The media rarely fails to surprise me in their ignorance and sheer laziness when reporting on the topic of multilevel marketing, and alas, USA Today is no exception. Today they published an article Many in multilevel marketing sales find it hard to earn much that was somewhat critical of MLM, and attacked two companies in particular – Amway and Fortune Hi-Tech Marketing. It’s so full of poor journalism, errors, misconceptions, and downright deceit I don’t quite know where to start in response.
(note: I’ve focused only on Amway here and not covered the article’s discussion of Fortune Hi-Tech Marketing as I know little of how they operate)
A good place is probably the various sins of omission, perhaps most obvious with a glance at a calendar. Why do I say this? Well, the journalist, Jayne O’Donnell, cites three former Amway distributors in the piece – husband and wife Jim & Lori Wittlich and Jack Tucker. The Wittlich’s report they were with Amway for two years, ending in 2000. Tucker says he was a distributor until “the late 90’s“.
USA Today has clearly has missed the fact that it’s currently the year 2011! More than a decade has passed since these folk were involved with Amway. Can you imagine someone writing a story on say, General Motors, and talking to customers and employees from more than a decade ago to get a picture of the company? Why wouldn’t you interview current or recent distributors? Are they that hard to find? The only reasons I can think of do not reflect well on either Ms O’Donnell nor USA Today.
Yet that’s one of the lesser sins of omission.
The piece also cites Roland Whitsell, who is described a “a former business professor”. I was unable to find out much information about Mr Whitsell, he’s remarkably unremarkable on Google. He claims to have been researching multilevel marketing for 40 years , but alas he doesn’t have a single published academic paper on any topic showing in google scholar, let alone any papers on multilevel marketing. We do learn however that he is an associate professor at Volunteer State Community College. That’s some CV you have, professor.
So one has to ask – why did they interview Roland Whitsell? Why not Professor Charles King, Professor of Managerial Studies at the University of Illinois, who has quite an extensive list of publications, including a book entirely about multilevel marketing – The New Professionals: The Rise of Network Marketing As the Next Major Profession. If they wanted an academic who has specialised in Amway, then they may have considered Professor Dominique Xardel, former head of one of Europe’s most prestigious business schools, ESSEC, and author of the book The Direct Selling Revolution: Understanding the Growth of the Amway Corporation.
But they didn’t ask either of them. Instead they chose a non-descript associate professor, with no publications to speak of, from a Tennessee Community College.
Why is that?
But let’s not stop there. They also cited Pat Slaven of Consumer Reports, on the value of Amway’s SA-8 powder. In 2010 they apparently evaluated it and didn’t rank it so well. What USA Today fails to also report is that a few years earlier they compared SA-8 not with standard washing powders – but with environmentally friendly washing powders only. SA-8 came out well on top, scoring 99 out of 100, 12 points higher than the next best competitor.
No mention of that in the USA Today article.
And it continues …. USA Today goes on to compare Amway’s premium Nutrilite Double X, at $75 for a month’s supply, to what they term GNC’s “most comparable product” Ultra Mega Green multivitamins, at $40 for a 60-day supply. They may be correct in stating Ultra Mega Green is the “most comparable product” to Double X, but for some reason they neglect to mention that Amway has another product, Nutrilite Daily, which is Amway’s “most comparable product” to Ultra Mega Green. It’s price? $11.30 for a 3 month supply – significantly cheaper than the GNC brand.
And yes, there’s even more.
They quote Amway’s “average income” of $115/mth, as given in the Business Reference Guide and state it is for “active” distributors, which they claim is IBOs who “get at least one bonus check or make one sale or meeting a year.” Yet another sin of omission. It includes any IBOs who *attempt to make a sale*, not who actually make a sale. For some reason, USA Today has decided to omit the word “attempt”. Join Amway, ask your brother if he wants to buy an XS. He says no. You decide it’s all too hard and go back to watching TV – voila, you’re an active IBO. Tell me folks, is $115/mth a good or a bad income for that? But of course, you can always have fun with statistics. You don’t even have to omit words that change definitions quite drastically.
And we can go on. They –
- quote (associate) Professer Whitsell claiming that “You’d be hard-pressed to find anyone making over $1.50 an hour” (here’s some help, Professor) and completely ignore industry statistics collated by the Direct Selling Association
- claim that people are “effectively required to purchase products and event tickets from the high-level distributors” – which is a little hard to reconcile with the statistics, reported in the TEAM vs Quixtar lawsuit in California, that half of distributors never even place an order after registering, let alone attend events!
- fail to clarify that the tools and training which the (decade ago) IBOs refer to purchasing weren’t even sold or offered by Amway but by 3rd party companies
- fail to note that the California judge has rejected the initial attempt to settle the Pokorny & Blenn class action, noting that a major chunk of the settlement with Pokorny & Blenn is simply to pay their lawyers!
But seriously, interviewing people who were reps more than a decade ago?! Do we really need to say anything else about this article?
UPDATE 2011-02-09: MLM Attorney Kevin Thompson has also written a good response