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
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.
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]
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.