For decades, multilevel-marketing companies had it easy. Cutco knives, Tupperware containers, and Pampered Chef bread mixes were inoffensive products sold at weeknight wine parties and, later, in themed Facebook groups. For the most part, they were an unremarkable part of women’s lives.
Multilevel marketing—a form of direct selling in which a major chunk of a person’s income comes not from the sales they make themselves but from the sales made by people they recruit into the company—was often regarded as exploitative by consumer advocates, but it rarely encountered a serious threat.
During the pandemic, distributors for many MLM companies have used this lack of pushback to their advantage: On Instagram and Facebook, women have tried to persuade their followers to use their stimulus checks to join a company that sells shampoo or weight-loss products. They have used economic collapse as a recruitment tool, offering MLMs as the solution to lost income and increased precarity.
For Heather Rainbow, a 20-year-old chemistry student, these appeals were a wake-up call. In May, she made her first anti-MLM TikTok video, green-screening herself in front of what she claims is the 2018 income-disclosure statement for the hair-care company Monat, which shows that 94 percent of its distributors had an average income of $183 that year. She now considers herself something of a consumer advocate and misinformation combatant, posting about companies such as Cutco, Younique, Arbonne, and Lipsense to her 113,00 followers.
“That was my first TikTok to really get views,” she told me. “I had no idea that people on TikTok would be so receptive to the anti-MLM message.” (I reached out to several of the companies named in this article, and most, including Monat, did not respond to my requests for comment. A spokesperson for Arbonne told me in an email that regulators “have recognized the legitimacy of multi-level marketing for decades.”)
The same social networks that multilevel-marketing distributors are called upon to exploit—their friends, their family, their followers, their “mutuals”—are now the social networks through which women are pushing out a completely different message. (Though men participate in multilevel marketing as well, they do so in much smaller numbers.)
On Reddit, Facebook, YouTube, and TikTok, a huge community has coalesced around the anti-MLM sentiment, bringing together disenchanted former salespeople, curious independent researchers, and thousands of women who are just tired of getting Facebook messages about selling essential oils.
#AntiMLM is still diffuse and disorganized, but its rise poses an existential threat to multilevel-marketing companies that rely on the constant recruitment of new participants. And its newfound popularity is already presenting challenges for the community, which critiques capitalism on commercial platforms: If criticizing multilevel marketing is a good way to get views and followers and personal attention, how long will it be before that becomes the reason to criticize multilevel marketing?
On the Reddit forum r/antiMLM, members mock the industry all day long, referring to distributors as “hunbots” who lead off every conversation with a faux-warm “Hey, hun.” There is plenty of anger and caustic humor, but the community is tightly checked by moderators who insist that all screenshots have names and identifying information obscured.
Self-promotion of any kind is entirely forbidden, as is commentary on the quality of MLM products, good or bad. Shaming victims is out of bounds, and nobody is painted as a dupe: “If the post does not highlight a core problem with the MLM business model, it does not belong here,” the rules warn.
The moderators restrict discussions that take away from the mission of the subreddit—to map out and dissect MLMs—and encourage conversation about the system over anecdotes about low-level bad actors. The first major gathering place for people who shared the anti-MLM sentiment, the forum was started in 2011, but had only 2,000 members before suddenly taking off in August 2017.
Now it has more than 680,000 members and serves as the hub for a growing, informed discontent. Rainbow, the TikTok creator, refers to the Reddit community as the “OG anti-MLMers,” and calls it “the heart of the movement,” responsible for most of the significant work….Read more…..
“The fine line between legitimate businesses and pyramid schemes”. The Chicago Tribune. Archived from the original on August 9, 2020.Karp, Gregory (February 10, 2013). “The fine line between legitimate businesses and pyramid schemes”.
The Chicago Tribune. Archived from the original on August 9, 2020.“Multilevel Marketing”. FTC. May 18, 2021.Multi-Level Marketing Businesses and Pyramid Schemes”. FTC, Bureau of Consumer Protection. January 4, 2018. Retrieved October 16, 2020.DuBoff, Leonard D. (2004).
The Law (in Plain English) for Small Business. Sphinx Pub. pp. 285–286. ISBN 978-1-57248-377-4.Xardel, Dominique (1993). The Direct Selling Revolution. Understanding the Growth of the Amway Corporation. Blackwell Publishing. pp. 1–4. ISBN 978-0-631-19229-9.
“The Perils Of Multi-Level Marketing Programs”. Texas Public Radio. October 4, 2017. Retrieved February 16, 2018.“Legging company, LuLaRoe accused of misleading consultants”. Valley News. Retrieved February 16, 2018.O’Regan, Stephen (July 16, 2015).
“Multi-Level Marketing: China Isn’t Buying It”. China Briefing. Dezan Shira & Associates. Retrieved September 19, 2018.“MLM law of China ‘Prohibition of Chuanxiao'”. gov.cn. September 3, 2005. Retrieved September 19, 2018.Carroll, Robert Todd (2003).
The Skeptic’s Dictionary: A Collection of Strange Beliefs, Amusing Deceptions, and Dangerous Delusions. John Wiley & Sons. pp. 235–236. SBN 0-471-27242-6.Taylor, Jon M. “Public Comments regarding proposed Trade Regulation Rule (16 CFR Part 436)” (PDF). Consumer Awareness Institute.Chung, Frank (March 1, 2017).
“WorldVentures multi-level marketing business claims to have 10,000 Australian members”. News.com.au. Retrieved September 19, 2018.Herb, Greenberg (January 17, 2013). “From High Energy Clubs to Dashed Dreams: Herbalife Tales”. CNBC. Retrieved September 19, 2018.
“Amway: Selling the Dream of Financial Freedom”. Knowledge@Wharton. May 5, 2011. Retrieved September 19, 2018.“Lewis: Herbalife selling ‘dreams’ and ‘stories'”. The Denver Post. January 8, 2013. Retrieved September 19, 2018.
“Selling the American Dream”. CNBC. Retrieved September 19, 2018.Valentine, Debra A. (May 13, 1998). “Pyramid Schemes”. FTC. Retrieved September 19, 2018.Coenen, Tracy (2009). Expert Fraud Investigation: A Step-by-Step Guide. Wiley. p. 168. ISBN 978-0-470-38796-2.Salinger, Lawrence M., ed. (2005). Encyclopedia of White-Collar & Corporate Crime. Vol. 2. Sage Publishing. p. 880. ISBN 0-7619-3004-3.
“The Bottom Line About Multilevel Marketing Plans and Pyramid Schemes” (PDF). FTC. December 2012. Archived from the original (PDF) on September 20, 2018. Retrieved September 19, 2018.
Not all multilevel marketing plans are legitimate. Some are pyramid schemes.
Multilevel Marketing”. FTC. May 18, 2021.“Multilevel Marketing”. FTC, Bureau of Consumer Protection. January 4, 2018. Retrieved September 19, 2018.“What’s Wrong With Multi-Level Marketing?”. Vandruff.com. Retrieved September 19, 2018.
“‘Person to person’ sales plans… “dream” opportunity or business nightmare? [Amway Ad]”. Life. Vol. 68, no. 7. February 27, 1970. p. 51.rown, Caryne (December 1992). “Door-to-door Selling Grows Up”. Black Enterprise. 23 (5): 76.Charles W. King; James W. Robinson (2000). The New Professionals. Prima Publishing. p. 80. ISBN 0-7615-1966-1.Sheffield, Michael L. (February–March 1999).
“Comp Plan Conversion:Direct Sales to MLM Compensation Plans”. Direct Sales Journal. Retrieved September 19, 2018. (citing Neil Offen, president of the Direct Selling Association)“US Direct Selling in 2009” (PDF). Direct Selling Association. 2010. Retrieved September 19, 2018.
“Direct Selling Organization Membership”. Direct Selling Association. Retrieved September 19, 2018.Ziglar, Zig; Hayes, John P. PhD (2001). Network Marketing for Dummies. Hungry Minds. ISBN 0-7645-5292-9.Pareja, Sergio (2008). “Sales Gone Wild: Will the FTC’s Business Opportunity Rule Put an End to Pyramid Marketing Schemes?”. McGeorge Law Review. 39 (83).
“MLM History”. network-experience.net. January 24, 2014. Retrieved September 19, 2018.Brown, David (November 27, 2007). “Marketing group merely ‘selling a dream'”. The Times. Retrieved September 19, 2018.Berkowitz, Bill (January 28, 2009). “Republican Benefactor Launches Comeback”. Inter press service. Retrieved September 19, 2018. (in reference to BERR vs Amway (Case No:2651, 2652 and 2653 of 2007) in point of objectionability”c”)Dokoupil, Tony (August 2, 2008).
“A Drink’s Purple Reign”. Newsweek. Retrieved September 19, 2018.Ryan, Leo; Wojciech, Gasparski; Georges, Enderle, eds. (2000). Business Students Focus on Ethics (Praxiology): The international Annual of Practical Philosophy and Methodology. Vol. 8. New Jersey: Transaction Publishers. p. 75. ISBN 0-7658-0037-3.Peterecca, Laura (September 14, 2009).
“What kind of business do you want to start?”. USA Today. pp. 4B. Retrieved September 19, 2018.O’Donnell, Jayne (October 15, 2010). “Fortune Hi-Tech: American dream or pyramid scheme?”. USA Today. pp. 6B. Retrieved September 19, 2018.FTC (November 8, 2016)
“FTC Returns More Than $3.7 Million to People Harmed by Pyramid Scheme“O’Donnell, Jayne (February 10, 2011). “Multilevel marketing or ‘pyramid?’ Sales people find it hard to earn much”. USA Today. Retrieved September 19, 2018.Del Valle, Gaby (October 15, 2018).
“Multilevel marketing companies say they can make you rich. Here’s how much 7 sellers actually earned”. Vox. Retrieved October 15, 2018.Singletary, Michelle. “Why multilevel marketing won’t make you rich”. The Washington Post. Retrieved October 22, 2018.ফখরুল ইসলাম (Fakhrul Islam) (April 11, 2015). “সব এমএলএম অবৈধ (All MLMs are illegal.)”. Prothom Alo. Retrieved May 29, 2020.Jeffery, Lyn (March 21, 2001).
“Placing Practices: Transnational Network Marketing in Mainland China”. In Chen, Nancy N. (ed.). China Urban: Ethnographies of Contemporary Culture. Duke University Press. pp. 23–42. ISBN 978-0822326403.Xu, Lehman Lee. “Chinese Law | China: Direct Sale”. http://www.lehmanlaw.com. Archived from the original on January 21, 2015. Retrieved September 19, 2018.直销企业信息披露网站. zxjg.saic.gov.cn.
Marketing Programs To Buy: