Anti-MLM Zealots – Part V

        Then there are those more passionate Anti-MLM Zealots, like Robert FitzPatrick (author of the books “False Profits” and “Pyramid Nation”) who at least try to go beyond just anecdotal evidence in making their case against network marketing. I explained why he was wrong in the last three issues. And then there’s guys like Dean Van Druff (author of the article “What’s Wrong With Multilevel Marketing”) who openly admit they’ve performed virtually no investigation into the subject matter at all. His was a “theoretical” analyses. In other words, he guessed at it. I explained why he guessed wrong in the first segment of this series. In a future segment I’ll deconstruct the prolific anti-MLM efforts of Jon Taylor. Jon’s case is an odd one. He actually claims he was “successful” in MLM, yet still claims none of you will be.

Behind The Smoke & Mirrors – Ruth Carter

        So now we come to Ms. Ruth Carter. Ruth is a rare breed of Anti-MLM Zealot in that she not only, God forbid, actually participated in MLM, she was genuinely burned by it. As her story goes, which she’s chronicled in her book “Behind the Smoke & Mirrors,” she joined Amway back in 1982 after being invited to a few meetings. She recounts her feelings of curious apprehension, and how she had wondered why the speaker at one meeting was driving such a beat up old car when he was supposed to be so successful? Why was he serving store bought cookies and drinks in Styrofoam cups? Why was his wife, who was obviously home, never present? Why was there such “ludicrous” passion and excitement over a company that just sold some “basic household and personal care items, and supplied name brand product through a catalog”? However, it was not until about seven years later (of her 13 “core” years in the business) that she finally “neglected to leave my brain at the door” and started to look critically at her experience.
        This followed years of doing everything by the book: attending all the meetings (at first a 600 mile round trip), spending thousands of dollars on all the tapes and books she was told to purchase, attending all the major functions, showing the plan, recruiting people, and selling some products. Yet, she also describes her arduous financial struggles, debilitating bouts of depression, and poor social life (one date was “thoroughly appalled” after attending one meeting with her, and another claimed he had just lost his marriage over his wife’s Amway involvement – Ruth doesn’t elaborate, but I suspect that date didn’t go well). Six years into the business, with two children from a previous marriage, her savings depleted, no regular job, and a new husband who had tried in vain to get behind her Amway business, but who was now “questioning everything” about it causing constant arguments, she decided to have another child. Her husband wanted children, and she announced that she wouldn’t even consider having another child unless they were building the business so she could be a stay-at-home mom. He agreed to “do whatever it takes.” She then became pregnant – and their business “ground to a halt.”
        Several months later, Ruth’s loyalty and efforts finally attracted the attention of an upline Diamond who wanted her to come to work in his office. Understand, in the Amway world, such an offer is analogous to a real estate agent being asked to intern for Donald Trump, or a Catholic priest being asked to work directly with the Pope. Amway Diamonds are more than just edified by their downlines, they’re practically deified. However, this is when, as the story goes, Ruth was exposed to the inner workings of an AMO, or “Amway Motivational Organization” (better known as the “tapes & tools” business). She alleges a lucid moment occurred when she discovered that only 5% of the Diamond’s income came from his downline overrides. The rest came from tools and functions. She said she felt sick that she had “helped him steal from his distributors.” Actually, steeling would be offering them motivational tools, taking their money, then not sending motivational tools. Offering them, taking their money, then sending them exactly what they willingly ordered would be the opposite of stealing. But this is Ruth’s story.
        So, after seeing this “evidence” that was “right in front of (her) nose” for so long, and after visiting several anti-Amway web sites, she decided to turn hostile witness – and launched her own web site. It’s called MLMSurvivor.com.
        This is probably a good time to address a common question I receive regarding this series: Why do I mention the Anti-MLM Zealot’s material by name? Doesn’t that increase the exposure to their work? Fair question. The answer is simple. I have no fear of you being exposed to their side of the story. I firmly believe this industry can stand up to any scrutiny. Only the side with the weakest argument doesn’t want you to compare both sides. Only the side that bases their case on anecdotal, theoretical, sometimes even completely fabricated arguments doesn’t want you to be exposed to all the facts. Like Ruth and her cohorts at MLMSurvivor.com, for example. We’ll get to her web site later.
        But first, what about this book? It does seem to paint a pretty compelling, dissuasive story against, well, at last Amway (now operating under the name of Quixtar and their parent company Alticor – however, her book was written in 1999 and she refers to them as Amway throughout, therefore I will as well). Indeed, the subtitle of her book is “Amway Motivational Organizations.” At least 90% of the material and discussions on her web site directly or indirectly pertain to Amway. Robert FitzPatrick, who’s testimonial consumes the entire back cover of her book, congratulates her for her “courage” to put the truth in print regarding the Amway business (an ironic accolade considering “Ruth Carter” hides behind a pseudonym – that’s not her real name).
        For the record, I also dislike the manner in which some AMOs operate. I am within the much larger MLM camp that believes you don’t have to spend thousands of dollars on books, tapes, videos and numerous meetings and functions. What is offered to distributors should be sold at, or even below cost. This would allow more distributors access to the material so the producer of the material makes their money by the resulting increased sales activity. That way the seller doesn’t make money by simply selling the tools, they only make money if the tools actually help the buyer make money.
        Having said that, let’s be clear about a few things. First, these tools Ruth is referring to are not offered by Amway, but by Diamond distributors (which she does acknowledge), and are not sold on a multilevel basis (in fact, Amway has terminated Diamonds who tried to do this). Amway corporate makes very clear these tools are totally optional and have no barring on any qualification in the compensation plan. Thousands of Amway reps are not involved in an AMO. Also, the Diamond distributor she uses as a case study in her book did, in fact, have gross income from Amway bonuses less than 5% of his total gross income, but this Diamond also incurred $2.6 million in expenses while operating his extensive tools and training business. His Amway income was actually 30% of his total net income. While I agree it should certainly be more, citing the 5% figure seems disingenuous. Also, Ruth provides a breakdown of the suggested training event costs for a year and it totals $1,040 – for forty-two events! That’s about the same cost as two Tony Robbins seminars. At an average of $24 per event, it’s actually not a bad deal – as long as you don’t go to all of them!
        Carter states that the training tapes are repetitive. “After you’ve heard a dozen or so teaching tapes, you’ve pretty much heard all the information they offer. So why subscribe to a Standing Order Tape (SOT) and buy a tape per week?” Good question – so why did she? She tries to make a case that the AMOs are cult-like in their use of brainwashing tactics. She devotes 36 of her 157 pages to a discussion of cults and “mind control”. This explains her devotion for so many years to both a financially and emotionally draining experience. This also explains why, when told to spend thousands on motivational books, tapes, videos, and meetings, she couldn’t simply say, No thanks (a perfectly valid option). This rationalizes her commitment to a program that allegedly encourages the shunning of friends and family who are unsupportive, and so severely damages such relationships. Yet, she paradoxically claims there are “millions of distributors who have walked away” from their Amway business. Millions. By Ruth’s own accounting (based on published data), 59% of all current Amway reps are inactive (that is, somehow found the will power to stop). She refers to “Prisoners of MLM” who have been psychologically manipulated into continuing, in spite of the notoriously high attrition rate throughout the MLM industry. Such statements seem to border on the absurd considering the extreme level of ease so many others seem to have in leaving their MLM program. In fact, it’s often too easy! She describes the many people whom she introduced the business to in much the same way it was introduced to her who immediately rejected it (or even, as described earlier, were “appalled” by their first introduction). What did they see that she failed to see? She does candidly questions her own “stupidity” in the beginning.
        While it may seem easy to just dismiss her “I did it because they told me to” explanation with the common Mom line “If they told you to jump off a bridge, would you do it?” (my Mom used “bridge,” yours probably used the more common “cliff”). However, there are a very disproportionate number of folks who get involved in these Amway Motivational Organizations, lose a lot of money and friends, and just can’t seem to stop. I think the alleged use of mind control techniques by these groups deserves consideration and should not be summarily dismissed. Some people are more susceptible to these tactics than others (a sign of emotional weakness and lack of common sense perhaps, but certainly not intelligence), and in my opinion it does appear most AMO leaders are playing to that demographic. But let’s be clear: we are talking about a faction within Amway’s distributor ranks, not all distributor groups within Amway. And we are not talking about Amway corporate, who seem to be going out of their way to inform new reps of the true average income potential of the opportunity, and that the tools and training are completely optional, totally voluntary purchases. In fact, about two years before Ruth wrote her book Amway began requiring renewing reps to sign an agreement stating “I understand that the purchase of Business Support Materials is always optional.” If they choose to purchase such collateral material, they must sign an arbitration agreement. In their policies (which all reps must agree to) they clearly state:

“If you sponsor others, you have an obligation to train and motivate them whether or not they choose to buy Business Support Material. All distributors are free to change their volume of purchase of such items, to cancel standing orders, or to cease such purchases at any time without threats, pressure, or retaliation.”

        Ruth completely acknowledges all this, and the provision that anyone who sells such tools must agree to buy them back within 180 days, yet it appears to have made no impression on her at all. She claims this provision is “completely ignored by distributors in the field.” Her evidence? Two e-mails she received from “disillusioned” ex-distributors.
        Ms. Carter also gratuitously, and clumsily, attempts to make a case that Amway is now operating as a pyramid scheme. Like Robert FitzPatrick, she believes a high percentage of personal consumption among distributors is somehow indicative of an illegal pyramid (according to the FTC, it’s not, which was proven in the last installment). But it’s not so much what she’s claiming as how. Here’s her statement, verbatim: “Virtually no product is sold at retail today in North America – actual retail sales comprise only about 18% of all Amway sales.” According to Ruth, 18% = 0%.
        She makes the sensationalistic claim later in her book that “As financial and mental-health professionals become more familiar with the devastation that follows in the wake of many MLM opportunities, they are becoming better resources for helping people recover from AMO involvement.” Here in lies the crux of Carter’s ignorant, illogical, campaign against the entire MLM industry – she thinks the experiences of a subset of AMO members, themselves a subset of the entire Amway organization, which is a subset of the entire MLM industry, is indicative of how all MLM programs operate. All this in spite of the easily verifiable fact that such tools & training systems are virtually exclusive to Amway. No other MLM company employs such Motivational Organizations. Not a single one. And the “devastation” she refers to that requires the care of a mental-health professional is overly melodramatic and hyperbole even within Amway (certainly some folks have been devastated, but they are a small, vocal minority who file law suits and build web sites). I’ve known literally thousands of networkers over the last 14 years and can’t think of a single Oxyfresh, New Vision, Freelife or Cell Tech distributors who ever needed psychological counseling due to their experience. Every failed distributor I’ve ever known just quit, moved on, and got over it.
        Ruth Carter’s book is not what classifies her as an “Anti-MLM Zealot.” Obviously, she was genuinely traumatized by her experience. If writing a book and starting an on-line “survivor’s” support group for others with similar experiences is cathartic for her and others, more power to her. I sincerely mean that. But her agenda is not so benign. She has, once again it appears, been brainwashed into believing all MLM opportunities are evil, vile, scum. Her experience in this one organization within this one company was horrible, so they all must be as horrible. She is now so blinded by her loathing for all things MLM that she didn’t create AmwaySurvivor.com, she launched MLMSurvivor.com. This web site is where the real fun begins. Don’t miss the next issue!