Multi-Level Marketing: Your Product is You | 162

Multi-level marketing businesses like Mary Kay, HerbaLife, and Amway are so ubiquitous, it's almost hard to imagine where they started or how deep their influence goes. In this special episode of Scamfluencers, Sarah Hagi talks with Bridget Read about her new book, Little Bosses Everywhere: How the Pyramid Scheme Shaped America. She spent years researching the origins of the “pyramid scheme,” a twist on the classic Ponzi scam, and she talks about who is most vulnerable to these massive, billion-dollar frauds, and why they’ve become unavoidable today. Be the first to know about Wondery’s newest podcasts, curated recommendations, and more! Sign up now at https://wondery.fm/wonderynewsletter Listen to Scamfluencers on the Wondery App or wherever you get your podcasts. You can listen early and ad-free on Wondery+. Join Wondery+ in the Wondery App, Apple Podcasts or Spotify. Start your free trial by visiting wondery.com/links/scamfluencers/ http://wondery.com/links/scamfluencers/ now. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Sarah Hagi?

  Audible subscribers can listen to all our episodes of Scamfluencers ad-free right now. Join Audible today by downloading the Audible app.

• 0:14Sarah Hagi?

  Sachi, have you had the experience of a random stranger from your past, all of a sudden, changing their entire social media presence, posting pictures of them with perfect makeup, they're on fabulous vacations, talking about self-empowerment, and being their own boss? And you just know they've joined an MLM?

• 0:36Scaachi Koul?

  Honestly, I don't see a lot of this, and I think it's a testament to how disinterested I stay in other people's lives.

• 0:42Sarah Hagi?

  You know what it is? It's something you would have seen from people you knew in high school or when you worked other jobs. And then you kind of see it in your 20s. And by now, you've probably removed them from who you see.

• 0:55Scaachi Koul?

  Yeah, they're just not in my life.

• 0:56Sarah Hagi?

  I actually did have one person try and recruit me. It was someone I'd worked retail with for many years. And she kind of hits me up, and I'm like, oh, yeah, you know, we were friends at work. Maybe she wants to get coffee or something. And it turns out, it was a multi-level marketing scheme. Very quickly, did I realize it was? I was like, she's never been interested in me. And now she wants me to be my own boss? Why does she care?

• 1:23Scaachi Koul?

  She was not trying to empower you.

• 1:25Sarah Hagi?

  No, she totally wasn't.

• 1:27Scaachi Koul?

  Sarah, it's funny that even you have almost gotten clipped by one of these people, because it does really speak to how ubiquitous they are. I feel like I see them all the time, on TikTok or on whatever X is anymore, women who are talking about being their own bosses. But it always seems a little unlikely.

• 1:46Sarah Hagi?

  Yes. And as you know, multi-level marketing, or MLM, is so ubiquitous, it's almost hard to imagine where they started or how deep their influence goes. But I got to talk to a journalist who spent years researching and uncovering not just how predatory these schemes are, but how government policy helps them flourish.

• 2:11Sarah Hagi?

  It's 2016 and Josie Nikoi is at a company retreat. Josie is in her late 20s with long, dark hair and a perfectly-applied cat eye. She used to work as a makeup artist and hairstylist before joining her current job, a network marketing company that offers workout routines and health shakes. Today, Josie is meeting with about a dozen of the company's top earners. They're gathered in a huge rented mansion, sitting around an enormous marble kitchen island with their laptops in front of them. These women are power hitters in the company. Almost all of them rake in millions of dollars a year. But when Josie looks around the room, she notices something. These successful, high-powered women all look exhausted.

• 2:56Sarah Hagi?

  And as the weekend wears on, the group never leaves the retreat house. They hardly change out of their pajamas. Everyone just wants to lay around and rot because they are so burned out. Alarm bells start ringing in Josie's head. She's here to learn how to be more like these women, to finally reach the highest tier, rake in big money, and live the good life. But these women are not only tired, they're unhappy. Here's how Josie describes a moment years later.

• 3:23Speaker 02

  I also witnessed the top, the seven-figure earners in it, being miserable. Everybody was miserable. Everybody, and that scared me.

• 3:33Sarah Hagi?

  This is already a problem for anybody operating in capitalism, unfortunately, but an MLM is capitalism on speed. And so, all the things you really hate about capitalism and about what it does to us, what it does to our spirits, what it does to our bottom lines, what it does to our quality of life, happens in a bigger, faster, harder way in an MLM. Yeah, and Josie has overcome a lot to get where she is. She was raised in a small town in Missouri. Her family was very religious, but after getting divorced in her early 20s, she left the church. Josie went to cosmetology school and found work in a salon, but at some point, she sustained a whiplash injury. She needed physical therapy, and paying for that was tough.

• 4:18Sarah Hagi?

  She was fully booked at the salon, but you can only cut so many people's hair in one day. Before long, Josie was swimming in medical debt. Plus, cutting hair was aggravating her injury.

• 4:30Sarah Hagi?

  Around this time, Josie discovered a brand of workout DVDs and protein shakes that helped her lose some weight. And one day, in the fall of 2013, she saw a video posted by a woman who worked for that company. In it, the woman said that her job had changed her life and enabled her to pay off all of her debt. Josie was intrigued, so she sent the woman a message, and before long, she started working there herself. The job is in multi-level marketing. Sachi, do you know how those jobs generally work?

• 5:00Scaachi Koul?

  Yeah, okay. So, it's a business that recruits people to sell a product directly to a consumer. So, it's sort of like how Mary Kay works, where there was like a lady in your neighborhood who was a Mary Kay rep, and she sold lipstick to your mom. So, let's say you're recruited to sell makeup. You buy the products from the person who recruited you, otherwise known as your upline. Then, it's on you to figure out how to sell the makeup at a markup. But the real way to make money is by recruiting people to come in and work under you. And those people have to buy makeup from you, which is guaranteed money. Those people are in your downline. And soon enough, those people are recruiting other people to work under them, and on, and on, and on. And that, Sarah, is why they call it a pyramid scheme.

• 5:43Sarah Hagi?

  Yes, that is exactly it. And like all MLM jobs, Josie was required to buy a certain amount of the product every month. She either had to sell it, or eat the cost. Josie took to multi-level marketing like a fish to water. She believed in the product, because she'd actually had success with it. She was soon taking in up to $2,000 a week, but only $200 to $400 of that was from retail sales. The bulk of her earnings came from recruiting more people to her team. And Josie was good at it. By her third year, she made more than $100,000. She quit working as a hairstylist and bought a Mercedes. And she was able to put her sister through college.

• 6:29Sarah Hagi?

  But she's working nonstop. And she started to notice that there was always a catch. Like, at some point, Josie earned a $500 a month car bonus. So if she leased a car, her company would pay the dealership $500 a month to cover the expense. But to get this perk, Josie had to agree to spend more than $1,000 on company product each month. The math wasn't even girl mathing.

• 6:54Scaachi Koul?

  It's always amazing to me how bad the margins are and the math is on these businesses. And people still fall for them.

• 7:02Sarah Hagi?

  Yeah, it's like the goalposts never stop moving. There's always one more thing, one extra thing. But at this retreat, the grind is finally getting to her. One of the women there was a top 10 earner in the company, who had just made enough to earn a special superstar day. The company flew her to corporate headquarters in California, where all the employees greeted her with flowers and balloons, clapping and cheering. But when Josie asks, "How was your superstar day?", the woman doesn't even crack a smile. She says, "It was one day, after all that hard work, one day." Josie is totally thrown. It takes a couple more years and stints at two other MLM companies, but she eventually decides she has to leave.

• 7:48Sarah Hagi?

  Josie's decision to go has pissed off all of the friends she made in her MLM jobs. She's cyberbullied for leaving, and everyone blocks her on social media. And Josie feels guilty for all the people she recruited, who she worries she set up to fail. She starts working as an esthetician and tries to heal from an utterly draining six years in multi-level marketing. But about a year later, during the pandemic, Josie starts seeing tons of people posting about their business opportunities. She knows they're all getting sucked into MLM, and she feels like she has to speak out. So she starts her own YouTube channel called Not The Good Girl, where she talks about her experience.

• 8:30Sarah Hagi?

  Josie is part of a big online anti MLM community that warns people about this technically legal but insanely predatory industry. An industry that, by one estimation, employs more than 6 million Americans. Although it's estimated to be a $40 billion industry, more than 99% of MLM workers will not only not make any money, they'll actually lose money.

• 9:02Speaker 03

  In New Orleans, truckers kept getting sideswiped the exact same way. When a man is found murdered under questionable circumstances related to these accidents, the rubber hits the road. Listen to "Over My Dead Body: Operation Sideswipe" wherever you get your podcasts.

• 9:21Speaker 04

  I'm Gemma Whelan, and in the new season of The Spy Who, we tell the story of the original femme fatale, the spy who was Mata Hari. A famous dancer turned World War I secret agent, accused of seducing Allied officers to uncover their plans. But was she a temptress or a scapegoat for French failures? Follow The Spy Who now, wherever you listen to podcasts. You can also listen to the full season of The Spy Who Was Mata Hari, early and at free on Audible.

• 9:56Sarah Hagi?

  From Wondery, I'm Sarah Haggie. And I'm Sachi Cole. And this is Scamfluencers.

• 10:10Sarah Hagi?

  Even if you don't know how multi-level marketing works, you're familiar with the biggest names in the industry: Mary Kay, Herbalife, Amway. And odds are, you probably know someone who's been involved in one. To spell out how the idea of "being your own boss" turned into the hamster wheel from hell, we're talking to Bridget Reed, author of the book Little Bosses Everywhere: How the Pyramid Scheme Shaped America. She's going to tell us about how a pyramid scheme is a cute little twist on the classic Classic Ponzi scam. Explain who's most vulnerable to these massive billion-dollar frauds, and share how the biggest MLM companies have used their clout to avoid regulation, fund conservative causes,

• 10:53Sarah Hagi?

  and get a few heartbeats away from the White House. This is Multi-Level Marketing: Your Product Is You.

• 11:04Sarah Hagi?

  Hey, Bridgette, welcome to Scamfluencers. I'm so excited to talk to you. Thank you so much for taking the time.

• 11:10Speaker 05

  I'm so happy to be here.

• 11:12Sarah Hagi?

  We'll start with something very broad. How did you become interested in MLMs and researching them to this degree?

• 11:22Speaker 05

  I started looking at the Instagram hashtag #FreeCar, which it's an abundant hashtag, and it is where MLM recruits of all stripes from many companies post themselves with their car. I think maybe it was my sister. I have a twin sister, and she was like, please look at this hashtag. And that was one of my first forays into MLM as it exists now. Obviously, I was aware of Mary Kay and Amway and things like that growing up. But that was my first intro into like, wow, these things still exist and people still do them. And then I did a short, very short story in 2021

• 12:06Speaker 05

  for New York Magazine about MLM companies experiencing this mini-boom in the pandemic. And it was just barely scratching the surface. And I just thought, this is a crazy thing. You can barely explain it. So that opened the door, and that was the beginning.

• 12:24Sarah Hagi?

  I think a lot of people vaguely know about multi-level marketing and know that it's scam-adjacent, but they're probably more focused on specific companies like Lularoe. I don't think many people could explain what an MLM is exactly.

• 12:40Speaker 05

  The thing I learned about MLM really quickly was that there was a lack of long sustained journalism on it and journalism about it as an industry rather than looking at specific companies which are scammy and have so many crazy characters. And so at this point, when I started looking into writing a book, there was the Vice documentary about Lula Rowe, there was Betting on Zero, which is a documentary about herbal life. There was the Dream Podcast, which is a fantastic podcast, but they also focused on just a few specific companies. And no one had really looked at MLM like a business, even though MLM calls itself a business. So already, that was sort of my primary goal was like, okay,

• 13:23Speaker 05

  if you're a business, then fine, I'm going to look at you like you say you are and do that from the perspective of an objective third party trying to figure out what the hell is going on. And I do think MLM was so smart to camouflage itself among, quote, "business" because nobody in the business world and in a lot of business reporting and financial reporting, nobody wants to confront the fact that a publicly traded company on American stock exchanges might be like a complete fraud. That, it opens up a lot of questions.

• 13:56Sarah Hagi?

  Yeah, there are a lot of thorny questions. And let's start from the beginning. MLM sells itself as the chance to achieve the ultimate American dream, which is being an entrepreneur. But in your book, you lay out that sales was not always synonymous with American values.

• 14:13Speaker 05

  Yeah, the history of sales was something that I really had to dig into because it feels like a part of our DNA in a way that's really insidious because Americans weren't always salesmen. It really was something that demand had to be kind of created for before, say, the Civil War, sales, like retail, as we think of it now, was, was not a major industry, right? The US was an agrarian society. Most Americans worked on a farm. And then around the Civil War, Expansion, railroads, shipping, urbanization,

• 14:54Speaker 05

  all of these forces then create a new kind of door-to-door salesperson. So the Yankee peddler, which is like the old timey guy going door-to-door with like knives and books or whatever, actually becomes someone who works for another company. But where it really expands is in the early 20th century, when US imperialism is really also expanding, right? And then you get the door-to-door salesman as you kind of think of him in like Death of a Salesman or Glengarry Glen Ross. And that happens with the expansion of US consumer culture. And then when MLM is invented, we've just won World War II

• 15:39Speaker 05

  and US consumer culture becomes the way you're going to be a good citizen in the world is you're going to buy stuff. And demand has to be created and salesmen are the ones who are going to create that demand.

• 15:52Sarah Hagi?

  So I want to get to how consumer culture goes from above board to essentially a Ponzi scheme in the form of MLM. Like, could you just explain who Lee Mittinger, William Castleberry and Carl Renberg are? These men are super important in the book, but they're not household names despite having changed the world in so many ways.

• 16:10Speaker 05

  Yes. So the quick and dirty on the inventors of MLM. Carl Renborg is a homemade vitamin maker who invented a multivitamin around the 1930s called Nutrilite. And he created these homemade vitamins while the vitamin like industry as we know it today was becoming a thing. Americans were taking supplements. But his company didn't go anywhere. Carl Renborg's life is just like a series of utter failures at being a salesman. Like, he sucks. And it's not even just because he sucks. It's just because it's already really difficult. The trend in the United States is big corporations, big conglomerates. And by the time he invents his vitamin, he's competing with like literally Merck and Pfizer

• 16:54Speaker 05

  and Bayer, these big companies that still exist today. And so he runs this company for at least a decade before he meets two men who are also salesmen who come up with the structure of the company that becomes multiple marketing. And one is Mittinger, who's a Funeral plot salesman. He actually was the head of a company that was run out of the state of Maine for defrauding people into investing in funeral plots. And then Castleberry was a Stanford educated psychologist, who was kind of a bit of a Dr. Ruth. Like, he had a self-help radio show in Southern California.

• 17:38Speaker 05

  And in my own research, I've found that he was a eugenicist. He was straight up studied under Louis Terman at Stanford, who's one of the most prominent American eugenicists. So that's the world that those two guys are coming from. And they they meet when they're both working at the Douglas Aircraft Factory, at the tail end of World War II. And the sort of parable goes that they're standing around saying, oh, sales sucks. What if we could come up with a solution where no one would have to, like, give up a cut of their sales? And that's how they invent MLM, which just covers up so much of what really they invent, which is a version of the Ponzi scheme using the vitamins of Carl Renberg's business as a cover up. But instead of one guy at the top,

• 18:24Speaker 05

  you have a million little Ponzi's who get a cut of whatever anybody under them buys. And so that's how MLM is born.

• 18:32Sarah Hagi?

  Yeah, this is such a crazy concept, and it blows my mind every time. It's basically supercharging a Ponzi scheme. Because, like, in a Ponzi, the scammer gets people to give him money for a phony investment. The twist here is turning investors into salespeople, pulling them into the con, and using real products as a cover. And in your book, you say that these two men, Mittinger and Castleberry, call this innovation, quote, "the plan." Then they make their own company, MNC, to put the plan in action by selling Renberg's vitamins. Can you break down what this actually looks like in practice?

• 19:10Speaker 05

  The plan is the early euphemism for what becomes multi-level marketing. And it is the Way that the business is structured in traditional door to door selling. I buy a pack of vitamins and I get them at a discount and I sell them for a higher price and I pocket the difference. That's like classic direct selling. That's your Avon lady or Fuller brush. Those are kind of the two iconic American companies where that's how you would make a really small living. What the plan is, is they create something called the Nutrillite Business Opportunity.

• 19:52Speaker 05

  So you can make your pennies on the dollar selling your vitamins door to door. But what you can also do is recruit a team member under you and what that person buys at their discount, you will get paid based on that. So what people often say when describing the plan, because it's never changed, is that multi-level marketing is you get a cut off of your recruits' sales. And the word sales is what's wrong with that because what Mittner and Casper invent in the plan is something called purchase volume and that's what you get paid on.

• 20:35Speaker 05

  You get paid on what people buy under you in what's called your downline. And that, again, same in MLM today. But that is what makes it a Ponzi, not some other type of quote selling. The sales of the vitamins, which of course was such a problem for Carl Renborg because no one wanted to buy his weird homemade alfalfa vitamins, obviously, they do away with that problem entirely because now you're just getting paid on what your recruits buy under you. And it does not matter if they ever sell it, which is why the classic MLM scenario of like ending up with boxes and boxes in your basement, that's endemic to MLM because you're getting paid just on bringing people in. So you can see how you tell somebody, oh, you're going to do great.

• 21:17Speaker 05

  You're going to sell vitamins and you get them to buy a two-month supply of vitamins. You've brought in a huge amount of your quote, "purchase volume," and now that person also has a bunch of vitamins that they need to offload. So they're gonna bring people in, do the same thing. So it creates this like, sort of ingenious level of like, multi Ponzi operators in one pyramid. And what M and C did in the plan is they enabled you to get a cut on an unlimited amount of people under you. So like, you have such an incentive to recruit and recruit and recruit and buy and buy and buy, and no one cares if you sell the vitamins. So that's the plan.

• 21:54Sarah Hagi?

  Yeah, it's diabolical and baffling. And like, essentially, working in MLM is not about actually selling product to a consumer at all, but it's more just like recruiting other people to buy product from you. And then those people are responsible for selling it. But what they actually do is just recruit more people under them. So nobody's actually even buying shit. And I, I don't know, like, do you think they really believed like, that this business approach could work?

• 22:22Speaker 05

  I have gone back and forth about whether Mittner and Castlebury, at this point in American history, 1945, whether they truly believed that America would expand so much that there really would be an endless supply of salesmen and that the pyramid really would go on forever. Like, how much of that was an optimistic story that they were telling themselves about the United States in this moment? And how much of it was fraud? Was straight up just a lie that they were telling people and they knew that's impossible? That even, you know, the greatest country in the world couldn't expand like that?

• 22:58Sarah Hagi?

  Yeah, and thanks to all the research you talk about in your book, we know that, in fact, the pyramid isn't endless. Like, people hardly make money. And you cite a 2011 study of 350 MLM companies that found that 99% of participants lost money during their time in an MLM.

• 23:17Speaker 05

  If you get in early, you're high in the downline and you have tons of people paying in under you. And even joining just a little bit later, the way those numbers work, you just have such a smaller pool of people to bring in. And so already, you face far worse chances of making your money back.

• 23:35Sarah Hagi?

  Yeah, but as you talk about it in your book, like, those downline numbers are actually reported as retail sales, like, as if the business is actually successfully selling the product.

• 23:44Speaker 05

  That's still how these companies operate. So it's documented in the book. For example, in Mary Kay, they call it production. So what you buy in Mary Kay, they take that number and they basically double it because in Mary Kay, you get a 50% discount and they call it your production, which is then called retail sales. None of that has to be documented. All that's documented is me, the recruit, what I'm buying. And that's what's in their internal systems. And that's the only thing that they keep track of, which is, to me, like, the most damning piece of evidence. And again, companies, over the years, have put in place different, oh, we track customers. You have to prove you have 10 customers. It's all very easily fake. And how could they even keep track of it, right?

• 24:26Speaker 05

  These companies are independent contractors and they have millions and millions of recruits worldwide. It would be the most expensive compliance. It would be millions and millions that you would have to spend on reading, like, receipts from random people. So they don't care.

• 24:40Sarah Hagi?

  Damn. That's so crazy.

• 24:43Speaker 05

  It's crazy.

• 24:44Sarah Hagi?

  So do you think multi-level marketing is inherently a scam?

• 24:50Speaker 05

  I don't think there is such a thing as legitimate multi-level marketing with the evidence that we have. And I'm not the first person to say it. There was an Attorney General from Wisconsin named Bruce Craig who went after and prosecuted Amway sponsors who sort of flooded into the state in the 80s. And he, throughout the rest of his career, before he passed away a few years ago, kept writing to FTC officials, government officials, saying, this thing you have decided to call legitimate MLM, it does not exist. I don't believe it exists. It's a distinction without a difference. And they ignore him.

• 25:29Sarah Hagi?

  OK, stick around because after the break, we're going to talk about who is most likely to be targeted by MLM. And it's not who you think. And Bridgette is going to talk about the former Mary Kay saleswoman she followed while researching this book.

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• 26:22Speaker 04

  I'm Gemma Whelan, and in the new season of The Spy Who, we tell the story of the original femme fatale, the spy who was Mata Hari. A famous dancer turned World War I secret agent, accused of seducing Allied officers to uncover their plans. But was she a temptress or a scapegoat for French failures? Follow The Spy Who now, wherever you listen to podcasts. You can also listen to the full season of The Spy Who Was Mata Hari, early and ad-free on Audible.

• 26:59Sarah Hagi?

  We've talked a lot about the larger industry of MLM, but in the book, you track one woman's story of getting caught up in Mary Kay. And like, you walk us through what drew her in and what her experience was like within that company for years. How did you hear about her story? And what made you want to highlight her experience specifically?

• 27:19Speaker 05

  So Monique, that's a pseudonym, but I met her on YouTube. She had commented on someone else's coming out of Mary Kay video, but she was brand new. She was, her comment was something like, "Oh, my goodness, I'm gonna have to sit with this one," or something. Like, I could tell that she had not fully kind of reflected on it.

• 27:39Sarah Hagi?

  Wow.

• 27:41Speaker 05

  That really drew me to her because I really did want to like, be with somebody as she was reflecting herself and sort of in the middle of that processing. And I was really lucky that she let me kind of do that with her. And we were doing these interviews, like, literally while she was still technically in Mary Kay. And so she had access to all of her, like, internal stuff. And I could see what it looks like in her, quote, "back office" online. And she still had all these products and was getting these texts from her uplines. And so... It felt important to like be able to do that with somebody. And she is a veteran in Florida. She is a black woman who left the military and not only had retirement money, but had a disability payment.

• 28:25Speaker 05

  And that made her like a huge target because she has this stable income coming in. And so even though it's definitely not enough income, that's a big draw. If you're an MLM recruiter, because it's like, oh, this woman has like a little nest egg every month that she can put towards her Mary Kay payment. So that was interesting to me because it was like really obvious and a sort of sinister element that made her really vulnerable. And then her military background, I think, really contributed to her being ready to like seek some order and seek some external validation. But she, she let me really like go through it with her.

• 29:05Sarah Hagi?

  It seems like there's a perfect storm of circumstances that makes some people more prone to getting recruited into an MLM. So like, what did you learn in your research about, you know, the demographics of people who are sucked into these businesses?

• 29:20Speaker 05

  The demographics of MLM are sort of woefully under-reported and certainly like hard to parse because it is not well-studied. We do know that it's women, predominantly women, 75%, but that's also self-reported by the DSA, the lobbying trade group for direct selling. So take that with a grain of salt. But then within that, there are a few studies that have helped illuminate that women in labor markets where they don't have access to like traditional labor. So like retail wage labor or like service hospitality.

• 30:01Speaker 05

  You have to look at who has student debt, who has medical debt, who needs flexibility, who probably can't afford childcare. And obviously like that means younger women and that means women of color. Like we don't have like statistical evidence that those people are. Sort of gaining traction in MLM, but anecdotally, like, that's a lot of who I spoke to was younger women. Many of them are women of color. A lot of them are like even in cities, right? Like, one woman at the end of the book is in Brooklyn. She lived very close to me, and that was surprising to me. I was like, oh, you're not in Utah, you know? So I think it's everywhere.

• 30:37Sarah Hagi?

  So the people getting sucked into MLM are already some of the most vulnerable people out there, and they have to spend money just to participate, buying stuff that they can hardly sell. You know from your research that very, very few people are actually making money. So why do they stay at all?

• 30:56Speaker 05

  I think about it in terms, honestly, of what Mittinger was doing when he was selling people funeral plots, which is like, it's all about your future and the horizon and like, what's to come. And they get you on like, you will win one day. And that's how they keep people in. And Monique, the whole time was being told, it'll come back to you. You're gonna get that rung of leadership where you're gonna make everything back, and it's all gonna be worth it. They'll bring in PowerPoints with like Steve Jobs, and they'll say like, Steve Jobs spent XYZ on his, you have to invest in business to get it back. There, there's

• 31:39Speaker 05

  so many euphemisms that will just force people to accept that they're spending this money. When you buy the products, they had told Monique, you can't sell an empty from an empty wagon. Like, there's a truism for everything that convinces people that they're investing in a business. It's incredibly manipulative to teach somebody like, don't look at your balance. They teach you like, there'll be one magic moment, and you won't know when it's coming conveniently, but it'll come, and then you'll, you'll win.

• 32:08Sarah Hagi?

  Yeah, you know, it sounds so familiar to influencer wellness culture and like, this idea of betting on yourself until you make it. And, you know, making it is basically also being an influencer. Like, people get lured into the presentation of wealth and access, but What is it they're actually supposed to buy? Like, they're buying something that, I guess, isn't real.

• 32:32Speaker 05

  I think the collapse that happens when you're an influencer between yourself and your product, that is truly what MLM shares with that world. The idea that your product is you and the way you're going to, like, bring more people in is convincing them that they are also their own product. The idea that we shouldn't question everything being commodified and why are we selling ourselves? That also feels like MLM world to me. This idea that that's a good way to think about being a person and what you owe somebody is what you can get out of them.

• 33:06Sarah Hagi?

  Stay with us. After the break, Bridget talks about how MLM doesn't just mess with your money, they go after your mind, too.

• 33:22Speaker 07

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• 34:48Sarah Hagi?

  So, multi-level marketing companies aren't actually about selling a product. So, the people at the top make money based on how many people are recruited into the business underneath them. And since they can't really justify their existence financially, they recruit people by projecting like a very specific worldview. They claim to embody the American entrepreneurial spirit, and they tell people that working for the company means they're masters of their own destiny. So, in that sense, there's kind of a philosophy behind MLM. So, what did you find that philosophy to be in your research?

• 35:22Speaker 05

  There's definitely a few different strains of what multi-level marketers think about the world and how ideological or political they are. But certainly in the beginning, they share this sort of radical free enterprise ideology, which then kind of becomes like the new right or Reaganism in the 80s. But really, in the beginning, it's a reaction to the New Deal. Like, it goes that far back. Early, early on, Mittinger, Castleberry, and Renborg are Republicans, but they also like dabble in this very strange and quite fringe element of conservatives. They're market purists, right?

• 36:06Speaker 05

  You could call them like Ayn Rand kind of Republicans, or you could call them libertarians. But they really believe that like the market is basically God, that we are market actors, and that that is primarily the way to organize society. And so, the reason they react to the New Deal is because they don't want anything impinging on the market, on capitalism. So, they react against Social Security, they react against unemployment benefits, all the welfare state that is established by the New Deal. They immediately, after, you know, the Depression, start figuring out, how do we get rid of all this? MLM very early on has ties to those movements, and then really through... Amway and through the DeVos and Van Andel families,

• 36:49Speaker 05

  the founders of Amway are very explicitly part of this radical political movement. And they really built power over the course of the 70s. And then Reagan really unleashes all kinds of policies that they want, which are essentially these free market policies that are all about deregulation, about cutting taxes, about privatizing industry. And really, cutting out the core of what the New Deal did, which with all caveats about the ways that it worked and ways that it didn't, it established like a basic dignity for all Americans that we like get from the government. And what the ideology of MLMers really, they share that the government turns us into slaves

• 37:32Speaker 05

  if we are given anything for free, that really we deserve nothing and everybody should be working for what they have and that that's true freedom.

• 37:41Sarah Hagi?

  Right, as though all Americans are starting out with the same advantages. I want to focus on one very important company you mentioned, Amway. In some ways, they're the most important MLM in your book. And Amway has been around since 1959. And like you mentioned, their founders, Jay Van Andel and Richard DeVos, had very deep ties in conservative politics. And in your book, you talk about how that continues on today. For example, members of the DeVos and Van Andel families were pretty central to the extreme rights political playbook, Project 2025.

• 38:18Speaker 05

  The Heritage Foundation was started in 1973. And Jay Van Andel of the DeVos Van Andel duo takes up Heritage as really one of his pet projects, although both families give money to the organization over the years. And the Heritage Foundation is just one of many right wing groups, think tanks that they funnel their money into, which is of course, coming from people enrolled in Amway, right? So. While politicians are spreading these ideas about like small government and that we should all, you know, the ills of the 70s, because at this point, it's important to remember that the 70s, the economy was tanking, we were in the midst of stagflation. This story that they wanted to tell was, okay, capitalism's not working and we're

• 39:01Speaker 05

  going to fix it with more capitalism. What MLM does is they build the grassroots effort to seed that in people's hearts and minds and convince people that the path forward is less government, not more.

• 39:15Sarah Hagi?

  Right. And that really culminated with Reagan's election and the legalization of Amway and MLM, because you say in your book, in 1979, the FTC ruled that while pyramid schemes are illegal, they don't consider Amway to be one. And you spell out in the book that the agency was under a lot of pressure and some in Congress are really kind of rallying to get rid of the agency entirely. So they basically want to avoid controversy and said that Amway could continue operating.

• 39:46Speaker 05

  Yeah. Amway makes a billion dollars. Their profits surpass a billion dollars, which at the time, you know, was huge. And Reagan wins and they sort of cap off like the best decade ever. So these people who are enrolling in Amway are directly bankrolling things like Heritage. They give money to the Council for National Policy, which is like a dark money group, the Acton Institute, Mackinac Institute. These are all like right wing policy think tanks. Some of them are explicitly religious or anti-choice, things like that. But Heritage is really prominent because now Jay Van Andel's daughter, Barbara, Barb, excuse me, Barb Van Andel, Gabby, is his daughter and she is the head of the

• 40:30Speaker 05

  Board of Trustees of Heritage. And literally when she inducts Kevin Roberts, who's the new president of Heritage, who wrote for Project 2025, she says, "He will only grow our influence on Capitol Hill." Like, they really see Project 2025 as their vision. But the reason MLM paved the way for this, when I look at it, is because MLM is like the Wild West of a corporation, right? There's literally no rules, except the rules of the guys at the top. And that's supposed to be the selling point is like, there's no limit. You're going to grow infinitely and there's, you don't know, there's no employees. There's no labor law. You don't even have a store.

• 41:13Speaker 05

  There's nothing keeping you from doing, you're the only thing standing in your way, which translates to, there's a line in the book where somebody who's really excited about the Trump administration and MLM, he's from Herbalife, but he says, "It's the post-regulatory world." So this idea that there's no rules, MLM pioneered that early, early on. They are an industry that said, "We're going to regulate ourselves." They literally have something called the Self-Regulatory Council. And so now, obviously like Doge, that's Doge's number one thing, right? It's like, the government is a useless arbiter. It's full of corruption and everybody should just be in charge of themselves

• 41:54Speaker 05

  or we're going to use AI to like certify whatever and like make building plans. It's just terrifying to me. But anyway, beyond Doge, like self-regulation is the new call to arms for the whole tech industry, right? That we're going to regulate ourselves. So like MLM is doing that way before anybody else and trying to sell this idea that like all government regulation is harmful to growth and going to get in the way of, of growth and productivity. Can you talk a bit more about this socially conservative and religious component to the MLM philosophy? Javan and Andal and DeVos were Michigan Calvinists,

• 42:35Speaker 05

  which is a conservative type of Christian that really believe in the prosperity gospel and that certain types of Christians are ordained by God to be rich, like to get rich is to be godly. And so those guys truly believe that like- Getting money is to get to heaven. So that's, you know, a really important part of their philosophy. Nowadays, it's really all about wellness and getting money, getting your bag as a way to be healthy and healthful. Like, I see a through line from the early MLMers all the way to that guy Ashton dipping his face in the Saratoga water and the banana, you know?

• 43:14Speaker 05

  Like, there really is this, the true conspicuous consumption, but as a like godly activity. That the way that you're gonna be the best, you know, person and citizen you can be is through making money.

• 43:27Sarah Hagi?

  Yeah, and the way you laid out in the book, it's so clear how, you know, prosperity, Bible beliefs are kind of exemplified in MLM. And you also connect the world of MLM directly to the rise of like positive thinking, self-help gurus, because MLM doesn't work for the vast majority of people. Like, they don't really want for you to think about it as a system. Like, they want you to focus on self-improvement and positive thinking. And that way, if you aren't making money, they can just say it's your fault. So can you talk about that more?

• 44:03Speaker 05

  MLM is a really unexamined pioneer of self-help as a booming business. Like, truly before self-help exists in the way that it does as an industry. Like, MLM was already making self-help content, essentially, right? And that actually comes all the way from like old-timey direct selling, before MLM was even invented. Fuller Brush and Avon, they had newsletters, they had, you know, prizes, they were giving you the car. And it's all because the work sucks so badly that they're like, we have to give them something to make them feel like they're getting something out of it. And that's why, being a Fuller Brush man, they would say to you, how are you feeling? And as a Fuller Brush guy, you were supposed to say, fine and dandy.

• 44:46Speaker 05

  And it's truly like all about teaching you that you're getting something, you're becoming better, even as you're like selling these shitty brushes and making no money. So this like, the self-help element and the like constant mental work is very key. It keeps you busy, it keeps you occupied, and it keeps you from not thinking about what money you're spending. You're just constantly thinking about moving forward and who you're gonna be. And that's the most toxic part, I think, because it really teaches you to like... Not think critically, you don't care about yourself and you don't care about the people under you, who you're bringing in. And that to me is like the darkest element of what MLM does in changing how people think.

• 45:28Sarah Hagi?

  Yeah, it's just so shocking that MLM is still considered legal when like so many people are losing from it. So why do you think this hasn't received the kind of attention it should, even though it is so pervasive and everyone knows it's bad?

• 45:43Speaker 05

  First of all, like white collar crime is just not considered something that is really that punishable, right? In the United States, like financial crime is just not punished in the same way. And then I do think that the way MLM kind of eats into the fringes of people's livelihoods, the people who really suffer are like, you know, Monique, spending $80,000 over decade. For her, that was, I mean, it's devastating. It's like her savings, it's-

• 46:15Sarah Hagi?

  It's truly heartbreaking.

• 46:16Speaker 05

  Right. But like, that's not who Americans are gonna read about. And when we really take stock of like loss, it's Bernie Madoff level loss or like FTX, right? It's like big corporate, the scammers that really go down have to have like taken out somebody that quote matters. And I think that that's a really awful thing is like, I mean, it's a pyramid, even all of us on the bottom, like even all together, the aggregate of the losses on the bottom is a drop in the bucket with the profits at the top.

• 46:51Sarah Hagi?

  Yeah, I mean, it is like, it is about wealth. And I think it crosses, you know, whatever political boundary there might be because it's about upholding wealth. And I feel like a huge takeaway for me was that, like, you know, these things are kind of bad or are harming people. And, you know, the government does benefit a lot from this harm. You know, even in our show, I feel like-

• 47:17Speaker 05

  There's so much white collar crime and very often the consequence is just a slap on the wrist. Or they can just go back to doing the exact kind of scam again. And it does seem like there's a huge contingent of people who've just been severely affected by MLM and who've lost so much money and their lives have just completely been changed and destroyed through this lie.

• 47:41Sarah Hagi?

  There's a big community of people trying to fight it. But as you talk about in the book, some of the most foremost experts aren't really optimistic that anything can be done at all. And I'd like to know, where do you stand on that? And do you think anything can be done about MLM? Can there be any type of justice here?

• 48:00Speaker 05

  Lena Khan, she was the FTC Commissioner appointed by Biden. And she initiated what's called an FTC rulemaking. So the FTC has the power to make rules, which are regulatory. They're not laws because they're not passed by Congress, but they function as laws. The process for making a rule is sort of long and bureaucratic. But she did initiate two separate rulemakings that would impinge, if not totally destroy MLM. One is called the Business Opportunity Rule and one is an Earnings Claim Rule. So both of these, without getting too nitty gritty, have to do with disclosures that you make when you're recruiting someone into an MLM.

• 48:43Speaker 05

  They would basically make it impossible to do what MLMers do, which is lie about how easy it is to sell things and how much money you can make and showing you their checks. And it would be impossible to recruit the way that they do if these rules took effect. So that happened before she left office. But now, of course, the new administration, even though the new FTC Commissioner is an antitrust guy who has kept the lawsuit against Facebook, for example, that rulemaking is probably... It could die on the vine. That's what's probably going to happen.

• 49:17Sarah Hagi?

  Yeah, that's very depressing to think about. What worries you the most about MLM today?

• 49:24Speaker 05

  What freaks me out about MLM is like... And it's an oligarchy, but it's an oligarchy that teaches everyone to want to be an oligarch. It's a system that teaches you to aspire to be your own rich person at the top who like has inordinate wealth and power. And so that ability to like get inside somebody's mind and when you're looking at a really, really inordinately wealthy person, like say like a Jeff Bezos, MLM teaches you to like, look at that and say, not like, hey, why does that guy have so much more than I do? It teaches you to say, oh, like, I'm gonna do that, too.

• 50:06Speaker 05

  And I'm gonna be that, too, without really thinking like, well, is that really rational? So that that lack of critical thinking about wealth, lack of critical thinking about class, where we are at in American history, but also just like the world, that is a bipartisan problem. Like, so many people are not thinking about that, and they're not thinking critically about where we are in in our own pyramid. You know, progress on MLMs is like, how do we just get people to wake up and say, I'm not gonna be a cog in this giant machine?

• 50:41Sarah Hagi?

  No, I mean, you just saying that kind of gave me chills. I was like, yeah, I mean, I think it is so important to remember that it's easy to kind of feel dispirited by what you see as those in power and to feel like you don't have any power and you can't do anything. But as corny as it sounds, it does take people to try and change things, right? Like, things don't have to be forever or set in stone. So, yeah, I think that's a very good note to end on. Bridget, thank you so much. You are genuinely one of my favorite reporters. I like, I love your work, I admire everything you do. And I'm gonna tell everyone to buy this, and I really want everyone to read it.

• 51:23Sarah Hagi?

  Bridget's book is Little Bosses Everywhere, and it is out now, available wherever books are sold. Bridget, where can people find you? Where can people find your work and and your thoughts and your beautiful mind?

• 51:36Speaker 05

  I still work my day job at New York Magazine. I'm a features writer there, and I'm on X, I guess we call it now. Bridget Gillard is my handle. It's my middle name. And I made a little Instagram for the book called Little Bosses Book. Primarily, My Beautiful Mind is in this book, so please buy it. And then tell your friends to buy it, and their friends, and their friends.

• 51:58Sarah Hagi?

  And, you know, and if you buy enough of them, you could sell them to other people.

• 52:03Speaker 05

  Yep, and you'll generate passive income for generations. No, no, no, no.

• 52:12Scaachi Koul?

  Follow Scamfluencers on the Audible app or wherever you get your podcasts. You can listen to all episodes of Scamfluencers ad-free by joining Audible.

• 52:23Sarah Hagi?

  This is Multi-Level Marketing: Your Product is You. I'm Sarah Haggy.

• 52:29Scaachi Koul?

  And I'm Scaachi Cole. If you have a tip for us on a story that you think we should cover, please email us at [email protected]. Please check out Bridget's book, Little Bosses Everywhere: How the Pyramid Scheme Shaped America. And you can find Josie Nijkoy at NotTheGoodGirl on YouTube.

• 52:45Sarah Hagi?

  Our senior producer, Sarah Enni, wrote this episode. Additional writing by us, Scaachi Cole and Sarah Haggy. Fact checking by Lexi Peery. Sound design by Sergio Enriquez. Additional audio assistance provided by Augustine Lim. Our music supervisor is Scott Velazquez for Frieson Sync. Our managing producer is Desi Blaylock. Our senior managing producer is Callan Flues. Janine Cornolo and Stephanie Jens are our development producers. Our associate producer is Charlotte Miller. Our producer is Julie McGruder. Our senior producer is Ginny Bloom. Our executive producers are Jenny Lauer Beckman, Marshall Louie, and Erin O'Flaherty for Wondery.

• 53:30Speaker 09

  Hey, I'm Cassie DePeckle, the host of Against the Odds from Audible Originals. In each episode, we share thrilling true stories of survival, putting you in the shoes of the people who lived to tell the tale. In our latest series, we track the story of Hugh Glass, the real-life revenant that inspired the 2015 film starring Leonardo DiCaprio. In 1823, Glass was brutally mauled by a grizzly bear in present-day South Dakota and left for dead. His survival depended on trekking through 350 miles of wilderness alone with grave injuries. But he was driven by his thirst for revenge. Follow Against the Odds wherever you get your podcasts. Audible subscribers can binge all episodes of Against the Odds early and ad-free right now. Join Audible in the Audible app or by subscribing on Apple Podcasts.