America is a Pyramid Scheme
September 20, 2021 9:18 AM Subscribe
America is a pyramid scheme. “It relies on people buying into the American Dream and then working hard to get to the top. But of course - almost no one does. Beneath each successful person in America is a downline of unpaid and underpaid labor.” So reads the buried lede in Anne Helen Petersen‘s insightful interview with Meg Conley where they discuss 'LulaRich,’ a baffling story of greed, crime, and crappy leggings. What shape is more sustainable (and more delicious) than a pyramid? A doughnut.
I'd never come across Meg Conley, until someone shared AHP's interview the other day when I was raving about LulaRich, and now I'm just addicted. So glad to see this mentioned here!
posted by mittens at 10:14 AM on September 20, 2021 [4 favorites]
posted by mittens at 10:14 AM on September 20, 2021 [4 favorites]
Subscribed to Conley’s writing, she was such a great and salty interview.
posted by migurski at 10:29 AM on September 20, 2021 [3 favorites]
posted by migurski at 10:29 AM on September 20, 2021 [3 favorites]
"America is a pyramid scheme" is one of the memes whereby MLMs scam their victims: "Hey, CEOs of Fortune 500 companies make 500x the earnings of their lowest-level employees, why don't you 'Own Your Own Business' instead"!
Of course, in that Fortune 500 company the average earnings of the bottom quartile of workers is $40,000, while in most MLMs, everyone except the top 5% has a negative income (commissions/markups are less than unreimbursed costs), and you have to be in the top 1% to average $40,000 a year after unreimbursed costs.
posted by MattD at 10:35 AM on September 20, 2021 [31 favorites]
Of course, in that Fortune 500 company the average earnings of the bottom quartile of workers is $40,000, while in most MLMs, everyone except the top 5% has a negative income (commissions/markups are less than unreimbursed costs), and you have to be in the top 1% to average $40,000 a year after unreimbursed costs.
posted by MattD at 10:35 AM on September 20, 2021 [31 favorites]
It's either a pyramid scheme or money laundering operation. Or both!
Laundering a pyramid of money!
posted by Greg_Ace at 10:44 AM on September 20, 2021 [11 favorites]
Laundering a pyramid of money!
posted by Greg_Ace at 10:44 AM on September 20, 2021 [11 favorites]
All forms of governance eventually become some variation on plutocracy. Status seeking is one of the innate traits of our species. And some are better or luckier at it than others...
posted by jim in austin at 10:53 AM on September 20, 2021 [5 favorites]
posted by jim in austin at 10:53 AM on September 20, 2021 [5 favorites]
ReginaHart: "America is a pyramid scheme."
It's not like we hide this fact....
posted by chavenet at 11:07 AM on September 20, 2021 [9 favorites]
It's not like we hide this fact....
posted by chavenet at 11:07 AM on September 20, 2021 [9 favorites]
In case anyone is interested in the "shaking curls" reference in the article: this comes from the book "Fascinating Womanhood" by LDS author Helen Andelin, in which she teaches women to be domestic angels in the home and submissive to their husbands. Curl-shaking is an expression of "childlike anger" which is supposed to be adorable and arouse protective and loving instincts in the husband, whereas a genuine adult expression of anger is unsubmissive and likely to lead to fighting and power struggles.
From an online review of the book by Samantha Field:
Childlike anger is the cute, pert, saucy anger of a little child . . . when such a child is teased, she doesn’t respond with some hideous sarcasm. Instead, she stamps he[r] foot and shakes her curls and pouts. She gets adorably angry at herself because her efforts to respond are impotent . . .
A scene such as this invariably makes us smile with amusement . . . This is much the same feeling a woman inspires in a man when she expresses anger in a childlike way. Her ridiculous exaggeration of manner makes him suddenly want to laugh; makes him feel, in contrast, stronger, more sensible, and more of a man.
~~~~~~~
I remembered the reference from having read Fascinating Womanhood in my fundamentalist youth. Not being able to understand why my abusive first marriage wasn't working, it was suggested to me that I simply needed to learn to submit 😒
posted by Serene Empress Dork at 11:07 AM on September 20, 2021 [75 favorites]
From an online review of the book by Samantha Field:
Childlike anger is the cute, pert, saucy anger of a little child . . . when such a child is teased, she doesn’t respond with some hideous sarcasm. Instead, she stamps he[r] foot and shakes her curls and pouts. She gets adorably angry at herself because her efforts to respond are impotent . . .
A scene such as this invariably makes us smile with amusement . . . This is much the same feeling a woman inspires in a man when she expresses anger in a childlike way. Her ridiculous exaggeration of manner makes him suddenly want to laugh; makes him feel, in contrast, stronger, more sensible, and more of a man.
~~~~~~~
I remembered the reference from having read Fascinating Womanhood in my fundamentalist youth. Not being able to understand why my abusive first marriage wasn't working, it was suggested to me that I simply needed to learn to submit 😒
posted by Serene Empress Dork at 11:07 AM on September 20, 2021 [75 favorites]
Any MLM, no matter how good its products are* or how well-intentioned its leadership is**, is doomed to fail at the ostensible purpose of moving product and enriching those that sell that product, because that way of structuring a business inevitably makes no effort to match supply to demand.
Traditional franchises are very good at that sort of thing. If you want to open a Starbucks, you straight up cannot do it unless Starbucks corporate, in reviewing your location, thinks there is bonafide potential for a Starbucks in that location to be successful. Those occasional photos you see of a city corner with four Starbucks, one on each corner? Those exist because when there were only three of them, they all were showing strong enough sales figures that corporate knew a fourth could fit in the market.
By way of contrast, the MLM model is all about getting as much product as possible into the hands of the lowest-level marketers—notably, not into the hands of consumers. This is done without regard to whether there's actually a market for that product, with the result that you'd have seven LuLaRoe retailers showing up at a flea market which had the demand to support maybe two of them. Internet marketplaces make this even worse: Herbalife regularly used to (maybe still does, dunno) claim that low-priced products claiming to be theirs on eBay are fakes. Maybe a nonzero number of them actually are, but a lot of the cheap Herbalife on eBay is from former sellers trying to get any money at all for their leftover stock. That's the sort of thing that happens when you flood a market with supply wildly disproportionate to demand.
*Most don't even bother with good products, of course, because the product isn't what makes them money. There are occasional outliers that merge a good product with this ruinous marketing plan.
**Likewise, most MLMs are led by predators, not in-over-their-head naifs. But even if they weren't they'd still be fundamentally broken.
posted by jackbishop at 11:23 AM on September 20, 2021 [36 favorites]
Traditional franchises are very good at that sort of thing. If you want to open a Starbucks, you straight up cannot do it unless Starbucks corporate, in reviewing your location, thinks there is bonafide potential for a Starbucks in that location to be successful. Those occasional photos you see of a city corner with four Starbucks, one on each corner? Those exist because when there were only three of them, they all were showing strong enough sales figures that corporate knew a fourth could fit in the market.
By way of contrast, the MLM model is all about getting as much product as possible into the hands of the lowest-level marketers—notably, not into the hands of consumers. This is done without regard to whether there's actually a market for that product, with the result that you'd have seven LuLaRoe retailers showing up at a flea market which had the demand to support maybe two of them. Internet marketplaces make this even worse: Herbalife regularly used to (maybe still does, dunno) claim that low-priced products claiming to be theirs on eBay are fakes. Maybe a nonzero number of them actually are, but a lot of the cheap Herbalife on eBay is from former sellers trying to get any money at all for their leftover stock. That's the sort of thing that happens when you flood a market with supply wildly disproportionate to demand.
*Most don't even bother with good products, of course, because the product isn't what makes them money. There are occasional outliers that merge a good product with this ruinous marketing plan.
**Likewise, most MLMs are led by predators, not in-over-their-head naifs. But even if they weren't they'd still be fundamentally broken.
posted by jackbishop at 11:23 AM on September 20, 2021 [36 favorites]
In 1992, I bought The Growth Illusion: How Economic Growth Enriched the Few, Impoverished the Many and Endangered the Planet by Richard Douthwaite. I just couldn't get into it. I've just finished Kate Raworth's Doughnut Economics cited above: it's bri'nt! Standard economic theory externalises many of the inconvenient aspects of how societies work: (labour in the home; the commons) and then has the chutzpah to claim that their models actually explain what makes the world go round. Several of the key theories are based on under-powered, trifling, arm-waving "experiments" which become holy writ despite subsequent replications or re-runnings (or different populations) showing that the initial studies were . . . wrong. I know bugger-all about economics but this book triggered déjà vu for the failure to replicate numerous highly cited papers in biomedical science [Begley & Ellis 2012] - and psychology [Reproducibility Project].
posted by BobTheScientist at 11:37 AM on September 20, 2021 [10 favorites]
posted by BobTheScientist at 11:37 AM on September 20, 2021 [10 favorites]
"America is a pyramid scheme" is one of the memes whereby MLMs scam their victims. Yes, let's reserve the term for actual pyramid schemes. People generally* don't take bad jobs because they think they're going to get rich; they take those jobs because that's the least bad choice they have. Few people show up at an Amazon warehouse with the impression that they're destined to replace Jeff Bezos. (*Yes, they sometimes do, and part of it being a bad job is not having the ability to fight back against wage shorting, etc.)
posted by Mr.Know-it-some at 12:03 PM on September 20, 2021 [16 favorites]
posted by Mr.Know-it-some at 12:03 PM on September 20, 2021 [16 favorites]
If anyone is interested in a lot of stuff about MLMs, there's some good YouTube channels about it. My personal favorite is iilluminaughtii, who has a long series about them called Multi Level Mondays that goes into LuLaRoe, all the way through to Amway, and a lot of them in between, like Avon, CutCo, Tupperware, Herbalife, along with trips to Trump's MLM setups, and a visit to the odius NXIVM cult (which was set up like an MLM in a few ways).
And yeah, I think that capitalism itself is an MLM.
posted by mephron at 12:42 PM on September 20, 2021 [3 favorites]
And yeah, I think that capitalism itself is an MLM.
posted by mephron at 12:42 PM on September 20, 2021 [3 favorites]
Capitalism as an MLM? I like that. I always thought of capitalism as being a perpetual motion machine.
posted by njohnson23 at 12:59 PM on September 20, 2021 [3 favorites]
posted by njohnson23 at 12:59 PM on September 20, 2021 [3 favorites]
IMO MLMs offer not the expectation of riches, but rather some income while also being able to be done not at corporate America's schedule. So assuming they are all desperate for the money seems wrong based on the anecdotal evidence of the people I know selling. Plenty of them have plenty of money - one of the Beanie Baby ladies was (well she still is) a practicing MD.
posted by The_Vegetables at 1:16 PM on September 20, 2021 [1 favorite]
posted by The_Vegetables at 1:16 PM on September 20, 2021 [1 favorite]
To be more clear, I think it offers some version of 'freedom'. If these exact same women had rented space and lost equally as much money, we'd feel bad for them because they were poor business women but not pity because they got taken by a MLM.
posted by The_Vegetables at 1:19 PM on September 20, 2021 [1 favorite]
posted by The_Vegetables at 1:19 PM on September 20, 2021 [1 favorite]
I will admit to getting scammed into joining a certain telephone service/communications MLM in 1994 when I was about 18 yrs old. They provided telephone/long-distance service, pagers, I think they were maybe getting into cellphones by the time I got out a couple of years later. Several of my friends were doing it, and wanting to fit in, I joined up too. I managed to sign up a few people for the phone service and pagers (which was not a bad product, from what I can remember), but I was never able to get anyone in my "downstream" -- no other salespeople whom I could manage and profit off of. For me, the appeal was the idea of being able to make money 1) outside of the corporate "system" 2) on my own schedule and 3) have a continuing source of income so I could focus my attention on other things I wanted to do (being a rock star). But, I was not good at the high pressure sales pitches that get other people to sign up under you. I mean, I probably could have been good at it, but I hated trying to persuade and brow-beat people into doing it, especially when they would come back with, "Wait, this sounds a lot like a pyramid scheme..." and all I had in response was, "No, no, it's multi-level marketing, totally different!"
posted by Saxon Kane at 1:28 PM on September 20, 2021 [5 favorites]
posted by Saxon Kane at 1:28 PM on September 20, 2021 [5 favorites]
Saxon Kane: I will admit to getting scammed into joining a certain telephone service/communications MLM in 1994 when I was about 18 yrs old. They provided telephone/long-distance service, pagers, I think they were maybe getting into cellphones by the time I got out a couple of years later.
If it’s Excel Telecom, that ripped through my ham radio club when I was a teenager too. My buddy kept bugging me to go to his meetings, featuring a 20-something girl with a banana yellow Porsche that she bought with her earnings in getting so many people to switch to their long distance service. In retrospect, I’m sure most of those bonuses were for recruiting, not for getting a few pennies per phone call.
As I recall, the portal they used to convert customers to their service had some glaring security issues but that is another story.
posted by dr_dank at 1:41 PM on September 20, 2021 [1 favorite]
If it’s Excel Telecom, that ripped through my ham radio club when I was a teenager too. My buddy kept bugging me to go to his meetings, featuring a 20-something girl with a banana yellow Porsche that she bought with her earnings in getting so many people to switch to their long distance service. In retrospect, I’m sure most of those bonuses were for recruiting, not for getting a few pennies per phone call.
As I recall, the portal they used to convert customers to their service had some glaring security issues but that is another story.
posted by dr_dank at 1:41 PM on September 20, 2021 [1 favorite]
If these exact same women had rented space and lost equally as much money, we'd feel bad for them because they were poor business women but not pity because they got taken by a MLM.
That's just it, though -- if they were actually starting their own businesses, and failing based on their own business decisions, we could judge them as businesswomen.
MLMs love to convince their recruits that they are "small business owners" and "their own bosses," but neither is actually true. Business owners might try to harass everyone they've ever met into patronizing their "business", buying their terrible products for ludicrous prices in heinous quantities and trying to resell them at a markup, but business owners have the right to choose their publicity strategy and select their own inventory; they can fail, succeed, or break even on their own merits. And lord knows they're not expected to spend most of their time recruiting their own competition into an already-oversaturated market.
MLMs thrive because they prey on people who aren't sophisticated enough to know the difference between a local business, a franchise, and a pyramid scheme. Joining an MLM doesn't make you an entrepreneur any more than forwarding a chain letter that threatens victims with bad luck if they don't send you ten bucks. Maybe, as with Ponzi schemes, you could call them "investors" on a technicality, but they're not business owners. They're marks.
And yes, as with so many scams, the appeal is in the unrealistic promise of making lots of money without hard work. As the linked article points out, scams like MLMs play on conservative religious subcultures' fondness for the so-called prosperity gospel, and on their disdain for women having full-time employment outside the home. Hosting "parties" (where you guilt-trip your female acquaintances into buying trash) is an acceptable feminine goal; having a career is not.
posted by armeowda at 2:30 PM on September 20, 2021 [22 favorites]
That's just it, though -- if they were actually starting their own businesses, and failing based on their own business decisions, we could judge them as businesswomen.
MLMs love to convince their recruits that they are "small business owners" and "their own bosses," but neither is actually true. Business owners might try to harass everyone they've ever met into patronizing their "business", buying their terrible products for ludicrous prices in heinous quantities and trying to resell them at a markup, but business owners have the right to choose their publicity strategy and select their own inventory; they can fail, succeed, or break even on their own merits. And lord knows they're not expected to spend most of their time recruiting their own competition into an already-oversaturated market.
MLMs thrive because they prey on people who aren't sophisticated enough to know the difference between a local business, a franchise, and a pyramid scheme. Joining an MLM doesn't make you an entrepreneur any more than forwarding a chain letter that threatens victims with bad luck if they don't send you ten bucks. Maybe, as with Ponzi schemes, you could call them "investors" on a technicality, but they're not business owners. They're marks.
And yes, as with so many scams, the appeal is in the unrealistic promise of making lots of money without hard work. As the linked article points out, scams like MLMs play on conservative religious subcultures' fondness for the so-called prosperity gospel, and on their disdain for women having full-time employment outside the home. Hosting "parties" (where you guilt-trip your female acquaintances into buying trash) is an acceptable feminine goal; having a career is not.
posted by armeowda at 2:30 PM on September 20, 2021 [22 favorites]
All forms of governance eventually become some variation on plutocracy
exactly. saying "america is a pyramid scheme" is true in the sense that all hierarchical endeavors are, in the broadest sense, a pyramid scheme, and so maybe a tad beyond the scope of this particular MLM scam. where and when in human history has it not been true that "Beneath each successful person ... is a downline of unpaid and underpaid labor" ? that's kind of the steady state of human civilization.
posted by wibari at 3:06 PM on September 20, 2021 [7 favorites]
exactly. saying "america is a pyramid scheme" is true in the sense that all hierarchical endeavors are, in the broadest sense, a pyramid scheme, and so maybe a tad beyond the scope of this particular MLM scam. where and when in human history has it not been true that "Beneath each successful person ... is a downline of unpaid and underpaid labor" ? that's kind of the steady state of human civilization.
posted by wibari at 3:06 PM on September 20, 2021 [7 favorites]
"Wait, this sounds a lot like a pyramid scheme..." and all I had in response was, "No, no, it's multi-level marketing, totally different!"
Our model is the trapezoid!
posted by NoThisIsPatrick at 3:15 PM on September 20, 2021 [7 favorites]
Our model is the trapezoid!
posted by NoThisIsPatrick at 3:15 PM on September 20, 2021 [7 favorites]
Conjoined triangles of success!
posted by iamkimiam at 3:23 PM on September 20, 2021 [11 favorites]
posted by iamkimiam at 3:23 PM on September 20, 2021 [11 favorites]
Robert Fitzpatrick talks at length about the “business disguise” of MLMs in his excellent book Ponzinomics . In yesteryear, some MLMs genuinely did sell products that were novel and unavailable in stores (ie Tupperware, Avon, etc). Today, MLMs offer no product that you can’t get for cheaper/faster in the age of Walmart/Amazon/Target/EBay/Costco/etc. What keeps Amway afloat when the average person couldn’t name one or two of any product that they sell? The answer is their only true selling point: the “income opportunity”.
posted by dr_dank at 3:24 PM on September 20, 2021 [7 favorites]
posted by dr_dank at 3:24 PM on September 20, 2021 [7 favorites]
If you want to open a Starbucks, you straight up cannot do it unless Starbucks corporate, in reviewing your location, thinks there is bonafide potential for a Starbucks in that location to be successful.
Back when there were only three Starbucks in my town, it didn't escape my attention that they were all in the nastiest, most skanky locations possible. One day I overheard a conversation where an executive said, "Did you ever wonder why all the Starbucks in this town are in the nastiest, skankiest locations possible?" Yes, I thought to myself, I have wondered that. He explained that Starbucks corporate looked at the traffic flows in town, pinpointed several locations, and voilà, Starbucks were built there. They never even came to the city to see the locations. (This was before Google streetview!) I found that interesting.
posted by jabah at 4:04 PM on September 20, 2021 [4 favorites]
Back when there were only three Starbucks in my town, it didn't escape my attention that they were all in the nastiest, most skanky locations possible. One day I overheard a conversation where an executive said, "Did you ever wonder why all the Starbucks in this town are in the nastiest, skankiest locations possible?" Yes, I thought to myself, I have wondered that. He explained that Starbucks corporate looked at the traffic flows in town, pinpointed several locations, and voilà, Starbucks were built there. They never even came to the city to see the locations. (This was before Google streetview!) I found that interesting.
posted by jabah at 4:04 PM on September 20, 2021 [4 favorites]
I knew a couple back in the late '80s; he was a respected full professor of biology with a national reputation, and she was the head of nursing at a cancer care clinic in a university hospital. They had a beautiful home and two kids, and were extremely capable human beings in an almost universal sense in my opinion.
And they became Amway distributors!
I was stunned — I just could not grasp it, though I didn’t say anything then. But 30 years later, in a wide ranging conversation with the woman, whom I'd always really liked and admired and still do, I asked why they did that, and shared that it had really surprised me.
She looked me right in the eye and said they didn’t understand it either! They weren’t heavily recruited or proselytized, but a moment arrived when they both just felt like they needed to. It was like a trap had been laid along their life pathway, and when they got there, it snapped shut on them. They took a total bath and ended up with masses of useless and unsellable product gathering dust in the basement.
They did both come from poor and in his case rural backgrounds.
posted by jamjam at 4:11 PM on September 20, 2021 [18 favorites]
And they became Amway distributors!
I was stunned — I just could not grasp it, though I didn’t say anything then. But 30 years later, in a wide ranging conversation with the woman, whom I'd always really liked and admired and still do, I asked why they did that, and shared that it had really surprised me.
She looked me right in the eye and said they didn’t understand it either! They weren’t heavily recruited or proselytized, but a moment arrived when they both just felt like they needed to. It was like a trap had been laid along their life pathway, and when they got there, it snapped shut on them. They took a total bath and ended up with masses of useless and unsellable product gathering dust in the basement.
They did both come from poor and in his case rural backgrounds.
posted by jamjam at 4:11 PM on September 20, 2021 [18 favorites]
All products featured here are independently selected by our editors and writers. If you buy something through links on our site, Mashable may earn an affiliate commission.Oh, the irony!
posted by The Underpants Monster at 4:30 PM on September 20, 2021 [1 favorite]
LulaRich was incredibly depressing not only for the obvious reason — these two perpetuated a giant scam and ruined the lives of hundreds of people — but because, as usual in these stories, the people behind the giant scam and the ruined lives suffer zero consequences, and will never suffer anything more than zero consequences. Yeah, they had to sit for a few depositions, BFD. They’re protected from personal liability and they’ll go on their merry way, driving one of their $150,000 cars into the circular driveways in front of one of their 10,000 square foot houses, and they’ll die rich and happy. “Horrible Asshole Has Tons of Money and Will Always Have Tons of Money” is ultimately always the real title of these stories.
posted by holborne at 5:55 PM on September 20, 2021 [21 favorites]
posted by holborne at 5:55 PM on September 20, 2021 [21 favorites]
I actually knew a guy that made decent money with Excel for a few years. Rather than buying into the MLM aspects, he rented a mall kiosk and paid kids minimum wage to run it. It worked out for him because it didn't have as much overhead as being an authorized retailer for the facilities-based carriers and most importantly there weren't a bunch of people in town also trying to sell the exact same service. When the market did get saturated a few years later, he shut that shit down with all possible speed and moved on to something else.
MLMs are a scam because they recruit people who have no concept of market research or basic skills about running a business through promises of easy money. They then encourage people who don't know any better to run their "business" in a way that benefits the upline even when it's the exact opposite of what an individual needs to do to make money.
Day trading platforms, some restaurant franchisors, and others do the same thing, just without the MLM structure. That doesn't make it any better. Either way, they're preying on people without the skills and experience to know what they're getting into.
posted by wierdo at 8:24 PM on September 20, 2021 [1 favorite]
MLMs are a scam because they recruit people who have no concept of market research or basic skills about running a business through promises of easy money. They then encourage people who don't know any better to run their "business" in a way that benefits the upline even when it's the exact opposite of what an individual needs to do to make money.
Day trading platforms, some restaurant franchisors, and others do the same thing, just without the MLM structure. That doesn't make it any better. Either way, they're preying on people without the skills and experience to know what they're getting into.
posted by wierdo at 8:24 PM on September 20, 2021 [1 favorite]
“Horrible Asshole Has Tons of Money and Will Always Have Tons of Money” is ultimately always the real title of these stories.
Don’t forget the next couple of generations, in which their descendants start mercenary companies and are appointed to dismantle the Department of Education.
posted by mr_roboto at 9:16 PM on September 20, 2021 [26 favorites]
Don’t forget the next couple of generations, in which their descendants start mercenary companies and are appointed to dismantle the Department of Education.
posted by mr_roboto at 9:16 PM on September 20, 2021 [26 favorites]
She looked me right in the eye and said they didn’t understand it either! They weren’t heavily recruited or proselytized, but a moment arrived when they both just felt like they needed to.
jamjam, out of curiosity, were they involved in Evangelical Christianity? Amway built itself in large part on wedging itself into that particular religious subculture and even if not directly proselytized to, one might still spend years exposed to positive messaging about it.
posted by Pope Guilty at 11:40 PM on September 20, 2021 [2 favorites]
jamjam, out of curiosity, were they involved in Evangelical Christianity? Amway built itself in large part on wedging itself into that particular religious subculture and even if not directly proselytized to, one might still spend years exposed to positive messaging about it.
posted by Pope Guilty at 11:40 PM on September 20, 2021 [2 favorites]
That's a good question, Pope Guilty, and I agree with you that being Evangelical would have gone some distance toward explaining it, but no. They were both atheists raised in families which rarely saw the inside of a church. They got married in a church, however.
posted by jamjam at 12:18 AM on September 21, 2021 [1 favorite]
posted by jamjam at 12:18 AM on September 21, 2021 [1 favorite]
I was at first frustrated that this documentary focused on this group of top sellers, the ones who had gotten the big bonuses and bought cars with them. One woman said she had 5000 people in her downline. But after awhile, I thought about it and realized I'd read a lot of stories about the people who get into these schemes too late, throw a lot of good money after bad chasing success, and lose their houses. It was interesting to hear these women's stories, and to see the variety of degrees of personal regret, regret at having brought their downline into it, and complete lack of regret that they exhibited.
I had heard about the quality problems, and the bad cuts that resulted in pants penises and the likes (small prints! small prints, people!), and the moldy leggings, and hadn't ever had all of that explained—the merchandise sitting in the parking lot, for instance. For women who got in early, it must have really felt like a betrayal for the quality to have declined like that.
I posited to a friend that there must have been a time circa 2018 when it was falling apart, when thrift shops put up "No LuLaRoe" signs, the way you'll sometimes see NO HARRY POTTER NO FIFTY SHADES OF GREY NO DA VINCI CODE at used bookstores or places that take book donations, as women who'd sold off as much as they could at cutrate prices on eBay and at garage sales just wanted it gone so they could forget about it.
Many years ago, I had a friendly acquaintance who got pulled into one get-rich-quick scheme after another. One time she told me she'd spent her property tax money on those little vending machines that fit on countertops, and how all she had to do was get stores to put her vending machines on the counters, and then it was basically passive income, just drive around once a week and re-stock the machines and collect the cash. I was like, "Your...property tax money?" Oh, sure, but she wasn't worried because she was so sure to make multiples of her money back.
At some point (related? who can say) I helped her pack to move. It was really sad seeing the remains of previous ventures piled in her garage. I wondered then what it is that could lead a person to try one after another of these schemes, despite every single one failing. But then, at this point in my life I've recognized a couple of thinking errors I make all the time and that make me, for instance, less effective at handling a budget than I would like to be, and even knowing I make this same mistake over and over, I've struggled to stop making it, because it's so embedded in me—a kind of optimism, I think, that makes me think that we'll have extra money next payday even though we haven't had any extra money for 400 paydays in a row, or that I'll have more time or more energy next week than I had this week, or in any of the 400 previous weeks. So I can't cast stones.
posted by Orlop at 7:25 AM on September 21, 2021 [18 favorites]
I had heard about the quality problems, and the bad cuts that resulted in pants penises and the likes (small prints! small prints, people!), and the moldy leggings, and hadn't ever had all of that explained—the merchandise sitting in the parking lot, for instance. For women who got in early, it must have really felt like a betrayal for the quality to have declined like that.
I posited to a friend that there must have been a time circa 2018 when it was falling apart, when thrift shops put up "No LuLaRoe" signs, the way you'll sometimes see NO HARRY POTTER NO FIFTY SHADES OF GREY NO DA VINCI CODE at used bookstores or places that take book donations, as women who'd sold off as much as they could at cutrate prices on eBay and at garage sales just wanted it gone so they could forget about it.
Many years ago, I had a friendly acquaintance who got pulled into one get-rich-quick scheme after another. One time she told me she'd spent her property tax money on those little vending machines that fit on countertops, and how all she had to do was get stores to put her vending machines on the counters, and then it was basically passive income, just drive around once a week and re-stock the machines and collect the cash. I was like, "Your...property tax money?" Oh, sure, but she wasn't worried because she was so sure to make multiples of her money back.
At some point (related? who can say) I helped her pack to move. It was really sad seeing the remains of previous ventures piled in her garage. I wondered then what it is that could lead a person to try one after another of these schemes, despite every single one failing. But then, at this point in my life I've recognized a couple of thinking errors I make all the time and that make me, for instance, less effective at handling a budget than I would like to be, and even knowing I make this same mistake over and over, I've struggled to stop making it, because it's so embedded in me—a kind of optimism, I think, that makes me think that we'll have extra money next payday even though we haven't had any extra money for 400 paydays in a row, or that I'll have more time or more energy next week than I had this week, or in any of the 400 previous weeks. So I can't cast stones.
posted by Orlop at 7:25 AM on September 21, 2021 [18 favorites]
It's right there on the dollar bill
posted by thelonius at 7:33 AM on September 21, 2021 [2 favorites]
posted by thelonius at 7:33 AM on September 21, 2021 [2 favorites]
But then, at this point in my life I've recognized a couple of thinking errors I make all the time and that make me, for instance, less effective at handling a budget than I would like to be, and even knowing I make this same mistake over and over, I've struggled to stop making it, because it's so embedded in me—a kind of optimism, I think, that makes me think that we'll have extra money next payday even though we haven't had any extra money for 400 paydays in a row, or that I'll have more time or more energy next week than I had this week, or in any of the 400 previous weeks. So I can't cast stones.
Yes you can. You can cast stones at the billionaire grifters and our system which enables them. Grifters can do what they do because everyone has logical fallacies and points of weakness and moments of flippant optimism and hope for a better day and confusion about how our system works or doesn't work and sometimes seems actively rigged against us. You can feel empathy and sympathy for your friends and family that get roped into MLMs. Fundamentally, we all want to feel we have worth and even more fundamentally we all need to eat and have a secure place to sleep at night. The fact that this is elusive is what leaves open a massive hole for these kind of predators to operate. These predators will always be there; it's the failure of our society that we enable them.
I urge everyone at a minimum to never buy a MLM generated product from anyone. If they ask you, tell them that you just can't support MLM companies in any way no matter the product as you think it is bad for society. I had a very long back and forth with a friend, a peer, about the MLM she started hawking on Facebook. She engaged with me for a long time and I got to share about the financial disclosure statements and show her what her company says is possible. Finally, she said that her whole family likes and uses the products so for the discount alone it was worth it. But, speaking of family, she didn't block me until I asked her which MLM she'd be recommending her sons get into when they are able. Yeah, that cut close to the bone.
She's a well-credentialed, underemployed smart woman who lives in the suburbs with her husband and four sons, one of whom has a chronic illness that needs constant care. She has "decided" like so many women before her (then, and still, and into the future) that her value in the workforce is less than her value at home. (At a minimum it's more effort and bullshit - and she is correct.) Therefore, she is a perfect mark for these companies - loads of extra energy and initiative, even after all the soccer games! And with a built-in power imbalance where her partner is the "breadwinner" (Winner!! of Bread!!) and she is a SAHM. Now she gets to talk business with her other boss babes and feel like she is contributing money (remember: the thing that has actual value in our society) to the family coffers or her own future well-being. But...this is world (mostly) that is not for boys. Boys grow up and do things and become breadwinners, they don't grow up to sell face creams in online "parties." The fact that at the top of most of these pyramid schemes are men should tell you how corrupt the system is. Sure, there might be a lady co-owner or founder. But how many men did you see on LuLaRich at the top? Quite a lot. And they weren't wearing LuLaRoe.
Please throw stones!
posted by amanda at 8:19 AM on September 21, 2021 [14 favorites]
Yes you can. You can cast stones at the billionaire grifters and our system which enables them. Grifters can do what they do because everyone has logical fallacies and points of weakness and moments of flippant optimism and hope for a better day and confusion about how our system works or doesn't work and sometimes seems actively rigged against us. You can feel empathy and sympathy for your friends and family that get roped into MLMs. Fundamentally, we all want to feel we have worth and even more fundamentally we all need to eat and have a secure place to sleep at night. The fact that this is elusive is what leaves open a massive hole for these kind of predators to operate. These predators will always be there; it's the failure of our society that we enable them.
I urge everyone at a minimum to never buy a MLM generated product from anyone. If they ask you, tell them that you just can't support MLM companies in any way no matter the product as you think it is bad for society. I had a very long back and forth with a friend, a peer, about the MLM she started hawking on Facebook. She engaged with me for a long time and I got to share about the financial disclosure statements and show her what her company says is possible. Finally, she said that her whole family likes and uses the products so for the discount alone it was worth it. But, speaking of family, she didn't block me until I asked her which MLM she'd be recommending her sons get into when they are able. Yeah, that cut close to the bone.
She's a well-credentialed, underemployed smart woman who lives in the suburbs with her husband and four sons, one of whom has a chronic illness that needs constant care. She has "decided" like so many women before her (then, and still, and into the future) that her value in the workforce is less than her value at home. (At a minimum it's more effort and bullshit - and she is correct.) Therefore, she is a perfect mark for these companies - loads of extra energy and initiative, even after all the soccer games! And with a built-in power imbalance where her partner is the "breadwinner" (Winner!! of Bread!!) and she is a SAHM. Now she gets to talk business with her other boss babes and feel like she is contributing money (remember: the thing that has actual value in our society) to the family coffers or her own future well-being. But...this is world (mostly) that is not for boys. Boys grow up and do things and become breadwinners, they don't grow up to sell face creams in online "parties." The fact that at the top of most of these pyramid schemes are men should tell you how corrupt the system is. Sure, there might be a lady co-owner or founder. But how many men did you see on LuLaRich at the top? Quite a lot. And they weren't wearing LuLaRoe.
Please throw stones!
posted by amanda at 8:19 AM on September 21, 2021 [14 favorites]
For those wondering, yes, it was Excel Telecom.
posted by Saxon Kane at 2:58 PM on September 21, 2021 [1 favorite]
posted by Saxon Kane at 2:58 PM on September 21, 2021 [1 favorite]
My wife likes LulaRoe clothes and has been buying from the same woman for years. As we watched the documentary, we realized her source must be doing pretty well if she is still doing it, so we googled her and found pictures of her hanging out with the founders at their ranch. We also found an article where she was quoted as saying she was making $30K a month in bonuses. I can think of a lot of actual retail stores that don't offer the level of service my wife gets, and we're spending maybe a couple of hundred bucks a year on LuLaRoe. I can also think of a lot of actual retail stores that aren't clearing $30K a month.
posted by COD at 4:03 PM on September 21, 2021
posted by COD at 4:03 PM on September 21, 2021
>a visit to the odius NXIVM cult (which was set up like an MLM in a few ways
In fact, Keith Raniere started out as a MLM, "Consumer's Buyline", which was a pyramid scheme for discounts on appliances and groceries. The Vow: What to Know About Consumers' Buyline, Keith Raniere's Scam Before NXIVM .
A dear friend who died in 2012 was doing their computers in the early 90's. Invited me up one day. I would say my visceral reaction to meeting they guy would be, "I felt kinda ill in the morning, but still ate a hit of acid anyway. It wasn't a bad trip, but it wasn't a good one either."
posted by mikelieman at 4:20 PM on September 21, 2021 [1 favorite]
In fact, Keith Raniere started out as a MLM, "Consumer's Buyline", which was a pyramid scheme for discounts on appliances and groceries. The Vow: What to Know About Consumers' Buyline, Keith Raniere's Scam Before NXIVM .
A dear friend who died in 2012 was doing their computers in the early 90's. Invited me up one day. I would say my visceral reaction to meeting they guy would be, "I felt kinda ill in the morning, but still ate a hit of acid anyway. It wasn't a bad trip, but it wasn't a good one either."
posted by mikelieman at 4:20 PM on September 21, 2021 [1 favorite]
We also found an article where she was quoted as saying she was making $30K a month in bonuses.
How many people did she have to recruit into her downline to get those numbers?
Also, not to burst any bubbles, but since we’re trading anecdotes now: when a bunch of my old theatre friends* quit MLM, they all admitted they’d been shining it on about how “successful” their new “business” was — posts about the bonuses/extra income were outright lies.
Why would they lie about making lots of extra money?
Because the MLM told them to. Said it would be a great way to recruit a downline. Just act as if.
Pyramid schemes contain a few high-rolling scammers, a lot of broke marks, and a good number of the latter trying desperately to look like the former.
*Utah theatre people are more socially liberal than the general population here, but arguably no better at smelling a racket.
posted by armeowda at 7:10 PM on September 21, 2021 [10 favorites]
How many people did she have to recruit into her downline to get those numbers?
Also, not to burst any bubbles, but since we’re trading anecdotes now: when a bunch of my old theatre friends* quit MLM, they all admitted they’d been shining it on about how “successful” their new “business” was — posts about the bonuses/extra income were outright lies.
Why would they lie about making lots of extra money?
Because the MLM told them to. Said it would be a great way to recruit a downline. Just act as if.
Pyramid schemes contain a few high-rolling scammers, a lot of broke marks, and a good number of the latter trying desperately to look like the former.
*Utah theatre people are more socially liberal than the general population here, but arguably no better at smelling a racket.
posted by armeowda at 7:10 PM on September 21, 2021 [10 favorites]
How many people did she have to recruit into her downline to get those numbers?
The documentary confirmed that people at the Mentor level were making that kind of cash - at least before they changed the payout to be based on sales to end users and not wholesale purchases. My best guess is that during peak LuLaRoe, when there would be three booths selling the stuff at every local event, the topline folks that got in early, either by luck or by connection, did pull down that kind of money for a while, maybe 1-2 years tops. Again, that's 1% of the people selling it, but right place/right time some people do make a short term killing on MLM. That's the bait that gets so many more to send in the $5000 investment they'll never get back.
posted by COD at 7:53 PM on September 21, 2021 [2 favorites]
The documentary confirmed that people at the Mentor level were making that kind of cash - at least before they changed the payout to be based on sales to end users and not wholesale purchases. My best guess is that during peak LuLaRoe, when there would be three booths selling the stuff at every local event, the topline folks that got in early, either by luck or by connection, did pull down that kind of money for a while, maybe 1-2 years tops. Again, that's 1% of the people selling it, but right place/right time some people do make a short term killing on MLM. That's the bait that gets so many more to send in the $5000 investment they'll never get back.
posted by COD at 7:53 PM on September 21, 2021 [2 favorites]
I've seen part of that video - the images of the ridiculous legging patterns are hilarious. Especially "they're wet."
Their justifications for and denials about their bullshit are Platonic train-wreck ideals.
posted by bendy at 9:11 PM on September 21, 2021
Their justifications for and denials about their bullshit are Platonic train-wreck ideals.
posted by bendy at 9:11 PM on September 21, 2021
I've listened to a fair number of podcasts about MLMs and other scams.
As far as I can tell, there are scams aimed at women (make a little extra in your spare time, maybe get that pink Cadillac) and scams aimed at men (get rich rich rich by learning how to invest). Coffeezilla has podcasts about the latter.
The only gender-neutral scam/MLM I know about is Scientology. I'm probably missing something, and there's a right-wing prepper/supplement/investment ecosystem I don't know much about.
One more angle-- the New Thought imagination-creates-reality is just built to fit into MLMs. You're not making money? It's not because the math doesn't work, it's because you weren't imagining success enough.
posted by Nancy Lebovitz at 4:14 AM on September 22, 2021 [1 favorite]
As far as I can tell, there are scams aimed at women (make a little extra in your spare time, maybe get that pink Cadillac) and scams aimed at men (get rich rich rich by learning how to invest). Coffeezilla has podcasts about the latter.
The only gender-neutral scam/MLM I know about is Scientology. I'm probably missing something, and there's a right-wing prepper/supplement/investment ecosystem I don't know much about.
One more angle-- the New Thought imagination-creates-reality is just built to fit into MLMs. You're not making money? It's not because the math doesn't work, it's because you weren't imagining success enough.
posted by Nancy Lebovitz at 4:14 AM on September 22, 2021 [1 favorite]
scams aimed at men (get rich rich rich by learning how to invest)
I used to work for a guy who'd go to these seminars. I hope he got some cheese danish and motel coffee out of it, at least. I asked him once, if these guys have the secret to no-effort wealth from real estate, how come they are in the seminar business? Don't think he had a convincing answer.
posted by thelonius at 4:43 AM on September 22, 2021 [4 favorites]
I used to work for a guy who'd go to these seminars. I hope he got some cheese danish and motel coffee out of it, at least. I asked him once, if these guys have the secret to no-effort wealth from real estate, how come they are in the seminar business? Don't think he had a convincing answer.
posted by thelonius at 4:43 AM on September 22, 2021 [4 favorites]
America is a pyramid scheme.
It's right there on the dollar bill
Indeed. But who i$ John Galt?
posted by cenoxo at 6:50 AM on September 22, 2021
It's right there on the dollar bill
Indeed. But who i$ John Galt?
posted by cenoxo at 6:50 AM on September 22, 2021
Possibly relevant to the question of women in the home finding paying work: Jobs tutoring Chinese kids in English drying up.
posted by humbug at 6:59 AM on September 22, 2021
posted by humbug at 6:59 AM on September 22, 2021
My totally uneducated opinion is that cryptocurrencies are MLMs for men.
posted by toastyk at 9:57 AM on September 22, 2021 [18 favorites]
posted by toastyk at 9:57 AM on September 22, 2021 [18 favorites]
I asked him once, if these guys have the secret to no-effort wealth from real estate, how come they are in the seminar business?
Nailed it! See also, "WORKSHOP this Saturday: Learn from the Pros How YOU Can Become a Successful, Sought-After VOICE ACTOR!"
(They'll probably tell you the secret is to spend thousands of dollars on your own home studio and work up a massive demo recording, and then maybe a casting agent will give you the time of day. The real trick, IMHO, is to start out as an already-famous screen/stage actor, so you can bring valuable "star power" to animated works/fast food commercials.)
posted by armeowda at 2:46 PM on September 22, 2021 [1 favorite]
Nailed it! See also, "WORKSHOP this Saturday: Learn from the Pros How YOU Can Become a Successful, Sought-After VOICE ACTOR!"
(They'll probably tell you the secret is to spend thousands of dollars on your own home studio and work up a massive demo recording, and then maybe a casting agent will give you the time of day. The real trick, IMHO, is to start out as an already-famous screen/stage actor, so you can bring valuable "star power" to animated works/fast food commercials.)
posted by armeowda at 2:46 PM on September 22, 2021 [1 favorite]
« Older I guess we should have a Canadian election thread | Screenwriters directory Newer »
This thread has been archived and is closed to new comments
posted by toastyk at 10:04 AM on September 20, 2021 [7 favorites]