Tupperware parties go away as companies ditch MLM schemes

The end of Tupperware parties? Companies move away from MLM schemes

What you probably already know: Goodbye multi-level marketing schemes, and hello affiliate programs. Companies that have relied on multi-level marketing systems to sell products often aimed at women, like Tupperware, Mary Kay and Avon, are abandoning those models for a new system that allows people to get a cut of the products they sell. Companies including Bodi (formerly known as Beachbody) and Rodan + Fields have shifted away from MLM in favor of affiliate marketing. Previous models had people kicking portions of their sales up the ranks to the people who recruited them.

Why? The Beachbody Co.’s executive chairman told the Wall Street Journal that the old MLM model is “outdated and unsustainable,” and the change will allow the company to reduce its workforce by one-third. MLM companies also face increased scrutiny from the Federal Trade Commission as they can develop quickly into models where those at the lowest levels of the pyramid make little to nothing, and invest their life’s savings, while enriching those at the top. Frequently, former members call these organizations “scams” and these groups often target women and minorities, according to a Georgetown Law study.

What it means: Affiliate programs allow participants to get incentive-based payouts when they successfully sell products, essentially getting commission on their sales. So when that influencer on Instagram is showing off that new cat toy, and then you buy it from the link in her bio, she gets commissions. It’s a pretty standard part of the economy now, and even the New York Times brings in millions every year in affiliate payments from its Wirecutter publication. These tend to draw less scrutiny from regulators and can be lucrative for those with large audiences.

What happens now? While newer brands might be shifting their models, Avon and Amway don’t appear to be moving away from the MLM system anytime soon. Amway has a whole section of its website dedicated to explaining why it isn’t a pyramid scheme (you doth protest too much?) and has gotten a pass from the FTC because members don’t get paid when they recruit new members and people can get their money back if they fail to sell the products. Herbalife is also doubling down on the MLM system, telling the WSJ that it is “investing in people” as a mode of selling and distributing its nutrition products.