Maybe She's Born With It, Maybe It's an MLM
We all have a friend (or several) who’s started ferociously promoting a new product or program online. My Instagram feed is filled with influencer-adjacent accounts screaming about how they’re growing their own businesses, work flexible hours, and have the best hair of their lives.
Colour me skeptical.
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As a fine-haired lady, a few of these accounts have piqued my interest. For instance, some of my former sorority sisters have found themselves as Monat Market Partners. Their hair admittedly looks fantastic, so I’ve flirted with the company website.
If it works for them, why not me?
It’s easy to convince yourself that these Market Partners are so impassioned because the product is incredible. On the other hand, we’ve been bombarded with the “Hi Hun, How are you? I’ve started my own business…” message a few too many times to trust anyone promoting a product that intensely.
It’s a specific kind of enthusiasm - or maybe desperation - that we’ve learnt to sniff out a mile away. The stench of multi-level marketing.
That said, I want nicer hair….
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Down to the Roots
I’m not one to spend hundreds of dollars on a new hair care routine, especially without looking at reviews. Unfortunately for my Monat-Mamas, a couple of Canva Instagram posts aren’t enough to close my sale.
One Google search turned up a ton of less-than-glowing news about the company. For one, there have been several lawsuits and more than 1000 complaints with the Better Business Bureau accusing Monat products of causing hair loss. Many described “leakage and sores” on their scalps, and a few were told by Market Partners that this was part of a hair “detox” process.
Understandably, angry customers (and former Market Partners) took to social media with their frustrations. Vickie Harrington, one of the first to speak out, posted a photo of a bald Mona Lisa with the caption “Monat Lisa.”
I mean that’s brilliant.
Alas, Monat didn’t agree. Instead, they fired back with a lawsuit of their own claiming defamation. Since 2018 the company has filed at least three separate lawsuits against women who outwardly complained about hair loss, all of whom had reached out to the company for help first.
Imagine calling customer service, not getting helped, and then being sued for speaking out. That's even worse than trying to switch internet providers.
After years of backlash - and multiple legal battles - Monat is finally taking a bit of ownership. In the fall of 2020 the company signed an agreement with Florida’s attorney general’s office promising to change major elements of their business. Some of these changes include:
They will not claim that their products will offer the users some kind of health benefit or health solution without producing any scientific research result in support of the same.
They will never represent the hair loss by the customers as the result of scalp detoxifying or enlargement of hair follicles.
They will never claim that their products are clinically proven to promote hair growth and stop hair fall.
They will never lie about the certification of the company by claiming that it is done by the government or any other reputed entity.
They will not claim that their products are 100% vegan in nature and cent percent gluten-free.
They will stop using stock photos stating them under the headline ‘Before and After’ in their advertisements making those gullible.
Yeesh.
Monat has also committed to refunding all the state’s legal fees and at least $82,782 to customers who had complained.
That's all well and good, but why was a company suing disgruntled customers in the first place? The adage is pretty simple: 'the customer always comes first.' To throw lawsuits at women complaining about severe hair loss and scalp burns is unbelievably horrendous PR - way worse than the bad reputation that customer could have spread to her small circle of friends.
In a statement, Monat had this to say about their brand: “We grew incredibly fast in 2017 and 2018 — faster than we expected. We also grew faster than we were prepared for and as a result, we had some issues to address. Those issues have now been resolved.”
Growing fast is not an excuse for customer attacks. It's even less of an excuse for making fake scientific claims and using stock photos in advertising.
If anything growing quickly should highlight a need to seek more feedback. Negative reviews are to be expected for any new product, but thousands of complaints signal that something is rotten in Denmark. Doubling down on the effectiveness of your product is an odd choice when the masses are asking for change.
The only logical explanation is that the products aren't Monat's main focus...
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One of Us. One of Us.
It's no secret that Monat uses direct selling as their primary form of marketing. Essentially, direct sales involves a seller directly transacting with their customers. Another way to look at it is "network" or "person-to-person" marketing.
Direct sales becomes a multi-level enterprise once sellers are able to earn cash and commission by recruiting other sellers. That's what creates the lovely pyramid shape we all know and love.
There is one key difference between multi-level marketing and a pyramid scheme: product.
MLMs, despite also being pyramid-shaped, are legal because they sell something tangible. Pyramid schemes, which focus on financially trapping their members, do not.
Before we scoff at the menial difference, let’s remember that direct sales are a booming industry. In Canada MLMs generate $3.5 billion of sales revenue a year, which is a fraction of the $186.6 billion seen in the US. The system works, and new companies pop up every day with their version of direct-marketing.
As such, the amount of focus on products required for pyramid scheme to pass as an MLM is minimal. One big differentiator, according to the Federal Trade Commission, is selling to external parties and not within the pyramid - though there are loopholes.
For example, Monat requires a minimum of $200 in “personal volume” a month to remain an Active account. If you aren’t Active, you aren’t eligible to earn any commission. Personal Volume (PV) can come from an array of sources - selling products, recruiting someone from your downline, or buying the products yourself.
For Monat, that means the company is guaranteed 200$ a month from every entry-level Market Partner who wants to stay in the game. For people at the bottom of the pyramid, that means selling $200 of hair-loss serum or forking it over in the hopes of doing better next month.
No wonder Monat wasn't quick to fix their products. What's the incentive to overhaul their formulas if they're earning the bulk of their cash from current Market Partners?
The main incentive for members is in recruiting other sales people to join your “downline”. When someone you’ve brought in makes sales, a portion of it counts toward your PV. In their Compensation Plan Monat even defines a Market Partner as someone who joins “with the intention of growing a team and generating income.” Nothing in that description says anything about sharing hair tips or pushing product. It’s about generating bodies to do the work underneath you. The more people on the downline, the more passive income you make.
And, by extension, the more you earn for people at the top. The contrast between pyramid levels is abundantly clear in this 2018 Monat income chart:
The Finance Guy
To be extremely clear, the figures above only measure Active accounts. Considering the $200 a month cost in PV, it's hard not to see the above as financial exploitation - product or not.
While the chart makes it look like you could work your way up to a decent living, the truth is that the majority (as many as 99%) of people who join MLMs lose money. For Monat specifically, only 3% of people who join are able to climb to Managing Market Partner status, and that income isn't much better.
Moreover, the success of the people at the top depends on people (94% of the people to be precise) earning the $183 dollars at the bottom. It's not about providing the best hair care, it's about bringing in as many impressionable people as possible rake in cash for you.
Again, it's undeniably pyramid-shaped.
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#BossBabe
To keep recruitment high, MLMs are manufactured to prey on a few key demographics. They boast flexible schedules, a “be your own boss” rally cry, minimal start-up costs, and discounts on beauty products.
They know these perks will specifically appeal to women. Namely moms wanting to stay home with their kids and military spouses having difficulty establishing roots.As a result, of the approximately 19 million Americans working in direct sales today, 74% are women.
This isn't a new concept. Women have been selling shit to each other for decades as a way to earn extra cash for the family. The concept dates back to Tupperware parties of the 50s and 60s - an entrepreneurial hobby in a time when women were meant to stay at home.
Direct selling is also a brilliant marketing tactic. Women in the same network are more liable to trust each other than advertisers, and it's more cost effective to have your members out selling product themselves.
Considering what we know about MLMs, companies have to continually find the smartest ways to recruit. The Huffington Post outlines a much darker tactic MLMs use to prey on women - loneliness.
As part of the deal, MLMs offer “an upline of sponsors” who are there to support the launch of “your” new business. It’s pitched, in part, as a sisterhood in badassery - a love triangle, if you will. If you’ve ever wanted to be a #BossBabe or SheEO, now you have a connected web to help you.
That's a powerful idea to sell. Having spent months in quarantine, what I wouldn't give to have a group of ladies supporting me through my career, side projects, and day-to-day. The only problem is that MLM "sponsors" aren't hired to be your coaches. They're there trying to make their own bottom lines, and, considering the income breakout above, they're struggling too.
Being part of an MLM inherently does not make you your own boss. You aren’t choosing your sales targets, commission rate, or even the products you’re selling. On Instagram it might look like you're calling the shots, but the pressure to make enough cash for you and your superiors lends itself to some pretty ugly sales tactics.
One former MLM member shared that she was asked to use her mother’s cancer as a sales pitch to sell more Tupperware. Even worse, other sellers used her story to sell their own stock.
That's an extreme example, but I’m sure all of you have been alienated from a friend who wouldn’t let up about trying their new protein bar, fitness routine, or serum. The internet has exploded with memes about old high school friends popping into your inbox with the dreaded “hey hun” starter.
It seems impossible that the Sally you knew from school can now relentlessly pitch you on whatever scheme infiltrated her home town. Part of the grip these companies hold is in the “mindset training” they offer new members. One woman the Guardian interviewed shared slides upon slides of “Never let anyone tell you that you won’t succeed” and "the greatest comeback is to SHOW them your success” messaging.
Once they have you, they don't want to let you go. It's more beneficial to convince you to shed your skeptical friends than it is to have you leave.
When we piece this all together - financial exploitation, recruiting vulnerable people, cutting members off from friends and family - it sounds a lot like a cult. In fact, here are some eerily-similar cult characteristics as defined by Steve Eichel:
The group is preoccupied with bringing in new members.
The group is preoccupied with making money.
Questioning, doubt, and dissent are discouraged or even punished.
Members' subservience to the group causes them to cut ties with family and friends, and to give up personal goals and activities that were of interest before joining the group.
Members are expected to devote inordinate amounts of time to the group.
Sure, there’s no larger-than-life messiah figure pulling the strings, but the point stands. Once you’ve bought in, you’re in, and you’ll do whatever you can to make those sales happen.
Women continue in MLMs for that same reasons people stay in harmful relationships. They've been sold on a lifestyle the want to make a reality, they're on the hook for whatever products they bought upfront, they've publicly committed to the brand, and they're bombarded with pressure from their upline. It's a toxic environment meant to exploit women in a (mostly) legal way, and it's devastating.
Poor one out for the girls you see doing TikTok dances about "working from their phones" and feeling #blessed. They're going through it, and they're likely going through it alone.
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"Let me know if you're interested! :) <3”
Despite the underlying exploitation, I’m unbelievably impressed by the girls I know flaunting their Monat lifestyle online. There’s an insane level of dedication to their strategy, and a confidence that I don't have in sharing my own content.
My closing thoughts are this - if you have enough energy and drive to DM me 30 times about a product that makes hair fall out, why are you using an MLM to grow your empire? It's a tragic waste of true ambition.
Come on girl! You can be a #Bossbabe (whatever that means) without the ridiculous hurdles of a pyramid scheme. Statistically speaking, you're only ever going to lose money - and hair - with Monat, and I'm rooting for you to set your sights higher.
