Saturday, 6 October 2018

New Vox Media article reveals yet more 'MLM' deceptions.

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YouTube is full of MLM resignation videos — but some are sales pitches for new companies

Former sellers for companies like LipSense and Younique often turn to YouTube to announce their resignations. But how many of them are genuine?

Sometimes, these videos are just another recruitment tactic.
 PeopleImages/Getty Images
In the summer of 2016, Jenie Evans posted a YouTube video explaining why she was leaving Younique, a cosmetics-focused direct sales company not unlike Mary Kay or Avon.
Evans was a successful “presenter,” the company’s term for salespeople, according to her video. She was “purple” status, the second-highest rung on the Younique ladder. In addition to earning commission on her own sales, she had 350 women on her “downline,” meaning she earned commission on all of their sales as well. But, Evans said, she had problems with the product, particularly the mascara, which she said had become virtually unusable after the company changed its formula. She said she felt like she had to lie to her customers in order to keep making sales.
Halfway through the video, titled “Why I resigned from Younique as a Purple Status,” Evans’s emotional explanation turns into a sales pitch. “What Younique did for me was help me dream bigger than I’ve ever dreamed,” she says around the six-minute mark. “It’s helped me realize that direct sales — network marketing — is the future. It’s what’s going to give me and my family the future that we want, that we deserve.”
After a few more minutes of explaining why Younique failed her and all its other presenters, Evans finally revealed the exciting new opportunity that helped her leave a company where her concerns weren’t taken seriously: She’s going to become a “beauty guide” for LimeLight by Alcone, now known as LimeLife. (In a recent episode of The Dream, a podcast about MLMs, one of the hosts signed up to join LimeLife and was told the best way to make money was by recruiting more people to her downline.)
“I dreamed about it every night,” Evans said in the video, which has received more than 450,000 views. “I couldn’t sleep. All day, it was all I thought about. I finally made the decision that this was the right thing to do. I know it was the right decision — I know it was.”
There’s a corner of YouTube that’s full of videos in which disgruntled sellers for multi-level marketing (MLM) companies explain why they just can’t take it anymore. The sellers are almost always women. They often describe being alienated from other sellers once they voice their concerns. And in some cases, the videos are just recruitment tools for a new multi-level marketing scheme, disguised as an airing of grievances against another.

What even is multi-level marketing?

Even if you haven’t heard of Younique, it’s likely you’ve been approached by a seller for another MLM at some point. You know that Facebook friend who messages you out of the blue because she’s got an “exciting business opportunity” she knows will change your life? Or the ones you see hawking leggings, lipsticks, and weight-loss smoothies online? Chances are, they’re involved with an MLM.
It’s rare for these companies or the people who work for them to refer to themselves as MLMs. Some will use the term “direct sales,” but, as Gray Chapman wrote for Racked last year, the lines between direct selling and multi-level marketing are so blurry, they’re practically nonexistent. Direct selling, at its core, means selling products to people you know. Multi-level marketing involves a degree of direct selling, but it also encourages sellers — or distributors, consultants, beauty guides, or whatever they may be called — to recruit people to work underneath them.
It sounds counterintuitive — why would someone recruit competition for themselves? — but MLM sellers/recruiters typically earn commission for all the sales and purchases made by those on their “downline.” And since many MLMs require new recruits to purchase a starter kit and build up their inventory before they can start selling, “uplines” — the recruiters — can make money off their downlines before those new sellers even earn a dime. If all of this sounds predatory, it’s because it often is. A 2017 report by the Federal Trade Commission found that 99 percent of MLM recruits end up losing money.
MLMs are selling something more intangible and alluring than makeup or vitamins. They’re selling the idea of freedom and flexibility; they’re offering people the opportunity to take control of their own lives. This sales pitch certainly appears to be working. According to theDirect Selling Association, the industry’s lobbying arm, one in six American households has at least one member involved in direct sales. Tellingly, more than three-quarters of those involved in direct sales are women.

The YouTube resignation

One of the biggest distinctions between a regular job and an MLM is that the latter requires you to leverage your social network in order to make money. This is why MLM sellers are so prolific on social media. It’s why my Facebook feed is a dizzying array of advertisements for LuLaRoe leggings, doTERRA essential oils, ItWorks! weight-loss supplements and firming wraps, LipSense lipsticks, and Younique mascara. Every friend and family member is a potential customer. More importantly, they’re a potential recruit.
So when an MLM seller decides to call it quits, it’s often a public affair.
YouTube is littered with MLM resignation videos where former sellers explain what pushed them over the edge. Sometimes, it’s the product: LuLaRoe had to offer refunds for leggings that customers said ripped “like wet toilet paper,” which cut into consultants’ sales. Other times, it’s oversaturation: LipSense became such a popular MLM that the company’s lipsticks were constantly out of stock, making some sellers feel like they had to buy up whatever they could in order to keep their business afloat.
Sometimes, those who leave these companies have climbed to the top of the ranks by recruiting hundreds of people for their downline and amassing thousands of dollars’ worth of commission in the process. More often than not, according to data from the FTC, MLM sellers either lose money on building up their stock or have just managed to break even.

Leaving one MLM just to join another

Most of the women who post these videos are genuine in their anger and disappointment. Some pledge to never work for another MLM again, no matter how enticing the sales pitch is.
But some of these resignation videos are barely-disguised sales pitches for a new MLM. Evans’s video, which was uploaded in June 2016, includes an edited description that says she “didn’t realize that my decision would inspire other women to chase their own worth,” presumably meaning that she didn’t realize that describing LimeLight as a promising alternative to Younique would encourage women to join her downline. (Evans did not respond to a request for comment.)
Others are more transparent. One video, uploaded by a woman named Lindsay Colombe, is titled “Why The First Black Status left Younique to Join LimeLight by Alcone.” (“Black” is Younique’s highest level.) Another, by a beauty vlogger named Haleigh Everts, is called “Becoming a MASKCARA MAKEUP ARTIST | Why I Quit Selling LipSense.” In her video, Everts describes her history with MLMs: Her mother was a Mary Kay lady, she says, and she herself sold ItWorks! before turning to LipSense. Her problem wasn’t with MLMs in general — it was with LipSense in particular, which she said was plagued by stock issues and a competitive company culture.
Robert Fitzpatrick, the founder of Pyramid Scheme Alert, told Vox that these quitting/recruitment videos are another popular MLM tactic. “These messages are part of a genre of deception that is commonly encountered throughout the MLM world. It’s a classic shell game, called ‘Find the Good MLM,’” Fitzpatrick said in an email. “They might be earnest. Those who are deceived can be the most effective believers.”
But these MLMs, he said, differ from each other in product, not substance. “The goal of all is the same — to get the person to join, buy, and recruit before they quit,” said Fitzpatrick. “It does not matter whether the recruiter is earnest or not, deluded or not, cunning and manipulative or not.”
The most insidious thing about these videos is how they capture the frustrations common to those who have worked for MLMs. In one video uploaded in 2017, former LipSense distributor Lexi Liljenquist said she was leaving the company because she was sick of being treated like her concerns weren’t real. “We were told that things would get better, over and over and over again,” Liljenquist says in her video. “You weren’t allowed to feel frustrated, and that — it broke me, because I literally couldn’t do anything.”
Liljenquist doesn’t mention any other MLM by name in her video, though she does mention that she has found “another opportunity.” Two months after her resignation video was uploaded, she posted a video titled “5 REASONS TO JOIN MASKCARA.”
In a phone interview with Vox, Liljenquist was upfront about the motivation behind the initial video. Yes, she wanted to let people know why she was leaving LipSense, but she also wanted people to know she’d be working with Maskcara — and that they could, too. “I didn’t highlight or specifically go out and say it, but it was obviously my intent to have people want to join Maskcara,” Liljenquist said. Like Everts, she described Maskcara as being fundamentally different from LipSense, though she said she understood why anyone who had a bad experience with one MLM would be hesitant to join another.
For Liljenquist, MLMs are “a game of luck” where early adopters reap the rewards. “You have to work hard for it, but if you get in at the right time, that’s what’s going to set you up to get more money,” she said.
Ultimately, those who benefit from MLMs are those at the top, the early adopters who recruit hundreds of women for their downline before anyone else does. Whether or not the company ends up being a scam doesn’t matter; the commission money has already rolled in.

Vox Media (copyright 2018)


'Multi-Level Marketing' warning:

The following deconstructed analysis has been formulated to sharpen the critical and evaluative faculties of all unwary persons approaching so-called 'Multi-Level Marketing' from the dangerous (subjective) point of view that it must be a business/industry, rather than from the safe (purely-objective) point of view that they don't really know what it is.


More than half a century of quantifiable evidence, proves beyond all reasonable doubt that:

  • the widely-misunderstood phenomenon that has become popularly-known as 'Multi-Level Marketing' (a.k.a. 'Network Marketing') is nothing more than an absurd, non-rational,  cultic, economic pseudo-science maliciously-designed to lure unwary persons into de facto servitude, dissociate them from external reality and not only steal their money, but also deceive them into unconsciously acting the role of bait to lure other unwary persons (particularly their friends and family members) into the same trap. 
  • the impressive-sounding made-up jargon term, 'MLM,' is therefore, the misleading title for an enticing structured-scenario of control which has been developed, and constantly acted out as  reality, by the instigators, and associates, of various copy-cat, major and minor, ongoing organised crime groups (hiding behind labyrinths of legally-registered corporate structures) to shut-down the critical, and evaluative, faculties of victims, and of casual observers, in order to perpetrate, and dissimulate, a series of blame-the-victim 'Long Cons*'  - comprising self-perpetuating rigged-market swindles**, a.k.a. pyramid scams (dressed up as 'legitimate direct selling income opportunites') and related advance-fee frauds (dressed up as 'legitimate: training and motivation, self-betterment, programs, recruitment leads, lead generation systems,' etc.).
  • Apart from an insignificant minority of shills (whose leading-role in the 'Long Con' has been to pretend that anyone can achieve financial freedom simply by following their unquestioning example and exactly-duplicating a step-by-step-plan of recruitment and self-consumption)the hidden overall net-loss/churn rate for participation in so-called 'MLM income opportunities,' has always been effectively 100%.

*A 'Long Con' is a form of fraud maliciously designed to exploit victims' existing beliefs and instinctual desires and make them falsely-believe that they are exercising a completely free-choice. 'Long Cons' comprise an enticing structured-scenario of control acted out as reality over an extended period. Like theatrical plays, 'Long Cons' are written, directed and produced. They involve leading players and supporting players as well as props, sets, extras, costumes, script, etc. The hidden objective of 'Long Cons' is to convince unwary persons that fiction is fact and fact is fiction, progressively cutting them off from external reality. In this way, victims begin unconsciously to play along with the controlling-scenario and (in the false-expectation of future reward) large sums of money or valuables can be stolen from them. Classically, the victims of 'Long Cons' can become deluded to such an extent that they will abandon their education, jobs, careers, etc., empty their bank accounts, and/or beg, steal, borrow from friends, family members, etc.


** The enticing structured-scenario of control fundamental to all 'rigged-market swindles' is that people can earn income by first contributing their own money to participate in a profitable commercial opportunity, but which is secretly an economically-unviable fake due to the fact that the (alleged) opportunity has been rigged so that it generates no significant, or sustainable, revenue other than that deriving from its own ill-informed participants. For more than 50 years, 'Multi-Level Marketing' racketeers have been allowed to dissimulate rigged-market swindles by offering endless-chains of victims various banal, but over-priced, products, and/or services, in exchange for unlawful losing-investment payments, on the pretext that 'MLM' products/services can then be regularly re-sold for a profit in significant quantities via expanding networks of distributors. However, since 'MLM' products/services cannot be regularly re-sold to the general public for a profit in significant quantities (based on value and demand), 'MLM' participants have, in fact, been peddled infinite shares of their own finite money (in the false expectation of future reward). 

Thus, in 'MLM' rackets, the innocent looking products/sevices' function has been to hide what is really occurring - i.e The operation of an unlawful, intrinsically fraudulent, rigged-market where effectively no non-salaried (transient) participant can generate an overall net-profit, because, unknown to the non-salaried (transient) participants, the market is in a permanent state of collapse and requires its non-salaried (transient) participants to keep finding further (temporary) de facto slaves to sustain the enticing illusion of stability and viability.

Meanwhile an insignificant (permanent) minority direct the 'Long Con' - raking in vast profits by selling into the rigged-market and by controlling/withholding all key-information concerning the rigged-market's actual catastrophic, ever-shifting results from its never-ending chain of (temporary) de facto slaves.

Although cure-all pills potions and vitamin/dietary supplements, household and beauty, products have been most-prevalent, it is possible to use any product, and/or service, to dissimulate a rigged-market swindle. There are even some 'MLM' rackets that have been hidden behind well-known traditional brands (albeit offered at fixed high prices). Some 'MLM' rackets have included 'cash-back/discount shopping cards, travel products, insurance, energy/communications services' and 'crypto-currencies' in their controlling scenarios.

No matter what bedazzling product/service has been dangled as bait, in 'MLM' rackets, there has been no significant or sustainable source of revenue other than never-ending chains of contractees of the 'MLM' front companies. These front-companies always pretend that their products/services are high quality and reasonably-priced and that for anyone prepared to put in some effort, the products/services can be sold on for a profit via expanding networks of distributors based on value and demand. In reality, the underlying reason why it has mainly only been (transient) 'MLM' contractees who have bought the various products /services (and not the general public) is because they have been tricked into unconsciously playing along with the controlling scenario which constantly says that via regular self-consumption and the recruitment of others to do the same, etc. ad infinitum, anyone can receive a future (unlimited) reward.

I've been examining the 'MLM' phenomenon for around 20 years. During this time, I've yet to find one so-called 'MLM' company that has voluntarily made key-information available to the public concerning the quantifiable results of its so-called 'income opportunity'.

Part of the key-information that all 'MLM' bosses seek to hide concerns the overall number of persons who have signed contracts since the front companies were instigated and the retention rates of these contractees. 

When rigorously investigated, the overall hidden net-loss churn rates for so-called 'MLM income opportunites' has turned out to have been effectively 100%. Thus, anyone claiming (or implying) that it is possible for anyone to make a penny of net-profit, let alone a living, in an 'MLM,' cannot be telling the truth and will not provide quantifiable evidence to back up his/her anecdotal claims.

Although a significant number of 'MLM' front-companies (like 'Vemma', 'Fortune Hi-Tech Marketing', 'Wake Up Now') have been shut-down by commercial regulators, some of the biggest 'MLM' rackets (like 'Amway' ,'Herbalife', Forever Living Products' ) have continued to hide in plain sight whilst secretly churning tens of millions of losing participants over decades.

The quantifiable results of the self-perpetuating global 'Long Con' known as 'Multi Level Marketing,' have been fiendishly hidden by convincing victims that they are 'Independent Business Owners' and that any losses they incurred, must have been entirely their own fault. 

Blog readers should observe how (in the above linked-videos) chronic victims of 'MLM' cults are incapable of describing what they were subjected to in accurate terms. Even though they are no longer physically playing along with the 'Long Con's' controlling-scenario, they unconsciously continue to think, and speak, using the jargon-laced 'MLM' script - illogically describing themselves as 'Distributors.' 

Chronic victims of blame-the-victim cultic rackets who have managed to escape and confront the ego-destroying reality that they’ve been systematically deceived and exploited, are invariably destitute and dissociated from all their previous social contacts. For years afterwards, recovering cult victims can suffer from psychological problems (which are also generally indicative of the victims of abuse):

depression; overwhelming feelings (guilt, grief, shame, fear, anger, embarrassment, etc.); dependency/ inability to make decisions; retarded psychological/ intellectual development; suicidal thoughts; panic/ anxiety attacks; extreme identity confusion; Post-Traumatic Stress Disorder; insomnia/ nightmares; eating disorders; psychosomatic illness, fear of forming intimate relationships; inability to trust; etc

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