My new favorite scheme: MLMs

Work from home! Earn passive income! Get rich quick!

These sales pitches could be from any digital nomad guru of late. They could be spouted by any huckster from years past. But they could also be from participants of one of my new favorite quasi-scams: MLMs, or multi-level-marketing schemes.

A couple of years ago, I set out to write a murdery thriller about digital nomad gurus promising how to teach others to “live the dream.” But as my first foray into the suspense genre, it proved too daunting, too close to my heart. While I struggled with the manuscript, I began listening to podcasts about these barely concealed pyramid schemes called MLMs.

The pitches were so similar to what I’d heard from digital nomad gurus, but instead of appealing to millennials dissatisfied with their careers and wanting a plane ticket, they appealed to stay-at-home moms who wanted to earn some extra income for their families.

MLMs are “direct sales” companies that offer their consumers the chance to also sell their products. These “consultants,” “retailers,” or “distributors” throw parties at their homes (or on Facebook Live) to sell the product, but the real money is to be made in signing up new recruits to become salespeople, too. The more recruits you sign up, and the more recruits those people sign up, the more money you earn. Hence, the pyramid shape.

You can tell a company is an MLM based on where people are earning the most money: Is it from the product? (Usually, no, and the product is of dubious quality.) Is it from referrals, downlines, and signing up others to join the pyramid? Yes? Well, you’ve got yourself a pyramid scheme.

A documentary about one of these companies debuted recently Amazon Prime, and it’s from the same filmmakers who did one of the Fyre Festival docs. This one, “LuLaRich,” follows the rise and fall of the multi-level-marketing company LuLaRoe, best known for its “buttery soft” leggings.

One of LuLaRoe’s biggest advertisements to join to sell its leggings yourself is “Want to earn full-time income for part-time work?” Oh, you mean a four-hour workweek?

It makes sense that MLMs caught my attention last year; they became more prominent than ever during the pandemic. People are especially drawn to get-rich-quick schemes during uncertain times. In 2020, people lost their jobs and income, and also got stimulus checks large enough to help them buy into the “startup kits” needed to join various MLMs. It was the perfect storm for their popularity to soar.

I’ve never been in an MLM, but that’s not to brag: I see how someone could get sucked in. Most of us think we’re too smart to fall for con artists, but that’s why so many con artists are never caught. People feel ashamed of being tricked; they feel that they should have known better. In MLMs, it’s even worse, because anyone who is successful has signed up downlines, therefore luring others into the MLM trap. They not only feel ashamed—they feel complicit.

But because I haven’t experienced MLMs first hand, I had to put on my journalist cap and dive into research for my book. I hope it portrays somewhat accurately (there’s also the fictional murder plot) what it’s like to be a part of an MLM — it can have disastrous consequences. People get into debt — usually the bottom 99 percent of MLM participants break even or even lose money — and their marriages and social relationships are strained, if not over completely.

There was another interesting thing that came up in my research: with the growth of MLMs recently, there has also been a huge growth in opposition to them. There are influencers, YouTubers, data analysts, and even former MLM participants who have built careers on shaming and mocking MLMs. This movement is called “anti-MLM.”

Hanging out in these online groups (both pro and anti) and watching the conversations, I realized these groups were pretty similar. They both ideologically strict, with their own cultural touchstones and dogmas. MLM reps could be nasty when they made fun of the 9-to-5 wage slaves they pitied (again, this could be digital nomads), but the anti-MLMers could also be ruthless when they savaged the MLM women they so despised.

I knew I had a great controversy to set my book within: The world of clashing MLM and anti-MLM warriors, and someone getting caught up in the fray, just hoping for a little bit of the dream themselves.