Driving alongside Interstate 15, there are numerous indicators of Utah’s standing because the unofficial capital for multilevel advertising — from a number of headquarters in Utah County to billboards to Younger Residing’s lavender farm in Juab County.
With extra MLM companies — or, because the trade and lots of economists name them, direct promoting corporations — per capita than some other state, Utah has turn out to be the “world hub” for that line of labor, in keeping with analysis from the College of Utah’s Kem C. Gardner Coverage Institute.
The MLM mannequin usually is touted to potential sellers as a approach to earn a living whereas working from dwelling or on a versatile schedule. Nevertheless, because the Federal Commerce Fee wrote in a July 2022 article, “most individuals who be a part of professional MLMs make little or no cash. A few of them lose cash.”
There are also instances, the FTC wrote, by which “individuals imagine they’ve joined a professional MLM, nevertheless it seems to be an unlawful pyramid scheme that steals all the things they make investments and leaves them deeply in debt.”
Dozens of MLMs, primarily based largely in Salt Lake and Utah counties, immediately make use of as many as 14,000 or so individuals, and not directly make use of 1000’s extra by way of suppliers.
Younger Residing, doTERRA and different giants inside the trade additionally maintain conferences that draw 1000’s of holiday makers and their tourism {dollars}.
The Direct Promoting Affiliation, the nationwide commerce group for the trade, stated direct promoting corporations thrive in Utah as a result of the state helps entrepreneurs and stresses group.
Researchers and trade leaders additionally level to The Church of Jesus Christ of Latter-day Saints as a significant component that pulls these corporations to Utah. MLMs are so frequent within the Beehive State that there’s a well-documented joke: The acronym MLM might additionally stand for “Mormons Shedding Cash.”
Greater than 90 corporations in Utah
A 2022 report from the Kem C. Gardner Coverage Institute recognized 91 corporations with headquarters in 5 of Utah’s 29 counties, largely alongside the Wasatch Entrance.
The Salt Lake Tribune discovered information for 78 of these corporations, utilizing a state system to look. (Utah Division of Workforce Providers’ search system requires a minimum of 5 characters, however some firm names include solely 4.)
Two different corporations — Clad & Fabric and BeneYOU — seem to have closed or have been absorbed into one other group.
The Direct Promoting Administration Affiliation, the trade’s lobbying group in Utah, didn’t reply to requests to confirm the record within the Gardner report from August 2022, to see if there have been extra corporations or whether or not some companies had closed.
Disclosure limitations forestall the reporting of tangible employment counts, however the 78 corporations for which The Tribune discovered information make use of between 7,200 and 14,500 staff.
The state’s numbers don’t embody probably 1000’s extra unbiased gross sales representatives residing in Utah.
For instance, doTERRA boasts on its web site 3 million unbiased distributors worldwide. Younger Residing claims 6 million, and Zyia Lively says it has 1000’s throughout the US and Canada.
Based on DirectSelling.org, there are almost 1 million full-time direct sellers in the US, and 6.8 million individuals who promote half time.
The Direct Promoting Affiliation says greater than 163,500 individuals are concerned within the trade in Utah.
Conservative girls, missions and self-reliance
So why do direct promoting corporations thrive in Utah?
It could possibly be the state’s repute for being business-friendly. Because the Governor’s Workplace of Financial Alternative touts, Utah “continues to be on the forefront of progressive and awe-inspiring financial alternative initiatives.”
Gov. Spencer Cox has stated Utah set the bar for entrepreneurship and rising startups.
Others — from WalletHub to U.S. Information & World Report back to CNBC — routinely rank Utah as top-of-the-line states for enterprise.
The Direct Promoting Affiliation stated in a press release that corporations within the trade have “discovered Utah to be welcoming for a lot of causes, together with its inviting enterprise environment for entrepreneurs and the deal with group that’s prevalent all through the state.”
The nationwide group has a number of members primarily based in Utah, together with Nu Pores and skin, Stampin’ Up! and USANA.
One other clarification could also be one thing many affiliate with the Beehive State: The Church of Jesus Christ of Latter-day Saints.
Deborah Whitehead, an affiliate professor of spiritual research on the College of Colorado, concluded after analysis that the Salt Lake Metropolis-headquartered religion is one attainable hyperlink between MLMs and Utah.
Whitehead dove into the subject after wanting on the rise a decade in the past of the “mommy weblog” — significantly amongst girls who have been Latter-day Saints and evangelical Christians — and noticing many have been additionally concerned with MLMs.
She discovered direct promoting might be enticing to conservative girls basically.
“There’s this bind that’s created for lots of girls in these conditions,” Whitehead stated. Traditions in some conservative households say it hurts households for moms to work outdoors the house, she stated, however the financial actuality is that almost all households can’t survive on a single revenue.
MLMs function an answer, Whitehead stated, by permitting girls to contribute by having a enterprise they will run with out leaving the house.
That meshes with what direct sellers informed The Tribune in 2022 as they lauded the pliability of their hours and talent to name the pictures in how they function their enterprise.
Latter-day Saint experiences and doctrines add to that, Whitehead concludes in an article printed early final yr within the journal Mormon Research Evaluation.
“When younger individuals go and serve missions,” Whitehead stated, “they arrive again with a sure set of expertise that really translate rather well into direct gross sales.”
Latter-day Saints who serve volunteer church missions turn out to be snug going door to door to ship a pitch that they’ve memorized and polished, she stated. In addition they get used to rejection.
Members of the religion are also community-oriented, Whitehead stated, giving unbiased sellers a robust community they will draw on to construct their enterprise.
As well as, she pointed to the doctrine of self-reliance, a theological advantage that interprets into storing meals, getting out of debt and sticking to a funds — but in addition can imply beginning your personal enterprise.
Entrepreneurship is “not one thing each Mormon has to do,” Whitehead famous, “however the church supplies sources to assist members begin their very own companies if they want.”
Even leaders inside the direct promoting trade have acknowledged the hyperlink between the religion and MLMs. The CEO of Completely Posh informed KUTV in 2016 that the prevalence of direct promoting corporations “should have one thing to do with the way in which LDS tradition works.”
Whitehead burdened the church has acknowledged the darkish aspect of direct promoting, akin to actions documented within the 2021 docuseries ”LuLaRich.” The four-part collection chronicled the rise and fall of the MLM leggings vendor LuLaRoe, whose founders are Latter-day Saints.
“Inside the LDS Church,” she stated, “there are critiques of the tendency to take the theological doctrine of self-reliance and perhaps distort it into purely materials success.”
Whitehead added that church leaders have cautioned towards falling prey to the concept making plenty of cash is the equal of non secular well being.
The church even up to date its on-line Basic Handbook — which incorporates directions for lay leaders and members — in 2021 to pointedly warn Latter-day Saints about unlawful enterprise schemes, particularly those who search to make the most of their membership.
“Affinity fraud happens when an individual exploits one other’s belief or confidence to defraud her or him. This may occur when each individuals belong to the identical group, such because the church,” the rules state. “It might additionally occur by abusing a place of friendship or belief, akin to a church calling or household relationship.”
The handbook makes clear that “members could not state or suggest that their enterprise dealings are sponsored by, endorsed by, or symbolize the church or its leaders.”
Megan Banta is The Salt Lake Tribune’s information enterprise reporter, a philanthropically supported place. The Tribune retains management over all editorial choices.
Editor’s observe • This story is out there to Salt Lake Tribune subscribers solely. Thanks for supporting native journalism.