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The Divine Rise of Multilevel Marketing

Behind the $34 billion industry making its way to your church.
The Divine Rise of Multilevel Marketing
Image: Darren Braun

Heather St.Clair’s phone peeks out of the plum, pleather laptop bag she totes around a women’s retreat in Lynchburg, Virginia. Before dinner with friends, she grabs the phone, swipes the oversized screen, then flashes a smile. “I just made $50!” she announces.

Last year, St.Clair became a seller with Thirty-One Gifts, a Christian-owned company that makes customizable bags and accessories. She wanted to get a deal on her laptop bag, and has since hosted 22 parties—in person, through catalog orders, and online. In July, the 38-year-old mother of four drove six hours to attend Thirty-One’s national conference in Columbus, Ohio.

There, the arena glowed pink from the crowd of 9,000 women dressed to match the signature magenta logo. Each wore a string of ribbons designating their achievements and goals: “Paid off debt!” “Empower women!” “Live for me!” Thirty-One Gifts has drawn in 300,000 sellers since Cindy Monroe founded it in 2003.

“We are a business that’s helping women make more income so they can reach their dreams and look for what God’s calling them to do,” said Monroe, 41, who named the company for Proverbs 31’s Wife of Noble Character.

Last year, Thirty-One Gifts brought in $643 million in revenue—more than popular purse line Vera Bradley, whose annual revenues average a half-billion dollars. Monroe recently appeared on a Forbes “Businesswomen to Watch” list. Her estimated net worth matches that of pop star Taylor Swift. “I want women to have the courage to think outside their box,” Monroe said.

The MLM industry recruited its biggest-ever sales force in 2014—as many Christians can attest, given the pitches and invites in their social media feeds, playgroups, and church events.

As American women think outside the traditional boxes of “work” and “home,” they are leading a resurgence in multilevel marketing (MLM). Following the business structure of well-known brands such as Tupperware, Mary Kay, and Amway, today’s MLM phenomenon is led disproportionately by Christian women, many of them moms who want to set their own rules for work. Amid a post-recession economy and the cultural push for women to “lean in,” MLM companies are tapping women like St.Clair to share the good news of products they love—purses, makeup, and fitness shakes, among others.

Here’s how it works: MLM companies train sellers to become experts in a distinct product line to market to friends and acquaintances. Sellers earn a commission on their sales as well as the sales of their recruits. Depending on the company, they could be “consultants,” “stylists,” “wellness advocates,” or “agents.” But the goal remains: Educate your friends and family about a wonderful product, sell it to them, then recruit them to do the same. Many companies emphasize that sellers can work from home and set their own hours, and many evoke Christian language about mission and ministry.

Today, an estimated one in seven US households includes someone involved in MLM, also known as network marketing. Women make up 75 percent of MLM participants overall; in some jewelry and health-and-beauty companies, that number is more like 95 percent. The MLM industry recruited its biggest-ever sales force in 2014—as many Christians can attest, given the pitches and party invites popping up in their social media feeds, playgroups, and church events.

Yet, outside exceptional success stories, the vast majority of women selling MLM wares bring in a couple thousand dollars a year. Factoring in business costs, this means their profits are slim to none.

No Pressure!

One clear appeal of MLM is that it provides women a taste of entrepreneurial success.

Sellers are trained in sales, social media marketing, and business strategy—developing expertise as they grow. Fellow representatives celebrate each other’s achievements with Facebook posts for earning a special certification, making a recruit, or reaching a personal goal. The setup offers the tangible rewards often missing from both the home and the office.

Women “don’t necessarily get that celebration, that encouragement, or that reward for moving one step forward,” said Monroe. “I don’t think we realize how important that is for women, but women do want to be acknowledged.” Thirty-One Gifts gives cash bonuses and free bags for milestones such as a consultant’s first party or $600 in sales.

But MLM’s main draw isn’t money, at least after the numbers are crunched. By some estimates, as few as 1 percent of sellers earn a profit. More than 90 percent of Thirty-One consultants remain at the lowest level in the company, meaning they bring in less than $600 a year—and that’s before tallying business expenses and taxes. Income disclosure statements for other MLM companies tell a similar tale.

St.Clair works part-time at a local insurance agency and her church, so she considers her work for Thirty-One a “hobby.” In fact, she doesn’t keep track of exactly how much she makes. She donates part of her income to church, a cancer charity, and a retreat for stepmothers. The rest, she uses to shop.

A friend had prodded St.Clair to join for five years before she signed on. Now that friend is St.Clair’s “director,” coaching her and 70 other consultants and receiving a percentage of their sales (hence, the “levels” in multilevel marketing). To join, St.Clair paid $99 for a sample kit, and today earns 25 percent commission on all orders.

Some MLM companies require sellers to buy inventory, pay a monthly fee, or meet sales quotas. The greater these costs, the harder it can be for participants to make a profit—and the greater the risk of being exploited. If an MLM company depends primarily on recruiting more sellers and getting them, rather than the general public, to purchase items, then you have yourself a pyramid scheme, according to the Federal Trade Commission (FTC).

Over the years, several MLM companies have faced such complaints. In 1979, the FTC declared that Amway was not a pyramid scheme, but did flag them for deceptive income claims. In 2010, the Christian-owned business settled a class-action lawsuit with former sellers who said they had been misled. (With $10.8 billion in annual revenue, Amway remains the highest-earning MLM company in the world.) And this summer, the FTC filed suit against energy drink company Vemma for operating as a pyramid scheme.

The FTC guide for prospective sellers describes how to evaluate MLM businesses’ ethics. Beyond analyzing the payment structure to ensure it’s not a pyramid scheme, they advise scrutinizing the product itself. Does the company make “miraculous” claims without providing reliable research? Is the product fairly priced? An online search about the company can also hint at its overall reputation and whether it’s been sued for deceptive practices.

Potential fraud or the appearance of fraud is one barrier to MLM. But so is the simple awkwardness of mixing business and friendship. That’s especially prevalent in the Northeast, according to economist Stacie Bosley. MLM tends to flourish in the South and the Midwest, regions that retain a strong Christian presence and a “collective mentality,” said Bosley, a professor at Hamline University in St. Paul, Minnesota.

The local church breeds “a strong expectation of reciprocity and a willingness to support one another, whatever those endeavors might be,” said Bosley. Any woman who has said “yes” to a party invite—only to search the catalog for the cheapest kitchen tool, necklace, or lipstick, despite her friend’s insistence that there’s “no pressure to buy!”—knows what she is talking about.

MLM as Mission

In some ways, the church is a perfect setting for MLM sales. Many companies were founded by Christians or have explicit Christian values, including Mary Kay (cosmetics), Shaklee (nutritional supplements), Pampered Chef (kitchen equipment), Premier Designs (jewelry), and Advocare (sports performance). “Because direct-selling is relationship-based, and of course the church community is so relationship-based, that definitely is a draw,” said Monroe.

Further, MLM allows Christian women to engage business, community, and family at once, in a way that the current work–home divide doesn’t allow for, at least not as seamlessly. Many women want to work and raise a family without the demands of a 9-to-5 job. In a 2012 Pew Research Survey, US mothers said their most desired work scenario would be part-time; working moms wish they were home more, and stay-at-home moms wish they could work outside the home. This makes a “work-from-home” arrangement such as MLM attractive—especially to evangelicals, who are more likely than any other religious group to say it’s better for the family when one parent stays home.

“As long as MLMs are regarded by conservative Christians as a more honorable option for women than a normal part-time or full-time job, these organizations will continue to attract women within the church at significant rates,” says Jen Wilkin, a minister at the Village Church in Flower Mound, Texas, where she leads a citywide women’s Bible study.

MLM is “one of the most sanctifying things that I have ever done aside from parenting,” says Molly Abrigg. The stay-at-home mother of two based in Dallas sells essential oils—tiny bottles of plant extracts purported to have cleansing and healing properties. For her, it’s a way to meet and minister to other sellers. “There are many benefits to being a stay-at-home mom and having an extra income coming from a product you are passionate about,” Abrigg said. “It helps women find their ‘why’ outside of being a mama.”

The two major essential oil makers, Young Living and doTerra, use the MLM model. Essential oils are popular among women looking for natural solutions to common ailments. Burn your hand? Rub on some lavender. Feeling down? Take a whiff of peppermint.

Many MLM companies don’t try to draw in women with get-rich-quick language. Some actually downplay the earning potential; doTerra, for example, boasts that 85 percent of their 150,000-plus distributors join for the discount. Instead, the real sales pitch is in the satisfaction of achieving goals and connecting with others. It’s the kind of satisfaction St.Clair gets when she checks her sales phone app, or when Abrigg makes a friend over a shared love of lavender oil. For these women, the reward is not financial. A consultant may join for product discounts, but “it’s the friendships that make her stay,” said Thirty-One Gifts’ Monroe.

Bosley’s research bears this out. She found that women who are enthusiastic about the products report being satisfied—regardless of whether they make money. Some women rationalize their involvement by focusing on purpose, which for Christians gets wrapped up in concepts like calling and mission. Even women who earn just a few hundred dollars a year see it as money they wouldn’t otherwise have—enough to cover this year’s Christmas presents, say, or to put toward a trip to Disney World.

Boom and Bust

Homeschooling mom Heather Patenaude is a remarkable exception: After business expenses and taxes on annual income of $130,000, she currently earns about $45,000 in profit a year with doTerra. That puts her in the very top—and very small—tier of MLM success. “I am overwhelmed at God’s grace in our lives because of doTerra,” she said. “I see this [as being] clearly from his hand.”

Two years ago, Patenaude was worried that the new Affordable Care Act requirements would hamper her husband’s chiropractic practice. She began selling doTerra oils as a way to boost the family finances. Within a year, she ranked among the top 10 percent of sellers, reaching the “diamond” rank. (“Diamond” sellers get a certificate, a charm, and a pin, along with sponsors, travel reimbursements, and a chance to win vacations.)

Patenaude now oversees a line of oil enthusiasts, many of them fellow Christians, and teaches classes about essential oils to natural-health adherents as well as nurses and doctors who use them at home and chiropractors who use them in their practices. Every few days, she uses Periscope, a live-video app, to answer questions from sellers. One piece of advice she gives: Invite specific people to “exclusive” events, rather than notifying all your Facebook friends, as many MLM sellers do.

“I wish I would have known from day one that not everyone will understand what we’re doing, and that’s okay,” she said. “We know God was leading, directing, opening doors.”

Crystal Paine runs the popular personal finance site Money Saving Mom. She recently wrote the book Money-Making Mom to help the kinds of women who are drawn to MLM for income. Based on pitches by eager sales reps, many women expect that MLM will be easy, that the product will “sell itself,” and that they can earn money working a few hours a week.

“I have friends who have been very successful in multilevel marketing. I also have friends who have lost thousands of dollars,” said Paine, 34. “It’s one of those things that’s very hard to be successful at.”

Despite the all-caps badgering from commenters who insist that, given her online reach, she could make tens of thousands in commission, Paine does not participate in MLM. She advises readers to do their own research on a company rather than relying on a friend’s or distributor’s testimony.

Similarly, personal-finance expert Dave Ramsey tells his listeners that, while many MLM companies are legitimate businesses, they take a lot of work. At root, Ramsey said in a video recording for his radio show, MLM success is about recruiting and retaining a sales team, not selling products. “You need to understand the business you’re in,” he said. “And the business you’re in is recruiting.”

It took one party for Donna Bixby, an educator in Greenville, South Carolina, to realize that selling moisturizers and mascara was not going to work for her. When she became a Mary Kay consultant to supplement her teacher’s salary, she knew the pitfalls, yet believed she could buck the trend. But she immediately felt uncomfortable pressuring friends to buy a product she wasn’t personally passionate about. She ended up with thousands in debt, a closet full of makeup, and shame.

“I know God does not hold this against me, but it’s something I know I shouldn’t have done, and the guilt haunts me,” she said. “MLM sales come at a cost to someone. There is a price to pay. Think carefully and pray earnestly before embarking down this route.”

Pitching in the Pews

The average price point for MLM products is $30, a price most middle-class and lower-middle-class families can afford. Not so for the working poor, who often opt out of social activities centered on “lifestyle products.” Nor can they become consultants, since starter kits typically run between $100 and $300.

Some church leaders try to avoid the social tensions created by MLM. To prevent pressure within Bible study groups, Wilkin tells women not to use each other for business contacts, MLM or otherwise. Greg Baker, who leads Fellowship Bible Church in Liberty, Utah, asked the congregation’s leaders not to participate in MLM, and told congregants not to distribute materials or products at church events. By doing so, he hopes to keep suspicion out of church relationships. “I don’t want anybody wondering why I’m calling him,” he said. He also worries that MLM testimonials foster a “love of money,” and meets with congregants involved with MLM to learn about their motivations.

Amanda Edmondson of Sojourn Community Church in Louisville, Kentucky, has raised concerns that MLM had become “inescapable” at the multisite church. “We appear tolerant, but behind closed doors, women are really frustrated,” the women’s ministry leader told CT. “We don’t know how to talk about it, but we know it’s infiltrating our churches.” Edmondson challenged women to consider how MLM involvement affects their ministry, particularly if they hold prominent positions, such as pastor’s wives or ministry leaders.

One male churchgoer approached Edmonson to tell her about “an inappropriate photo of that woman leading worship on stage.” The worship leader had posted “before and after” pictures of her stomach on Facebook; she was touting her weight loss using Shakeology, part of the Beachbody fitness program centered on meal-replacement shakes.

Other Sojourn attendees have raised concerns about the effectiveness of supplements, essential oils, and weight-loss wraps sold through MLM, or what such products communicate about physical beauty. A Christian-owned company called It Works! reported $538 million in revenue in 2014 for its body-toning products. Its signature cloth wrap—marketed literally as “that crazy wrap thing”—claims to minimize the appearance of fat and cellulite in as little as 45 minutes. As founder Mark Pentecost told Tech Insider, “When I first started in the industry, you could go to a mall, hang out, meet people, start a conversation. Today’s gathering place isn’t the mall. It’s Facebook.”

Of course, concern about churchgoers pitching to other churchgoers, or the merits of certain products, reaches far beyond MLM. But people tend to be more skeptical of business ventures that fall outside the traditional marketplace, said Anne Bradley, vice president of economic initiatives at the Institute for Faith, Work, & Economics. With any “unusual” venture, whether it’s a food truck or an at-home business, she said Christians may be more suspicious of potential ethical and spiritual pitfalls.

“MLM or not, we all want to justify what we’re doing. My advice would be: prayer, prayer, prayer,” Bradley said. “If we’re selling jewelry, we don’t have to ask whether it’s okay to sell each bracelet. But we should be asking, ‘What are my idols?’”

Work of Their Hands

At its best, MLM reveals the good impulse among Christian women to create wealth, connect with each other, and make a difference. “That underlying desire for a sense of purpose is core to who we are,” said Jenni Catron, executive pastor at Menlo Park Presbyterian Church and author of the book The Four Dimensions of Extraordinary Leadership. “Women who are in these other arenas where they’re finding fulfillment and purpose in the work they’re doing, are finding that there instead of the church.”

But the concerning aspects of MLM—the overall lack of verifiable profit, the strain on relationships—raise the questions: Are women in the church pursuing MLM because it’s truly the best outlet for their gifts? Or are they pursuing MLM because it’s one of the only options available to them?

With entrepreneurs and marketers among the groups leaving US congregations, churches have “a huge…to help connect faith and calling, particularly for young women, who now have more opportunities in the world,” said David Kinnaman. The Barna Group president encouraged “vocational discipleship” in a video for Propel, a Christian nonprofit targeting women in the marketplace.

By infusing work with identity, purpose, and fellowship, MLM has enlisted Christian women to help build a $34 billion industry in the United States. But women’s distinct gifts as leaders and entrepreneurs aren’t limited to one industry or sphere, MLM or otherwise. In God’s good design, no program or marketing technique will lead to success for every woman.

The Bible praises the woman who manages her household, sells her wares, gives to the poor, and receives praise for “all that her hands have done” (Prov. 31:31). The task now is to discern all that the modern MLM seller’s hands have done—and ask whether those hands are indeed fulfilling God’s call, or if they could be put to other use.

Kate Shellnutt is editor of Her.meneutics, CT’s women’s site. Find her on Twitter @kateshellnutt. Hannah Anderson is a blogger, freelance writer, and author of Made for More. She tweets as @sometimesalight.

March
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