Writing about MLMs is like fighting Hydra, I write about one and people email me asking about two more.
In this case, someone (we'll call him Tim) emailed me asking about the MLMs in the energy deregulation industry. I covered Ignite/Stream, which indicate in their marketing materials that they are a pyramid scheme according to the FTC Guidelines.
A couple of months later, Tim asked me about a company called Add Wallet. He linked to a site that I could only say is a get rich quick scheme. It's one that you shake you head at in the first 5 seconds and say, "Hell no!" Today, all I can find is videos on YouTube about it being a scam. The link to the page doesn't work anymore.
A couple of months later it was another one. Tim is too smart to fall for these, but he wanted to share them. He was probably hoping I'd write about them. Maybe I should, but most people should know they are scams very quickly, and they went out of business within a couple of months.
Then Tim hits me:
"I get the impression that people think you are against all direct selling / network marketing companies. Perhaps one of these days, you can take a look at the company I am involved with ... although we are direct selling / network marketing, we consider ourselves much different than most of the others ... we put an emphasis on obtaining customers more than we do recruiting reps.
When you see all the components of our company, you may just be able to write something positive and shut some of these naysayers up :)"
In the immortal words of Barney Stinson...
I'll get into whether I'm against all MLM companies next week. For now I'll give the short answer is that MLMs compete fiercely for distributors. They aren't very well regulated (except in rare cases and then ten years late), leading to companies getting rewarded for bad behavior. There is no environment for a legitimate to operate.
First I'll start by clearing up the nomenclature of MLM vs. Network Marketing vs. Direct Selling. MLMers use them interchangeably to mean MLM, but the reputation of MLM has gotten so bad that they had to co-opt other names such as Network Marketing (what NBC and CBS does when it shows you a commercial) and Direct Selling (selling door-to-door) to describe their business. Neither term has anything to do with the multi-level aspect of MLM and it is simply Doublespeak.
Unfortunately the Doublespeak has gone on so long that most people don't notice any more.
Tim's company is... You guessed it... Miessence.
To get me started Tim described it like this:
"... we have no hype,no BS, no false promises - just certified organic products.
(1) Customer sales are our main focus
(2) We are carbon negative company
(3) Our factory runs off wind power Sustainability - Miessence: home to probiotic, antioxidant and green alkalising certified organic superfood nutrition.
(4) We are a part of B1G1
(5) Our shipping is anywhere from free to a maximum of $9.95 for both reps and customers
(6) Take a tour of our factory - not sure many companies go to this extent - Miessence Factory Tour"
Sounds like a pretty great company, right? Well let's dig in...
I love the carbon negative company as I'm getting my solar installed in about 6 weeks. I'm going to combine #2 and #3 above, because they are the same thing... #3 just explains how they get to #2.
The video for the factory tour was 45 minutes long. It not only was too boring for me to sit through, but I have better ways to spend 45 minutes of my time. I skipped through and it seemed like every other factory tour I've seen (which has actually been a few). It certainly didn't look like a clean room to do medical experiments in or anything outstanding. However, I'll give them the benefit of the doubt that there's some great stuff there.
It sounds great that they are part of B1G1, right? I decided to look at how much money they've contributed. Unfortunately, the B1G1 doesn't say. Instead they say things like, "106,756 days worth of support were given to farmers around the world." Well, what is a "day of support" to a farmer? There were other things that were more tangible such as "23,840 days worth of grain seeds were given to nourish people in need."
It sounds awesome until you realize that you can give a year's worth of seeds for $1.85. The grand total of money spent for those 23,840 worth of seeds is $120.83 cents.
I'm not picking on the seeds. There was also a mention of 1162 school lunches given. It comes out to around $260 based on yearly price of 312 meals.
I'm a fan of any giving to charity, but that number comes across as charitywashing, "Gaining the trust, good faith, or simply the business of customers by aligning your product with a charity."
I think I'm being generous when I say their charity giving through B1G1 is less than $5000. Better than a poke in the eye, but not what you'd expect from a corporate sponsor.
The last selling point left is the shipping that is either free or a maximum of $9.95. I want to caution that it is an Australia-based company, so American readers are probably looking at paying that $9.95 shipping (as I was when I simulated buying the products.)
Let's Look at Miessence Complete Protein
I always like to look at the products when evaluating an MLM company. One of the the Pen Pyramid Scheme which goes like this:
"Say Mr Pyramid buys pens in bulk from Staples and sells them for $100 each. Who's gonna pay $100 for a pen? But tell them that they can also sell pens for $100, and we'll pay you $30 for every pen you sell, plus you can recruit people to sell pens as well, and you'll get $10 for every pen they sell, and $5 for every pen their recruits sell. Three levels, $45 commissions total on a $100 sale. Everyone has to buy 10 pens a month for personal use to participate in the program. Just find three people who find three people who find three people.... In the end, yeah, you are buying 10 pens a month for $1000, but you are getting $3150 in commissions, so don't sweat it. Why wouldn't you join?
Product is moving. The pens get used. No recruitment revenue, only product commissions. Absolutely 100% a pyramid scheme. The only real reason people are paying $100 for a pen is for the opportunity to make money off the sale of pens. Completely unsustainable as eventually, you run out of people to sell to and those at the bottom get hosed buying $1000 pens but not being able to sell them. This is an extreme example, but if you look at the world of MLM, there are some pretty big name companies out there that somewhat fit this mold on a less cut and dry basis."
So the VERY first thing you want to know is, "Is the product priced competitively?" In the dozens of MLMs I've written about here, I don't think any of them have come close to passing this test. Usually they are 10x or 20x more expensive. Sometimes an MLM product might only 3 or 4 times as expensive and that what qualifies as "good." In the real world (i.e. not MLM) you want to see something priced within 20%, not 300% or 400%.
Miessence Complete Protein was the top product they pushed on the page. They have other product, but this seemed like the flagship that they wanted to buy.
The price of Miessence Complete Protein per pound is $44.66.
The price of EAS 100% Whey Protein, Chocolate, 5 Pounds is $8.00. (It was actually $6.80 a couple of months ago, maybe a sale ended and another product is cheaper.) It's no contest that $8.00 is much better than $44.66.
Miessence distributors are probably screaming, "That's a bad comparison!" right now. After all Complete Protein is "raw, organic, gluten-free, vegan." The average protein consumer is not vegan and does not eat gluten-free.
If you don't need it, there's no reason to pay for it... especially when half of Americans have less than $500 in savings.
Thus we can safely eliminate 95% or more of the addressable market by simply giving them a much cheaper product that is in-line with their current diets and doesn't destroy their life savings in a matter of a year.
So what about the other 5% of vegan or gluten-free people? Well I can help them save a lot of money too...
This Orgain Organic Protein Plant-Based Powder is around $20 a pound in one flavor. When I was writing Tim, it was $18/lb and available for $15/lb with Amazon's Subscribe and Save. At standard pricing, it is about half the price of Complete Protein and can be 1/3rd the price for the same level of Vegan, Gluten-free, Organic protein.
Tim didn't argue that it was an inferior product and it is extremely highly rated on Amazon with over 450 reviews.
Between these two products on Amazon (with less shipping), there is something for everyone. Miessence's Complete Protein looks like every other MLM that I've seen... pricing that "somewhat fit[s] [the Pen Pyramid Scheme] mold on a less cut and dry basis."
However, since I love saving people money, I looked at the main ingredients in Complete Protein and found that you could get 90% of the benefit at around 1/4th the price $12 a pound by combining organic rice protein and pea protein both found on Amazon. (I'll leave the math and pea protein as an exercise for the reader.)
I can't figure out how Miessence has customer sales as its main focus. Its product isn't priced to be competitive for the average consumer's needs (regular protein). Its product isn't competitive for those who have special diets that want a "complete" protein (Orgain is better). Its product isn't competitive for those with special diets who are looking for a less "complete" protein to save a little money.
Let's state the obvious that unless you are a body builder or a competitive athlete, you really don't need a "complete" protein in the first place.
I see no market outside of the business opportunity of recruiting people into an MLM/pyramid scheme that Complete Protein is competitive in.
About Miessence's Environmental Stance...
I thought more about this and the factory tour appears to be in Australia, where the company is based. If they are so carbon negative, why would they ship their products around the world to people in the United States? Why not source the ingredients in the United States and ship from here? Shipping product around the world has a large environmental impact.
In addition, having a factory in the United States would mean American jobs which could be seen as worth a "Made in America" premium. At least Orgain is headquartered in the United States.
When I asked Tim about it, his response was that they might not do that because they are small company and it might cost a lot of money. My retort to that would be if they are going to charge 2-3 times more than the competitive market, they should be able to figure that out before they ship product around the world. Why not just grow in Australia until you can naturally expand to the United States.
Since it appears that they are charitywashing, I'm going to call them out for greenwashing as well.
Usually, I like to dig into the company more, but at this point, I feel like I've found enough strikes. This article is already a lot longer than I intended.
Any company choosing an MLM structure that is consistent with pyramid schemes should stay away from red flag such as uncompetitive pricing.
The justification with environment and charity causes falls flat when you dig deeper. Even if they didn't, consumers could do a lot more if they simply bought the cheaper products and used the savings to donate to charity or their own environmental causes. (As I said, I'm a huge fan of solar power.)
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