Of MLMs, Truth And Beauty

MLMs and pyramid schemes essentially have the same design. The only difference is that MLMs will include a real product{s} to mask the connection between them and a pyramid scheme- but they are dependent for their main source of income on the sale of the business model to all your friends and relations, not from actual products.

The FTC states “Steer clear of multilevel marketing plans that pay commissions for recruiting new distributors. They’re actually illegal pyramid schemes. Why is pyramiding dangerous? Because plans that pay commissions for recruiting new distributors inevitably collapse when no new distributors can be recruited. And when a plan collapses, most people – except perhaps those at the very top of the pyramid – end up empty-handed.”[26]

For most MLMs, the product is really a mere diversion from the real profit-making dynamic. To anyone familiar with MLMs, the previous discussion (which focused so much on the fact that MLMs are “doomed by design” to reach market saturation and thus put the people who are legitimately trying to sell the product into a difficult situation) may seem to miss the point. The product or service may well be good, and it might oversaturate at some point, but let’s get serious. The product is not the incentive to join an MLM. Otherwise people might have shown an interest in selling this particular product or service before in the real world. The product is the excuse to attempt to legitimate the real money-making engine. It’s “the cover.”
Intuitively, we all know what is really going on with MLMs. Just don’t use the word “pyramid”!”You see, if you can convince ten people that everyone needs this product or service, even though they aren’t buying similar products available in the market, and they can convince ten people, and so on, that’s how you make the real money. And as long as you sell to a few people along the way, it is all legal.”


But the way to make money fast in all this is clearly not by only selling product, otherwise you might have shown an interest in it before, through conventional market opportunities. No, the “hook” is selling others on selling others on “the dream.”

Math and Common Sense

MLMs work by geometric expansion, where you get ten to sponsor ten to sponsor ten, and so on. This is usually shown as an expanding matrix (just don’t say “pyramid”!) with corresponding kick-backs at various levels.
The problem here is one of common sense. At a mere three levels deep this would be 1,000 people. There goes the neighborhood! At six levels deep, that would be 1,000,000 people believing they can make money selling. But to whom? There goes the city! And the MLM is just getting its steam going. Think of all the meetings! Think of all the “dreams” being sold! Think of the false hopes being generated. Think of the money being lost.

MLM programs are almost always large based on a personality cult.

in typical MLM’s , the “approved materials” showed what a great man the founder is, depicted the depth of his management experience, showed him in mood shots, etc, showing how wealthy he is and how many other “successful” business he started. It is easy to swoon in admiration of such a powerful, visionary man, dedicated to bringing this wonderful opportunity to common Americans like us. This is the essence of a personality cult.

By attracting people to a person rather than a product the company is encouraging a passionately personal devotion based on emotions and adulation of the founder.  They know that if they can gain your loyalty to a person rather than a product, you are more likely to stay involved, and to be a loyal minion.  It’s good psychology. Outsiders may observe, and even document that the central person’s story changes over time- he or she may have boasted about credentials they don’t have, experiences that turn out to be impossible or simply false, and there is documentation of the changing story, of the reasons why the original story is not true (there may a claim of a hospital stay or a court case, and there are no records of either, or a college course where the central person was never enrolled, or there is no such college, or there are claims about jail time and a life turned around, only it turns out there are nor records of that person ever having been in prison and people who knew them then tell a different story)- none of these facts matter to the True Believers hawking their wares and snake oil.

It’s not just MLMs who do this of course, I can think of several relgious leaders who sold the public not just their talents, but also a whole life story for people to connect to and feel good about- only the life story, the credentials, the experiences all turned out to be false or greatly exaggerated (a speeding ticket turns into serving time, an audited class becomes a college degree, a cold becomes pneumonia)

Many of the companies or their representatives make dishonest and even slanderous claims- they will not just build up their own product, but spend a lot of time tearing down the competition, often appealing to your sense of vanity and pride (don’t buy the other products, they are adulterated with secretly toxic materials, unlike our pure and perfect product).  But if you look carefully,  there is little substance to the claims, or, in some cases, the substance is dishonesty.

I recently asked a person in an MSM to please give me some independent studies to back up her claims (she claimed, among other things, that her products could cure cancer).  She offered an alleged ‘independent’ study from a University that wasn’t independent at all. That university has close ties with the founder of her MLM. In fact, that very study was sponsored by the MLM in question, not independent.  She offered me another study as an example of a ‘typical’ independent study supporting her claims.  It wasn’t a study about cancer at all, or about curing any person. It was a study about some level of effectiveness her products showed against a strain of bacteria in a petri dish in a lab.  More importantly, the study wasn’t independent- to the contrary, it was authored by the founder of her MLM business and one of his employees.  When I pointed this out, she got very, very angry and defensive and accused me of being unChristlike, among other things.

Some MLM’s will invent terms that have no real legal or scientific meaning or standard (‘Therapeutic Grade” is one of these).  ‘ If you look carefully at claims made for the product, you will see that those claims have been made based on emotion and strong feelings, but no actual independent research or sources have been given for most of them, if not all of then.  Jane will say she felt so much better after using the product, Margaret will testify that her laundry smelled fresher and felt cleaner or looked brighter, and George will say he was feeling blue until he he slathered the new shiny product on his feet and then magically it all got better- but you won’t really be able to check on those stories.

Most of them require you first to exploit your friends and relations as prospects and customers, which means that in the real world outside of the MLM, you damage your own reputation the minute you try to sell the product or the ‘business’ to any of those friends and relations.   MLMs just do not have good reputations with most people who are not involved in them.

The fresher the recruits are from a marketing seminar, the more hyped up they will be, to the point that they have lost all sense of perspective for what is or is not appropriate.  They will take somebody’s status on losing a family to a fatal illness and use it to sell their product.  They will get involved in a discussion about somebody who suffered a terrible late term miscarriage at home, resulting in significant blood loss, and use that as an opportunity to recommend their MLM’s laundry soap.  They are absolutely clueless about the lines they cross, the tender areas on which they trespass with their MLM treaded boots, the friendships they hurt- and if anybody tries to point it out they get huffy and consider it persecution (note the religious terminology), and call people ‘anti’ this or that, and insist the only reason to be ‘against’ the pink or the stink is some irrational animosity.

Most of the MLM sales tactics to their own members push for success through tactics that are largely appeals to the flesh- violating 1 Timothy 6:

2. Your riches are corrupted, and your garments are motheaten. Your gold and silver is cankered; and the rust of them shall be a witness against you, and shall eat your flesh as it were fire. Ye have heaped treasure together for the last days.
….But godliness with contentment is great gain.
For we brought nothing into this world, and it is certain we can carry nothing out.
And having food and raiment [covering] let us be therewith content.
But they that will be rich fall into temptation and a snare, and into many foolish and hurtful
lusts, which drown men in destruction and perdition. 10. For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows,

Why are these tactics so successful? Why is there so much resentment and hostility when others point out the discrepancies and factual errors in a given MLM’s background story and claims?

I think a willful lack of discernment is part of it. Some people like to believe in pretty stories, and they resent it when they learn the stories are not true. Maybe pride is involved, too- nobody likes to admit they were tricked, they were drawn into the hype.

I once watched a religious movie, alleged to be a documentary, with some, to me, obviously outrageous claims about incredible discoveries that supposedly ‘proved’ the Bible (that’s another issue)- One of them was about how the Ark of the Covenant was in a cave beneath the cross so that when Christ’s blood gushed out from the sword slash, it fell directly on the Ark. I called nonsense. My 8 year old even spotted out unlikely it was. An adult watching with us chided our skepticism and lack of faith- it was such a beautiful story that it must be true.

A few minutes on google and a talk with somebody who makes the topic of Christian evidences quite the hobby, and I had plenty of information that discounted everything in that video.

The person who believed it because it was beautiful resented learning it wasn’t true and kind of resented me for being the bearer of what that person thought was bad news. If not for hard hearted, skeptical me, they could have continued to believe in something beautiful and moving.

To me, the truth is beautiful. Dishonesty, deceit, all falsehood is like a veneer over a rotting carcass. It might be a pretty tale, but it is never beautiful.

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  1. Lisa Beth W.
    Posted August 27, 2014 at 8:39 am | Permalink

    Psalm 33:4
    For the word of the Lord is right, And all His work is done in truth.
    Proverbs 12:22
    Lying lips are an abomination to the Lord, But those who deal truthfully are His delight.

    Truth is beautiful b/c is it part of the essence of Who God is and what He loves. I have a brother-in-law who is trapped in a MLM scheme. Very sad for him and his family. Even though he gets little money from it (not enough to live on with a wife and four kids) and should be getting a legitimate job, he doesn’t seriously seek one b/c of this time-wasting excuse.

  2. Mama Squirrel
    Posted August 27, 2014 at 9:09 am | Permalink

    One antidote for taking current claims for things like health products too seriously is to look back at ads for similar products over the past fifty, sixty, seventy years. Last night we were listening to an old radio show that was aired during WWII and contained a fair amount of propaganda itself. Usually these “golden age” shows don’t include commercials, but this one promoted the sponsor’s product, Ironized Yeast, which was also featured in magazine ads from the 1930’s and ’40’s. The ads were quite funny, actually, since they not only promised increased pep but also weight gain (that was a GOOD thing). But it makes you wonder what future generations will think of what WE’RE being sold.

  3. Heather
    Posted August 27, 2014 at 10:00 am | Permalink

    I have to agree with you entirely. There is a product here that is sold through an MLM (it is sold by other sources, but the MLM is HUGE here). The product is actually a good product in my opinion, but the use of it sell memberships in the company, as well as tearing down other companies who sell it (they are not as pure, etc.) and finally, the plain Bad Advice that is being given by the salespeople (whose training is not at all medically based, but they act as if it was.) Anyhow, with all of those things, I am no longer buying from them anymore, and have discovered that other companies have just as good a product, for much less since I am not paying for all of the extra levels of people, and these other companies don’t have the cultish behaviors around them.

    It was really difficult to write that out without naming names.

    • Headmistress, zookeeper
      Posted August 27, 2014 at 2:12 pm | Permalink

      I know exactly what you mean. The bad (and sometimes dangerous) medical advice from people who have absolutely no idea what they are doing medically really frustrates me.

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