Image: A black and white photo of a white woman standing in the center of a circle of women, holding tupperware. Image via wikimedia commons, creative commons usage. Tupperware was one of the first direct sales companies that targeted women, specifically.

As the COVID-19 recession deepens, many of us have been receiving more calls from long-lost friends or relatives selling energy drinks, workout videos, jewelry, or various household goods. In the absence of social insurance policies to soften the pandemic’s devastating toll, more and more Americans desperate for financial stability are turning to multilevel marketing (MLM), also known as direct sales or network marketing to provide for themselves and their loved ones. For decades, MLMs have offered participants flexible hours, a support network of other dedicated sellers, and the tantalizingly elusive promise of getting rich to those facing uncertainty.

But these programs promise more than just an opportunity to flex your entrepreneurial skills. Apart from selling, these multilevel marketing programs offer participants the promise of luxury cars, tropical getaways, and an end to financial squalor for those who work hard enough. But how does this industry work? Social science research points to this decades-old business model’s potential pitfalls for disadvantaged participants.

Business structure

From essential oils to protein powder to plus-sized clothing and just about everything in between, MLMs sell a wide range of consumer goods. Here’s the catch: you can’t buy these items online or in stores. Sellers – “distributors” in direct sales parlance – purchase product in bulk from companies (think Avon, Herbalife, LulaRoe, Plexus) to sell to friends, family, and contacts. While companies profit from these transactions, sellers seldom see these dollars themselves. To profit, these distributors must recruit new team members. The more members – or “downlines” – on their “team,” the higher commission the “upline” – the recruiters – receives. Perhaps unsurprisingly, given the high start-up cost and lack of benefits, research from the AARP suggests that 73 percent of those who participate in MLMs lose or make no money at all, deepening the vulnerability of already disadvantaged participants. 

Direct sales and gender

Since its inception at the turn of the 20th century, the predominantly male traveling sales industry evolved into the female-dominated MLM model we know today. To curb the unsavory reputation itinerant sellers engendered – reputations commonly laced with antisemitic tropes and xenophobic stereotypes – companies began culling vendors from a more acceptable population: middle-class, predominantly white women and, at first, young college students. With companies pledging flexible hours and easy sales to their social circles, this business model took off following WWII. Tupperware revolutionized the way products were sold; instead of door to door sales or sales calls, buyers — mostly unemployed housewives — attended parties filled with product demonstrations and socializing. While social media and the internet have changed the nature of direct marketing, feminized notions of work and domestic responsibility still permeate this market, from the products sold (cleaning products, kitchen supplies) to the emotion-laden bonds forged within teams of distributors. Such MLM opportunities remain attractive, in part, due to the persistence of sex discrimination in employment, and the antiquated expectations that still limit women’s earning potential, self-image, and job prospects.

Charisma and Risk

Much to the chagrin of regulatory agencies, many MLM products have been marketed as “cure-alls” for all manner of maladies and ailments. In April 2020, the FDA publicly chastised seven direct sales companies about misleading claims, arguing their products protected against coronavirus. Alongside these audacious claims, these companies have long used self-empowerment rhetoric to energize distributors and build their following. This charismatic language has drawn often vulnerable populations seeking economic stability and community into the MLM orbit. Research demonstrates how these emotion-laden themes work alongside promises of socioeconomic advancement to make multilevel marketing a promising career path for a wide variety of aspiring entrepreneurs and desperate sellers alike. Instead of offering financial security, MLMs dangle audacious promises and a competitive environment for individuals to pursue prosperity, often with little success.