Student Sample- Persuasive

Introduction

Source #1

(Attention Getter) Courtney Harwood was on her way to becoming a millionaire as a Mentor status distributor with Multi-Level marketing company LuLaRoe. At her peak, she had a downline of 3,500 women and was receiving bonus checks from their sales which totaled almost $40,000 a month. She owned a North Carolina mansion, drove a Cadillac, and lived a life of luxury. However, when controversy struck LuLaRoe in 2017 and the distributors she had recruited began jumping ship on the company, that lifestyle evaporated before her eyes.

That story, as told by a 2019 Vice News Documentary called Leaving LuLaRoe, is one of many that details the catastrophic stakes involved in multi-level marketing.

(Thesis) Multi-level marketing has been deliberately engineered to profit off of failure and thus should be banned as an American business model.

(Credibility Statement) This issue hits close to home. In 1997, a family friend pitched a way to earn extra income to my parents. They took the bait and signed up as Amway distributors. But by the end of 1999, we were forced to pack up and move because our house was being foreclosed on.

(Preview of Main Points) Today, I’ll be detailing the inherently predatory nature of Multi-level Marketing (MLMs). First, I’ll explain why MLMs are problematic. Then, I’ll get into some of the contributing factors of what makes them such a widespread problem. Finally, I’ll offer some solutions of what we can do to combat this business model from thriving in the United States.

Body

A. (Problems) To examine the problems with multi-level marketing, we can start with the very structure of them.

1. MLMs, sometimes called Direct Sales, function via a system of network marketing.

Draw diagram of direct sales model on whiteboard

Source #2

What designates this from a pyramid scheme? Well, if you ask the Federal Trade Commission, not much. According to a Forbes Magazine article in 2019 by Lisette Voytko, the FTC defines a pyramid scheme as one which “promise(s) consumers or investors large profits based primarily on recruiting others to join their program.”

Source #3

In a study published in 2011 conducted by John Taylor of the Consumer Awareness Institute, 15 years’ worth of research revealed that 99% of participants in MLMs lose money, that’s a higher rate than the 90% that lose money in pyramid schemes in which there is no product (federally illegal).

2. MLMs often require a risky non-refundable investment to get started.

Unlike traditional sales jobs, most MLMs require you to buy the product that you intend to distribute.

Source #4

According to the previously mentioned Vice News documentary “Leaving LuLaRoe”, LuLaRoe distributors must purchase a starter kit of leggings and shirts, chosen at random by the company, in order to start their endeavor. The cost of that starter kit? $5,000.

Non-refundable.

(Causes) So, why are MLMs such a widespread epidemic in the United States?

MLMs use predatory tactics to recruit vulnerable people into signing up.

Source #5

In an August 22, 2019 article on Business.com, Mona Bushnell describes how MLMs routinely target specific Americans who might be more eager to climb up the income ladder in an unconventional way.

She details that women, especially stay-at-home moms, are some of the most targeted for these schemes because they have no alternate sources of income.

Those in tight-knit communities are also targeted by recruiters because they already have strong bonds of trust with those recruiting them (Mormons in Utah, undocumented or non-english speaking communities, etc)

Another part of how MLMs have become so widespread is that they have ties to those who are in places of power.

Source #6

The US Chamber of Commerce website, last updated June 18, 2013 excitedly announced a new addition to their Board of Directors. Steve Van Andel, who also serves as Chairman of the Multi-level marketing company Amway, will be in charge of expanding trade interests.

Source #7

Our own President, Donald J. Trump was at the helmof the Trump Network. Ana Swanson of the Washington Post details this in her 2019 article “The TrumNetwork Sought to Make People Rich, but Left Behind Disappointment.”

3. (Two-sided Appeal) People who lose money in MLMs just weren’t trying hard enough or did not have the sales skills to sell a product.

Chuck Holmes of OnlineMLMCommunity.com stated in his

Source #8

November 2019 article “Top 10 Herbalife Marketing Tips and Success Tips” that failure in an MLM business isn’t inevitable. In fact, it is the product of a lack of skillset or specialized knowledge. He states, “Your ability to generate leads, retail, recruit, and build a team are what will make you money in Herbalife.”

Source #9

Source #8

(Counterpoint) In the previously mentioned 2011 study conducted by John Taylor of the Consumer Awareness Institute, it was found that 100% of the top 350 MLM companies (including Herbalife) turned the majority of profits not via sales of product, but via recruitment and onboarding fees.

The same study found that 99.43% of Herbalife distributors lost money in their endeavors, with only 1 in 175 people turning a profit.

(Solutions) When a problem is so deeply ingrained in American culture, it can be difficult to know how to combat it. However, there are steps you can personally take to combat the spread of multi-level marketing.

Always research the products that are advertised to you.

Source #10

According to MLMlegal.com last accessed November 20th, 2019, a quick way to find out if a company is an MLM is to check their website for key phrases like “independent consultants” or “be your own boss.” Refrain from buying products from MLM distributors, even if they are your friends or family.

Call those in power.

Source #11

According to dcreport.org, last accessed November 19th, 2019, in an article titled “Pyramid Scammers Get A Little Help from Their Republican Friends”, call your senators and demand their support for stricter legislation on MLMs and their close resemblance to pyramid schemes. If a bill hits the senate floor, we need their support. For California, our Senators are Kamala Harris and Dianne Feinstein.

Conclusion

Today we’ve covered why Multi-level Marketing business models are a problem, how they have gotten to be so widespread, and what we can do as individuals to prevent the spread of their harmful influence.

It can be intimidating to try to tackle the insidious nature of these predatory business practices. But just remember, it only takes a few bricks at the bottom being removed for a pyramid to fall.

References

Bushnell, M. (2019, August 22). How MLMs Sell the American Dream and Steal Your Money. Retrieved November 26, 2019, from https://www.business.com/articles/mlms-target-women-and-immigrants/.

Check to see if a MLM Company is Legal or a Pyramid Scheme. (2016). MLM, Network Marketing, Direct Selling News, Videos, Articles, Legal Updates, and More. . Retrieved 11 April 2020, from http://mlmlegal.com/MLMBlog/check-see-mlm-company-legal/

(2019, May 22). Retrieved November 26, 2019, from https://video.vice.com/en_us/video/why-women-are-leaving-lularoe/5cd2e56dbe407766d2 269f41.

Holmes, C. (2019, November 24). Top 10 Herbalife Marketing Tips and Success Tips: Explode Your Business. Retrieved November 26, 2019, from https://onlinemlmcommunity.com/top-10-herbalife-marketing-tips/.

Pyramid Schemes Get a Little Help From Republicans | DCReport.org. (2017). DCReport.org. Retrieved 11 April 2020, from https://www.dcreport.org/2017/08/25/pyramid-scammers-get-a-little-help-from-their-republican-friends/

Swanson, A. (2019, April 29). The Trump Network sought to make people rich, but left behind disappointment. Retrieved November 26, 2019, from https://www.washingtonpost.com/news/wonk/wp/2016/03/23/the-trump-network-sought-t o-make-people-rich-but-left-behind-disappointment/.

Taylor, J. (2011). The Case (for and) Against Multi-Level Marketing. Consumer Awareness Institute, 7–1-7–33. Retrieved from https://www.ftc.gov/sites/default/files/documents/public_comments/trade-regulation-ruledisclosure-requirements-and-prohibitions-concerning-business-opportunities-ftc.r511993-

00008 /00008-57281.pdf

U.S. Chamber Board Elects Steve Van Andel Chairman. (2013, November 22). Retrieved November 26, 2019, from https://www.uschamber.com/press-release/us-chamber-board-elects-steve-van-andel-chair man.

Voytko, L. (2019, November 7). Herbalife, Younique, LuLaRoe And Other MLMs Suddenly Under Fire. Retrieved November 26, 2019, from https://www.forbes.com/sites/lisettevoytko/2019/11/07/herbalife-younique-lularoe-and-oth er-mlms-suddenly-under-fire/#596742227db6.

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