Thursday, May 02, 2019

Recommended podcast on multilevel marketing

The Dream by Stitcher.

Excellent look at how multilevel marketing companies succeed at avoiding regulation and at convincing enough people to try them—and convincing them that their subsequent failure is their own fault and not intrinsic to the model—to make the people at the top a lot of money.  Both gender and the collapse of real economic opportunity for many people in the U.S. play big roles—the American mythos of success being a matter of wanting it enough, combined with women’s desire for flexible work that will allow them to support their families in both economic and noneconomic ways, makes MLMs seem like a plausible response to rather than a symptom of toxic inequality.  There are many striking moments, including the justifications that people in the “upline” use to explain why it’s ok to take money from losers—I mean, from people who lack sufficient motivation to succeed.  (Interestingly, the industry mouthpiece who appears in the last episode does not push that line, contrary to all the individual MLMs trying to recruit “sellers”—instead, he would prefer to characterize most “sellers” as people who sign up because they like the product and want a discount, even though he admits that almost all of them want to be understood as sellers/businesspeople.) One woman with 150 people in her “downline” makes (just) $42,000 a year—which raises the question of how much money is going to the MLM, since that’s a small fraction of the money it takes to buy enough product to get that kind of commission.  The podcast also spends a fair amount of time on the FTC’s largely lost battle to regulate MLMs like Amway, and on MLM-friendly proposed legislation that will define most MLMs as not pyramid schemes no matter how large a percentage of their “sellers” lose money.

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