'Little Bosses Everywhere' looks into the Wild West of multilevel marketing

Summary

NPR's Book of the Day: "Little Bosses Everywhere" – A Deep Dive into the Wild West of Multilevel Marketing

Release Date: May 22, 2025

In the episode titled "Little Bosses Everywhere," NPR's Book of the Day explores the intricate and often controversial world of multilevel marketing (MLM) through the lens of journalist Bridget Reed's latest work. Hosted by Andrew Limbaugh and featuring an insightful interview with Aisha Rascoe, the podcast unpacks the history, strategies, and legal nuances of MLMs, shedding light on why these organizations continue to thrive despite widespread criticism.

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Introduction to Multilevel Marketing

Andrew Limbaugh kicks off the episode by sharing a personal anecdote that sets the stage for the discussion on MLMs. Reflecting on his childhood, Limbaugh recounts how a family friend persistently tried to sell skincare products to his mother and sister:

"[00:02] Andrew Limbaugh: ...I don't even actually remember what the thing was. I just remember hearing the hard sell over and over again."

This experience underscores the pervasive nature of MLM pitches and introduces listeners to the central theme of Bridget Reed's book, "Little Bosses Everywhere."

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Understanding MLMs: Mechanisms and Major Players

Bridget Reed delves into the mechanics of MLMs, explaining how these organizations operate under the guise of entrepreneurship. She emphasizes the allure of transforming everyday moments of doubt into opportunities for profit:

"[02:13] Bridget Reed: Pitch is hard for many to resist. Imagine turning life's moments of I can't into I can."

Aisha Rascoe elaborates on the structure, detailing how MLMs function through product sales and recruitment:

"[02:13] Aisha Rascoe: Multi level marketing supposedly works like this. You can buy products at a discount and sell them at a higher price to make a profit. But what you can also do is recruit people under you on your team, which is called your downline."

Prominent MLM companies such as Amway, Mary Kay, Herbalife, Cutco, Lularoe, Young Living, and Doterra are highlighted as key players in the industry, each specializing in various products from cosmetics to essential oils.

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MLMs vs. Pyramid Schemes: Drawing the Line

A significant portion of the discussion focuses on differentiating legitimate MLMs from illegal pyramid schemes. Reed questions the validity of this distinction, suggesting that the lines are often blurred:

"[02:45] Bridget Reed: How does it compare to a pyramid scheme?"

Rascoe responds by outlining the fundamental differences:

"[02:48] Aisha Rascoe: A pyramid scheme? Instead of really making money on buying or selling any products, you're just making money on people investing into the scheme..."

However, Reed contends that evidence increasingly shows minimal differences, arguing that both structures exploit participants similarly.

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The Legal Landscape of MLMs

One of the most pressing questions addressed is "How is this legal?" Reed challenges the seemingly predatory nature of MLMs:

"[03:16] Bridget Reed: How is this legal? Because it seems like what you're describing is a bit predatory."

Rascoe explains the regulatory framework established in 1979, highlighting its limitations:

"[03:24] Aisha Rascoe: The rules that were established in 1979... involve having a minimum amount of retail customers. You're supposed to prove that you've sold the products you buy before you can re up and buy again."

She emphasizes the challenges in enforcing these regulations, noting the vast number of independent contractors involved and the industry's ability to exploit loopholes:

"[03:24] Aisha Rascoe: The oversight is, I think, nearly impossible. And so what ends up happening is it's really easy to flout the rules."

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Economic Trends and the Rise of MLMs

Reed's book also examines how MLMs ebb and flow with economic cycles. Rascoe outlines the historical context, showing that MLMs often surge during times of economic uncertainty:

"[05:02] Aisha Rascoe: MLMs really exploded in the 1970s because of the stagflation that was impacting the economy and because of, you know, really high unemployment."

She traces the adaptability of MLMs through various economic climates, from the digital boom to the Great Recession and the recent pandemic, each time rebranding to appeal to those seeking financial stability.

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The Reality for MLM Participants

Despite the enticing promises, the reality for most MLM participants is bleak. Reed highlights that only a small fraction achieve substantial financial success:

"[07:06] Aisha Rascoe: A tiny fraction of people are successful in that they're actually making a living wage, not even a lot of money in one of these companies."

Rascoe criticizes the culture of personal responsibility promoted by MLMs, which often blames individuals for their lack of success rather than addressing systemic issues within the models themselves.

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Advice for Potential MLM Recruits

Concluding the discussion, Rascoe offers pragmatic advice for those approached by MLM recruiters:

"[07:54] Aisha Rascoe: The number one thing is really to not join. A lot of people sign up under their friends and family because they feel kind of guilty or feel bad."

She warns against the immediate financial losses that often follow initial involvement, urging listeners to resist the pressure to participate to avoid perpetuating others' losses.

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Conclusion

"Little Bosses Everywhere" serves as a critical examination of the MLM industry, unraveling its complexities and the psychological tactics it employs. Through Bridget Reed's investigative lens and Aisha Rascoe's expert insights, the podcast offers listeners a comprehensive understanding of why MLMs persist and the often detrimental impact they have on individuals seeking financial empowerment.

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For those interested in exploring the full depth of MLMs and their societal implications, Bridget Reed's "Little Bosses Everywhere" is a compelling resource available wherever books are sold.

Transcript

[Andrew Limbaugh]

Hey, it's NPR's Book of the Day. I'm Andrew Limbaugh. Growing up, we had a family friend who was always trying to sell my mom and sister some sort of skin care product thing. I don't even actually remember what the thing was. I just remember hearing the hard sell over and over again. It was obviously a part of a grander multi level marketing scheme. And if you have someone in your life caught up in an mlm, you know how consuming it can be. Today's book digs into the history of MLMs and MLM culture. It's titled Little Bosses Everywhere by journalist Bridget Reed. And in this interview with NPR's Aisha Rascoe, they get to the question we all want to why are MLMs even legal? That's coming up.

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[Bridget Reed]

Pitch is hard for many to resist. Imagine turning life's moments of I can't into I can.

[Aisha Rascoe]

What will your I can story be?

[Bridget Reed]

Improve your life and your bank account by becoming a salesperson or distributor for Mary Kay Cosmetics or any number of other multi level marketers.

[Aisha Rascoe]

Amway is the biggest one. Amway sells everything energy drinks, makeup, cleaning products, household products. Herbalife sells nutrition supplements and shakes. Cutco sells knives. Lularoe sold and sells leggings. Young living and Doterra sell essential oils.

[Bridget Reed]

But what kind of opportunity is this really? Journalist Bridget Reed goes deep into the answer in her new book Little Bosses Everywhere with the history and tactics of MLMs.

[Aisha Rascoe]

Multi level marketing supposedly works like this. You can buy products at a discount and sell them at a higher price to make a profit. But what you can also do is recruit people under you on your team, which is called your downline. You're the upline. And you can also make money on what they're buying and selling and build a team of hundreds, even thousands of people under you so that you're making a lot of money rather than just on what you alone can buy or sell.

[Bridget Reed]

How does it compare to a pyramid scheme?

[Aisha Rascoe]

A pyramid scheme? Instead of really making money on buying or selling any products. You're just making money on people investing into the scheme, Robbing peter to pay Paul once the expansion stops. The people that got in early, They've made a lot of money on the people below them. The people that got in late tend to lose the difference between multi level marketing and pyramid schemes, that's much harder to parse. My book really argues that there's a lot of evidence that there isn't a difference.

[Bridget Reed]

How is this legal? Because it seems like what you're describing is a bit predatory.

[Aisha Rascoe]

How is this legal? Is like the million dollar MLM question and the rules that were established in 1979. Those rules are really the only small regulatory oversight over the mlm industry. They involve having a minimum amount of retail customers. You're supposed to prove that you've sold the products you buy before you can re up and buy again. But mlms use hundreds of thousands of independent contractors every day Selling these products. The oversight is, I think, nearly impossible. And so what ends up happening is it's really easy to flout the rules.

[Bridget Reed]

Well, why is it so hard to regulate en masse?

[Aisha Rascoe]

Mlm participants tend to not be powerful people themselves. You know, many of them are women, Many of them are housewives. It's a kind of demographic that I think it's unfortunately easy to ignore. And so the combination of that has meant that the regulation is really much more of a gray area. So it's not that even mlms are, quote, like legal in a way where there's been a law passed or something that legalizes them. It's more like the loophole, the gray area. The wild west that they exist in has never had to be kind of reined in.

[Bridget Reed]

Well, I mean, this book also follows kind of the ebbs and flows of mlms, and their life cycles do seem to follow kind of political and economic cycles. Tell us about some of those trends. And I mean, mary kay's been around for a long time, but then you'll see like an herbalife or a lularoe or something like that, and things just start popping up.

[Aisha Rascoe]

Since the beginning, mlms have offered themselves as a low cost, low entry path to entrepreneurship, which, of course is a pitch that flourishes in an economic downturn. So the moment mlms were invented was the post war moment in the united states where we had won the war, but we had yet to kind of enter the eisenhower golden era of prosperity. So there was a lot of economic anxiety. So that's a moment they were born out of. And that trend has just continued. So MLMs really exploded in the 1970s because of the stagflation that was impacting the economy and because of, you know, really high unemployment.com boom and then bust. A lot of MLMs change their pitch to call themselves sort of digital at home businesses when the Internet was first becoming widely used. Right. They do the same thing again in the Great Recession when they're offering, you know, a lot of white collar professionals who lost their jobs rather than door to door selling. This is a home based network marketing business. So making it sound much more managerial. And then they did it again in the pandemic, same thing, you know, encouraging people to use their stimulus checks, especially women who were, you know, sent home at a higher rate than men. They were doing childcare to invest those checks in their, you know, quote, small businesses. So that's a common trend. And unfortunately it means that even as MLMs kind of are declining in terms of popularity and membership, a long, slow decline over the last 20 to 30 years, every so often they get a little boom in new membership because people who've never heard of them, or maybe even people who've tried them before and think they'll work this time are feeling desperate.

[Bridget Reed]

MLMs like Amway, like Mary Kay, like Lularoe, they will point to people in their organizations who do make some money. Is the argument that this just doesn't work for most people because some people may get in there and they may make some money.

[Aisha Rascoe]

A tiny fraction of people are successful in that they're actually making a living wage, not even a lot of money in one of these companies. And what the rhetoric of the companies themselves is that they're just better at it than you or me. If we tried and failed, there's a real, very strong culture of personal responsibility and work ethic and that if you didn't do well, you just didn't hustle hard enough.

[Bridget Reed]

So after all this research and reporting, what's your biggest advice for anyone who's getting approached by a friend or a friend of a friend, you know, or someone at church, or, you know, someone who you like, or someone who seems nice enough and they're pitching this opportunity to make money selling products in this way?

[Aisha Rascoe]

I mean, the number one thing is really to not join. A lot of people sign up under their friends and family because they feel kind of guilty or feel bad. But what you're actually doing is kind of giving somebody a burst of early sales and recruiting that is very hard to replicate. You know, resist as much as you can because you're only prolonging the loss that they're very likely going to experience if they keep up with trying to make it.

[Bridget Reed]

That's Bridget Reed. Her book Little Bosses Everywhere is out now. Thank you so much for joining us.

[Aisha Rascoe]

Thank you so much for having me.

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