Network Marketing: A primer

The pesky allure of network marketing companies in Utah’s culture.

I live in a city called Heber, named after a Mormon apostle. If you believe a name should tell you something about the place, you’ll agree with me that naming this town Heber was a stupid idea, especially when there’s so much about the valley worth incorporating into a name. You don’t have to get too creative — how about Mountain Valley, or Pleasant View, or Soul Crushing Winters? At least those names would be something more than sunshine blowing up an apostolic kilt. But, Heber it is, for better or worse, and I suspect the old man may have felt some misplaced pride at having a city in so beautiful a valley named after him.

I doubt Charles Ponzi ever felt such pride for his namesake, the Ponzi scheme. In a Ponzi scheme, someone lets you pay a dollar, which means you get to let others pay you a dollar so they can let others pay them a dollar, and eventually everyone gets money except for the last line of suckers before the scheme collapses. It’s quite illegal, deemed so because there is nothing of value being created; it’s just money changing hands without any service or goods provided. It moves a lot of money in the short term, but it can’t last.

Creative capitalists needed a way to skirt the legal definition of a Ponzi scheme while still benefiting from its structure, and so the multi-level marketing company was born. MLM (or network marketing) companies aren’t Ponzi schemes because the dollar I spend in order to let other people give me a dollar is rewarded with a product of some kind. Originally it was soaps or coins or any random widget–they didn’t really care what the product was, as long as it became a vehicle for dodging Ponzi laws–but as the industry matured they realized they needed a reason for people to overpay for their widgets. The more obscure or elite the product, the easier it is for them to keep the scheme afloat without running afoul of lawyers, legislators, and rational thinkers.

This is probably why so many MLMs feature exotic products and hire their own “scientific advisory board” to assert that their mystery wonder powder is better than the others. It is also why so many people jump on board, believing the hype and falling in love with the idea of building wealth while helping their friends and family benefit from their mystery wonder powder.

I’m not saying all MLM products are crap, but I am saying that the business model preys on human weaknesses — greed, fear, and vanity, at least. I know a lot of people who are invested in one scheme or another. I have family employed by the companies responsible for unleashing them on the world. For years, I even gave my kids MLM vitamins every morning. The people I know who are into MLMs are good, caring people, they just believe in a different model of business than I do.

Towns like mine — towns named for dead Mormons—tend to love network marketing. If you know many Mormons you probably already know someone selling something wrapped in MLM lard, and you probably know that açaí (ah-sah-EE) is the most amazing, profit-worthy food product since manna. (The bible doesn’t mention it, but manna was actually an MLM thing. Probably.)

Açaí comes from the Amazon delta. It really is higher in antioxidants than any other food they’ve found. More than ten times higher. It really is a staple in some of the healthiest primitive cultures, too, or it was, until the recent açaí boom increased prices such that many can’t afford it anymore. Maybe you’ve bought some, in wine-like bottles at wine-like prices, from MonaVie, one of Utah’s endless MLM companies. Maybe you even sell for them, convinced that you’re helping people discover a wonder food and dreaming of your millions. (MonaVie’s 2014 disclosure statement shows that 95% of their distributors make less than $80 per week, so if millions is your goal I hope you’ve got 240 years before retirement.)

Like açaí, tomatoes were once media sweethearts, thrust onto nutritional pedestals as the next big superfruit that was going to save your life. That was nearly 100 years ago, and while it turns out tomatoes really are good for you, they’re not crushed into powder or pressed into expensive drinks because MLMs know that no one will pay $45 for Tomato Magic Elixer™ when V8 has the market covered for three bucks. I predict the same fate for açaí, in spite of its high anti-oxidants, because scientists are already discovering that test-tube results don’t translate well into human body results.

“Despite all the hoopla,” says Jeffrey Blumberg, director of an antioxidant lab at Tufts University, “the flavonoids that you find in açaí are not very important, or powerful, or significant contributors to fighting free radicals.” Said another food scientist at Texas A&M, “you can make the same health claim for açaí as you can make for a carrot.”

And that, my friends, brings me to my point: I am giving you a unique opportunity to invest in my brand new company, çårrøt. It’s going to be HUGE. It turns out my product, çårrøt, has the same health benefits as açaí! We’ll have çårrøt conventions. Çårrøt brochures. We’ll wear orange all the time. You can be the first distributor in our såpphïrê çårrøt circle. You can alienate your friends and family while adding absolutely no value. It will be an epic adventure in the grand MLM tradition. I’m only accepting the first six emails I receive at millionaire@çårrø, so think on your toes, and with your wallet, and trust me. But, you know, don’t cancel your MonaVie account or anything. Just in case.

I love to write and I love to think. Sometimes I do them in the right order. Father of 5.

I love to write and I love to think. Sometimes I do them in the right order. Father of 5.