The great pyramid scheme

Multilevel marketing businesses are all games and no fun.

By Sutton Reekes

You open up Instagram, notice you have a direct message and there it is: the classic multilevel marketing (MLM) pitch in your inbox.

It goes something like, “Hey, girl! I was looking at your page and love it! I think you would be a great addition to my team!”

Many people vehemently oppose MLMs and click out of that fated direct message. But some people join, creating a domino effect of reaching out and seeing if anyone from their friend group wants to join their team.

Alanda Carter joined Beachbody to make extra money. She ended up spending at least $20,000.

Courtney DeWitt got the message and joined Younique. She spent over $2,000 on makeup products. She said she didn’t even know that much about makeup. "[But] they incentivize you, so I started to get really into makeup."

When the pandemic hit and the economy slid into a recession, MLMs saw an opportunity to target new potential team members.

“It's unfair to even call these companies businesses because they're not. They're high-level indoctrination, money funnels. They're not businesses.”

— Roberta Blevins

These businesses aren't an "opportunity" though. "Some have been identified as cults," said Doni Whitsett, a cult expert at the University of Southern California.

When you picture a cult, you don’t see a pyramid scheme of makeup or fitness shakes as one of them. Yet despite the lack of religion, some MLMs are cultlike groups.

When the world shut down in March 2020, the world of MLM and cultlike groups opened up because “you could work from your phone.” But why were people joining these groups? What went on that was cultlike if you answered the fateful “Hey, girl!” message.

Example of MLMs profiting off of COVID-19. Photo courtesy: mofammemes on Instagram. Link to photo.

The history of MLMs

Since multilevel marketing is a term for a type of business, when and how these groups were created remains uncertain. But MLMs are a type of company that uses distributors as recruiters to make money.

In layman's terms, let’s break it down:

First, distributors make money by selling products and recruiting new members. Then, distributors make money from the sales and recruits made by people under them.

This cycle then leads to what is called a “downline” of salespeople who were recruited one after the other.

Differences between an MLM and a pyramid scheme. Link to source.

But, if the business is a true MLM and not a pyramid scheme, the money you earn is not based on the recruitment aspect.

Yet, despite the different ways to make an income in these businesses, the AARP found that only 25% of participants made any money in their “business venture” while 47% lost money.

Even more shocking, another study by the Consumer Awareness Institute found 99% of participants lose money.

With statistics like these, how do people still join MLMs? It doesn’t seem promising to join a potentially cultlike business to lose money?

Yet, many women still do — since women are the primary participants in MLMs.

Characteristics

Without making broad generalizations, since MLMs encompass different companies, rules and regulations, it is important to note not every MLM is a cult.

But many are.

Whitsett said you have to compare the characteristics of a cult and the designated group to find out.

A cult is described as a group or a movement exhibiting excessive dedication to some person, idea or thing, Whitsett said. It employs unethical manipulative techniques of persuasion and control designed to advance the goals of the group leader, to the detriment of the group members, their families and the community.

One of the most prominent characteristics that enable people to join a cult is vulnerability, Whitsett said. "The people who get into groups, they're really no different than anybody else," they're just vulnerable to cult indoctrination, at that point in their life, she said.

Roberta Blevins with her left over LuLaRoe clothing after leaving. Photo courtesy: Roberta Blevins

Being vulnerable

Carter was diagnosed with breast cancer. She then joined Beachbody.

The BITE Model of Authoritarian Control by Steven Hassan. Link to source.

Roberta Blevins’ father had passed away. She then joined It Works!

MLMs thrive off of people’s vulnerability to get them to join. Why? “They’re at a point in their life where they’re going through a transition or they have been going through some crisis in their life,” Whitsett said.

“These groups offer a community,” she continued. “It gives them something to have hope about and to reduce their anxiety. It appeals to people’s normal needs for belonging, and to feel safe.”

After Carter was diagnosed with cancer, she was looking for ways to work from home. She then ran into a neighbor who worked for Beachbody. Her neighbor claimed she made six figures through Beachbody.

Carter decided to look into it and talked to her neighbor about joining.

Which she did. Carter quickly became a coach, which is what Beachbody calls their distributors. She bought the shakes and began doing the Beachbody workouts. After purchasing all the supplies, it was time for Carter to promote her new business. Promoting her new business though meant recruiting other people, “You’ve always got to be inviting someone,” she said, because people continue to leave.

Carter remembers they told her that as long as you work really hard, then there’s no way for you to fail. And she was determined — Carter was going to be successful and gain team members.

She remembers talking to friends, joining different online groups and even cold-calling people to join her team. Nothing worked. No one wanted to join or stay with Beachbody.

Not ready to give up, Carter obtained different certifications to help her business. She became CPR certified and became a certified Beachbody program instructor. She thought with her new certifications she could join a gym to teach and gain new team members.

But no gym took her new qualifications.

After working so hard to achieve her certifications, Carter was upset no gym took her new expertise. She felt like she wasted money and time. Yet, another cultlike characteristic of the group then appeared: Love bombing, lavishing someone with attention or affection — especially to influence or manipulate them.

In these groups, love bombing can take place at different times, the women described. It can happen in the beginning when joining, during or when trying to leave. For many of the women, it happened periodically during their time within the cult.

Blevins was love bombed to join It Works! and then LuLaRoe later. She was told she was a rock star salesperson and was born to be a business owner, despite not having the qualifications to be a business owner, she said.

Blevins said the group would tell her anything, “That you would want to hear when you're in the lowest part of your life. Everything that you genuinely believe about yourself on a very deep level [and] … hope that someone else sees it too,” she said.

But that love bombing eventually starts to fade. Especially if you were not working 24/7.

“This was all times of the day, all throughout the day, and then if you weren’t attentive enough,” DeWitt said, “They’ll be like … Maybe she doesn’t want it bad enough.”

Blevins and a friend at LuLaRoe event. Photo courtesy: Roberta Blevins

Blevins and her LuLaRoe leggings. Photo courtesy: Roberta Blevins

Blevins at a LuLaRoe event. Photo courtesy: Roberta Blevins

A flyer for Blevins and her business. Photo courtesy: Roberta Blevins

The women said this treatment is one of the undisclosed principles of MLMs. The love bombing happens when you’re successful, and when you’re successful, that is because of the group.

But when you fail? That’s your own fault, the women described. It’s always, “I can’t pay my bills this month, I’m a loser. It’s not, hey thanks LuLaRoe, I can’t pay my bills this month,” Blevins said.

“It always goes back to somehow you have to change yourself. It’s never the system,” said Carter. “It’s always that you are the problem. You’re holding yourself back.”

This cycle of treatment leads many women to feel shameful or guilty for not doing enough, despite working longer hours than a typical 9-to-5 job.

“You had two parties and you didn't make enough. Well, you should have had four parties then,” Blevins said, impersonating the MLMs.

It leads the women to then long for the group to accept them and “praise” them once again, pushing them to work overtime.

While it might be easy to question how these women don’t notice what’s happening, many did. They said they heard the voice in the back of their head telling them to leave. Yet, ignored it.

Ignoring your conscience is extremely normal in these groups, Whitsett said, because group members are shamed for having diverging thoughts. Those thoughts keep them in a state of failure within the group leading them to believe they’re having doubts because they didn’t recruit enough people, Whitsett said.

The cycle then continues.

Members are praised (or love bombed) for having a good week. Members having a bad week are considered a failure. “They psychologically trap you,” Blevins said.

How does one get out of this ongoing cycle? By a snapping moment.

DeWitt spent $400 on new makeup in one sitting when her husband sat down with her. To him, $400 was crossing the line. “It was such a little thing that my husband did. But it turned out to be such a huge thing. And me taking further steps to leave,” DeWitt said.

Carter was watching videos when an anti-MLM video queued up next. Despite being a business owner in Beachbody, Carter listened.

As the video played, Carter became horrified and ashamed. The video discussed what she had been doing to other women as a Beachbody coach from the outside looking in. Carter left.

Yet, despite how easy it was to explain leaving, the women said leaving the group was incredibly difficult: a constant tug and pull with other distributors love bombing the women to stay.

As one of the top distributors for LuLaRoe, Blevins described developing anxiety and having panic attacks as she was leaving. Women from the group would harass and even spy on her for leaving. Her anxiety became detrimental. Blevins would leave her phone in her room for days, panicked and paranoid someone from the group would try to spy on her.

The treatment she received left her with mental health struggles. It hurt even more because I thought these were my friends, Blevins said.

Aftermath

While leaving an MLM may seem trouble-free, Whitsett said it’s the exact opposite. “We know these groups cause emotional, psychological, physical and often sexual abuse. People who come out need to work through the various traumas that they’ve incurred because of their experiences,” she said.

When the pandemic hit, Blevins and DeWitt created an anti-MLM hashtag. With MLMs profiting off the coronavirus as people became laid-off and unemployed, Blevins and DeWitt inevitably knew what was going to happen.

Blevins and DeWitt's anti-MLM flyer. Photo courtesy: Roberta Blevins and Courtney DeWitt

Anytime they saw a distributor attempting to gain new teammates online, Blevins and DeWitt would interject by messaging those that could fall prey. They didn’t want anyone to go through what they went through emotionally, mentally and financially.

“[People] don’t know anything about MLMs. They think it’s just a party. They don’t realize how insidious it actually is,” Carter said. “MLM is the worst cult of all of them. As you meet other people, you don’t see them as a person, you see them as someone who can buy your [product].”

It takes one person to step up and be vocal about what goes on in MLMs, DeWitt said. That’s what starts the movement.

So, if you answer that fateful “Hey, girl!” message in your inbox, that’s what is cultlike when you join.