Multi-level marketing has been likened to a legal pyramid scheme – the backlash against it is growing

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Máire O Sullivan, Edge Hill University

There is a growing rumble of discontent against multi-level marketing (MLM) businesses. As well as a growing backlash from former MLM recruits, regulators are getting involved, too. Unfortunately, however, these businesses that have been likened to legal pyramid schemes are unlikely to disappear altogether.

Multi-level marketing is the model of selling products through a network of distributors. Distributors buy stock in the company’s product and then sell it on, keeping a cut of the profits. Money is not just made from selling, but also from recruiting new distributors – if someone signs up under you, you become their “upline” and receive commission from their earnings, too. If your recruits sign up anyone beneath them, you also take a cut of their profits, and so on.

The difference with illegal pyramid schemes is that there is a product. But critics say that many MLMs have a business model that focuses on recruiting “downline” and getting new distributors to buy the product, rather than on actual sales to consumers, making them akin to pyramid schemes.

A recent report in The Guardian newspaper revealed the “cultish grip” that some of these businesses have on many recruits. They offer people a life-changing financial opportunity, but many lose money – and their friends – when they sign up to MLMs. Only the few at the top of the pyramid profit.

The Guardian focused on beauty sales business, Younique. But you may have seen a number of brands on your social media feed, including Herbalife which sells weight-loss products, Arbonne which sells skincare and many others. In fact, these businesses increasingly rely on social media to grow, both selling their products and recruiting new distributors online.

Women are the main target. According to the US Direct Selling Association, the trade body for the sector, 73.5% of those involved in MLMs in 2018 were women. The European Direct Selling Association suggests 77% are women in the UK.

Young mums, in particular, are inundated with requests to “support the businesses of their friends”. They are promised an easy way to make money from home, while balancing childcare. Another appeal of MLMs is the community they offer to distributors. Recruits are given coaching on how to make their side hustle a success and get support from others in the network.

This often results in vulnerable people being targeted by the allure of making easy money, fitting work around your own schedule and entering a supportive community. But some of these companies have an alarmingly cult-like mentality, encouraging distributors to cut negative influences and naysayers from their lives.

Bearing in mind that only 1% of people turn a profit, those naysayers may have good reason to sound the alarm. And the constant drive for sales can alienate friends and family who don’t want to get involved in the MLM.

Anti-MLM activism

The number of people that have been burned by their experience as an MLM distributor has led to the rise of an anti-MLM movement. The anti-MLM group on internet forum Reddit has almost half a million members. It states that: “Multi-level marketing (MLM) schemes are a drain on our society. Its participants either build the pyramid taller, or get squashed by it.” The Facebook group “Sounds like MLM but ok” has more than 100,000 members and a podcast to discuss MLMs and what it describes as “their poor business structure, obnoxious marketing practices, and all around awful nature”.

Clothing MLM Lularoe is a particular target for online activists and has been the subject of a recent Vice documentary. Lularoe had an initial buy-in cost of a minimum US$5,000 – an enormous sum in the MLM industry. A litany of subsequent scandals has culminated in the Washington state attorney in the US filing a lawsuit against the company alleging it is a pyramid scheme – something Lularoe says is completely without merit.

Activists have many major MLMs firmly in their sights. The Netflix documentary Betting on Zero, for example, features the fight against Herbalife by LatinX community activists in the US. The Pink Truth assists “women in freeing themselves from abusive pyramid schemes and predatory multi-level marketing companies like Mary Kay [cosmetics]”. Activists often feel they have been personally victimised by the industry, either as former distributors or as targets of them.

End in sight?

With this renewed media attention and a burgeoning grassroots movement against MLMs, it is interesting to see that AdvoCare, a diet and nutritional supplement brand headquartered in Texas, decided last month to abandon its MLM model. The company stated that the Federal Trade Commission took issue with “how AdvoCare compensates its distributors”.

The FTC talks that led to this decision were confidential so it’s hard to know exactly why AdvoCare decided to terminate its 100,000 distributors. But its MLM model had experienced difficulties in the past few years with an ESPN investigation into its practices, a class action lawsuit by former salespeople claiming it was a pyramid scheme, and an Olympic swimmer alleging that their products were responsible for her testing positive for a banned substance.

Despite all of this, it is unlikely that we will see an end to MLMs any time soon. While specific MLM companies have risen and fallen, the model itself – which promises easy money and an alluring community – has withstood a number of court challenges over the years. But hopefully the anti-MLM movement will bring about change through consumer education and pressure, as well as supporting the many people who fail to reap the rewards that these businesses promise.


We asked for comment from the MLM companies referred to. Only Lularoe responded. They insisted they offered participants an opportunity for “responsible entrepreneurism” and “a journey towards new freedom in their life”, suggesting failures just hadn’t put in the “required effort”.

Máire O Sullivan, Lecturer in Marketing and Advertising, Edge Hill University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Is there hope for independent candidates in a snap election? A short history of MPs who go it alone

Paula Keaveney, Edge Hill University

British politics is in a state of flux. In the space of less than a year we’ve seen at least two new parties formed – The Brexit Party and the Independent Group for Change (formerly Change UK). We have seen MPs leave parties to join others. Chuka Umunna, for example, left first the Labour Party then Change UK to end up in the Liberal Democrats, while various other MPs are sitting as independents in the House of Commons. And the most recent national election, the European election in May, showed that voters are increasingly willing to forsake the traditional two main parties.

As the number of groupings increases, perhaps parties are losing their hold. So does this open up opportunities for those who want to go it alone?

Former Labour MP Frank Field recently announced that he is to stand as an independent candidate in the next election, after quitting the Labour Party in 2018. The Birkenhead on Merseyside MP had clashed repeatedly with the Labour leadership over its handling of antisemitism in the party before resigning the whip and complained of a “culture of intolerance, nastiness and intimidation” in local parties.

Field, who has represented his constituency since 1979, has applied to register the Birkenhead Social Justice Party with the Electoral Commission to make his bid possible. The party is more of a vehicle for getting noticed on the ballot paper, however, rather than an attempt to start a new movement. To all intents and purposes, Field is striking out alone. Of course he’ll have helpers and supporters, but he is independent of party.

Modern British politics, particularly at Westminster level, is not that kind to independent candidates. The main parties have huge machines and most voters pick the party rather than the person when entering the ballot box. Even when a politician has a personal vote, it’s hard to beat the machine.

There are some examples of independents succeeding, though. One of the best known independent candidates must be the former broadcaster Martin Bell, who triumphed in Tatton in 1997. Bell stood as an anti-corruption candidate against incumbent Conservative Neil Hamilton, who had been part of a “cash for questions” scandal. Bell’s path to victory was smoothed by Liberal Democrat and Labour candidates, who stood down to give him a better chance. Both parties also provided support to Bell. He did. however, pledge to only serve one term, so we’ll never know if he could have won the seat again.

When MPs go independent, it’s generally because they are unhappy with their party. In 2005, Peter Law, a member of the Welsh Assembly, caused quite a shock when he quit the Labour Party to stand as an independent candidate for the Westminster seat of Blaenau Gwent. The seat had become available when the Labour incumbent announced his retirement but the Labour Party angered some local activists when it decided that his replacement would be chosen from an all-woman shortlist. Law was among the dissenters and caused quite a shock when he won the seat – supposedly one of the safest for Labour in Wales.

Another famous case is Labour MP Dick Taverne, who fought a by-election in 1973 as an independent in Lincoln after falling out with his local party over Europe. Taverne defended his seat successfully in the first of the two 1974 elections, but lost in the second.

History tells us that independent candidates find it difficult to win election and even harder to retain a seat. One of the few who has successfully stayed in place is Wyre Forest’s Richard Taylor, a retired doctor who stood on a single-issue campaign to save his local hospital. He won in 2001 and defended in 2005. On each occasion, the Liberal Democrats stood aside. He lost to the Conservatives in 2010.

Lessons for Field

Historically, successful independent campaigns in the UK have all involved a big issue, like the health service or sleaze, and a party row which effectively provides plenty of manpower and motivation or tacit support from potential opponents. They have also included some element of personal vote, although it is important not to overstate this. Bell’s triumph, for example, also included a good dose of anti-politics.

Field does have an issue, but frankly “social justice” is too broad and too open to being claimed by others. He has rowed with the Labour Party over antisemitism and over Europe (he campaigned for Brexit) but, again, these are too broad to make the difference for him as an independent candidate.

Field has certainly had a row with his former party, but will this deliver the person-power needed to mount a campaign? It is hard to see the Liberal Democrats standing down to help Field. The party has councillors on the Wirral and disagrees with Field on lots of issues – particularly Brexit. The Greens have been making progress locally too. Labour has just selected a new candidate and says it will contest the seat vigorously. Labour, after all, has since 2017 had a massive majority there. It is also hard to see the Conservatives walking away from this one – although the Brexit Party might step aside to give Field a better chance.

Field has a personal vote but, based on previous examples of independent campaigns, this is not enough for a victory. But politics is in flux today and maybe that big issue will come along.

As the election gets nearer, it will be intriguing to see if any others decide to strike out on their own. The risks are great, but the current talk about de-selection in both the Labour and Conservative parties may make some think more seriously about it. With most positions in the political marketplace clearly occupied at the moment though, any potential independent will need to keep his or her fingers crossed for that elusive local issue.

Paula Keaveney, Senior Lecturer in Politics, Edge Hill University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Remain Alliance – can it halt Brexit and beat Boris Johnson?

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Paula Keaveney, Edge Hill University

This week’s by-election in Brecon and Radnorshire will be the first formal test of the so-called Remain Alliance. The unusually short list of candidates in this contest is partly because parties such as the Green Party and Plaid Cymru, have stood down in favour of the Liberal Democrats. Campaign visits have also been made by those who originally formed Change UK, such as former Conservatives MPs Anna Soubry and Heidi Allen.

It is rare in British politics for parties to stand down in favour of their usual competitors. And while this isn’t the first occurrence, or the first initiative, the Brecon agreements could well lead to something more formal. A little earlier in the summer, former Change UK (now Independent Group for Change) leader Heidi Allen launched Unite to Remain. The idea is for Remain-supporting parties to work together to maximise the chance of electoral, and therefore policy, success. This would include the use of a common title or strapline to make the point.


Read more: How Boris Johnson can win a snap election – and what the others can do to stop him


There have been attempts to achieve a common purpose in the past. The 2017 general election, for example, saw the promotion of the so-called Progressive Alliance (of which more later). But what marks out the latest attempt is the move to register a name and logo (Remain Alliance) with the Electoral Commission. Current electoral law means that ballot papers can only include registered names and logos (or the word “Independent”).

Tribalism

To understand whether or not the current initiative can succeed, it is worth looking at cross-party cooperation, or the lack of it, in the past.

British politics is usually very tribal. This tribalism has meant that past efforts at cooperation have generally been motivated by negative factors, such as a desire to defeat a particular party (usually the Conservatives).

But the nature of the electoral system also means that tactics could trump tribalism. In a first-past-the-post system, which is used for UK parliamentary elections, a horse-race narrative often develops. It is in the interests of a challenger party to appear as the only participant with a chance to overtake the favourite and win.

This in turn means supporters of lower placed, unlikely-to-win parties are targeted to “lend” their votes to defeat a less-preferred option. This has given birth to idea that only certain parties are worth supporting.


Read more: How Boris Johnson draws on the past to rule in the present – with a little help from myth


Resistance, however, can come from the candidates and activists of those lower-placed parties. While the Green Party did stand down in favour of the Liberal Democrats in the 2016 Richmond Park by-election when the Lib-Dems successfully took the seat from Zac Goldsmith, for example, parts of the local Green Party felt very aggrieved and voiced their annoyance quite publicly. This in turn means that cooperative arrangements are often rare.

Who wins, and loses?

It can be very difficult to negotiate cooperation, particularly when one party will feel it is losing out. Anyone who thinks this is easy needs to look further into the SDP-Liberal Alliance.

The SDP was formed in 1981 and almost immediately began working with the existing Liberal Party. The idea was that one of either party would contest each parliamentary seat. This was generally achieved, but only after tortuous negotiations which rather ruined the image of cooperation and which are well described by participants such as the then MP, now Lord, Bill Rogers and the authors Ivor Crewe and Anthony King.

In fact, the Croydon North West by-election in 1981 was fought by the Liberal Bill Pitt – rather than by the leaders’ preferred option, Shirley Williams – because Pitt simply refused to budge. Pitt went on to win.

Of course, parties do not need to be working together explicitly for voters, or organisations, to urge tactical outcomes. While tribalism has a long history in UK politics, so too do attempts to persuade voters to make tactical decisions.

TV87, for example, referenced in an article in Political Behaviour, was a campaign set up to focus voters’ minds on the possibility of lending votes in the 1987 election. And it became common for publications and campaigns to produce lists of seats where incumbents were vulnerable to temporary tactics.

Anna Soubry: leader of Independent Group for Change. Shutterstock

The current initiative, which goes well beyond leaving decisions to voters alone, can perhaps best be judged against more recent projects. The 2017 general election saw the promotion of the so-called Progressive Alliance. The thinking was that Progressive parties (generally centre-left or left wing) could stand down for each other in seats where this might help defeat a Tory, or assist a vulnerable Progressive incumbent. The book All Together Now by Barry Langford lists 42 seats in which this happened, but it was not always successful and it was only really the Green party which played a full part.

So can the Remain Alliance work?

The Brecon and Radnorshire by-election result may provide part of an answer, although we need to remember that this has been a Lib-Dem seat in the past and the party has been campaigning there for some time (in other words, the cooperation between parties may not be the crucial factor here).


Read more: Brexit: wisdom of crowds proves effective predictor of Britain’s chaotic EU departure


Perhaps more telling will be any negotiations ahead of the forthcoming Sheffield Hallam by-election as well as what happens when more than one party has a justifiable claim to stand.

The big issue, however, must be Labour’s role and how one can define a Remain party. Labour played no active part in the 2017 Progressive Alliance, so what would the Remain Alliance do if Labour was the clear challenger to the Conservatives, or Brexit party, in a tight contest? Only time will tell, but the answer hangs on whether or not Jeremy Corbyn ever comes out as an unequivocal supporter of either Leave or Remain.

Paula Keaveney, Senior Lecturer in Politics, Edge Hill University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Why conditional offers are better for students

Students in lecture theatre

As we enter the new application cycle, a fresh cohort of prospective students will again be confronted with unconditional offers (not based on their final exam results) or other incentivised offers to persuade them to choose a particular university. As this practice becomes increasingly common, key figures in education are questioning whether it really benefits students – or the university sector as a whole.

In their recent report on the subject, UCAS stated that the number of unconditional offers made to 18 year old students from England, Northern Ireland, and Wales has risen significantly over the past five years – from 2,985 in 2013, to 67,915 in 2018. In the most recent application cycle, 22.9% of this group of students received at least one unconditional offer, an increase of 29% on the previous year.

The Government has been critical of this sharp rise in unconditional offers. Universities Minister, Sam Gyimah, has criticised the practice as “completely irresponsible” stating that it “undermines the credibility of the university system”. Gyimah says that “unconditional offers risk distracting students from the final year of their schooling, and swaying their decisions does them a disservice – universities must act in the interest of students, not in filling spaces.” His comments have been echoed by Robert Halfon, Chair of the Commons Education Select Committee, who claims that the practice is putting “funding” before “standards”. Gyimah has promised to closely monitor the number of unconditional offers being issued and has empowered the Office for Students to take appropriate action if necessary.

Head of Student Recruitment, Simon Jenkins, said: “At Edge Hill, we believe that going to university is a rewarding, life-changing decision and that choosing the right university is vital. Students should select where they are going to spend the next three years on the basis of which university and course is right for them, rather than which university is prepared to make an offer unconditional if a student chooses them.”

Geoff Barton, General Secretary of the Association of School and College Leaders, highlights the long-term dangers of unconditional offers saying that they “can lead to students making less effort in their A-Levels because their place is assured. That can then hamper their job prospects later down the line if potential employers take into account their A-Level grades.”

Edge Hill has always had a policy of not making unconditional offers to applicants who are sitting their A-Level, BTEC or equivalent qualifications for this reason.

“We are very conscious that exam grades are not just about getting into university,” said Simon. “We set what we believe are stretching entry requirements and we encourage applicants to work hard to achieve the very best grades that they can.

“We have strong academic standards as a university and we want students who are passionate about their subject and who want to be part of an exciting and dynamic community of lecturers and like-minded students. We also want students who are committed to their own success. For that reason, we will not compromise our standards by making unconditional offers to applicants in order to encourage them to come to us regardless of the grades they achieve.”

Third year Geography student Max Beaton turned down two unconditional offers from other universities to take up a place at Edge Hill. He said: “I chose Edge Hill as my firm choice as I could see myself studying and living here. The unconditional offers didn’t really sway my choice – visiting Edge Hill on open days and applicant days definitely sold the University to me and allowed me to talk to students and staff and get a real feel for the place.

“I do think I made the right choice. Being a student here and being a member of the Edge Hill community actually exceeded my initial expectations.”

Max advises students starting off on their application journey to choose the university that is best for them.

He added: “Unconditional offers do look great and very encouraging and the university might really want you to choose them, but if it’s not the right choice for you, no matter what they are offering, you have to do what is best for you.”

Kazia Cannon, a 3rd year Drama student, also received two unconditional offers before deciding on Edge Hill. She said: “Edge Hill was just a lot more suited to my needs both academically and in terms of student support.

“When you’re visiting universities, you have to think ‘is this somewhere I can imagine myself in three years?’ That’s what I did every time I went to an open day and that’s how I made my decision in the end.”