The Political Causes and Consequences of MLM Participation

• In Event: Corporate Politics in American Political Economy

Abstract

Multi-level marketing companies (MLMs) have been a persistent feature of the American business landscape since the 1880s. Although the first MLM was formed in 1886, MLMs rose to prominence following World War II, and many have become well-known, including Tupperware, Amway, LuLaRoe, and Herbalife. MLMs are distinct from other corporations because they primarily sell through independent distributors, and those independent distributors typically earn more income through recruiting other distributors (“downlines”) than they do by selling products. Although over 20 million adults in the US are current or former MLM participants (AARP), and about 6.2 million Americans are currently participating (Direct Sales Association), very little is known about how the politics of MLM recruitment or the effect of MLM participation on political identity and political behavior.

In this paper, we begin to lay the foundation for a longer-term project investigating both how politics and government affect MLM recruitment and how MLM participation influences identity and political behavior. In the broader project, we argue that recruitment is driven by the intersection of market failures, failures of the social safety net, and the unique pressures faced by women and minorities. We argue that participation will affect identity and behavior because MLMs are also characterized by the close relationship and frequent communication between the company (“home office”), the person who recruited the distributor to sell (“upline”), and the distributor. The relationship and communication styles are so frequent and so replete with identity cues that they are often described as being cult-like (Montell 2021). Additionally, MLMs are also known to push distributors to isolate themselves from friends and family who do not agree with their participation, which may remove counter-influences to identity change. We expect the closeness of this relationship, the frequency of communication, and the exclusion of non-believers to result in identity convergence within MLMs. Because MLMs frequently reiterate that distributors are small business owners (despite them having little control over their business and almost always losing money), we expect this convergence to be around an identity of small business owner and right-wing politics popularly associated with small business ownership.

There are many popular accounts of MLMs - both positive and negative - but very little systematic study of the participants. In this paper specifically, we will present a preliminary theoretical model of both of these dynamics, and new survey data that will begin to identify if and how MLM participants differ from other business owners and the general population politically and demographically. To our knowledge, this is the first nationally representative survey linking direct sales to political preferences and identity. Beyond descriptive differences, we also explore how MLM participation affects conceptions of self and business-related policy attitudes.

Authors

• Ellen M. Key, Appalachian State University

• Jane Lawrence Sumner, University of Minnesota, Twin Cities