The Feed: Multi-level marketing or pyramid scheme?

Last night in Australia, the SBS Vice show The Feed did an electric piece on multilevel marketing schemes in Australia. This is a review of the episode and some of my own musings.

Sun, surf, sand. The iconic Gold Coast region of Queensland, Australia is the backdrop of this episode and has been part of my ‘backyard” for the last 10 years. The Gold Coast is where the action happens – it’s the holiday zone, the place where people from all over Australia and the world come to for vacation but also, where many southerners move up to enjoy the mild sub tropical climate, access to great amenities and fun parks and a laid back lifestyle. The Gold Coast is renowned for its white sandy beaches, designer skyscrapers full of restaurants and boutiques, palm trees and external showers along the beach front, fish and chip shops and people in summer attire – all the time. The Gold Coast has also been the forefront of some of the most renowned frauds and scams in Australia. It’s just that type of place. It attracts those types of people.

So it’s no shock to me to see that the money shot from the opening scene of the show is a hotel conference room full of people with their arms in the air, in an almost Evangelical uprising chanting, “I love money, and money loves me”.

That’s the thing with MLMs – they’re cults, they brainwash, they’re fanatical, like Evangelical Christians believing that the ‘power’ of the Lord manifests through chanting, singing with your arms raised to the air in a quasi submissive “I’m your servant, God” type analogy.

The question is asked early on – can you really earn a six-figure salary, retire at a young age and go and live on a tropical island with a yacht by working at one of these companies?

The short answer is no – and I have no hesitation in saying that. Yes, I do acknowledge that there are people at the top of the ladder of any MLM/pyramid scheme that do make money, no doubt – but the vast majority do not. And that’s one of the issues. The fact that earning money, not a specified amount (as it is illegal to misrepresent potential earnings in order to gather recruits) is a unicorn in the grand scheme of things, and distributors often end up with greater losses over any alleged earnings.

The premise of the show is threefold – to identify and learn about this phenomenon of MLMs on social media, to follow the aspirations of a few new recruits to well-known MLM Enagic (who sell water filters), and to bankroll a salesperson into SeneGence, the well known MLM for makeup product LipSense, the long wearing lipstick.

We get introduced early on to a couple of high rollers in Enagic. We see the glitz and glamour – the suave hotel rooms, the champagne, the grotesquely huge swimming pools, snorkelling, the flash cars, the yachts, the fancy shoes and handbags and dresses, and the photographer taking photos of seemingly regular people, dolled up to make it look as if they have more than they truly do.

We know this is a common tactic of MLMs. We know based on endless research and post MLM testimonials that they love to suggest that there is a certain secret life, or secret cocktail for life you can develop when you get involved in an MLM. They can’t often say it because of legal reasons and the concept of providing inducement, but we can deduce that when someone hands you a brochure or pamphlet of this idyllic lifestyle they’ve achieved that they never had before that it may just be because of something new they are doing, and that new thing happens to be the MLM.

In this episode of The Feed, we also get introduced to a few people who are keen to get in on the magic. One guy talks about working 12 hour days Monday thru Friday and 8 hours on Saturday. He wants to spend more time with his family, do activities with the kids, and not be ‘a statistic’. The other guy we see spent $13,000 on a ‘fast tracked’ program because if other people can do it (as in, make money), then he can too.

This is one of the grand manipulations that occurs. One of the selling points, specifically the ones targeted at women, are that you can be a better person, a better mum, a better wife, a better [insert phrase here] if you have this MLM as a ‘side hustle’. You’ll not only be contributing to the family coffers, but you’ll be available for school pickups and drop offs and play dates, and home in time to make muffins with the kids and have dinner on the table ready for when your husband comes home. Reminds me so much of this image of the 1950s house wife…

Source: https://darlingmagazine.org/the-perfect-housewife-a-great-american-myth/

The Feed mentions this, that this concept of doing the MLM as a thing on the side is just a joke. In fact, be prepared to spend 8-10 hours per day “working the business” to try and achieve those achievables the MLM tries to push.

And that’s another thing – this idea that everything that can or should be achieved is based entirely and solely on your positive thoughts and your actions. This is such a bug bear for me, because in order for anyone to do my IRL job they need to have a lot of experience, an academic qualification and an ability to always be willing to learn and willing to adapt. There is no such thing as “I thought positively about it and it didn’t work so I’m going to go and think MORE positively about it.”

No. Just, no. This Law of Attraction shit is just that, shit. Now don’t get me wrong – I am all for being positive and being optimistic and having the cognitive ability to pull yourself out of a negative mindset. But that comes with the notion that you have an understanding of why you are feeling the way you do, identifying the triggers, and then working to remedy the issue, whether it be on yourself or an external thing you need to learn to live with in your life. There is no such thing as imagining $1,000,000,000 and it just materialising on your doorstep. If that was the case I would be extremely, extremely wealthy right now, as I imagine most others who dream of winning the lotto would also be.

That’s not to say that there aren’t ways for you to project positivity and optimism and for it to have an impact. I remember once as a first year uni student many many years ago, I got my first big person job in a call centre in a bank. I felt so important and so accomplished and so privileged to have such an important job with a very well known company in Australia. We obviously had lots of training and I still remember to this day when we started doing the training sessions for how we actually answered the phones, how we spoke with irate people etc – and I remember the trainer saying, ‘always answer the call with a smile’. Always speak to people with a smile, because they can hear it. And it’s true. You know yourself if your significant other calls and they’re having a terrible day or moment and they’re upset or angry or irate, the first thing you feel yourself doing is also getting upset and irate, and yet you can’t even see them. That’s because their attitude and behaviour can carry on to you, and you sympathise and you feel their anger. It’s human condition, it’s bonding.

But for anyone to suggest even remotely, that the reason a ‘small business’ has failed is because they didn’t try hard enough or want it enough is absolute baloney. There are so many factors that impact on whether a business is a success or not. And those overnight success stories don’t just happen overnight but are in fact several years and efforts and cultivation’s of different businesses that get that success story to where they are. Unfortunately though in the MLM world, this excuse of failing being attributed only to the distributor is one that is used to entirely absolve any responsibility the company has to the individual in any capacity.

Remember in my posts about the legal classification of an independent distributor in employment terms? Those posts, for reference are here, and here, and here. Well, that highlights some of the ambiguity and confusion these companies create purposely because putting them (the distributor) into a no man’s land category implies that there is little to no legislation to protect or cover the distributor and what they do is at their own risk. These caveats get ingrained in the language of MLMs so that when challenged, the ‘huns’ feel that this is part of the vernacular and don’t necessarily have cause for concern. It’s also easier to believe something when it comes from “compliance” then when it comes from an external, well researched piece of information because we don’t ‘speak’ in the language they’ve been trained in.

My favourite part of the entire program was when they bankrolled a real salesperson to sign up for SeneGence and for her to try and sell the product. She held the parties, the Facebook lives, the testing sessions and had a bunch of testing colours available. After a couple of months, she made only $11 profit. $11….for a product that is selling in excess of $30 per tube for product, which needs to have an “oops remover” or some other rubbish to get the long wear product off, and a gloss to apply over the three layers of super drying, mattifying, going into the cracks and crevices of your lips lipstick which when you get all these tubes of shit comes to something like $75 AUD…oh, and let’s not forget the $55 AUD startup kit fee and a yearly fee that gets charged to be part of the program.

One thing the show didn’t mention was the variety of ‘fast start’ starter kits that were available for purchase from the SeneGence website. These range from $95 – $1,355 AUD and were supposed to jump start the distributors into making profit quicker. The show did mention the amount of personal orders and non personal orders required to ‘keep active’ and qualify for commissions and boosts – in other words, Pay-to-Play.

All in all – a good foray into the MLM world, but I felt it was only brief. I know that the reporter was doing a lot of research and that potentially also the segment was limited to time, but any exposure of the true nature of MLMs is a welcome one. The Feed had a representative from the Consumer Law Action Group who indicated that much more work needs to be done on MLM and these grey areas that exist in their operation.

These days they don’t just spam our social media feeds, but they use aggressive tactics to push people to purchase in excess. Note the comment from the speaker at the evangelical event when he said something, and I’m paraphrasing here, but he said something akin to ‘money should not be an option’. He repeated the statement. So he’s saying that as an individual if you say you can’t afford to or need the money for an urgent bill that that’s not a good enough excuse to say no to an MLM? The burgeoning debt crisis, the current economic downturn in Australia and the constant increase in the general cost of living and expenses comes first. No MLM takes precedence over your own or your family’s economic and financial security.

And let’s just remind ourselves – you will not make money from an MLM. You will not make 6 figures from an MLM. You will not achieve economic freedom from an MLM. You will not have more freedom, or be a better parent, or live on a tropical island or own a yacht. You simply won’t. You will spend precious money on shit made from overseas laboratories, sometimes with unknown ingredients or ingredients banned for sale in Australia. ALL the money you spend will be effectively sending a commission to the person who you signed up under. You will have financial obligations to the company and the upline before you get anywhere near making a few dollars for yourself. So, stop with the delusion. Don’t listen to the #bossbabe bullshit. And keep your day job.

The Feed episode on MLMs can be found here: https://www.sbs.com.au/news/the-feed/multi-level-marketing-or-pyramid-scheme-consumer-advocates-call-for-tighter-rules

Get Rich Quick with The Feed on SBS VICELAND – Crownless Princesses post

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