Multi-Multi-Level-Marketing

Summary

Podcast Summary: "Multi-Multi-Level-Marketing" on The Dream

Episode Information:

• Title: Multi-Multi-Level-Marketing
• Host: Little Everywhere
• Guest: Erin Bees
• Release Date: January 20, 2025

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Introduction

In this episode of The Dream, host Little Everywhere welcomes Erin Bees, a military veteran, certified personal trainer, and a former multi-level marketing (MLM) participant who has dedicated over a decade to exposing the pitfalls of MLM companies. Erin shares her tumultuous journey through six different MLMs, her awakening to their deceptive practices, and her current crusade against these organizations.

Erin Bees' MLM Journey

Joining and Transitioning Between MLMs

Erin Bees recounts her extensive involvement in the MLM industry, having participated in six different companies:

• Slumber Parties
• Pure Romance
• Arbonne
• Modere
• Love Winks
• Prove It

She explains that her transitions were often triggered by unfavorable changes within the companies or acquisitions. For instance, her move from Slumber Parties to Pure Romance was due to the latter acquiring her initial company, leading to dissatisfaction with Pure Romance’s leadership and operational tactics.

Quote:

"I spent 13 and a half years in multi level marketing and healed my way out." – Erin Bees [00:33]

Awakening to MLM Issues

Realization Through Financial Insights

A pivotal moment for Erin was after reviewing her taxes, where she discovered she had only netted $10,000 for the year despite significant efforts and expenses. This stark realization highlighted the financial instability MLM participants often face.

Quote:

"We had done our taxes. And my accountant called and said, oh, well, you netted 10k for the year. And I said, what? 10k? ... That’s not great." – Erin Bees [07:05]

Identifying Red Flags

Erin identifies several deceptive practices within MLMs that contributed to her disillusionment:

• Bait and Switch Tactics: For example, Pruvit’s "Dollar Keto Club" initially advertised a low entry fee of $1, which quickly escalated to requiring the purchase of expensive products.
• Profiteering During Crises: Pruvit’s push to sell hand sanitizers during shortages exemplified opportunistic profiteering.
• Lack of Genuine Support: Erin often found leadership unresponsive and more focused on self-promotion than supporting distributors.

Quote:

"The goalposts are constantly being moved. ... It’s a spinning plate analogy." – Erin Bees [05:05]

The Shift in the MLM Landscape

Transition to Affiliate Models

Erin discusses a significant trend where traditional MLMs are shifting towards affiliate marketing models. This change often involves rebranding distributors as "affiliates" and eliminating recruitment-based income, ostensibly to comply with regulations but primarily to sustain profits by continuing product sales without expanding downlines.

Quote:

"Now there’s just so many resources out there. ... the majority of the money is made off of recruiting people." – Erin Bees [17:45]

Examples of Companies Making the Shift

• Make Wellness: Rebranded distributors as "affiliates" while maintaining MLM characteristics.
• Beachbody: Transitioned to an affiliate model, removing recruitment bonuses.
• Rodan and Fields: Similarly moved towards an affiliate structure, causing many distributors to migrate to other MLMs like Shackley.

Quote:

"They’re trying to come up with all these different phrases to fly under the radar..." – Erin Bees [19:36]

Regulatory and Fraud Issues

FTC Investigations and Findings

Erin highlights the Federal Trade Commission’s (FTC) scrutiny of MLMs, revealing that all examined MLMs were found to be engaging in fraudulent practices. The FTC identified that MLMs often exclude inactive members or those who didn’t recruit others from their income disclosure statements, misleading potential recruits about the profitability of participation.

Quote:

"Every single one of them was committing fraud." – Host [26:52]

Bridge Contracts and Legal Battles

Erin explains the concept of bridge contracts, agreements that MLMs use to retain top distributors when transitioning to new business models. These contracts often come with financial incentives but can bind distributors to unfavorable terms, leading to legal disputes.

Quote:

"They will actively start shopping for another MLM company and it kind of comes down to who's going to give them the best deal." – Erin Bees [37:09]

The Impact on People

Effects on Top Leaders and Distributors

The shift away from MLM models has left many long-term distributors in financial distress. Top leaders who heavily relied on recruitment bonuses find their income streams disrupted, leading to frustration and financial loss.

Quote:

"She was bringing so many people to his mastermind group and to his events, and I just feel like I've watched all of that kind of dwindle." – Erin Bees [43:05]

Emotional Toll and Community Impact

Erin shares the emotional challenges faced by MLM participants, including broken relationships and the psychological impact of leaving what they once considered a supportive community.

Quote:

"I'm still being angry about some of the things that these people have said about her, specifically trying to monetize her still after her death." – Erin Bees [43:28]

Erin’s Current Work and Reflections

Anti-MLM Activism

Transitioning from being an MLM participant to an activist, Erin utilizes her social media platforms to educate the public about the dangers of MLMs. She emphasizes the importance of transparency and urges current and potential MLM participants to conduct thorough financial assessments.

Quote:

"I want people that are in a multilevel marketing company ... to do a profit and loss statement so that they could wake up faster than I did." – Erin Bees [09:18]

Reflections on Industry Changes

Erin reflects on how the anti-MLM movement has gained momentum, making it harder for MLMs to recruit new members and sustain their business models. She credits increased awareness and education as key factors diminishing MLM appeal.

Quote:

"The anti MLM movement is so vast ... I'm happy to be a part of it." – Erin Bees [33:49]

Personal Impact and Future Outlook

Erin discusses the personal losses and ongoing emotional struggles related to her former MLM connections, particularly following the passing of Jesse Lee Ward, a prominent figure in her MLM community. She remains committed to combating MLM deceit and supporting others in leaving such structures.

Quote:

"I still have moments in my days where I'm like, I can’t believe that she’s gone." – Erin Bees [43:28]

Conclusion

Erin Bees’ story is a compelling narrative of resilience and transformation. Her insights shed light on the inherent flaws within MLM structures, the deceptive practices that entrap participants, and the evolving landscape as MLMs attempt to rebrand amidst increasing scrutiny. Through her activism, Erin aims to protect others from the financial and emotional pitfalls she experienced, advocating for greater transparency and ethical business practices.

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Notable Quotes with Timestamps:

• Erin Bees: “I spent 13 and a half years in multi level marketing and healed my way out.” [00:33]
• Erin Bees: “That’s not great.” [07:05]
• Erin Bees: “It’s a spinning plate analogy.” [05:05]
• Erin Bees: “Now there’s just so many resources out there...the majority of the money is made off of recruiting people.” [17:45]
• Host: “Every single one of them was committing fraud.” [26:52]
• Erin Bees: “They’ll be trying...fly under the radar...” [19:36]
• Erin Bees: “I want people...to do a profit and loss statement so that they could wake up faster than I did.” [09:18]
• Erin Bees: “I still have moments...I can’t believe that she’s gone.” [43:28]
• Erin Bees: “The anti MLM movement is so vast...I’m happy to be a part of it.” [33:49]

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This summary encapsulates Erin Bees' extensive experience with MLMs, her critical insights into their operations, and her ongoing efforts to dismantle deceptive practices within the industry. For those unfamiliar with the episode, this overview provides a thorough understanding of the key discussions and revelations shared by Erin Bees.

Transcript

[Narrator]

If you wear glasses, you know how hard it is to find the perfect pair. But step into a Warby Parker store and you'll see it doesn't have to be. Not only will you find a great selection of frames, you'll also meet helpful advisors and friendly optometrists. Yep, many Warby Parker locations also offer eye exams. So the next time you need glasses, sunglasses, contact lenses or a new prescription, you know where to look. To find a Warby Parker store near you or to book an eye exam, head over to warbyparker.com retail.

[Erin Bees]

So my name is Erin Bees. I'm a wife, a mom, a military veteran, a certified personal trainer. I spent 13 and a half years in multi level marketing and healed my way out. And now I'm using all of my social media platforms to educate and raise awareness around the dangers of multi level marketing companies and the tactics used by.

[Host]

The reps. And what companies were you with?

[Erin Bees]

I was in Slumber Parties, Pure Romance, Arbonne, Modere, Love, Winx, and then Prove it.

[Host]

Jesus.

[Erin Bees]

So I have six companies.

[Host]

You may recall this voice from season three of this show. In season one, we did a deep dive on MLMs, also known as direct marketing, Network marketing, Direct Sales, and according to me, Pyramid schemes. As Erin said, she used to be in a diet culture MLM called Pruvit, whose top seller and a friend of Erin's was a woman named Jessie Lee Ward. During the production of last season, Jesse Lee died. And most of what Erin and I talked about was Jesse Lee before that happened and the grief after that happened. But I wanted to know more about Erin herself and her current crusade against MLMs. She's a big deal in the anti MLM and anti scammer world and she attacks it from all angles and literally all platforms, including YouTube. Her videos are great, but let's start with her personal journey from MLM devotee to anti MLM crusader. Okay, so what made you keep switching companies?

[Erin Bees]

Well, the first company, Slumber Parties that I was a part of was actually acquired by Pure Romance. So that was why I switched from there. Once I got into that company and started to see that in my opinion they were just wanting specific downlines to come over to Pure Romance or Teens. They weren't really interested in everybody because they were giving a lot of us the runaround, even though they're like, oh, we have a whole leadership chat for you. You couldn't get ahold of anybody to ask any questions, that kind of thing. So it just for me at that time, I was like Yeah, I don't. I don't. I don't think that's.

[Host]

You fizzled out because of an acquisition.

[Erin Bees]

I just didn't like the leadership.

[Host]

Yeah.

[Erin Bees]

So then I was like. At that point, I was like, well, maybe I'll just get out of MLM as a whole. And then after that, my upline in slumber parties and Pure Romance was starting her own. And so that's where Love Winks came into play. We got sued by Pure Romance and they ended up winning and we had to take a year off. Yeah.

[Host]

What were they accusing you of?

[Erin Bees]

Basically cross recruiting, which I did. Nothing. I didn't do any of that. Then from that, we got sued. I had to take a year off in that year. We ended up moving here to Vegas, and I joined Arbonne for a short period of time before we moved. And I sold a lot of product and I made absolutely nothing, and it pissed me off, so I didn't do that.

[Host]

Wait, I'm gonna slow you down just a little bit. What at the time was drawing you to do these types of ventures as opposed to what we now understand to be like, quote, unquote, real jobs? You know, can you recall that person? Because I know you've changed so much and you've learned so much, and you're different, but who was Aaron back then when you're maybe heading into your third or fourth MLM?

[Erin Bees]

Yeah. Well, at the time, Mia, who's gonna be 18 in March, was a baby. That was what I was doing full time. So I was home with her. And even though I was spending all of my time working in my mind, at that time, I was still home with her. So that was the only option that I had that I felt like I had at that time.

[Host]

Do you look at it differently now?

[Erin Bees]

Oh, God, yeah.

[Host]

What? How do you look at it now?

[Erin Bees]

I mean, granted, we're talking about. This was 2013, 2014. Ish. Somewhere in there now, there's so many ways that you can make income and, you know, if you want to work from home, there's legit ways that you could do that versus making all your money on recruiting people. So now there's. There's just so many resources out there. And I think that that's the coolest thing about all of this.

[Host]

But did you feel like you were being the stay at home mom that you wanted to be at the time?

[Erin Bees]

Yeah. When you're in an MLM and you are working and on Zooms, and at the time, I was doing parties, so I was driving an Hour and a half one way, two or three times a week to do parties. So at the time you think, okay, I'm going to put all of this effort in and in a few years I'm going to be able to slow down, I'll have a bigger team. And that never comes. The goalposts are constantly being moved. But that's part of the MLM brainwashing is you buy off on this idea that one day you'll be able to retire your spouse or be able to, you know, take all these vacations. But it's a spinning plate analogy. Like you see at the circus. The clowns are spinning these plates and they've got both hands going. Well, the second that you stop spinning those plates, that crashes. So you can never stop working. And that's the part that is really confusing and that is the part that I think takes a lot of time to process when you're in an MLM and you're starting to see some of the red flags and you're starting to experience cognitive dissonance and work your way through kind of the chaos and asking questions and answering them for yourself versus going to your upline or the company. That's the part that aside from the relationships that you thought were this is my family, and the second you get out, all of a sudden you're no longer family kind of thing. So it's really hard to, especially after being in for so many years, to process all of that at once. But at the time, yeah, I did think that this was my option and I thought it was working, you know.

[Host]

So your motivation for jumping companies when things became apparent that they weren't working was because you still wanted to be a stay at home mom.

[Erin Bees]

Yeah.

[Host]

Am I hearing that right?

[Erin Bees]

Okay, yeah. Yeah.

[Host]

I mean, that's like a, that's totally reasonable that you would just say, oh, well, this company had bad organization or they had bad leadership, or they had a bad business plan or they had bad products or whatever. But the MLM model is still worth my time. Do you remember during your six different MLM company experiences, the moment that the cracks started to show?

[Erin Bees]

Yeah. You know, that wasn't until 2020. That wasn't until the seven years in.

[Host]

You were seven years in.

[Erin Bees]

Well, I was more than seven years in by that point because I joined my first MLM in 2007, at the end of 2007. So we're talking 13 years in and.

[Host]

Making no money still.

[Erin Bees]

I was making money on paper. But one of the aha moments for me was we had Done our taxes. And my accountant called and said, oh, well, you. You netted 10k for the year. And I said, what? 10k? And she was like, yeah, that's great. And I was like, so wait, 10k for the year? That's like $800 a month. What are you talking about? And she was like, yeah, you know that. That's great. And I was like, that's. That's not great. That's not.

[Host]

Talk me through how that happens. Talk. Talk me through that. Like, how did that happen to you?

[Erin Bees]

So this is where the undue influence from your upline encouraging you to buy the new products, the new flavors get to the event. You know, all of these expenses, they're like, listen, it's. It's fine. It's a tax write off. It's a tax write off. It's. It's totally fine. That's where this all comes into play.

[Host]

And that is why is kind of big enough to make your eyes go googly or.

[Erin Bees]

Yeah.

[Host]

But you're not counting your expenses, correct?

[Erin Bees]

Yeah. Yeah. And I mean, it happens to so many people in multilevel marketing. And that is why I talk about profit and loss statements is because that was not language that was talked about in MLM when I was a part of it.

[Host]

Right, right.

[Erin Bees]

And so I want people that are in a multilevel marketing company that happen to be watching my content to do a profit and loss statement so that they could wake up faster than I did.

[Host]

Yeah.

[Erin Bees]

Even if these MLM companies or these uplines had people that came in and were like, okay, this is what you need to know about taxes, people would realize what they're participating in faster and they would be like, oh, no, no, no, no, no. Because the numbers don't lie, you know?

[Host]

Was there another tipping point? Which company?

[Erin Bees]

There were so many.

[Host]

Okay, let's talk through them. I want to hear them all.

[Erin Bees]

Okay.

[Host]

I want to hear them all.

[Erin Bees]

Yeah, yeah.

[Host]

This is what I was thinking. This just shows us, like, how many things have to stack up against the brainwashing, essentially.

[Erin Bees]

Yeah.

[Host]

Does that make sense? Like, how many things have to occur to you if you've been in the kind of cultish environment for a decade plus, like, how many bad things need to happen for someone to have the scales fall from their eyes.

[Erin Bees]

Yeah. And I think part of the reason that I had to have so many. Wait a second, this doesn't seem right, kind of red flag moments was because I had been in it for so long, I don't think somebody that is in it for six Months or so is going to have to have the same amount of wake up calls that I had to have in order to realize what I was participating in.

[Host]

Right.

[Erin Bees]

So during the height of the pandemic, there was a push from Pruvit to.

[Host]

Recruit people and again, prove it is what. Sorry, we need to remind people because we've been off the air for a while.

[Erin Bees]

Yeah, it's okay. Pruvit is a company that sells ketones. They're exogenous ketones that you drink and they claim that it puts you into nutritional ketosis, even though that's not how physiology works.

[Host]

I don't know what any of the words you just said are. They sell ketones. Like, is it like a.

[Erin Bees]

It's a supplement. It's a powder you mix with water. And they say that when you drink it, it puts you into ketosis, which is basically when your body is burning fat for fuel instead of burning carbs and using glucose for fuel.

[Host]

Okay, how.

[Erin Bees]

Exactly, exactly. And then fasting kits. Yeah, they have like a. I think it's a five day fasting kit where you're taking. I believe it's like six or seven of their products.

[Host]

Arbonne does the same thing, right?

[Erin Bees]

Yeah, they're 30 day to living, I think is what their program is called through Arbonne and it's a bunch of protein shakes and. Yeah, it's.

[Narrator]

Yeah.

[Erin Bees]

All of these companies, especially quote unquote health and wellness companies have some sort of a kit that people buy.

[Host]

Diet program.

[Erin Bees]

Yeah, yeah. It's disgusting.

[Host]

So what was that next red flag? Sorry, I interrupted you because the ketone ketosis did. I was like, I know we've talked before and like I've seen the boxes, but I'm like, yeah, is this science? Like, what's going on?

[Erin Bees]

Yeah, yeah, yeah, yeah. So another red flag was they were trying to get us as to recruit people under the guise of, oh, you can join for a dollar. And it was called the Dollar Keto Club. And so basically people would pay a dollar and it was their annual promoter fee that's now, I believe, $49 a year. They dropped that to a dollar, but you still had to buy product. So they were asking us to pitch this Keto Dollar club, saying it was for a limited time, a registration fee. Essentially it was supposed to cover the website, but they went from $49 to a dollar. And so they were wanting us to pitch this, hey, you can join Pruvit for a dollar and start making money at home. But when people would join, they Were like, oh, okay. So I joined for a dollar, but I don't get any product. Now I have to buy a box of Pruvit ketones for $130 before shipping and tax. So it was very bait and switch. And that really bothered me because of what we were dealing with, with the pandemic and what people were facing. And then it felt very deceptive. And I was like, I do not like this. And I remember very distinctly telling my team that I was not going to promote it because it didn't feel right to me. So that was another wake up call. And then.

[Host]

There'S another one.

[Erin Bees]

I know. Oh, there's more. So remember when there was a shortage of hand sanitizer? Pruvit wanted us to sell hand sanitizer.

[Host]

Okay.

[Erin Bees]

And I was like, if you have access to hand sanitizer, why would you not send it to your distributors? And the boxes of products that they're ordering or you could donate it or. No, they wanted us to sell it. And then they were selling things like Tide pens and stuff like that. And I was like, what is this money grab situation that's happened?

[Host]

Profiteering.

[Erin Bees]

Yeah. I hate it. I was so. I was so mad. So there was a lot of that. And then several times I would get on our team trainings with my upline and I'd be like, what are we doing here? What are we even talking about? All she's doing is talking about herself. How is this training? How is this helping anybody? Oh, look at me. Look what I bought. Look what I'm doing. If I can do it, you can. No, because if that were the case, that would be happening.

[Host]

Yeah.

[Erin Bees]

I think that's the majority of kind of the red flags that really just rubbed me the wrong way. And I was like, I'm done. I'm done.

[Host]

We'll be right back. Here come some ads.

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[Narrator]

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[Host]

We're back with anti MLM activist Erin Bees. So much has changed in the world of MLMs since we launched our show, which was in 2018 when we did the season about pyramid schemes and multi level marketing. And then my book about it, Selling the Dream came out in March of this year of 2024. And even since then, so much has changed. So I'm hoping you can help us understand all of this nonsense that's been going on. And some of it's very good. A lot of it's really good. Tell me about it.

[Erin Bees]

Yeah, yeah, some of it is really, really good. There's been several companies that have gone to an affiliate model.

[Host]

Will you explain what that is?

[Erin Bees]

Yeah. So a lot of times what we'll see from companies and specifically the distributors in these multi level marketing companies is they will Try to act like the company that they're representing is an affiliate model, which basically when you go on social media and you see somebody and they're sharing their favorite L gloss or their favorite lotion or things for the home and they'll say, oh, you know, click my affiliate link and you can grab this and save a little money. They're supposed to actually disclose, according to the ftc that they do make a little bit of money.

[Host]

I see the sponsored on the bottom of posts. Are there people that don't mark their post as sponsored who are doing affiliate marketing?

[Erin Bees]

Yep. Yeah. You're supposed to disclose that you do make a commission if people choose to use that link, that kind of thing. So that's really important. And that's according to the ftc. What I was seeing in the last probably maybe year, year and a half, maybe even two years is MLM companies and their distributors specifically are trying to kind of fly under the radar and appear to be like affiliate marketing. But the big difference is there's not really a compensation plan that rewards people for having a team and or recruiting people to sell the same exact products and do the same exact things on social media when we're talking about affiliate marketing. But in multi level marketing, the majority of the money is made off of recruiting people and having a team. And so by them being deceptive and them being people within multi level marketing, they were trying to come up with all these different phrases to fly under the radar so that people aren't immediately turned off knowing that it's a multi level marketing company.

[Host]

So it doesn't. Extreme Amway.

[Erin Bees]

Yes, exactly.

[Host]

What were those phrases?

[Erin Bees]

Some of the companies, for instance, Modere, they've been calling themselves social retail, social selling in some of these newer companies, take Make Wellness for example. They are calling their.

[Host]

Wait, it's called Make Wellness? Is that the name of the company?

[Erin Bees]

Yeah, it's called Make Wellness. Yeah, yeah. But their shtick is Bio Precision peptides.

[Host]

Absolutely not.

[Erin Bees]

Hard pass for me.

[Host]

Shut it down. They're biohacking inside the pyramid. Okay.

[Erin Bees]

Essentially, yeah.

[Host]

Okay.

[Erin Bees]

Yeah, that's definitely a company you should look into. Just FYI because of the claims that they're making. Of course it's a proprietary blend, all of that stuff.

[Host]

Let's do a whole other episode about that.

[Erin Bees]

Great, I would love that.

[Host]

Okay, fantastic. So Make Wellness. They did what in their changing of the language?

[Erin Bees]

So what they did is instead of calling their distributors a distributor or an associate or something along those lines, they're actually calling them affiliates.

[Host]

But they're Not.

[Erin Bees]

It's very. They're. No, they're not. I've looked at their comp plan, I've covered their comp plan. And the person that had his hand in creating Make Wellness is Justin Prince, who was terminated from Modere last October. And now all of a sudden there's this new MLM company and they're in pre launch and they were strictly recruiting people into these affiliate titles within this company that are really just distributors. There was no product. It's this whole thing.

[Host]

What did Modere sell or quote unquote sell? Yeah. What did Modern sell?

[Erin Bees]

Anything and everything.

[Host]

Oh, so they're like an Amway?

[Erin Bees]

Yeah.

[Host]

Like makeup and soap and.

[Erin Bees]

Yeah. Dietary.

[Host]

Yeah. Okay. Yeah. Okay. So the former Modere guy who is now at MakeWellness is calling his distributors, quote unquote distributors, his downline. Essentially. He's calling the people in his downline affiliates. When there's already a definition for affiliates that has nothing to do with pyramid schemes.

[Erin Bees]

Correct.

[Host]

Okay, what else we got?

[Erin Bees]

Yeah, so we've had companies that have been traditionally multi level marketing companies. Take Beachbody, AKA Adi and here recently they just announced that they were going to be going to an affiliate model, meaning people were only going to be earning commission off of the selling of their products. There would be no recruiting bonuses or getting paid off of your downline. And the thing that's fascinating, and we have seen this with Saint Makeup, we've seen it with Beauty Counter, we've seen it with Beachbody. That was a big one. And what these people do that are in these companies, when they have ranted and raved all over social media and whoever will listen in person to them, you know, about how great the products are, I'll use these products forever. And the second that their company says, oh, we're going to an affiliate model and you're no longer going to get paid to recruit people, you're no longer going to get paid off of having a downline. Now all of a sudden they're looking for a new company. They join something new. And it's not really about the product. It's because they were no longer going to get paid off of having a team and or recruiting, which we all know is how people in multilevel marketing make the majority of their income.

[Host]

It's how the companies stay alive.

[Erin Bees]

Right.

[Host]

Who are the new up and comers? Who's absorbing the people leaving these companies that are switching to an affiliate model?

[Erin Bees]

Shackley is one of them. There's a lot of people that are going to Shackley from Body Shackley is kind of like Melaleuca or Amway in that they sell everything. Yeah, vitamins, skin care, probably toilet paper. I don't know.

[Host]

Toilet paper. If anyone from Shackley is listening, I will take a sample of your toilet paper. I will not our office. I just want to see how great this toilet paper is that you wouldn't just pick up at the grocery store. Okay, so Shackley's absorbing a lot of people. Are they just shameless in their MLM ism?

[Erin Bees]

It's the same rinse, wash and repeat that we see from other MLM companies. Oh, this is the greatest. And the comp plan is the best. And come over here. And another company that just went to an affiliate model was Rodan and Fields. That was another really big one. A lot of those people are going to Shackley.

[Host]

Oh wow. Really? Huh.

[Erin Bees]

It's just been interesting to watch these big companies that have been around for so long and very clearly a multi level marketing company now all of a sudden are going to an affiliate model and it's the same thing from their distributors. Oh, these products are great. I'll use them forever. And to watch them just jump to the next company and now start raving about vitamins, it's wild to me. Cause it's not the products. The products don't matter.

[Host]

Right.

[Erin Bees]

It's the recruiting model. That's what's important to them, I think.

[Host]

Also Rodan Fields did that marketing framing a few years back where they were transparent with their income disclosure statement with that one piece of paper that every MLM nowadays has, but even five years ago didn't have. But they were kind of revolutionizing transparency inside of these schemes. And it was all fraudulent, but they packaged it like we're going to be the ones that are very upfront about who makes money and how much money they make and what your opportunity really is here for an income. And so to see them be one of the first to like ditch the MLM model, I don't know. How did you feel? I just felt like, is this just another pivot? Does it mean anything to you? Are you trying to stay out of jail? Did someone like knock on your door? Like, what happened?

[Erin Bees]

A couple things. One, we could sit here and talk about income disclosure statements.

[Host]

I need to.

[Erin Bees]

Okay, so income disclosure statements are something that are put out by the company. They basically go into their software, their back office, if you will, and they pull the numbers by rank, by the amount of people, all of that stuff. They pull all the numbers directly from their company's software. And then there's no standardizing with how this information is put together. So, for example, if you were to take two random MLM companies that both have income disclosure statements and you were to look at them, they would be set up completely different. So there's no standardization when it comes to this to make it easier for the consumer to say, okay, well, you know, 78% of the company is only making 100 bucks a month before expenses. And that's being very generous. That's being very, very generous. So there's no standardization when it comes to these income disclosure statements, although they are a really great tool because in my opinion, these companies really do try to pad the numbers to make it look like, oh, this is better. You know, you can do this. If a small percentage of people have hit this top rank, you can too. And that's just not how the math and multilevel marketing works.

[Host]

Did you see that FTC report?

[Instacart]

Mm.

[Host]

The FTC did that study of, I think it was like hundreds, like 300 or something MLMs looking at their income. Income disclosure statements and said to a company, like to a person, to a t, Every single one of them was committing fraud.

[Erin Bees]

Yeah, yeah. And that's because the majority of people make money off of having a team.

[Host]

No, not just that. I mean, inside the income disclosure, they didn't include people who dropped out. Some of them didn't include someone who made $0. Like, they fudged the numbers. And every single one of them lied in various ways. And the FTC finally, like, came out this year saying, we actually spent a lot of time and money and looked into this. And you guys are all funny, you're all lying.

[Erin Bees]

You know, in the interesting way that a lot of these MLM companies get around this is they will put a stipulation in their compensation plan where they will say, well, in order for you to become an active distributor, you have to spend X number of dollars. You have to have an auto ship, or you have to have customers or team members. There's some sort of a buy in.

[Host]

Mm.

[Erin Bees]

In order to be considered active. And so what you'll notice on some of these income disclosure statements is it'll say active distributors from 2023. And what they're doing is they're excluding anybody that bought in on any kind of a starter package and never got a customer, never got a distributor.

[Host]

Right.

[Erin Bees]

They're essentially wiping those people off of the income disclosure statement, even though those people spent money they paid to join, but, oh, they didn't make any income. So we're going to get rid of these people as far as the document. Even though that would be a very, very eye opening statistic for people, especially consumers, to have in front of them if they were even considering in the year of our Lord 2024 joining a multilevel marketing company.

[Host]

Well, this is the same fight that I had with Joe Mariano when he came into my office during season one. He's the head of the dsa, the Direct Sellers association. And he gave me a two page document that had some pie charts and a few graphs and some clip art on it showing the state of the industry and how everything's going. And I said these statistics. Well, first of all, it was a study and all the statistics were in house. Essentially the call's coming from the basement. So they didn't go to an independent survey firm. They didn't have any forensic accounting or anything like that that done. And it showed on their paperwork. Here's how many people joined and how many people make money and blah, blah, blah, blah. But they didn't have any information about people who failed.

[Erin Bees]

Yep.

[Host]

None. None. And it's like if 99% of people who have an interaction with your company lose money or don't make any money, it's important to include that in your statistics.

[Erin Bees]

Absolutely. Yeah.

[Host]

Yeah.

[Erin Bees]

I love that you said he brought all these little charts and pie graphs. Because the visual that I just got from that explanation.

[Host]

The man standing next to like a chalkboard and pointing a stick at it and being like, see everyone here in multi level marketing in the United States makes money. And he did this thing after I pointed that out, he was like. I said that doesn't make any sense. I don't, you know, I'm not learning the thing here. It doesn't make sense. And he goes, of course it does, Jason. Like, oh, there's just this one moment in his tone of voice. It was so gnarly.

[Guest]

Inactive during the course of the year.

[Host]

How many of the 900,000 become quote, discount buyers and then inactive over the year?

[Guest]

Well, no, those are two different categories. The business builders that we described. There are people who are business builders throughout the course of the year have described themselves as business builders.

[Host]

Right.

[Guest]

So the inactives are the inactives. So I don't know how you can look at that and say that that's not helpful. I mean are those are facts I want to know.

[Host]

This is telling me nothing. I don't know where is Jane? We'll be right back.

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[Host]

We're back with our guest Erin Bees. What was the tipping point if you could guess at any for some of these companies to switch to the affiliate marketing model?

[Erin Bees]

I think there's several things that are contributing. I think the anti MLM movement as a whole over the last years and years and years.

[Thrive Market]

I'm clapping right?

[Host]

Good job Aaron. You did it.

[Erin Bees]

It's not just me, I mean, I'm happy to be a part of it.

[Host]

But I'm picturing for the listeners, Aaron dusting her shoulders off a little bit.

[Erin Bees]

Oh, I mean, the anti MLM movement is so vast and there's so many people that are a part of it, whether they're content creators or not. People that are watching, people that they have watched for years on social media that are saying, hey, this is weird. All of a sudden this person is talking about this and they're reaching out to their favorite content creators and their content creators are like, oh, I'm identifying this language, you know, where let's say that like make wellness. They're talking about bio precision peptides. So now they're seeing this person talk about bio precision peptides. Peptides that's, you know, a stay at home parents and all of a sudden now they're this science buff and it just doesn't make any sense. And so a large part of the anti MLM movement are people that are just consuming social media content and they're like, hey, this feels kind of weird. And then they're reaching out, you know, and that's a huge part of it. So I think that the, the voices within the anti MLM movement and the education that is available I think has made a big, big impact and specifically on people joining these multi level marketing companies. I don't think people are clicking the join button to join an MLM like they were even last year, the year before, the year before that. I just don't think that they have the numbers anymore. And if they're not recruiting, that company is not making as much money because in my opinion they make the most money off of that person that they know is not going to make any money buying that starter pack and then having a monthly auto ship. That's where a lot of the revenue comes from, in my opinion. And then they have these top leaders that make, you know, thousands and thousands of dollars, but that's a very small percentage of people. So if people aren't joining and the education and the anti MLM movement is so loud, it's a losing scenario for them.

[Host]

Right. And so they're switching to affiliate because they still believe in their product.

[Erin Bees]

I mean, I think the company does.

[Host]

Or maybe shareholders or. Yeah, things like that. I was thinking also, what about the people who have spent 1, 5, 10 years in these companies that are suddenly shutting down the MLM model? Have you heard stories about what happens to them? The people who are like in over their heads in debt, you know, or just the people who have profited off of the recruiting. The people at the very top, essentially, who have built downlines and now that's getting taken away from them. I have read a few things on Reddit about that. About how furious.

[Erin Bees]

Yes.

[Host]

Can you talk about that a little bit?

[Erin Bees]

I can. So this goes into. I don't know if you and I have talked about bridge contracts before. Does that sound familiar, that term? Okay, so what happens when you have this quote, unquote, top leader, which I hate even saying that, but let's take Sarah Robbins, for example. Sarah Robbins was one of the top and earliest distributors in Rodan and Fields and she went to Shackley. And what'll happen? I'm not saying that this is the case with Sarah Robbins. I'm just saying based on my experience and in my opinion, this is how these bridge contracts come into play.

[Host]

And I just want to let you know, Erin, we've never been sued on this show. Okay.

[Erin Bees]

Okay, good.

[Host]

Don't have.

[Erin Bees]

It's just a habit.

[Host]

I know, I know, I know, I know. And it's scary, right? Like, have you had cease and desists and things like that?

[Erin Bees]

Oh, yeah.

[Host]

Oh, gosh. I've never. Nothing.

[Erin Bees]

I turned it, I turned, I turned it into a dramatic reading and monetized reading the cease and desist on my YouTube channel.

[Host]

Okay, we'll point people there. But like, sometimes it makes me feel like a loser that no one has sued us.

[Erin Bees]

You're like, dang, somebody sent me a short so hard.

[Host]

Nobody has ever. Okay, go on.

[Erin Bees]

Yeah. So a lot of times what will happen is when a company announces that they're going to an affiliate model, they will actively start shopping for another MLM company and it kind of comes down to who's going to give them the best deal. Sometimes they call it a bridge contract. Sometimes it's called a sales performance based contract where they have to meet certain sales requirements and rank requirements. The company kind of puts it together. Or there could be top leaders that put together a bridge contract for this other person coming from another company. There's usually a financial reward. It's kind of like a, hey, we're going to pad your income coming over to this new company. But it's only that upline. The very top person that gets that bridge contract and then that person that got the bridge contract that has their income padded. Do you think that they're going to disclose that to their downline? That they're begging to come over to the new company while calling it, oh, our new home? And it has the best compensation plan. I've never seen anything like this.

[Host]

How are you finding out about this? Aaron Malls?

[Erin Bees]

I have never had a bridge contract, but I know many people that have that have shared that information with me. I also know based on my experience when I was in Modere, people like John and Nadia Melton would be notorious for flying in leaders that have a team in a previous or in another company, flying them into Modere headquarters in Utah, wining and dining them, letting them meet the corporate team, and then putting a bridge contract together for them. They sign up with a new company, they bring their team, and that's how that all works. So that's how I know that.

[Host]

Isn't that like expressly prohibited in the materials from every MLM that you're not supposed to transfer your downline or whatever to another company?

[Erin Bees]

Yeah, that's why a lot of the lawsuits happen is because of the quote unquote, cross recruiting, which would, in a.

[Host]

Normal world, not in the MLM world, that would be called poaching, which is not against the rules. Like, right. You, you know, I could call up another podcast company and call one of their employees and it would be a. It'd be a dick move and I haven't done it. But I could call and say, ditch your boss, come over here. And it might be uncouth, but it wouldn't be like written in the training materials or your onboarding paperwork that you're not supposed to do that.

[Erin Bees]

And then you also wouldn't see the lawsuits and you wouldn't see the snarky social media posts and the passive aggressive stories on social media because so and so decided to go to another company. And it's just. All of it is just so. It's just weird.

[Host]

You know, there have been closures lately. Right. Like with Tupperware.

[Erin Bees]

Yeah. Tupperware closed. Yep. They filed bankruptcy.

[Host]

Yep. I think for people who have heard the show before and people who feel kind of invested in your story and the story we presented the third season, I would love if there's any sort of update about Jesse Lee's passing and how the show maybe affected people or. And what's happened to her following. Do you know?

[Erin Bees]

Yeah. I do know that her Facebook page was taken down, which I'm really grateful. I also can recognize that I could see all sides of that. I am grateful that her Facebook has been taken down because of the medical misinformation that she was spreading while she was alive. But I also could understand how there's lots of memories from her Facebook Page that her audience now does not have. And I can. I understand and I can be empathetic to that situation, but I am really glad that that was taken down because of the misinformation that she was spreading. I do know that her estate is gone through the court systems. And I will say, since we're talking about Jesse Lee and ketones, I have had two rounds of heavy metal testing done on Pruvit's ketones, and they do have small amounts of arsenic, lead, and cadmium in them.

[Host]

We can say out loud that we teamed up on this. You were at Pruvit, which Jesse Lee was your upline? Yeah.

[Erin Bees]

Yep.

[Host]

And during the last season, we were talking about, how do you see if this stuff is even. Whatever it is, it's such a bummer that anything was found.

[Erin Bees]

I wanna say it was at the beginning of last year, I think, when Jessy was diagnosed, or maybe right before that. I just felt really compelled to keep this list of people that were passing away or were experiencing some kind of cancer that were drinking ketones. Let me also say. I'm not saying that if you drank prove it's ketones that you know, oh, it's the cause of your cancer. But there was something in me at that time that I was like, I should start documenting this. And there's a pattern of the types of cancers that I have on this list that I have been made aware of that they have. What types? Yes. So there's. The types of cancer that I'm seeing are stomach cancer, reproductive type cancer, and breast cancer.

[Host]

Wow.

[Erin Bees]

Yeah. Could it be a coincidence? Of course it could be. Of course, sure.

[Host]

But just don't drink lead and also don't tell people to drink something with lead in it, like, multiple times a day.

[Erin Bees]

That's my concern, and that's been my concern from the very beginning is the amount of products that these people are consuming.

[Host]

How have you been post all of this nonsense?

[Erin Bees]

I still have moments in my days where I'm like, I can't believe that she's gone. It's so weird. It does feel like the MLM world is a little bit more quiet. It does feel like there are people trying to jockey for that position, which is so weird. I find myself still being angry about some of the things that these people have said about her, specifically trying to monetize her still after her death. And that really bothers me. Eric Worre said after her passing that she was one of a kind. And then it felt like in his next breath, he said, well, I'M gonna find the next Jesse Lee. She was bringing so many people to his mastermind group and to his events, and I just feel like I've watched all of that kind of dwindle, you know, their cash cow is no longer here, so people can't make money off of her like they were, you know, and it's been interesting to watch that part and all the emotions that come with that.

[Host]

But, well, the cash cow is always a woman.

[Erin Bees]

Right, Right, right, right.

[Host]

I'm thinking of Brownie Wise of Tupperware. Yeah. Who like, started the whole party system and MLM party.

[Erin Bees]

Yeah.

[Host]

Well, I miss you, friend. I hope to see you soon.

[Erin Bees]

Bye, friend. Take care of you.

[Host]

Bye. You too. Bye. Okay, bye. Thanks to Erin Bees for coming on the show today. Her social media handle is Rine B s B I e s. The dream is a production of little everywhere.

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Okay.

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What makes a great pair of glasses? At Warby Parker, it's all the invisible extras without the extra cost. Their designer quality frames start at $95 including prescription lenses plus scratch resistant, smudge resistant and anti reflective coatings and UV protection and free adjustments for life. To find your next pair of glasses, sunglasses or contact lenses or to find the warby Parker store nearest you. Head over to warbyparker.com that's warbyparker.com.