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Why MLMs Are So Appealing to Military Spouses

Multilevel marketing companies like Rodan + Fields, Pure Romance, and LuLaRoe are popular because they allow for flexible schedules and lots of moving.

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According to data from the White House and the Department of Defense, there are nearly 690,000 spouses of active-duty service members, 12 percent of whom are active-duty military themselves. The unemployment rate for military spouses over the past decade has hovered between 20 and 25 percent, four times the rate for adult women.

At the same time, direct selling business models have exploded in the past few years, making military spouses uniquely prone to joining those companies, believing the answer to a frequently interrupted lifestyle lies in independent selling.

Or as Courtney Christensen, a 36-year-old Navy wife and Rodan + Fields seller in the DC area puts it, “You’re at the whim of where the military required us to be.”

More than half of military spouses have moved at least three times during their partner’s military career and they are frequently placed on or near military bases located more than 50 miles from major cities, “effectively limiting both the quantity and types of jobs available” according to the DOD.

“It’s really challenging to run a career when you don’t know how long you’re going to be in one area or you’re discriminated against if you’re not there long,” says Christensen, a former pharmaceutical sales rep who moved every two to three years while being a mother to four young children and a wife to a Navy officer now completing a naval medical residency. For Christensen, working in direct sales means “getting to take back control about when and where and with whom you want to work. When you’re a military spouse, someone else is always calling the shots.”

Still, joining a direct selling company, regardless of whether you’re a military spouse or a civilian, is divisive. There are those who say direct selling companies are harmful to military spouses and their families, while others claim it’s their key to financial freedom.

Direct selling companies: more than just a Tupperware party

Direct selling companies — also referred to as multilevel marketing (MLM) or network sales companies — are organized such that a company operates with a network of independent sellers, also called consultants, who have agreed to sell inventory and do not work as company employees. Typically, existing sellers recruit new sellers and may earn bonuses depending on how many individuals they can recruit to join the company.

That may sound like a “pyramid” structure, but the principal component distinguishing a legal direct selling company from a pyramid scheme is whether consultants make money primarily from recruiting new sellers (in the pyramid scheme model) or from the products they sell (the legitimate way to do business, as outlined by the Federal Trade Commission).

Military spouse unemployment is hardly a new problem. Direct Selling Association (DSA) president Joe Mariano says the issue reached Capitol Hill in the 1980s when he worked to make military base commanders more aware of the advantages of direct selling.

Despite early efforts, DSA data from 2014 shows that among more than 50 companies surveyed, less than 10 percent of companies offered any type of program for military spouses. When they did, they offered easier shipping logistics, no enrollment fees, and at times free products through philanthropy programs.

Why direct selling?

More than 20 million Americans are involved in direct selling in the United States, with penetration reaching every state and expatriates abroad, according to the DSA. In 2015, direct selling generated more than $36 billion in retail sales.

For military spouses, especially those on a military base, the question is not whether you’ll participate in a direct selling party or recruitment, but rather for which one, according to several former and current consultants with whom Racked spoke. Among more than 130 direct selling companies that are members of the DSA (and those that are not), “virtually every company has some degree of penetration and interest” within military communities, says Mariano.

Among the former and current consultants Racked spoke to, the most frequently cited companies included Scentsy (scented candles and waxes), Pure Romance (sex toys and intimate products), Thirty-One (tote bags), Beach Body (at-home fitness programs), and Rodan + Fields (skin care). Each of them noted that it had been a current or former military spouse who’d introduced them to the direct selling company they’d eventually join.

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“With very few exceptions, you know somebody that is selling something,” says Meg Flanagan, an author and education consultant with a master’s degree in special education, and a Scentsy consultant. Flanagan began selling Scentsy during her time living on Camp Pendleton in Southern California while the Marine Corps deployed her husband for a year.

“You have this giant pool of people around you, and each one has an MLM to pick from. I was one of 10 people who sold Scentsy in my neighborhood on a base the size of Rhode Island. There were at least seven or eight core teams with a complete up- and downline on Camp Pendleton. It took me two minutes to drive to my clients’ houses, and a person in my upline lived two blocks over. It’s insane.”

Many spouses opt to join several different direct-selling companies. Some shop around because they fail to find success with one or more MLMs; other are “kitnappers” who join just to get starter kits and preliminary discounts.

“Other friends were serial offenders,” Flanagan recalls. “I had a friend who tried Pampered Chef, quit. She joined skin care companies, walked away from that. She joined a nutrition supplements company, then quit. A ton of people try multiple companies and then walk away, thinking the next thing might be the thing that works for them.”

Regardless of what any given direct selling company hawks, the reported benefits are largely the same. Military spouses, many of whom have young children and live far away from urban areas with greater employment opportunities, find that the potential to make your own hours is good for at-home parents who are either unable to afford child care or choose to forgo it.

Your business is mobile, meaning there’s no need to put in for transfer positions with a company or to become recertified for a career when relocating to a new state or country. That also means that, in theory, your income can grow without a reset every time a move takes place.

“I worked in music marketing before getting married and subsequently moving all over the country every few years,” says Amy Murray, a 39-year-old military wife and mother of two who is preparing to move for the fifth time in 10 years. “Direct selling was not something I really considered before getting hitched to the military, but it has worked out really well with this lifestyle and has provided an opportunity for a portable career, which is not easy to find with our lifestyle.”

Murray describes the difficulty in finding a job that pays well at all (“I went on several interviews and only ever got one offer that was half my former salary”). She stumbled on Thirty-One through a Facebook post and decided she wanted to buy in initially to break even on her shopping habit. Gradually, she decided she’d commit more time to her sales. Seven years after she started selling Thirty-One products, she’s making a six-figure income.

Aside from trying to find a way to supplement a spouse’s military income or keep busy while a spouse is deployed, several military spouses say an appealing part of joining a direct selling company is that it helps them forge relationships with the new communities they encounter with every relocation.

Consultants increasingly use social media platforms like Facebook to host virtual product sales, but there are still those who choose to host parties in their homes with the intention of turning cocktails and hors d’oeuvres into sales goals.

“What these companies promise you is sisterhood. A lot of military spouses move so much that it’s really hard to settle in, make friends, and have an outside life like work, so these teams suck people in,” military spouse Iliana Ingram says.

But sometimes that “sisterhood” is exploited. “They immediately try to be so sweet and generous so you’re blinded by what’s going on,” Ingram says. While Ingram sold LuLaRoe and Plunder, she learned she didn’t want to leverage what she considered new friendships for sales, like so many others did. “I asked everyone to join my group only once, but if they’re not interested, I wouldn’t mention it again. I didn’t want to pressure anyone to join or buy my stuff because in the long run, you’ll just lose the friends you made that way.”

Flanagan describes the kind of pressure to sell to satisfy higher chains of command within a direct selling upline composed of other military spouses or to make a purchase at a direct selling party hosted at a military spouse’s home, especially when living on a base.

“You’re invited to a party and there’s food and wine or cocktails. Next thing you know, you’re handed a catalog; then the sales pitches start. You always end up buying at least one thing, since it’s awkward not to buy something,” Flanagan says.

Flanagan, who has lived on a base in Okinawa, Japan, for two years, says there’s also an implicit obligation to support other military spouses stationed abroad. “I don’t speak Japanese, I’m not necessarily 100 percent comfortable shopping for beauty products off base, and I don’t always love the quality of things at the base exchanges. So rather than buy something from Amazon, I figure, ‘Well, jeez, let me support another military wife and buy something from her,’” she says. “We’re a captive audience.”

Joining a direct selling company doesn’t always equal success

The same issues that civilians face when joining direct selling companies also affect military spouses. Since 1996, the FTC charged 26 multilevel marketing businesses with operating a pyramid scheme, all of which were either found guilty or forced to settle out of court. According to one study on the FTC website, of nearly 350 direct sales companies, roughly 99 percent of employees lose money after accounting for overhead costs, inventory, and other fees.

“With the explosion of social media over the last few years, there’s certainly been an abundance of pyramid schemes and pyramid-like activities pretending to offer economic opportunities that may not pan out,” Mariano, the DSA president, says.

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A red flag with any direct selling company is an unusually large buy-in, Mariano notes. Ingram, a Navy spouse with a bachelor’s degree in culinary management, worked as a career restaurant manager before having a baby. Soon after Ingram gave birth, her husband embarked on a seven-month deployment. That’s when she decided to join LuLaRoe. (Her sponsor, of course, was another military spouse.)

Ingram committed to the initial $5,000 starter kit — the minimum buy-in for LuLaRoe, which doesn’t include the company’s most popular product, its leggings. She says she only lasted as a LuLaRoe consultant for roughly six months, netting about $2,000 and saying the stress was “absolutely not worth the effort.” (LuLaRoe is a notable example of a direct selling company that has been accused of being a “pyramid scheme” in a class-action lawsuit filed in 2017.)

Still, Ingram wasn’t ready to give up on multilevel marketing companies. She’d later heard about Plunder, a direct selling jewelry company that only required a $99 buy-in.

“With Plunder, there were tons of videos and resources available to you with a huge team behind you to help you grow your business without paying for that,” Ingram says. “With LuLaRoe, you had to pay to go to their leadership events or sign on to webcasts at very specific times to learn. Plus, the Plunder starter kit included a box of 12 pieces of jewelry. The worst-case scenario would be that I bought $99 worth of jewelry.”

Even if military spouses identify the direct selling company that works for them, there are complicated logistics and nuanced relationships to navigate that may make selling more difficult. For example, when living on base, military spouses are required to use PO boxes to receive and ship inventory as a security precaution.

Packages may take longer to arrive or may be misplaced before making it to consultants. (Some companies, like Rodan + Fields, do not require consultants to carry the inventory themselves. They only require consultants to handle sales, which mitigates any issues with shipping products to and from bases.)

Additionally, living on base means consultants may need the approval of the base commander, the person who decides which nonmilitary businesses are permitted to operate and compete with the on-base military retailers, Mariano explains.

Federal resources focus on entrepreneurship, not necessarily direct selling

While direct selling might provide a private sector solution to military spouse unemployment for some, the federal government is renewing its commitment to helping military spouses find work.

In February, Sen. Tim Kaine (D-VA) proposed a bill to improve and expand professional and financial services and opportunities for military spouses and their families. On May 11, President Donald Trump issued an executive order to help military spouses find work in civil services and declared the date Military Spouse Day.

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As for existing resources, Hiring Our Heroes, a program within the US Chamber of Commerce, works to provide opportunities through job fairs, workshops, and a mentorship program. Separately, the MilSpo Project, a membership-based nonprofit, connects spouses who want to further their entrepreneurial pursuits, similar to how the Chamber of Commerce connects people. And the Military Family Initiative and Spouse Programs Support, part of the Military Officers Association of America (another membership-based nonprofit group), held seven symposiums and transition summits internationally in 2017 to help military spouses reinvigorate their careers.

Rachel Ketterlinus, a three-time direct selling consultant and Army wife of 17 years, spent the better part of her marriage moving from Germany to Korea back to the United States. She spent thousands of dollars on products as a consultant at various points for Mary Kay, Thirty-One, and LuLaRoe, only to net negligible gains by the end of her direct selling career.

As her husband’s military retirement is approaching, the Ketterlinus family will again relocate, this time off base, and with that, look for new work.

“The job hunt is on for both of us, but it won’t be in MLMs for me, I promise,” Ketterlinus said during a phone conversation with Racked. “My husband just gave me the thumbs-up for that.”

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