 2017 report by Consumer Awareness found that 99 percent of MLM sellers actually lose money, and while these companies shy away from being labeled pyramid schemes, the only way to make money is by recruiting new members. So, why are these companies still so popular?

That’s the question at the center of the Little Everywhere and Stitcher podcast The Dream. Audio journalist Jane Marie and her team of reporters trace MLMs from their origins in women’s beauty products to modern times, centering the experiences of women who have sacrificed material goods and personal relationships in pursuit of an elusive financial gain. The Dream also dives into the White House’s connections to MLMs, particularly Education Secretary Betsy DeVos’s family’s relationship to Amway.

Last month, President Trump was sued for allegedly encouraging vulnerable people to invest in sham companies, so there’s no better time than now to speak with Marie about the gendered history of MLMs, how social media has changed their business models, and why there are more MLMs than ever before.

How have MLMs evolved over time?

Early MLMs were products, such as feminine and Black beauty products, that [weren’t] in grocery or drug stores. [There] were [also a lot of] products that could be used in the home, like kitchenware and cleaning products. This was [in the] late 1800s [or] early 1900s, before the Food and Drug Administration was in everyone’s business and there weren’t big-box stores on every corner. After the success of Madam C.J. Walker and other Black [women’s] beauty products, a lot of companies thought, “These ladies are sitting in their houses anyway, we could hire them to go to each other’s houses and sell shit.” Now there are MLMs for every type of product, including internet service and health insurance. It’s still heavily [targeted] toward more-feminine products, but not exclusively.

How did your personal connection to MLMs shape the podcast?

I’m from [the] small town of Owosso, Michigan. My great-grandmother [sold] Avon, and I have [many] family members who’ve [participated in] MLMs. The hard thing about this world is [that] people [only] talk about it in a positive and advertorial way, with motivational quotes on Facebook. It was good to have people I know well who are more open about their successes and failures than the folks who say, “Fake it till you make it.” Research [has found that mostly] everyone is faking it because no one really makes money. I talked to a woman I knew in junior high who’s pretty high up in 31, a Christian-faith accessories company, and the next person I interviewed was the fill-in pastor at her church who had a horrible experience [with] Mary Kay. They were telling opposite stories, but they spend Sundays together, so it’s interesting.

How are MLMs marketed toward women?

A lot of people are writing us saying, “You need to go to Utah because it’s so big in the Mormon community, in Christian communities, and in military households.” Companies present themselves with, “Set your own hours. Be your own boss. You can have whatever life you want and run your own company on your terms.” But it really appeals to people who don’t have other options: Folks who can’t work a nine-to-five because they have babies at home, a husband in Afghanistan, or are running their households [alone]. Who does that end up being a lot of the time? Women.

This language of empowerment—#girlboss and all that shit—sounds nice, but these people have limited options. Also, to start an MLM, all you need is a little bit of cash: a hundred bucks and you can be your own boss. You don’t have to have a high-school diploma or a college degree. [They don’t even conduct] criminal background checks. But it snowballs into a ton of expenses [because] these companies don’t often allow enough of a markup or commissions to make any of that worth it. At every level, they’re ripping you off. They’re not that far afield from The Power of Positive Thinking, Think and Grow Rich, The Secret, and other “if you think it, you can do it” motivational movements. Those worlds are a Venn diagram.

 Journalist Jane Marie (Courtesy of Little Everywhere)

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What was it like joining the makeup MLM LimeLife for the podcast?

[Initially], LimeLife looked kind of legitimate. [Then], reporter Mackenzie Kassab went to a convention in San Francisco with 60 other sellers. She thought it was a sales meeting [about] how to boost your business, [but the convention] had nothing to do with selling makeup. It ended up being group therapy with lots of crying. One lady was selling makeup to get her dad a headstone. We’ve [been] going back and forth with LimeLife’s chief empowerment officer because it was a horrible, depressing, and manipulative experience for her. We’re having a hard time getting them to respond on the record.

How has social media changed MLMs?

It has changed them, but I don’t know if it’s translating into more money because these companies don’t release any numbers. Social media has created more targets for companies to recruit. [Before] social media, you had to have a real life social network to sell to. You could either go door-to-door or go to your aunts, cousins, best friends, or church. [Now, it’s] “I have all my former high-school classmates who have moved all over the country who I can sell to.” But I’m not actually sure it sells any more products [because] the recruitment fees, not the products, are the purpose [of MLMs].

Why are there more of these companies than ever before?

Zero regulation, zero oversight. In the 1970s, the Federal Trade Commission (FTC) tried to crack down on a lot of these companies. Amway beat the FTC, and established precedent for companies to frame what they’re doing as legitimate. Beating the FTC emboldened the industry, [and] since then, the FTC has sort of thrown up its hands. MLMs are also huge internationally now. There are a lot [of MLMs] in Mexico and Southeast Asia. With the internet, globalism, and neoliberalism spreading, the same things that make a housewife a good mark are also what appeals to people in developing countries who are struggling to enter a new capitalist world.

This language of empowerment—#girlboss and all that shit—sounds nice, but these people have limited options.

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What connections have you found between the White House and MLMs?

How many hours do you have? There was a recent New York Times article about Trump’s company ACM. His family has been involved in multiple MLMs. Ben Carson had one. Betsy DeVos is from the Amway family, which goes back decades. Her father-in-law was the finance chair of the Republican National Committee in the ’70s when he was on trial for fraud with the FTC. His partner Van Andel was the head of the Chamber of Commerce in the ’70s—and now his son is. It’s very intertwined. That “every man for himself” type of thinking—there’s money to be gotten so go get it however you can and don’t worry about the little guy—is basically Washington, D.C., right now. It’s not coincidental that so many people in the cabinet and in Washington have MLM connections.

What do you hope listeners take away from The Dream?

There’s no way to make money [from MLMs]. You won’t be better off [doing MLMs] than getting a regular minimum-wage job. In fact, you’ll lose nights and weekends and relationships because recruiting people can be devastating for families and friends. We fought for two-and-a-half hours [with] the head of the Direct Selling Association (DSA), which is the big lobby. He said, “It’s not a job.” I said, “That’s so unfair because these companies put themselves out there as if they’re a viable career opportunity.” He said, “No. It’s just an activity,” which is legal doublespeak. The numbers show that you don’t make money unless you started the company.

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by Hannah Steinkopf-Frank
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Hannah Steinkopf-Frank is a Chicago-based freelance writer and photographer. Her work has appeared in the Chicago Tribune, Atlas Obscura, Columbia Journalism Review, In These Times, JSTOR Daily, Jewish Currents, and Paper Magazine, among others.