Kirralee Nicolle
21 February 2023
Multi-level marketing schemes tend to thrive in close-knit environments such as church communities, an MLM researcher says.
The MLM model typically involves a two-fold approach of direct selling and recruiting others to join what is known as a “downline”, or team of direct sellers. The “upline”, or team coaches, are then paid a percentage of the profits from their downline.
Products sold using an MLM model include skin and hair care, some essential oils and cleaning goods.
Mother-of-three Amy Keeble was involved in skincare brand Rodan and Fields for a brief period in 2018 while she attended a Melbourne evangelical church. She said it began as a source of intrigue with the products on offer.
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“I’m fascinated by skincare and makeup,” she said.
Ms Keeble grew up in Papua New Guinea and attended school with peers from the United States. She said she later watched many of them become involved in MLMs.
When her US Facebook connections began talking about Rodan and Fields, she started paying more attention. Then, she said someone connected to these friends added her on Facebook.
“It became very apparent that she was expanding her network,” she said. “Her results from it were actually insane. At first it was a real fascination and then I was more and more intrigued by it.”
Ms Keeble said she was also feeling lost in her career having just given birth to her first child.
“It’s got that catchy thing, it works for anyone and any lifestyle,” she said. “There was a real hype about it.”
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Ms Keeble said she and another friend from her church became direct sellers with the company, then rapidly began to struggle with the MLM selling style. She said their upline tried to convince them to use social media to push the product and its benefits.
“[In Australia], we don’t like people being showy and then succeeding,” she said. There’s a very, very small portion of the population who will appreciate that. Our whole thing was we don’t want to do the hard push. We’re not going to chase people up randomly.”
“In the States, that works for their culture.”
Ms Keeble said her friend also began to experience a lot of criticism from her friends for being involved in an MLM. She said while she never experienced direct criticism herself, she was surprised by the lack of support they felt.
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“Just because you don’t like MLMs doesn’t mean what we [were] doing [was] bad,” she said. “I feel this way across the board – we don’t champion each other and support each other.”
Despite her experience, Ms Keeble said she still loved the Rodan and Fields products and believed direct selling could be managed well. However, she said she wouldn’t be joining another MLM.
“I don’t think MLMs are intrinsically bad,” she said. “The pyramid side of it doesn’t actually bother me so much if done ethically.”
While often referred to as pyramid schemes, MLMs are distinct from pyramid schemes as they require the transfer of money for products. Some large companies which popularised the MLM model include skincare brand Avon, wellbeing company Amway and kitchen storage brand Tupperware. Both women and men can become involved in MLMs, but products are often marketed to women, by women. They may be sold in batches as starter kits, designed to be sold to friends, family and social media followers.
Ms Keeble said while she didn’t personally suffer financially from joining Rodan and Fields, she found herself concerned and protective toward others she knew who had financial struggles and had paid for the full starter kit.
Queensland University of Technology multi-level marketing researcher Associate Professor Deanna Grant-Smith said those recruiting for MLMs often seek out those with certain vulnerabilities.
“They’re playing to your vanity,” she said. “They’re choosing a target in the room who they think would like to be built up by being told you could be excellent at this, you could make a lot of money, you could stay home with your children. They know all the buttons to press.”
Associate Professor Grant-Smith said while those who joined MLMs were not a homogenous group, typically those recruited had no prior experience in business or sales.
“There definitely is some degree of variety within who decides to be an MLM consultant, but the ones who are most committed to it, spend the most time and the most money on it are the ones who are most likely to leave,” she said. “They’re also the ones that, paradoxically, have the lowest levels of financial literacy. So, they think they’re making money, but they really don’t have the capacity to be making those judgments.”
Associate Professor Grant-Smith said her research found that many survey participants said they chose to join the schemes because they felt unable to decline the offer, and that recruiting within churches was likely due to the kind of connections recruiters typically sought to involve.
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“Through a sense of obligation or the relationship they had with others, they felt that they really couldn’t say no,” she said. “So that would suggest to me that the likelihood that [these schemes] would exist in close-knit communities like churches is really high.”
Associate Professor Grant-Smith said she found that one of the main reasons people chose to leave MLMs was that they felt uncomfortable trying to sell the products to their family and friends. She said this pointed to a potential for relationship breakdown due to involvement in these schemes.
“If this is the reason that people are leaving, it has the very real potential to damage relationships within that group, particularly if some people choose to stay [and] some choose to leave,” she said.
Associate Professor Grant-Smith said the expectation and projection of success despite the fact that a direct seller may not actually be succeeding could lead to imbalances and tension within relationships as well.
“It can be quite exposing to suggest that you’re not succeeding because they use a rhetoric of anybody can succeed at this and the only thing that limits it is you, it’s how much you put into it,” she said. “So if you’re not making money, and we know that most people don’t make money, it can actually make people feel quite ashamed that there’s something wrong with them.”
Rodan and Fields has been approached for comment.
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