Monday, March 2, 2015

My very brief flirtation with multi-level marketing...

Though I'm sure I could find plenty of things to write about that might piss people off today, I've decided I'd rather share a memory from 1994.  It was late August and I was a brand new college graduate.  I had spent the summer working at a Presbyterian church camp, living in a platform tent.  Then I went back to my small hometown and lived with my parents, who were none too pleased to have me back in their house.

I needed to find a job.  I wanted a job that would pay enough for me to move, but I definitely needed a job that would allow me to pay my bills.  Back in 1994, we didn't have Internet.  While I had taken part in job search seminars and job fairs, nothing had panned out.  I was armed with a degree in English with minors in speech and communications.  I wanted to find a job that would allow me to use my writing skills, but I didn't know where to start.  And my parents were really piling on the pressure for me to GTFO.

I picked up the newspaper and saw a couple of ads for "public relations" jobs in Richmond, Virginia, which was about 90 miles from where my parents lived.  The ads were kind of vague, but I was desperate.  I picked up the phone and called and scored two interviews, one at 9:00am and the other at 1:00pm.  Happy about my success, I went out and bought a new suit (it was red and black) and a pair of heels.  It didn't occur to me to be suspicious about the "jobs" I was applying for, even though the first guy I spoke to said he wanted me to come in and meet him so "we could see if we liked each other".  The second guy told me to make sure I told the receptionist that "Kevin" had sent me.

Bright and early the next morning, I got in the ugly beige pickup truck my dad let me drive.  It was a hideous Nissan with a camper shell and a non-functioning cassette/radio, but it ran surprisingly well.  I drove to the first appointment.  The place was an outfit called United Consumer Club (UCC) and it was located in a strip mall.  I had never heard of UCC before and went into the showroom like an innocent lamb.  Unfortunately, I was about 15 minutes early.  The proprietor, a slim built man with dark, beady eyes, and a receding hairline invited me to leave and come back at 9:00.  He didn't seem very friendly.  That probably should have been my first clue.


I came back at 9:00 and was given a standard job application to fill out.  Looking around, I could see there were a number of other people there for an "interview" for the "public relations" job that paid $22,000 a year.  There were whiteboards everywhere.  I started to get suspicious.

We were all invited to sit at a table, where we watched a video about United Consumer Club.  You may know this business better as DirectBuy-- a few years ago, their ads were all over TV.  In the cheaply produced video, we listened to people talk about how much they loved being members of UCC, where they could pay several thousand dollars for the privilege of buying furniture and building supplies at wholesale prices.  I noticed a couple of people got up and left while the video was running, but I had driven 90 miles and needed a job.  I was also curious.

After the video, the proprietor gave us a spiel about UCC and talked about the position he sought to fill.  Basically, it would be the successful candidate's job to schmooze with potential club members, trying to get them to sign up.  The entire presentation was about money.  I didn't like the proprietor and had a feeling I wouldn't want to work for him because he seemed sleazy.  But I stuck around for the actual interview, anyway.

When I finally sat down across from him, he shook my hand, looked me in the eye with his beady little peepers and asked, "Why should I hire you?"

Feeling uncomfortable, I asked "Uh, before we get started, is this some kind of hard sell operation?"

The guy immediately got pissy and said "I REALLY don't have time to answer your questions right now.  Do you want to interview for this position or not?"

I said, "I really would like to ask a couple of questions first."

He said, "Well, based on what I'm seeing, you won't be a good fit for this job."

"I guess you're right." I said as I got up to leave, thinking I had just totally wasted my time.  Years later, I realize that it wasn't actually a total waste of time, since I learned something from the experience and came away with a good story.  I forgot all about UCC until years later when I saw all the DirectBuy ads on TV.  Back in 1994, UCC prided itself on not using advertising.  I guess they changed their minds.


Glad I didn't get the job....

I went to a local mall to pass the time before my 1:00 "interview".  I was feeling bewildered and a little stung.  Little did I know that the morning interview would seem positively normal compared to what was in store for me that afternoon.

The "interview" I was attending was for a multi-level marketing firm called Equinox International.  Equinox has long since been out of business, but back in the 1990s, it was a burgeoning company that had celebrities like Kenny Loggins and Ted Danson shilling for it.  Of course, I didn't know this when I arrived at the very respectable looking high rise office building for my "interview".

I walked into the posh looking office and told the receptionist that Kevin had sent me.  She invited me to sign in and take a seat.  Once again, I noticed that others were there to be interviewed, too.

Kevin came out to meet me.  He was tall, handsome, and very Nordic looking.  I noticed he wore an expensive looking suit.   He asked how much money I hoped to make.  I said "Low 20's."  Remember, this was 1994.  Kevin just smiled at me as he led me to a room where there were rows of chairs set up.

At 1:00, Kevin and his very attractive partner, Karen, got up to make their presentation.  I noticed that Kevin and Karen were both really good looking and well spoken as they talked about Equinox, a company that made environmentally safe cleaning products and water filters.  They expertly explained why products one could buy in the store were unsafe.

First came the water filter demonstration. Kevin showed us two containers of tap water, one filled with ordinary water and the other filled with water that had been run through an Equinox water filter. Kevin put a chemical in the ordinary tap water that turned it yellow, while the filtered water stayed clear. I had to admit it was an impressive display. Kevin told us that we were poisoning ourselves everyday with ordinary substances like tap water. Equinox had products that would keep us and our loved ones safe. And we could help save humanity by making the products available to the world! Who wouldn't want that job?

Then Karen took the helm. She sprayed ordinary breath spray into a lighter.  The alcohol in the spray caused the flame to torch out impressively.  Then she did the same thing with water-based breath spray made by Equinox.  The flame was doused in a second.  Hmmm... not quite as cool as Kevin's presentation, but still worth looking at.

Karen and Kevin took turns telling us about how we'd make money signing up other people, and how they'd make money signing up people.  I distinctly remember them telling us it wasn't a pyramid scheme.  Only it was.  Equinox has been shut down and was sued by more than six states for being an illegal pryramid scheme.  Virginia is among those states. 

Next came the videos.  First, we learned about Bill Gouldd, the company's multi-millionaire founder.  He lived in a huge mansion, drove expensive cars, spent time with beautiful women... and all of this and more was within reach if we sold his products.  Gouldd himself had started out as a lowly salesman who had found the secret to success.  We could learn the secrets by taking (and paying big bucks for) his seminars.  The American dream could be ours by believing in the program and investing our money in Equinox.

Next, there was a video by Kenny Loggins, who told us of his now ex wife and her many medical problems that were alleviated by alternative medicine, a healthy environment, and all natural products like those peddled by Equinox distributors.  I have always enjoyed Kenny Loggins' music, but I have no idea why he got tangled up with this organization.  It kind of makes me wonder what kind of person he is.  Still, I have to admit that at the time I was really impressed... but still skeptical.  I knew they were going to ask me for money and money was something I REALLY didn't have.


Kenny Loggins' video for Equinox.

I noticed there were people laughing at all the "right" times.  It became clear to me after the video that there were, indeed, Equinox people interspersed in the audience to "help" the facilitators.  The meeting was getting very long and bizarre... and towards the end, it seemed almost cultish.  There were even a few people jumping up and dancing around, cheering, singing the praises of Equinox... very weird.  Other distributors approached me and asked me what I thought.  They were friendly-- too friendly-- and most of them were attractive.  I liked it and found myself trying to think of a way I could come up with the $500 I would need to get started by "renting a desk" (people paid $500 simply to be allowed to rent a desk in the office).  Thank God I have common sense, and that there was a healthy measure of it on hand that day.  I could have landed in some real trouble.  Equinox is the only "job" I've ever considered that actually required applicants to pay a $20 "application fee".  

As I was leaving, Kevin asked me if I wanted to sign up.  He was very charismatic and I have to admit, I was still thinking about it. But that's exactly what I told him.  I said I had to think about it.  He winked at me, as if he just knew he was God's gift to women. 

Then he said, "Well, if I don't hear from you in a couple of weeks, I'll give you a call..." As if perhaps I'd be waiting by the phone for the sound of his voice.

Thankfully, he never called and I was too afraid to risk borrowing money to get involved in Equinox.  I hate selling things anyway, and the idea of trying to get people to join that program left me cold.  But I have to admit, it was a sexy organization and the presentation was very seductive.  I could have been sucked in.  I can see how people might leave $60,000 jobs to go to work for multi-level marketing firms.

Years later, I researched Equinox International online and came to realize what a big bullet I dodged by not getting involved.  People lost their shirts.

In 2003, I read and reviewed Robert Morgan Styler's book Spellbound: My Journey Through a Tangled Web of Success.  I am reposting part of that review below for your edification.

Rob Styler, like me, is a Returned Peace Corps Volunteer. At the beginning of this book, he had just come back from his stint in Guatemala, where he met and married his first wife, Marina. Styler had come back to the States with his wife with the intention of earning more money so that he could move back to Guatemala, because he had bought fifty acres of land there. However, Marina had some medical problems that required two surgeries. Because the couple had no health insurance, they quickly found themselves $25,000 in debt. One of Marina's medical problems would be improved if she got pregnant, which she quickly did. But pregnancy required prenatal care and Marina's OB-GYN refused to take care of her because she lacked health insurance. Styler decided that he needed quick cash. Like me, Styler consulted the want ads. Like me, Styler saw several ads that looked promising. He called and left a message. Later, he was invited to an evening meeting for his "interview" at an international environmental marketing firm.

Styler showed up for his interview with long hair, a beard, wearing Birkenstocks and his best Peace Corps T-shirt. He was confused when he saw about sixty other people milling around the reception area, also there to be interviewed. But then they were all ushered into a big room where they were told they would be given a group interview. A jovial man stood up and gave an impressive demonstration of some of the products the "firm" sells. He also explained the concept of the pyramid scheme (although the man is careful to emphasize that this is NOT a pyramid scheme).

By the way, for those of you who don't know what a pyramid scheme is, here is dictionary.com's definition of the term:

Pyramid Scheme

A fraudulent money-making scheme in which people are recruited to make payments to others above them in a hierarchy while expecting to receive payments from people recruited below them. Eventually the number of new recruits fails to sustain the payment structure, and the scheme collapses with most people losing the money they paid in.

"Multi-level marketing" seems to be the more politically correct term for the pyramid scheme nowadays. After reading Styler's account of what happened to him-- he was recruited to join the company and asked to pay a huge amount of money-- and what he did to others-- asked others to join the company and pay huge amounts of money-- I would conclude that Equinox International most certainly did qualify as a pyramid scheme!

After the explanation of how individuals "make money", the group watched videos highlighting the company's president, Bill Gouldd (the extra d is for dollars- he added it on the advice of a psychic). Styler noticed the energy and excitement in the room and caught it himself. After the presentation, he wanted to know how to sign up. Then he was told it cost twenty dollars to apply for the "job" and $5000 to start out as a "Manager" with a lot of product or $500 to be a "Dealer". Styler said..."But I don't have any money." The enthusiastic people at Equinox International say, "That's okay, Rob. You've got OPM." That's other people's money. The company encouraged enrollees to hit up family members, take out loans, max out credit cards... do whatever they had to do to get that money.

Styler got the money and went into business. He found a couple of Spanish speaking guys to hit the Spanish speaking market and, after a great deal of concentrated effort and lots of OPM, ended up being among the rare people who actually made money at Equinox. But along the way, he saw people lose their shirts. He also pulled some amazing financial stunts himself, especially considering his terrible credit. Equinox encouraged its people to exude the illusion of wealth, even if they were days away from eviction from their apartments, they had no idea where their next meal was coming from, and their cars were running on fumes.

People working at Equinox rented their desks for $500 a month, paid for their own newspaper ads, and paid for their own phone lines. Those who opened up offices had to pay for the leases themselves; nothing was covered by the company. Moreover, enrollees had to attend and pay for training seminars put on by Bill Gouldd. Bill Gouldd was frequently abusive to Equinox enrollees, never hesitating to humiliate them publicly. Styler himself was the victim of Gouldd's abusive barbs several times. I was shocked reading what this man endured. And yet, here he was, writing about how he was an academic all star, former athlete, Returned Peace Corps Volunteer, the son of a doctor and stepson of a professor, and now he was in this huge mess.

Styler divorced Marina and married another Equinox enrollee. Bill Gouldd performed the ceremony. Styler sent $50 to the Universal Life Church so that Gouldd could become an ordained minister.  Gouldd was late for the ceremony and treated Styler with contempt on his wedding day. The second marriage lasted about six months; however, Styler managed to remain friends with both his first and second wives. At one point, he lives with both of his ex wives, his first ex wife's new husband, his son, and his son's half-brother. Very weird, in my opinion, but great for them if they can be friendly enough to live together.

Gouldd also made a point of sleeping with the female significant others of top earners within the company. When anyone questioned Gouldd's abusive tactics, Gouldd would immediately cut them down. Like an overly controlling lover, Gouldd was quick to keep his people in line. As a reader I was both fascinated and horrified by Gouldd's abusive treatment of fellow human beings. I was also shocked that people would allow him to treat them that way... and PAY for the privilege! Then I was eternally grateful that I didn't get involved with this outfit myself.

Styler fortunately managed to pull out of Equinox before its big downfall. When he informed Gouldd of his decision, he stated that the business plan was too hard for most people to make any money. Also, Styler was sent to Mexico to start an Equinox program there; however the chances of the program succeeding there were nil since the economy in Mexico was so weak. Gouldd was expecting Mexicans to purchase company products at the same prices they were selling for in the United States and he had similar expectations of distributors.

In 2000, Equinox International was sued in at least eight states for illegal pyramid scheme operation. Bill Gouldd has been barred from ever having anything to do with a multi-level marketing business in the United States again.

I found this book very interesting and timely. How many of us have looked in the employment section and seen those vaguely worded ads for jobs that say "Wild and crazy, rock and roll atmosphere! Need twenty-five people today!" and wondered what they were for? I read the book in about two nights; since I actually went through an "interview" with Equinox, I could relate to Styler's initial experience. In fact, I remember being very impressed with the slick presentation I saw. Thank God I had a healthy measure of common sense on hand that day as I sat through the Equinox presentation and didn't get involved with with that scam. Instead, I got out of my parents' house by joining the Peace Corps!

It's pretty obvious to me that this book was published inexpensively. The font used is large, the paper is cheap, and the artwork is kind of cheesy. It looks like maybe Styler self-published the book-- not such a bad thing, but obvious that he's not an established writer. However, the book is well-written and his story serves as a great warning about multi-level marketing schemes. It's definitely a revealing book on a subject you might not otherwise think to read about.





                  

6 comments:

  1. great topic! If I didn't have y studies to worry about and had a sufficient supply of meds to keep me awake but very loopy, i could start typing this very second and in a week or so end up with a book about the relatives on my dad's side and their various experiences with pyramid schemes and mLMs. Nukin, Xango, LivU, Shaklee , NeoLife, you name it, someone in my family has peddled it. I'll seriously blog about it when my next semi break comes. we're studying the quarter's final exams, for whcih we still have a couple of weeks but will be here before we know it. We've had more family fights over competing MLMs than anything else. my nuclear family has nothing to do with any of it except when someone gets mad at us for not buying or investing. it's a hott and a half..

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    1. I read a bunch of books about MLMs about ten years ago. They're pretty fascinating. I'm so glad I didn't get involved in them, though. They are bad news from a financial standpoint, especially if you aren't good at sales.

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  2. I wouldn't say my relatives are necessarily good at sales or at business, and there are too many of them selling to the same market, and selling similar and competing products for them to actually be successful. They have no trouble with the aspect of being pushy that's a requirement, though.

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    1. Yes and that's another reason why I'd avoid it. Despite contrary belief, I don't enjoy being pushy and manipulative.

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  3. I lost over $30,000.00 in 96 signing up as a manager. Desk rent, seminars, ads, clothes, the whole deal.. I did meet a few awesome people I'm still friends with. Good for you!

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    1. Wow... that sucks! I have read about a lot of people who lost money trying to make a go of it with Equinox. I have to say, even though I don't think all MLMs are like Equinox, just attending that first meeting was enough to scare me away from MLMs. I don't even want to buy anything from people involved with them.

      I'm glad you did at least manage to make some friends... and while losing $30,000 is an expensive lesson, it sounds like you learned something, too.

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