Multi-level marketing companies like LulaRoe prey on mothers desperate for flexible work.
The anecdote went viral on LinkedIn and Facebook: An executive noticed one of his employees, a mother, crying at her desk. She explained that her child is sick, she had no sick days left and couldn't afford to miss work. He wrote her a check and sent her home to her child. It's a modern-day working mom fairytale.
The male executive is the hero in the story, but frustrated women who were raised on Spice Girls-era girl power don't want to wait around for someone else to set them free from punishing corporate policies. These women want to be their own heroes (and their own bosses). And when a friend slides into their DMs to tell them they can be, well, they desperately want to believe it.
But the hard truth is that girl power never completely grew up to become women's empowerment and a culture that paid lip service to gender equality without making progress primed a generation of mothers to be the perfect targets for multi-level marketing (or MLMs as they're commonly referred to).
A population already burdened with so much unpaid work in the service of their families ended up doing even more unpaid labor to serve companies' bottom lines, and we need to ask ourselves why.
We have entered an era of MLM reckoning. The alarm is sounding about the damage MLMs can do to women and their families but if you listen closely, there is another sound here: The sound of opportunity for companies that can actually live up to some of the promises MLM fails to keep.
The era of MLM backlash
For years multilevel marketing got a pretty decent edit in popular culture—the pink Cadillacs helped—but in recent years a new awareness has been building. Debunking the myth of MLMs is in vogue.
It's been more three years since John Oliver's critique of the industry went viral and the documentary Betting on Zero, which details the controversy surrounding one MLM company, was released. There are several popular podcasts detailing the downside of MLMs, and multiple subreddits, Facebook groups and online communities dedicated to advocating against a business model in which 75% of the salesforce doesn't turn a profit.
It seems consumers are becoming more MLM-savvy, but this new awareness came at the expense of so many mothers. Thankfully, the media has been taking notice, especially of LulaRoe, an MLM empire built on leggings and female empowerment but plagued by lawsuits and stories of women gone bankrupt.
By the industry's own admission 75% of people who sign up to sell for an MLM company are women. The Direct Selling Association, the MLM industry's national trade association states that the average direct seller makes $5,702 in retail sales but the AARP Foundation suggests that more than half of those in MLMs who make money make less than $5,000 in a year and that the majority (73%) of sellers either break even or lose money.
If you've been on the internet much in the last couple of years you probably already know this. Vice did a documentary on it. Truth in Advertising released an investigative piece. From The Washington Post to the Huffington Post, media was busy in 2019 telling us that MLM are hurting women.
The question is, are we ready to stop the pain?
But in 2020 women are still joining MLMs because these companies are offering something that is missing from the lives of so many: Support and a flexible opportunity.
Motherly's second annual State of Motherhood survey found 85% of moms don't think society understands or supports mothers, and that while financial need is the top reason for moms participating in the workforce, "desire to participate in work outside the household" is a significant motivational factor as well. Today's moms need and want to work, but they want to work for companies that don't expect them to pretend they don't have children. The survey suggests that some moms are leaving their jobs because of the "inability to strike a work-life balance or the work culture not being supportive."
When asked what would help, moms said longer, paid maternity leave, childcare, flexible schedules and remote work opportunities. MLMs promise mothers the flexible, remote jobs they so desperately want.
Motherly's survey isn't the only one to highlight the need for better work-life balance. A recent survey by Flex Jobs found more than half of stay-at-home parents stay out of the workforce longer than they would like to.
"Without flexible work options, for example, 36% of stay-at-home parents we surveyed said that they actually wanted to return to work but their job was too inflexible to accommodate their needs as a working parent. Thirty-four percent turned to freelancing to bring in some income while staying at home with their kids, and 11% tried multi-level marketing businesses," explains Brie Reynolds, a career development manager and coach at FlexJobs.
It's clear that there is an eager talent pool that is going untapped, and Reynolds is hoping to see that 11% go down as more legitimate companies offer the kinds of opportunities parents are seeking. According to Reynolds, the number of people working remotely in the U.S. has increased 159% between 2005 and 2017.
"The most common work-from-home job titles include a huge range of professions, showing that companies are applying remote work to a wide variety of professions: teacher, writer, developer, analyst, sales representative, nurse, accountant, and project manager, for example. Hopefully, as more legitimate remote jobs become available, the need for parents to try risky MLM programs to find the flexibility they need will greatly diminish," she says.
Anti-MLM advocates say awareness of the problem isn't enough
Katie Young is the co-host of the podcast Sounds Like MLM but OK, which examines the impact of MLMs on sellers, and an administrator for a Facebook group by the same name. The group has more than 130,000 members, some of whom have been in, and left, the MLM industry.
"The former sellers are a really solid chunk of people that are joining this community because they are the people that have been personally impacted by the harm that the companies can do," Young explains.
According to Young, the promise of profit isn't the only thing prompting women to sign up to sell candles, shakes and clothing: It's also the promise of a supportive community. Additionally, Young believes MLM recruitment tactics prey on mom guilt.
"It's like, 'Don't you want to stay home with your kids? Don't you want to be the one to raise them?' There's a lot of pressure and a lot of shame," says Young, who adds that when messages like these come from a friend they carry more weight.
"They're making people feel bad about the way that they're living their lives and thinking that they're going to be better people and better parents by joining those these companies," she says.
Young hopes that the public backlash against MLM companies, combined with more flexible and legitimate work opportunities will help prevent more people from being hurt, but she is not holding her breath.
She believes MLMs will not lose their luster until lawmakers take action against them and non-MLM companies realize what parents are up against, because even in the era of MLM reckoning, when Googling a company serves up so many headlines about devastated sellers, people are still signing up.
The MLM horror stories shared in Young's Facebook group and the viral Facebook post about the hero executive have one thing in common: They shouldn't have happened. And if we create a culture that supports working parents we can stop them from happening again.
[This post was originally published on Apparently on September 24, 2019. It has been updated.]
[We reached out to LulaRoe for this story but have not heard back from the company. We also reached out to Herbalife and the Direct Selling Association. In response to this article the organization provided several links to its website. The Direct Selling Association also provided a link to its statement on LulaRoe (which is not a member of the DSA) in which it references the Direct Selling Self-Regulatory Council (DSSRC) administered by the BBB National Programs with the main goal of ensuring consumer protection. ]
[Correction, February 26, 2020: A previous version of this post stated "the average direct seller makes $5,702 in profit," but according to the Direct Selling Association "the $5,702 amount represents retail sales not profit."]