Pyramid Scheme Co Drops The Pyramid. Is This The Beginning Of The End For MLMs?
Let's hope!
Late last year, a whole lot of videos started popping up all over TikTok, YouTube, and other sites featuring people demonstrating a new “viral” makeup technique called “The Demi Method.” The “method” was really just a ridiculously complicated “no makeup makeup” look using color correction in place of foundation, a practice normally called “microconcealing.” Big whatever, right? Not exactly.
Behind the supposedly “viral trend” was a multi-level marketing company (MLM) called Seint, which sold — incredibly! — the very Demi Corrector palette that the people in the videos were using. Those making these videos initially were also Seint “artists” (not actual makeup artists), a fact that was not always disclosed. It became something of a minor scandal, as people who followed the trend thinking it was just like any other felt like they were duped into promoting an MLM.
Last week, perhaps as a result of all of that negative publicity, Seint announced that they were shutting down the multi-level marketing portion of their business and switching to an affiliate model. This means that, starting in October, instead of making money from the recruitment of team members (the number one hallmark of a pyramid scheme), “artists” will only make money off of what people buy from them or through their links.
“We are evolving our business model and compensation structure for our incredible Artist Community,” the company wrote on Instagram. “We deeply value our community and the amazing talent within it. We aren’t going anywhere — our commitment to our Artists and Customers remains as strong as ever. Together, we look forward to continuing this beautiful journey with you and our exceptional products.”
A lot of people were very, very angry about this, sharing on social media how they or their friends spent years “building their businesses” and their teams only to have the rug pulled out from under them like this.
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Now, we would never cheer for anyone losing their income or their job. (Take it back: We wouldn’t cheer for most people losing their income or their job.) What happened to these people is devastating, but so is the fact that far, far more people likely spent a whole lot of their own money hoping to build their businesses, only to end up in debt. Also, if the products are as fabulous as they claim, surely they can still rake it in without needing to exploit the people beneath them, which is the only way to earn money in these kinds of operations. That’s why they’re bad.
While there were certainly a few high earners in there — likely the people who got in at the beginning and were making the majority of their income off of team recruitment rather than from their own sales — the vast, vast majority of sellers were not making any money at all. As you can see from their 2023 income disclosure statement, 46 percent made an average of $77, while an additional 47 percent made an average of $985. That left about 5 percent of their sellers making more than that. In a year. Nine people did make almost a million dollars each, though! Out of roughly 24,000 people.
To be fair, the company did not handle this situation especially well. They told some people higher up on the Definitely Not A Pyramid a week before everyone else, and required them to sign NDAs and keep the information from their “teams.” It’s understandable for people to not be thrilled about having been kept in the dark. But all of this is exactly why these companies are unethical to begin with. None of these people were “building their own businesses,” none of them were or are actual employees of Seint — they were 1099 contractors selling mediocre, greasy-looking makeup for a shady company. They got Lula Roe’d.
Ultimately, this is a very good thing. Seint likely looked at what was going on online, saw how many people would not buy their products because they specifically didn’t want to buy from or support a multi-level marketing company, and realized that this was more of a minus than a plus for them.
They’re also not the only MLM to go under or to switch sales models as of late. The Body Shop ended its multi-level marketing branch The Body Shop at Home last year (and shut down all of its US operations), and Beautycounter just announced that it is shutting down its operations. Travelling Vineyards (a wine-based MLM) dropped its MLM component, and FinMore/TranzactCard (online banking MLM) shut down entirely.
My hunch is that it’s going to be the beauty product MLMs that crumble first, simply because they’re the ones that get the most public pushback online, and then the rest will follow.
These companies present themselves as a way for “mamas” to earn extra income (always “even so much my husbands can retire!”) and help support their families from home by being boss babes, but 99 percent will actually lose money. Many will actually go bankrupt. They’ll also, frankly, lose friends as people end up scared to hang out with them for fear they’ll try to sell them hideous leggings or nail wraps or essential oils. It’s a horrible thing to do to people.
The fact that consumers are wising up and so fiercely opposing this business model that the companies themselves are backing away from it is pretty incredible. It’s up to us to ensure that it’s no longer sustainable and to refuse to give our money to companies that ruin people’s lives the way they do — even when the one “Hey Hun”-ing us is our dearest friend from high school.
Addendum: I would just like to acknowledge that those of you who choose not to wear makeup or care about fashion are, in fact, much better and smarter than I am, if that is what you need to hear. That being said, this is not actually about makeup so much as it is about unethical business practices, so if we could keep the holier-than-thou humblebragging to a minimum that would be super awesome and great. XOXO
PREVIOUSLY:
When I was desperate for work, any work, I took an interview with a 'marketing firm' in southern Oakland Country (just north of Detroit). The interview went well, and it seemed like a decent place, so when they asked me to come back the next day and 'job shadow' one of their people, I agreed.
The next day I drove back to that place and three of us got in this woman's car. As she drove, she talked on and on about how much money she was earning. The whole time I'm staring at her passenger side mirror, hanging off her car by the cable that makes it adjustable with a button.
She drives us down to Six Mile and Gratiot, which at the time was not a particularly nice part of Detroit (haven't been recently, not sure if it's been cleaned up or not), hands us a catalogue, and we start walking north up Gratiot, trying to sell people the kind of shit you now buy on Temu. We're told not to ask if people want them, but how many they want. Coached in other high pressure sales tactics. After a while I tell the woman who drove us down that someone needs to get me back to my car, and I will not be taking this bullshit job.
And that's my MLM story.
Evangelical mothers are extremely prominent in MLMs. That subculture frowns on women pursing careers where they’re authority figures or where they outearn their husbands. By selling Pampered Chef or Longaberger, they can achieve an illusion of independence while maintaining the mandated role of homemaker and mother. The companies are still exploiting the women, of course.