‘It’s Desperation’ – The Multi-Level Marketing Scheme Using COVID to Attract Recruits

Wearing a pink sweatshirt, her hair tied up in a messy bun, a young woman speaks into her camera at a kitchen table. 

“With everything going on with coronavirus and the way that the world is being impacted,” she says earnestly, “if you have any doubt in your mind about your future or any concern that you might not be able to make a payment or that your health isn’t the best, and you’re worried that this is something that is going to seriously affect you, then just reach out to me and let’s just have a conversation.”

As the COVID pandemic swept the globe early last year, videos like this began to appear across social media. Individuals involved with network marketing companies were leaping on job insecurity and rising unemployment to entice potential recruits. While we all locked down, they promised furloughed and laid-off women that they could make money without leaving the house. Multi-level marketing rapidly became an unexpected symptom of a devastating disease – one that thrived on mass unemployment and stay-at-home orders. 

Multi-level marketing (MLM) companies are direct sales organisations that operate on a dual model – members are expected to both sell products and recruit others into the business. Salespeople receive a cut of their recruits’ profits, creating an incentive to attract more and more people to the company. Sellers are also encouraged to regularly purchase products for themselves, either to try out new lines or to make up for not meeting targets. The model has led to many comparing multi-level marketing companies to pyramid schemes, and an estimated 99 percent of participants operate at an insignificant or zero net profit. 

Multi-level marketing companies are not a new invention – Tupperware and Avon are two examples of more benign, highly successful companies that have followed a network marketing model for decades. Yet the rise of social media has breathed new life into the industry. Platforms such as Instagram allowed MLM participants (who are overwhelmingly female) to target potential recruits on a massive scale and paint a picture of a luxurious lifestyle reportedly funded by the profits of network marketing.

At the same time, the rise of hustle culture – a fetishisation of working multiple jobs fuelled by the soaring ascent of gig economy work – saturated social media. MLM recruits hashtagged #bossbabe and #hustlehard from their front rooms and discussed side hustles and multiple revenue streams in their comments sections. Working in your free time was beginning to be seen as an aspirational lifestyle, and MLMs were at the forefront of the trend.

Dr Máire O Sullivan is a lecturer in marketing and international business at Munster Technological University in Ireland. She was targeted by an MLM member whilst recovering from COVID in April last year, and was specifically asked whether she was secure in her current job. She says that this is a tactic that many recruiters are using in order to prey on the challenging circumstances that many in insecure work currently find themselves.

“I would say that it’s desperation, but really I think that it’s hope that drives people to MLMs in a time like now,” she says. “It’s very seductive. Even when you know the numbers, and you know that 99 percent of people make no money, there’s always a part of you that thinks, ‘Maybe I could be that 1 percent.’”

O Sullivan believes that the rapid rise of MLMs is part of a broader neoliberal deification of entrepreneurship. Being a business owner or working for yourself is often held up above being an employee – even when working for someone else means access to benefits and labour protections. Early on in the pandemic, when we were all being encouraged to support small and local businesses who might be struggling, MLMs (who refer to their participants as “business owners”) were able to thrive.

“There’s a huge section of society who don’t see anything wrong and feel like by criticising an MLM you’re attacking small business owners, but that isn’t what you’re doing,” O Sullivan says. “You’re attacking multi-millionaires who are running a loss-making enterprise for many people who believe that they are small business owners.”

Jemimah Freeside, a 22-year-old freelance actor from London, reports being bombarded by MLM recruiters during the pandemic. She has long been targeted by consultants involved in Arbonne, a prominent beauty MLM, and believes that as a self-employed individual working in an insecure industry she is seen as an ideal candidate. She says that she saw many of her peers being successfully recruited by Arbonne consultants during the COVID crisis.

“Being self-employed has meant that this has not been an easy year financially,” she says. “The glamorisation that Arbonne and other MLM representatives spout could be really tempting… I’ve seen a huge rise in Arbonne pushing since the pandemic. They use the idea of several income streams and the fact that people have lost work. I think that all of the techniques that Arbonne are using are exploiting people’s vulnerable financial and mental state.”

Arbonne told VICE in a statement: “Arbonne upholds the highest standards of integrity, and we do not condone deceptive, unethical, or illegal practices of any kind.” The company added that each Arbonne rep must sign a “comprehensive business agreement and adhere to a strict internal Code of Ethics.”

Dr Maja Golf Papez, a marketing lecturer at the University of Sussex, says that “MLM firms have seen a big surge in UK sign-ups since lockdown”.  The Direct Selling Association – whose members include Arbonne, Avon and The Body Shop at Home – has revealed growth in many of these companies’ figures as a result of lockdown.

“The main promise of MLM initiatives is being able to work at home whilst juggling other responsibilities,” Papez adds. “Pandemic-related challenges such as financial difficulties increase the pool of people likely to join these schemes. At the same time, MLM participants are becoming much more efficient with using platforms like TikTok to present MLM initiatives as a way of becoming financially successful in a very short space of time.” (TikTok banned MLMs in December of 2020.)

One such individual who was swept up in Arbonne’s dream-peddling rhetoric is Paige Skinner, who is 30 and based in the US. She joined the company as an independent consultant after being enticed in by a work colleague. After she signed up, she says that she was surprised by the heavy emphasis on recruitment and found that she was often pressured to purchase expensive products. Arbonne did not respond specifically to this claim, but urged those who had a negative experience with the company to reach out so they could “investigate further and respond, as necessary”.

Paige soon quit the company after being shocked by attitudes towards the pandemic that she saw from others working within Arbonne, and now runs an anti-MLM platform on YouTube.

“When COVID hit, people were offering a ‘COVID care box’”, she says. “Consultants would ask people to Venmo them $20 or $30 so that they could buy products from their Arbonne stores to send to doctors or nurses. It immediately made me uncomfortable. I realised that they could rank up or make commission or get new recruits from this. It was clearly a way to promote Arbonne and themselves. To me, that isn’t philanthropy, it’s exploitation. That’s when I quit, because I didn’t feel like I could associate with people who were exploiting the pain of others.”

Arbonne has put strict protocols in place in recent years that police the rhetoric that consultants use around recruitment, sales and the health benefits of their products, and Paige notes that the company did send out an internal communication urging members to stop this particular “charitable effort”. But O Sullivan adds that the hierarchical structure of most MLMs means that there are many layers of liability, and she believes that rule-breaking has been frequent during the pandemic, including individuals promising that their products have unproven anti-COVID health benefits. 

Arbonne told VICE that it is a “public benefit company whose stated purpose is to create innovative products and entrepreneurial business solutions that integrate principles of social, environmental and sustainable business practices to help people and communities flourish and thrive around the world.” 

It added that business ethics standards team “conducts regular training sessions with Arbonne independent consultants, continuously monitors their business practices to ensure compliance with our policies, and takes immediate action if questionable activities arise.” It also urged people to immediately report any unethical or improper behaviour and said that it is “are committed to investigating each complaint we receive through this channel”.

Twenty-four-year-old Aubree Mantei left Arbonne in 2020 after growing increasingly uncomfortable with the company. “At the beginning of last year, corporate rolled out a bunch of conditions saying that we couldn’t use certain words because they were concerned that people were portraying a false impression of the company,” she says. “At first I thought that it was weird. I didn’t understand why it mattered.

“But then I realised that there were people who were spending thousands and thousands and getting into debt. I knew a girl who opened up a credit card just so that she could purchase products to earn rewards. That’s when I realised that the whole thing was crazy.”

Whilst working within the company, Mantei spent hundreds on products, and she believes that Arbonne ramped up their tactics during the pandemic.

“They try and make you think that you’re doing a good thing by supporting local, but you’re really not,” she says. “They’ve played off that idea, and I also think that they’ve played off the unemployment rate. They’ve targeted people by telling them that they don’t have to go back to work, and that they can start working for Arbonne whilst in quarantine.”  

O Sullivan hopes that some of the challenges of the past year will guide the industry towards becoming more ethical, with much more openness towards finances, but she also admits that seems to be little appetite for change amidst MLMs. For now, she warns strongly against getting involved, and encourages those at the top of MLMs to think carefully about the structure of the companies that they work for, particularly during the pandemic.

“Even if you’re in the 1 percent, you need to think about where they money is coming from,” she says. “If 99 percent of the people in the business are losing money, then all you’re doing is transferring wealth from people below them up the list… I can understand that to someone who has lost their job, or perhaps has children at home and has no opportunity to go out and get a job because of caring duties or because you can’t expose yourself to COVID, MLMs feel like a lifeline.

“But that lifeline might have a weight attached to it.”

@whatkatiebwrote