Utah’s Stake in Multi-Level Marketing

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If you live in Utah, chances are you’ve been approached at least once by an Independent Business Owner (IBO), what most Multi-Level Marketing businesses (MLMs) call their social networkers. Jon Taylor of the Consumer Awareness Institute in Utah, disperses the truth about the density of MLMs in our state. He writes on his website, MLM-theTRUTH.com, that we have more MLM companies per capita than any other state in the nation, and that no other county in the U.S. comes even close to the saturation of MLM’s based in Utah County.

According to Taylor, NuSkin Enterprises (located in Provo) is the most famous Utah-based MLM. Taylor’s research over several years indicates that the company has been sued for countless misrepresentations and has been notorious for settling out of court and writing off these expenses as normal business expenses. Utah officials lack the will to prosecute, and also have limited information on these schemes, Taylor claims. To make matters worse, “less than one in 30,000 victims of these schemes will ever file a formal complaint,” Taylor’s website informs.

What is the big deal about MLMs? Ironically, as I sat down to write this article, a friend of mine, whom I haven’t spoken with in years, sent a Facebook text pleading for help with her “HUGE personal goal.” The goal, I’m assuming, has to do with adding “downline” (people below her in the pyramid) to her network of IBOs, who will go on to sell products under her IBO number. A portion of the profits will go to her, and a portion will be divided among the rest of the team. I imagine with our help, she can earn money faster and finally buy that new car or luxurious house she’s wanted all her life. I’ve heard this story before, and the truth is, the person at the top of the pyramid makes the lion’s share of the money.

I click on the link my friend provides, and a “Thrive experience” video appears on my screen. “Here we go again!” I think to myself as I recall my time as an IBO for Amway, then years later Quixtar (Amway’s new name), Pre-Paid Legal, and Melaleuca. The fast-talking, highly motivational leaders don’t leave room for thoughts of failure or doubts of any kind. Even the most skeptical consumers can be sucked into any business plan, and the product that comes with it, because let’s face it—we don’t hear many positive messages in our day-to-day lives. I never made a profit from these MLM’s because the products and services I paid for and the yearly membership fees outweighed the money I made from downline.

A video comes up on my screen, and I click “play.” Instantly, fast music starts in the background as thousands of success stories are displayed and the upbeat male narrator begins his pitch:

Are you ready to hear about the hottest weight loss and nutrition plan sweeping North America? It’s called the Thrive 8 Week Experience. With thousands of thriving success stories already, the 8 Week Experience is the only premium lifestyle transformation plan.

He goes on to promise that the Thrive experience will get you the best results in all areas of your life.

I’ve been around long enough to know that when a company promises the world and throws in the sky for good measure, it’s too good to be true.

But why are Utahans more susceptible to these messages than people in other states? The answer that immediately comes to my mind is that we have the highest concentration of Mormons—31% of the country’s 6.5 million followers according to mormonnewsroom.org—who are taught from a very young age not to question their faith. To give an example, The 2007 New Era magazine for Mormon youth states in its Q&A section that anti-Mormon literature should not be read because the information would take too long to read and is inaccurate. In other words, have faith that the church is true. The section goes on to encourage young members to rely on their feelings to decide what is truth when comparing anti-Mormon literature with Mormon literature.

In Mormon culture, faith and feelings take precedence over reasoning and logic. I suspect this mentality is carrying over to the business world where MLMs promise countless blessings while misrepresenting their success rates. In a business scenario, it pays to remember that an IBO is not an infallible source of wisdom.