Welcome back! Lately, we’ve been talking about some recent developments in the world of multi-level marketing schemes (MLMs). I find those developments interesting because of the great number of similarities between MLMs and Christianity. Now we’ll zero in on one of the biggest areas of overlap: wild claims of success. Today, I’ll show you some of those claims, and what support exists for them. Cripes, MLMs sound exactly like evangelism-minded Christians, and I am here for it.
(A ‘hun’ is an MLM participant. The name ‘hun’ derives from their aggression. A hun’s ‘upline’ is whoever signed her up to the scheme, plus their upline all the way up to the scheme’s owners. Her ‘downline’ is anybody she signs up underneath herself, plus their own downline. See this endnote for more info, if you’re new to all this. It’ll open a new tab and then you can close it to come back here.)
Wild Claims of Success.
Yesterday, I showed you a bunch of stuff about a haircare MLM called Monat. Early this month, Monat huns claimed that March 2020 had been the third-biggest month in Monat’s entire history. When these claims attracted journalists’ attention, Monat put the brakes on the whole thing.
The huns dutifully stopped making those specific claims. However, that didn’t mean they stopped making claims in general.
A few days ago, a Monat hun compared Monat’s growth to the growth of Apple (the computer brand). The r/antiMLM crowd quickly pointed out how ludicrous this comparison really is. But huns gonna hun, right?
She wasn’t the only one implying that Monat’s sales will only continue to blast big-name companies out of the water by comparison. Someone else tweeted a bit ago that it seemed to him that “FOREX & MONAT seem to have a heavy Stream of income right now.”
Lately, I see a lot of claims like these. MLMs’ owners and top huns are all generating a lot of words, words, words about how busy they’ve been signing people up and moving product.
But What Supports These Claims?
Nobody’s offered a single bit of proof that any MLMs are actually doing really well right now.
Similarly, I’ve seen no evidence that any MLMs have had overwhelming success with recruitment. It’s not that either claim would make a solid case for an MLM’s validity as a business opportunity, no, but it’d be nice to at least see evidence for the claim.
But the huns aren’t even trying to support their claims. It’s like they think all they have to do is repeat a claim a bunch of times and it magically becomes true without evidence at all.
Gosh, I wonder where they got that idea?
Don’t Worry, They’re Still Making Wild Claims.
Sure, Monat slapped down the huns on one claim. But they’re back to making wild claims again like nothing ever happened. They’re just avoiding the exact wording of the claim Monat disliked.
Idk who needs to hear this, but MONAT is ranked #24 in the world in direct selling with $388 million in revenue.
Direct sales is a $130 billion industry, and we’re in the top 30.
Oh, and we’re not even six years old yet.
Why wouldn’t you get in on this?!
Gee, I dunno, maybe because most of those sales get made to huns themselves, not to retail customers? When the MLM’s sales mostly go to people already participating in the scheme, and the huns themselves are therefore the primary customers buying and using the MLM’s products, that’s a big red flag that the FTC has identified. It means we’re looking at a “pay to play” dynamic — and that’s one of the hallmarks of a pyramid scheme.
Other Monat huns continue to insist that their predatory scheme “can help you” if you’ve lost your job or “want to reignite a sense of purpose.”
And Monat itself, the mother ship, told visitors trying to shop at their site yesterday that they’re experiencing such a high volume that they must assign everyone a “place in line.”
They’re definitely trying to maintain the fiction that they’re totally making tons of sales right now and recruiting tons of people.
Back in Reality-Land, Things Don’t Look So Good.
I haven’t yet seen any numbers for Monat, but a similar MLM called Rodan + Fields (R+F) might give us insight about their situation. R+F mostly sells skincare stuff. I’ve heard some people say some of it’s of decent quality, but either way it’s saddled with that awful, predatory MLM business structure.
And Moody’s just whapped them with a downgrade in ratings, as Reuters tells us:
Skincare products seller Rodan & Fields’ US$600m term loan B (TLB) was quoted at 84.5-88.5 on April 5 dropping a point following its downgrade by ratings agency Moody’s Investors Service, according to data from LPC, a unit of Refinitiv.
A TLB is a “term loan B,” which is structured with tiny interest payments for a long time and then a big payment due at the end. (Sounds like one of those “choose your own rates” mortgages from the housing bubble, right?) That quoted number depends on a lot of factors, among which are the company’s credit reputation. So it sounds like creditors are starting to see R+F as a risk.
Here’s a screenshot of the actual Moody’s downgrade, and a source for it.
The agency said their general outlook on the MLM giant was negative. They didn’t think the MLM’s fortunes will be improving anytime soon. In fact, their new rating is Caa2-PD. That means “Speculative Poor Standing – Probability of Default.”
Incidentally, they said the new rating derives from “weak earnings.”
The process of re-evaluating R+F began in January and only just lately wrapped up. The pandemic more or less began in March, and if it’d had a huge impact on the company then I’m sure Moody’s would have noticed it.
It’s important to note that Moody’s exists to impartially examine a business’ ability to make money and repay its debts. They don’t play favorites. This isn’t some awful bunch of haters picking on MLMs out of sheer jealousy. When an MLM does well, Moody’s gives them good ratings. This MLM just isn’t doing well, according to how they evaluate companies.
Another MLM Slapped Hard.
And, too, yet another MLM — Isagenix, a supplements slinger — has been having massive problems lately as well. From the same Reuters article:
Isagenix, a company that sells dietary supplements, meanhile [sic], saw its US$375m TLB quoted at 84-86 on Tuesday, a sharp decline from 89-90.5 quoted on April 1, LPC data showed.
Moody’s representative blamed the downgrade on the MLM’s growing inability to keep and recruit victims.
That makes sense, too, because a month ago I heard rumblings that Isagenix huns have been abandoning the MLM in droves. Isagenix has made some critical marketing mistakes in attracting victims, and now they’re paying the price.
Both these MLM’s situations remind me of watching a real scientist destroy an apologist.
Don’t Believe Anything a Huckster Says Without Proof.
As we discussed yesterday, MLMs really need to make big claims of success right now. Don’t believe a single word of it without evidence. All those huns in the news talking about how busy they are lately? Without evidence, we need to put their claims on exactly the same shelf as what we hear out of evangelists: believe it when you see it.
Considering how long the huns have made these claims about pandemic success without providing evidence for it, and considering Monat’s reaction to their attempt to make a too-specific claim along those lines, and also considering the problems suffered by some of their sister MLMs, I’m gonna call this one now. I don’t think any of those claims are true.
The reality sure looks like MLMs are suffering. And this pandemic won’t lift their numbers. Even if they manage to recruit a wave of victims desperate to make money, it’s hard to imagine those people sticking to the MLM once the pandemic eases. If the MLM’s sales pitches didn’t appeal to them before the pandemic, it’ll stop appealing to them afterward. (The same exact reasoning applies to churches who gain converts during a Rapture scare.)
But I don’t think the pandemic really is leading to massive short-term growth, much less sustainable long-term growth — for either MLMs or Christians.
NEXT UP: I’m taking a day off tomorrow, so our next post will be on Saturday. On Saturday, we’ll look at a venerable Christian leader openly fantasizing in public about all the grand conversions he’ll be seeing in the wake of the pandemic. See you soon!
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