LuLaRoe, Arbonne, Zyia, Beachbody, Mary Kay, Avon, Younique, or even the vintage classic Tupperware—you may have already spotted the common thread—these businesses are all prime examples of the controversial ‘multi-level marketing’ scheme. Yet, there seems to be another common and concerning trend among multi-level marketers. Whether it’s athleisure wear, essential oils or even vegan cosmetics, these brands seem to be overwhelmingly targeted at female or female-identifying sellers. One Huffington Post article argues that as many as 3/4 of MLM representatives are women.
These businesses claim that by becoming a representative-you can sell their products to make cash while working from home, completing your studies or working around a flexible schedule. Many companies promise all of this, telling you you can enjoy the benefits of owning your own home business. Social media posts show recruits who claim that they enjoy perks such as affording luxury goods, mentoring others and enjoying training weekends in exotic locations!
So why is this a problem?
If you stay off Reddit, YouTube and have yet to encounter Amazon’s four-hour deep-dive documentary LuLaRich, an eye-opening foray into the colourful business practises of flashy legging brand LuLaRoe. In that case, you may have yet to discover the ins-and-outs of the hot button issue; the ‘multi-level marketing’ scheme.
As a quick recap —multi-level or network marketing is when a business doesn’t just make money by selling directly to consumers. Instead they build profits by recruiting representatives to invest in business products for resale to their own network of consumers. Where it gets tricky is that representatives are also encouraged to bring their own ‘down line’ of other sellers into the business. If people in your down-line are selling well, you get a cut of the profit. This normally requires a start-up cost, which could range anywhere from $50 for a basic package, to a whopping $5,000 investment.
MLM’s harshest critics maintain that there is little difference between this model and the illegal method of pyramid selling. However these companies can legally operate as long as most of their profit is coming from selling products to end-users and not from new recruits buying into the business.
It’s murky water and some MLMs have definitely landed themselves in legal troubles trying to maintain this fine line. The LuLaRich documentary comes out at a time when the business has faced multiple lawsuits of its own. Prior seller’s criticisms of the brand range from receiving mouldy leggings to being encouraged to sell their own breast milk to raise business costs. Not to mention the copyright feuds that have emerged, as artists have claimed their own work popped up in designs, sometimes in extremely unflattering places!
Despite the glossy Instagram posts from those at the top, it’s estimated by the AARP (American Association of Retired People), that around 74% of MLM sellers either make nothing or even lose money in the process..yikes! So we’ve established that the MLM may not be the golden business opportunity their proponents claim. But how and why are they targeting women?
The first issue seems to lie in their favourite terms: #girlboss, #bossbabe or #she-e-o. In co-opting the language of female empowerment, they claim to give women a legitimate business opportunity in which they can control their success without the glass ceilings and unfair opportunities that they often meet within traditional corporations. Their message is that if you put in the time and honest work, you can earn a profit!
This is a dangerous message that glosses over the very real systemic problems that young women still face in the business community. They use these inequities to lure women in, but don’t mention the vast numbers of women in the down-lines of their own business who struggle to make ends meet. Hey, if you can’t make money, according to LuLaRoe CEO Mark Stidham, it’s because you and your sales tactics are ‘stale’.
The second component seems to be their reliance on the ‘network’ aspect of the business. If you are a young mom who has just moved away from her social life in the city or a college student away from their hometown looking for a fun new way to make money, you might find an MLM enticing. Reps have even earned the nickname ‘huns’- a parody of their sickly sweet language and greeting of choice when approaching an old contact via social media DMs…
“Hey hun, it’s been a while, how are you?! What have you been up to?! XXXX. I’m fab. In fact, I started my own home business…..”
It’s thought that female friendships tend to be more based on emotional trust, connection and support, whereas men value time spent on mutual interests and activities. This may be an oversimplification, but if an old friend or colleague reaches out to you seemingly to reconnect or share opportunity, the rhetoric of caring, valuing friendship, and trust might lead women to accept invitations more easily.
This is not to paint women as gullible, or more vulnerable to bad business decisions. It could just as easily be the social expectation or guilt associated with feminine connections that drive these actions. The point is the social image of sisterhood becomes the life-blood of these businesses’ marketing tactics. They promise not only a money-making opportunity but a chance to meet a community of like-minded women, the promise of mentorship and bonding.
Finally, the MLM tends to rely on the cultural idea: that if you don’t have it all, you’re somehow inadequate as a woman. They tout the glossy and glamorous image of their reps, who manage to look polished, maintain family relationships or romantic lives and achieve their financial goals. It’s not just suburban mums who fall prey to this, as young women are expected to pay for rising tuition costs, put themselves through grad school or cope in a highly competitive job market, all while maintaining a 4.0 GPA, dazzling social life and attracting a following on Instagram.
MLMs are legal, but if you find yourself being approached by a rep, it may be time to ask some questions. Does this brand really have my best interests and those of women in general at heart? Can I really sell this product? How much would I have to pay upfront to set up my ‘business’? If you don’t feel comfortable with the responses, my personal advice would be to put on your own leggings…and run a mile.