How suspicious should I be of multi-level marketing?

Great Debates
#1

I have always taken a dim view of pyrmaid-scheme-like companies (e.g. Mary Kay, Tupperware), wherein people host stuff-buying parties.

My wife recently returned from a local community fair with a sheepish expression, and when pressed, admitted she had signed up to host such a party for an outfit called “Discovery Toys.” (Discovery had a booth at the fair, and as we have a 16-month-old, my wife has a keen interest in kids’ toys. :slight_smile: )

She knew I’d be skeptical, and I was, but in discussing it afterward, she was able to deflect most of my criticisms:

Me: “It’s high pressure sales on your friends! That sucks!”

Mrs. P: “How is it high pressure? My friends know what’s going on, and they don’t have to come if they don’t want to.”

Me: “But the stuff is overpriced!”

Mrs. P: “How is that different than buying toys in a boutique? Or would you rather have that money go to buying cheap toys at Wal-Mart?”

Me: “But Discovery Toys is just using you as a cog in their money pyramid!”

Mrs. P: “So? If we have fun, and my friends end up buying toys they like for their kids, who loses?”

Me: “…”

At some level, despite my wife’s protestations, I still feel like it’s pressure-sales on our friends, which just seems wrong. Isn’t there some hard-to-define peer pressure to show up and buy, even if you don’t really need more toys for your child? And might not our friends always, from here on out, wonder if we consider them as marks for our marketronics?

I dunno. It bothers me at an emotional level, but I’m a creature of logic, and it rankles that I can’t come up with logical reasons to distrust this kind of commerce. As long as the toys are properly priced for their quality, and people only buy what they want, should I care? Am I wrong for being so suspicious?

What do my fellow Dopers think?

Thanks,

-P

p.s. Mods, I considered both GD and IMHO for this, and decided on GD because I suspected that a debate might well break out on the subject. Feel free to move it if you disagree.

#2

Ever been hit up at work to buy hideously overpriced candy bars for a fellow worker’s kid’s fund raising efforts?

I think it’s pretty much the same.

except it’s your friends, not your coworkers. So hopefully, they’ll have no problem telling you to stuff it. And hopefully, you and wife won’t be offended if they do.

#3

Is it really a mult-level marketing scheme? If so, I’d get out now-- before you end up hosting parties once/month.

Also, if your friends are like mine, their kids are not lacking in toys. Is it that hard to go to Tosy-R-Us these days or order stuff online?

#4

Did your wife volunteer to host a party, or did she become a “consultant” or whatever they call it?

Hosting a party is a one time deal. You invite all your friends, the consultant comes over with a catalog and some demo items and some freebies, shows off the products, and gets everyone to place orders. The host usually gets some kickbacks for hosting in the form of free merchandise depending on how much your friends order.

The consultant gets a percentage of every dollar ordered, plus kickbacks in the form of free merchandise, points for trips to company cheerleading events in Las Vegas, etc.

#5

An entire website devoted to peering into the dark corners of multilevel marketing.

#6

I could be wrong, but I don’t think Mary Kay or Tupperware are pyramid schemes (i.e., multi-level marketing). The difference, I think, is that for people involved in something like Amway/Quixtar, the primary goal seems to be building a “downline,” or levels of members below them, while the Avon Lady or Tupperware consultant’s primary goal is actually selling the product. In another MLM thread a few days ago, Mangetout mentioned that he was having difficulty buying a product from an Amway distributor, since the distributor was more interested in recruiting him than selling stuff to him.

#7

I’d have to agree with this. Are you sure its a MLM scheme? I was in one of those once (well, I agreed with a friend to go to the pitch for selling some vitamine products), and the whole goal wasn’t to sell the products but to product a downline…i.e. to get other people under you who would then get people under them, etc…all forking out the $1k ‘entrance fee’, and getting discounts on buying the various ‘products’.

Tupperware (which I’m at least passingly familiar with) is definitely about selling the product…at least thats what my wife tells me (she has been to a few ‘Tupperware parties’). Its possible that the whole downline thing is still in effect but the main emphasis is on selling Tupperware…at least thats how I see it.

So…I’d say some more research is needed. But if its a one time deal where your wife has some friends over and shows off some products…well, that seems harmless enough reguardless of if this is a MLM scheme or just selling stuff. Just be VERY wary if they ask you to pay that ‘one time entrance fee’ or however they coach it. Thats the point where the odor of the rat becomes appearent, IMHO…

-XT

#8

My idiot uncle John has been in every pyramid scheme known to man, and this is always the thing; it’s about recruiting more fools, not selling product.

He tried to get us interested in Herbalife, insisting this one pill would clean out your ass or something; when we said “fine, send us a bottle” he was quite adamant that what we should really do is become distributors and order it that way. You get the picture.

Mary Kay, Avon etc. are NOT pyramid schemes/MLM/Ponzi schemes.

#9

Inviting your friends to a sales party can be a bit dicey etiquette-wise, especially if you don’t let them know what they’re in for. That said, lots of people do like these parties. Here are some steps your wife should take to keep the event as polite as possible.

First of all, she should only invite people whom she knows quite well and whom she sees regularly on a non-sales basis. She wants to avoid looking as if she’s saying, “Betty Sue wasn’t a good enough friend to be invited to my Christmas party, but she’s good enough to be invited to buy some Tupperware.”

Secondly, it should be made very clear what they are being invited to. All of these party sales plans have printed invitations available to hostesses. These invitations make it very clear what’s up.

Third, follow up the printed invitations with a phone call or email letting the guests know that, however hard the salesperson may press, you really don’t care whether or not she buys any products.

#10

I’d also add, make sure your wife lets the invitees know that she won’t be offended if they chose not to attend.

A friend’s wife sells Pampered Chef. Occasionally, someone in our group of friends will host a party through her. We all get together, do some cooking and eating, oogle the catalog and fondle the kitchen gadgets, order a few things (or not) and go on our way. As long as everyone knows what’s what, before the event, I don’t see any problems.

#11

My wife and I were Tupperware dealers when I was in college. It’s not even remotely like a pyramid scheme. In fact, we were never encouraged to recruit new Tupperware dealers. Our manager did get a small percentage of the profits we generated, but it was made clear to us that selling the product was where the dollars were.

Y’know, if you don’t want to go to the party, don’t go. Go golfing that day, or take the munchkin to the park. My wive loves Pampered Chef parties and our kitchen is largely equipped from parties she has attended. I don’t go because I hate the expectation that I’m going to buy something and help the hostess win a freebie. The missus, on the other hand, feels no obligation whatsoever to buy a damn thing (of course, she’s never gone to one without dropping at least $100, sometimes more.) Women like to shop. They like to party. These merchandising parties are perfect for 'em.

There really isn’t a logical, rational or other man-type objection that works. These are female things that guys are well-advised to steer clear of.

#12

My wife went to a Mary Kay “party” last week hosted by one of her friends. It was the usual scenario of being pressured to by overpriced crap and “beauty treatments.” She came back fuming about the high-pressured “consultant” who was there. My remained polite because she didn’t want to embarrass her friend (that is, she didn’t tell the consultant to screw herself), but just barely. Her friend ended up calling my wife and everyone else who was at the party to apologize for the consultant.

So the end result of this particular party was to temporarily alienate the hostess’s friends.

#13

You know the strange 38 year old single guy who lives down the block and asked if your 12 year old daughter would be interested in staying at his house over the weekend and helping him with his spring cleaning? Well, he is more likely on the up and up than a MLM scheme. IMHO.

#14

There is another world where I spell all words correctly, and my syntax is flawless. It is a beautiful world.

#15

Where DID you get that extra wide brush?

#16

It was a freebie for holding a Sears Craftsman party in his garage.

#17

Actually, I was thinking that the Tupperware parties and Avon Ladies (and the other companies that copy Tupperware and Avon’s business models) appeal to a largely female clientele. Is there any company using the Tupperware party model or the Avon Lady model that appeals primarily to men?

(BTW, there’s a company that uses the Tupperware party model to sell adult toys to women. Those have to be weird parties.)

#18

I never viewed the Mary Kay/Tupperware type outfits as pyramid schemes. I guess it’s pretty similar, but I agree with your wife about the specifics of it.

See, I have a couple of ex-friends who I stopped hanging out with for a number of reasons, one of which was that they were trying to get me involved in pyramid schemes. There was a certain point where it was clear that neither I nor anyone else was a friend or the object of any kind of interpersonal relationship to them, just a walking dollar dispenser. One wanted me to sell sports drinks online for him–he said “I admit, I don’t make much money on it right now, but I get to write off such and such as business expenses”…er, OK, I get to write off all those things as school expenses, and anyway you’re creeping me out.

The other one wanted me to sell pre-paid legal insurance for him. The whole thing was just sketchy as hell, and he was a very, very sketchy character anyway (as I gradually came to learn).

But Tupperware parties and kid toy parties and stuff? I think that’s different. That’s not trying to push other people into lining up under you in the pyramid, really, you’re just using your home–hopefully a more comfortable place for your friends than the mall, which can I’m sure be a nightmare when kids are involved–to give your friends an easy opportunity to get some toys for their kids. And hell, they’re scientific learning toys. I mean, it’s not like you’re ripping people off–you’re helping young, inquisitive minds develop. Those little kids may not know to thank you 20-odd years down the line when they’re cashing in their science degrees and driving luxury vehicles, but I bet the Discovery Toys party won’t hurt.

Far funkier is the fact that your wife signed up the house that belongs to both of you to host one of these parties and then was reluctant to admit it after the fact. Couldn’t she have asked you before signing the form? That would seem like common courtesy to a roommate, let alone one’s life partner.

That’s what I thought of when I first read the OP. I don’t think it’s that weird of a thing for women, though–a lot of women talk to each other all the time about their body issues and sex and all that stuff anyway, and teach each other how to give blowjobs and such. My last ex sold sex products–not toys per se, more like tickling brushes and creams and other sexual miscellany. Interesting enough, we never did anything other than the standard vanilla stuff–I guess she felt like she’d be mixing business with pleasure if we tried out any of that stuff.

#19

She signed up with the understanding that she could cancel with no problem, if I later objected. And she was sheepish about telling me because she knows I have a – well, let’s just say a healthy skepticism – of other MLM-type outfits. My wife is a model of courtesy, trust me. :slight_smile:

She has no plans to become a Discovery Toys Drone – mostly she fell in love with one particular toy at the booth, which left her vulnerable to attack. We are fortunate to have a large, close circle of friends, and all of the invitees will have full knowledge of what’s going on. So, presumably, if the DT saleswoman assails our friends with high-pressure sales tactics, our friends won’t hold it against us afterward. And I imagine my wife will only offer to host future parties if there’s demand for more of them by our friends, after the first one is over.

My personal plan is to get together with some of the husbands that evening and play board games. Why should the kids be the only ones to get to play! :smiley:

-P

#20

Sounds like a good time all around, Parthol. I apologize for my misunderstanding earlier.