Multi-Level Social Media

By Gwyneth Easley

Four years ago, Taylor McCoy was sitting in her dorm room scrolling through Instagram. McCoy, like many other college freshmen, had fallen victim to “the freshman 15.”  As she scrolled, she saw a friend of a friend promoting a product that caught her attention: The Arbonne 30 Days to Healthy Living. McCoy, intrigued with the product, navigated out of instagram and began texting her father.

“Dad, I found something that I want to try but I don’t have any money right now. Will you buy it for me?”

“What is it?”

“It’s the Arbonne 30 Days to Healthy Living. It’s a little bit expensive though.”

“I’ll make a deal with you. I will buy this for you, and then you can sell the products until you make enough money to pay me back.”

“Deal.”

So McCoy contacted the friend of the friend and ordered the products. Then she signed up to be an Arbonne Consultant.

McCoy began using the products: drinking the protein shakes, brewing the detox teas and taking the digestion pills everyday. After a few weeks McCoy realized the products were working for her. She felt sharper, more energized and she was losing the weight. 

After posting about her success on Instagram, McCoy experienced an influx in her sales. Her friends who had originally poked fun at her new business, were now ordering the products.  In a month, she had made enough money to pay back her father.

“I realized that this was a way I could make money in college,” said McCoy. “It was flexible, I liked the products and I had already made a lot of money doing it.”  McCoy stayed on as a consultant and used the money she had made to fund her life in college. 

Multi-level marketing through social media is a new way that many people, especially college students have found that they can make extra income every month. 

Before social media, multi-level marketing consisted of someone signing up to sell a product then inviting all their friends to a party where they advertised their products. Now with social media, consultants don’t have to wait for parties to market products to their friends and acquaintances. They can do it with just a few taps over their phones. 

According to McCoy the secret to selling products via Instagram is to limit how many times a day you are actually promoting the products. 

“No one wants to feel like they are being sold to” she said. “They want to see you as a person, and then see you using and achieving success with the products.”

One in every four of McCoy’s Instagram posts is related to Arbonne. Then McCoy’s friends and her fellow Arbonne consultants will “like” her content which makes her look more appealing to potential new customers who come across her profile on social media.

McCoy is not the only student who has figured out this selling model. University of Oklahoma junior Taylor Thibodeau sells Monat hair products to pay her rent and college tuition.

“I began selling Monat when a friend of a friend reached out to me on Instagram” Thibodeau said. “I tried to products, realized I liked them and then I signed up to sell it.” 

Where public perception of these companies begins to turn negative is recruitment. According toThibodeau many people have reached out to her via social media and have accused her of being in a pyramid scheme.

“I’m not nor have I ever been in a pyramid scheme” Thibodeau said while laughing. “First of all pyramid schemes are illegal so my company would have been shut down if that were the case. Second of all, I don’t make money by recruiting new people I get paid for training them.” 

On New York Attorney General Letitia James’s website, she explains the difference between the two. A pyramid scheme “involves the sale of products or distributorships in an attempt to show legitimacy.” The profits in a pyramid scheme are dependent on the recruitment of new people to invest in the company rather than the sale of the product. 

  Multi-level marketing, on the other hand, are when products are sold through a network of distributors and salesmen who earn commission on the sales they make. Recruitment is a factor in multi-level marketing, but in order to stay legitimate the majority money and the emphasis of the company cannot be in recruitment. 

Pyramid schemes and multi-level marketing both share a pyramid like structure so they can appear similar, and it some cases a multi-level marketing business can be a pyramid scheme in disguise.

One famous case of a multi-level marketing business that is currently being sued by the Washington State Attorney General Bob Ferguson is LuLaRoe. A lawsuit that is bringing a bad name to multi-level marketing.

“I think that the investigation of LuLaRoe is definitely a big part of the negative perception of multi-level marketing” Thibodeau said “In fact, it wouldn’t surprise me if that was one of the factors that is causing social media platforms like Instagram to crack down on people who make their money through social media.”

The crack downs Thibodeau is referring to are Instagram proposing to take away the feature that allows users to view how many likes a picture receives and the feature that allows users to see who is viewing their stories.

The initial lawsuit against LuLaRoe was filed in January 2019 and Instagram began testing out removing likes and views in April 2019. 

For social media influencers and sellers this proposed change is extremely worrying, because seeing who is engaging in the content they are promoting allows sellers to know who is interested in their products and who they should reach out to. 

“It feels like a shot at people who influence and sell products over social media,” McCoy said. “It takes away the primary tool for showing that people like and use our products and our tool for measuring interest in our products.”

According to McCoy, around 90 percent of her sales come from Instagram. From that 90 percent, about 40 percent of those sales comes from her reaching out to her follows because she has seen that they have interacted with her content.

“If I can’t see who is interested and engaging in my content, I won’t know who to reach out to and I won’t make that sale” said McCoy“This is the income I have lived off of in college, and if a large portion of it goes away next semester I don’t know what I would do.”