As an adolescent my neighborhood was rocked by two separate tragedies. In two different years, friends of mine's fathers committed suicide. In both cases, these men were having career struggles and decided to put a lot of their time, money and effort into multi-level marketing "opportunities," one of them being Amway. No one else in the neighborhood was as involved in MLMs, and no one else in the neighborhood died that way in those years, leaving our entire neighborhood highly skeptical of MLMs, especially Amway.
When I graduated from high school in 1993 I decided to check out "turn key mail order business." This led me to two highly questionable practices, first Herbalife and then later an actual mail order scam. When I called up the number in the Little Nickel for the first turn-key mail-order business, it turned into an Herbalife recruitment very quickly.
Already skeptical of Amway, I took the Herbalife business claims at face value and decided to give it a try, with the caveat that if I couldn't make money off of sales myself, I wouldn't recruit anyone into my downline. As trained by my upline, I printed out thousands of leaflets and with the help of friends and family canvased the windshields of the parking lots in my county with these "lose weight now, ask me how" leaflets. The calls started coming in, and using the script from my upline, I sold people "Cellular Nutrition" and "Thermogetics" dietary supplement kits.
I had return customers, and had a clientele of a few dozen people all together. At first people were very impressed with the product (I myself enjoyed the "cellular nutrition" as well.) I had numerous friends approach me, saying that they had heard about how successful I had been, and how they wanted to get into my downline. I put them on a waiting list to get into my downline, and explained to them I wasn't sure how legit Herbalife actually was, and that if I could get it to work for me, I would recruit them right away*.
Then the business collapsed. The biggest problem was that after about three months, return customers started complaining that the supplements did not come with the amount suggested in the sales pitch I used from my Herbalife upline. The most glaring example is one of the three products in the Cellular Nutrition kit was a protein shake. I was trained to sell one canister as a one month's supply. This shake was to replace meals 1 or 2 times per day. But the shake canisters only contained 20 servings!
I had to go back to the drawing board and redesign my product offerings. But the problem was NONE of the products aligned up correctly for any sort of resale. The other parts of the Cellular Nutrition kit came in strange, nonsensical amounts as well. The Theromogetics came in two separate pills that had to be taken together, but the amount in the two separate bottles couldn't match up in anyway that made sense. The best case scenario was that Herabalife hadn't seriously thought this product line through for the end seller, which implied the worst case scenario, that Herbalife never intended to make money through the sale of their products outside of their downline in the first place!
Intentional or not, Herbalife did indeed seem to be a pyramid scheme, where recruitment was king and no products were designed to be sold outside of people suckered into joining Herbalife. With all my customers gone and my reputation tarnished, my Herbalife up line disowned me, with two disturbing statements:
- "The real money is in recruiting in your downline. You aren't doing that, so this is not going to work out for you."
- "I known you are Mormon, and I know Amway is a big Mormon thing. I can see why you want to recruit your friends into Amway instead of Herbalife, Herbalife isn't as big."
Apparently he didn't hear me when I told him I would never do Amway, or maybe he assumed I was as sleazy and two faced as he was. What is strange though is how he considered Amway to be legitimate. I was done.
So I decided to give the Turn Key Mail Order Business one more try. I sent off an SASE to a PO Box as advertised in the Little Nickel. The response (which looked like something from the 1950's) stated "If you send me $10, I will send you everything you need to start your own Turn Key Mail Order Business, and you will never have to send me any money again afterwords, nor will there be any more required training."
I sent in the $10, full well realizing it was some kind of scam, but wanting to know more about how the scam worked. What I got back read "The last letter I sent you, and this letter as well, are the business that I promised you. All you need to do is take out space in the want ads like I did and do the same thing, and you will have people sending you $10 in the mail, just like me." This simple mail order scam helped me understand exactly what Herbalife and other MLMs are: an "endless chain" scam. Endless chain scams ignore the whole concept of market saturation, assuming an infinite population to profit from. Endless chain scams include all Ponzi and Pyramid type schemes in general, especially MLMs.
By the late 90's I was serving a mission for The Church of Jesus Christ of Latter-day Saints (LDS) in the Western Pennsylvania area. In a small town outside of Pittsburgh, a local LDS congregation was purported to have an "apostasy" problem, and my first assignment was to that congregation, probably because I was about 4 years older than most of the other missionaries and had a year of college. At first I made the same observation the other missionaries had made, which is that there was a very large number of congregation members who wore USA-flag ties, every Sunday, and that they regarded themselves as a special group within the congregation. They called themselves "Constitutionalists," and had libertarian political views - including the idea that one should avoid paying taxes, which is antithetical to LDS teachings, and indeed a point of apostasy. There was associated apostate phenomenon, such as unauthorized meetings of Constitionalists in the Chapel after official Church services.
Then while having lunch with one of the Constitutionalists, she started using "residual income" language that was very familiar to me. I clammed up, not saying anything, and listened carefully. Afterwords I told my companion "she's the problem right there. She's doing a multi-level marketing scheme, and the product they are using is far-right literature. She is the center of it, the rest of these people are in her MLM downline." He scoffed at my suggestion, doubting that something as insignificant as an MLM could be leading to the potential excommunication of half of a congregation. But a year later that same companion, who had become one of the highest ranking missionaries in the mission, found an excuse to come visit me: I had been 100% correct on my analysis, and another talented missionary had found it necessary to root out the problem.
Going to college in the mid 2000's I began to realize how politically potent MLMs had become. They had significantly corrupted the GOP (by way of Amway) and had a strong influence even over the Clinton administration (by way of Herbalife.) I was doing an internship for school with Indymedia when they participated in and helped organize some of the biggest anti-war protests in history, and I started to realize that there was a fine line between the political corruption caused by organized criminal enterprise of Amway (and other MLMs) and the corruption caused by the military industrial complex, especially through the Devos family:
The Bush Dynasty was in no small part funded by Amway, and the Bushes had actually been involved in selling Amway to their pyramid scheme victims:
But George W. Bush with his total disregard for truth was even far more involved than his father, choosing a vice president with strong Blackwater connections and selling as much Amway to pyramid scheme victims as he could get away with, a practice he continues today:
But the Democratic Party was not innocent of MLM influence either. Madeleine Albright, Clinton's treasury secretary, was a huckster for Herbalife:
(And later Hillary's campaign in 2016 was rumored to have legal services provided by the Herbalife lawyer farm.)
After finishing grad school and paying off my student loans, I became more involved in Social Media because of other projects I was working on. There I noticed that companies that used to be into direct sales but may have not been MLMs per say (such as Avon and Tupperware) now seemed to have been corrupted by the likes of Amway and Herbalife, and were now full blown pyramid schemes. And now there were hundreds of new MLMs, the most problematic one being ACN promoted by infamous scoundrel Donald Trump.
Some of my LDS friends were involved in ACN, and I remembered a missionary on my mission that was trying to get other missionaries to join the Maelaleuca MLM. I had also learned over the years that Utah, headquarters of the LDS, is also the largest epicenter of the scourge that is MLM. I started to realize that the MLM I had helped to chase out of the LDS in Pennsylvania, (which profited by scamming people into trying to sell the gospel of the Cleon Skousen,) probably had Utah roots and had come to Pennsylvania through LDS subculture. I became alarmed: is LDS necessarily tied to MLM? Is LDS proselyting a real economic threat to a community because of the damage MLM can do?
Concerned about these problems, in January 2013 I started a facebook group called "Mormons Against Multi-Level Marketing." (This group is now called "Stop MLM Schemes.") LDS leadership is concerned about any form of "affinity fraud," and the LDS leadership has always strongly cautioned against any and all "Get Rich Quick Schemes." I have come to realize that these schemes include fake business gurus, "legit" MLM direct sales (which turn out to also behave like pyramid schemes,) actual Ponzi schemes, fake colleges providing no real training like Trump University, and a hundred other things LDS members could be suckers for, including of course classic MLMs like Amway, Herbalife and ACN. LDS from the beginning have felt humans should strive to be more like God, and get rich quick schemes prevent people from spending their time developing valuable skill sets, and getting good at stuff is a big part of being LDS*.
Starting in 2013 some of the people who joined Mormons Against Multilevel Marketing were not Mormon, saying they could find no other Facebook groups that were truly anti-MLM. Not very many people understood just how bad MLM was and what kind of economic hazard it represented to our society. The MLM "industry" makes around the same amount of money as Hollywood, but instead of providing good jobs and entertaining everyone, the MLM industry just sucks the money out of would be entrepreneurs* and funnels it up into the hands of pyramid scheming miscreants; The MLM industry stunts the growth of our local, national and global economies*. When I spoke of MLM, most people accused me as having a political agenda, or they wrote me off as a conspiracy theorist.
The media finally took note of MLM as a problem as they looked into Trump's background as he ran for president. It was the first time I had seen any major attention to what I considered one of the world's most serious problems since the 90's. Recently I discovered within the last few years an Anti-MLM movement has started to gain momentum. It is largely led by women on YouTube, and they are producing very informative and entertaining content.
*Going forward I think it is important to look for honest alternatives to MLM. Many people in MLM could be doing legitimate small businesses instead. Part of why I was able to get so many return customers was because I had far less market saturation in my community than if I had recruited several other people into my downline to try to sell Herbalife products in that same area. In fact it was the bad packaging practices of Herbalife itself that led directly to the collapse of my business.
In today's world if you really want to help people get in shape, you should get certified as a personal trainer. Any supplements you incorporate into that practice should be purchased in bulk so you can get them at a discount in order to resell to your fitness customers. You will not find MLM to be helpful in this regard, because their products are overpriced, quality is often questionable, and I personally found the branding/packaging to be designed to reassure pyramid scheme victims rather than to work for fitness customers. The truth is that like most MLM victims my heart really wasn't into fitness, but if it was, here is the small business approach I should have taken:
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