Ragged Riches

Have you ever been part of an Multi-Level Marketing company? If so, you’re like me and you’ve been preyed upon. They’re basically pyramid schemes that are legal only due to a single loophole that has been lobbied into staying open.

Modere is one of the many, many MLM companies that has recently shut down, following major names like Epicure, Monat, and Paparazzi Accessories. This particular MLM focused on one of the most widely-sold genres in the MLM scam worlds: “healthy lifestyle products.”

If you’re like me, you’ve watched MLMs victimize people who were highly vulnerable. You’ve seen the financial damage MLMs do and how quickly upper management will turn on their own. It’s brutal, and yet, there’s a story to be told.

What is Modere?

Modere is, erm, was an MLM company based out of Utah, the largest exporter of MLM companies in the world. It had a long line of beauty, fitness and household products geared toward “healthy living.”

While I haven’t come across it in my state, it was a highly popular MLM firm that was in business for 23 years. In other words, it was no “small potatoes” type of company.

How did Modere shut down?

Like its fellow now-defunct MLM buddy Epicure, Modere shut down completely out of the left field, no warning given to employees whatsoever. According to Business for Home, the company released a statement that said:

“We’ve made the difficult decision to close our doors. We’re incredibly grateful for your support, trust, and loyalty over the years. Whether you’ve been with us from the beginning or just discovered us recently, thank you for being a part of our story. From all of us at Modere — thank you. It’s been an honor.”

Just like that, their company shut down immediately after the statement release. Workers were paid for the work they did the month prior, with all other work remaining unpaid. Those few who actually made bank off Modere got totally cut off from their main income without any form of recourse.

What about the people who were customers, but not actual salespeople. Those who bought from the company might get their shipments if it’s early enough on and already shipped. Otherwise, they are out of luck.

Brutal? Yes, to the point that it’s stunning to most onlookers.

There are lessons to be learned from the sudden Modere shut down.

It’s not a secret that MLMs are really not doing well. They are not just struggling. They’re falling apart like a badly-sewn dress. As with all things, there are lessons to learn.

#1: MLMs are addictive.

Perhaps the most striking thing I’ve noticed from all this is the way I’ve seen so many of the salespeople behave after their MLM suddenly shuts down and pulls the rug from their feet. If that happened to me, I’d decry the system people warned me about.

“Huns,” as MLMers are called, are grieving but they’re not acting rationally. Most of them don’t take time to think about why this happened or whether they fed into a bad system. Rather, they’re already picking another MLM to work with.

You know how people often say that an addiction can be defined as tolerance? There’s a flip side to this too. You can also tell if you’re addicted by what happens when the addiction starts to hurt you or makes you lose your income.

If you’re reaching for another source for your “fix,” you are an addict. These huns know they are being hurt by these companies. They also are aware that they’re not just “a little more work away from millions” after having a company literally rug-pull them.

They don’t care.

They just want the weird rush that being part of an MLM gives you.

People really underestimate how much positivity and upbeat pep-talks tend to come with MLMs. MLM managers basically give you a full “cult treatment” which involves indoctrination and also providing you with a community that tells you how to live, laugh, love your way to success.

We live in a very lonely society. MLMs provide a community and a group of friends who support your “career” as long as you’re in. The pressure is there, but a lot of people get addicted to the community and hype around MLMs. As someone who’s seen it, it can be fairly intoxicating.

The people who immediately get dropped by Monere who just get back into the next MLM that breathes near them? Yep. They literally can’t imagine life without an MLM. They’re acting like addicts and that means they can’t be trusted to be honest with you if it could get them in the way of getting a fix.

#2: MLMs are a big ol’ club and you’re not in it.

Modere suddenly shut down, without warning, quite literally overnight. Huns were shocked, many of whom relied on this to make a serious chunk of change. They found out alongside everyone else and they likely may face homelessness because of the cruel lack of warning.

Modere is not the first company to act this way. Months earlier, Epicure went viral because it did the exact same thing, the exact same way. Even top-ranking Epicure sales huns were not “in the know” when it happened.

If you go online, you can actually see reaction clips on Instagram from huns who just found out. Some of them are not fun to watch. You can very clearly see the betrayal on these peoples’ faces.

MLMs keep telling their workers that they’re part of the “in crowd” by selling the dreams they peddle. It’s very easy to believe it, too. Top MLM managers tend to be the people who can really create a feeling of closeness and camaraderie among their downlines.

In reality, the vast majority of MLM workers are not part of the real “in crowd.” The real “in crowd” are the founders and their immediate family. They’re the ones who get out of an MLM closure unscathed, pockets lined with cash.

Anyone who sold their way to the top is not part of the “in crowd,” which means they will be thrown under the bus no matter how much work they put in. They’re just pigs being led to the slaughter.

#3: The MLM industry as a whole is suffering from the anti-MLM movement.

If you’ve seen the number of MLM companies that shut down in recent years skyrocket, congrats. You have a pair of working eyes. It’s getting really bad, to the point that many major companies (including Scentsy) have been struggling.

For those not in the know, several major companies closed their doors in the MLM field. Modere and Epicure are just two of the most recent. Beachbody (erm, Bodi), a classic MLM company, switched to affiliate sales.

Even companies like The Body Shop, which experimented with their MLM branches, decided to call it quits in favor of traditional retail sales. MLM sales has become a massive stigma for companies, to the point that companies are preferring to switch to affiliate sales instead.

Much of this is due to the public blowback that comes from MLM marketing’s ugly side. In recent years, major content creators have started to work together to warn others of MLM tactics under the “antiMLM” tag.

At first, the antiMLM movement was small. It’s grown quite large now, and its still growing. This, in turn, has made it incredibly hard for MLMs to recruit and keep others in their fold. After all, if you have a reputation for being a scammer, people are going to treat you like a scammer.

If things continue, it’s likely that the MLM business model might just become obsolete.

#4: Selling a dream is a powerful thing, but not in this economy.

MLMs aren’t really about selling healthy products or makeup, or even memberships to whatever they’re selling. They’re about selling a dream. That’s why people sign up for them: they want a shot at the dream of being able to work from home, steady income stream, without worries of bankruptcy or missing kids’ major days.

It’s a beautiful dream, really. Shame MLMs weaponize that very same dream into a nightmare. That’s precisely why the whole “dream sales” thing doesn’t work as well in a tough economy. Simply put, there aren’t enough financial cushions for huns to fall back on if they don’t see rewards within a decent amount of time.

MLM staffers need to kick the can down the road if they ever want to make those sales happen to the point that they actually turn a profit. In the past, it was easier to tell a person, “Just keep working at it as a side gig. You’ll be fine. Just pay a little more, you’ll be better off soon.”

Today, a lot of MLM huns are doing this as their main job because there is no other side job hiring. And when they realize they’re bleeding out money faster than a gunshot wound, continuing to chase that impossible dream becomes far more unappealing.

In other words, reality tends to be the best teacher—even when other people refuse to enable a person’s follies.

#5: MLM founders have all the care and empathy of pit vipers.

If you haven’t guessed, MLM founders know they’re technically scamming people. They don’t care. They also don’t care when they end up sabotaging, undercutting, and otherwise harming one another as long as they tend to run with the bag.

The way Modere’s leadership handled its recent legal issues is proof of this. Don’t believe it? Look at the legal woes that happened after the company severed ties with its lead distributor, claiming the distributor left them “sabotaged and crippled.”

So I guess they know how their distributors feel now that their entire business got pulled out from under their feet?

To a point, long term huns who hop from brand to brand aren’t any better in many cases. They often know but they are willing to step on others’ throats for that perceived prize.

#6: You can do everything right and not working on your own business will make you fail.

The huns hawking MLM products are not paid hourly. They are paid a pittance on commission and they are also encouraged to enroll people underneath them to sell the very same products they’re selling. In other words, MLMs encourage peope to sabotage their own keys to success.

Some huns, after putting in far more hours than a regular 40-hour job, end up makin a 1099 living. However, Monere’s shutdown pointed out that the living they make can evaporate overnight, even if they did everything perfectly well.

An MLM is not your own business.

You’re still a subcontractor who is told to sell other products to enrich the actual business owner.

Imagine if those women actually started their own businesses instead. No, really, think about it. Most of them would likely be raking in six figures on their own. And unlike their time in Monere, their besties likely wouldn’t be competition.

Hm. Imagine that.