Can Market America Save Your Soul? The uneven promise of multi-level marketing
“Do you want to see it?”
She’s screaming her head off, the little brunette in the pantsuit, the one who’s been pacing the stage and clicking off PowerPoint slides on the giant projection screens for the last half hour, the one who’s been’… emoting through her headset microphone to the assembled crowd in the Greensboro Coliseum, a gathering perhaps 20,000 strong. They’re seated all the way to the upper decks that get curtained off for smaller events like the women’s ACC Tournament or the circus.
It’s fairly packed at this moment and a low, pre-recorded drumroll brings them all to their feet while the little brunette on stage implores the crowd’… wills the crowd’… into a frenzy of anticipation.
“Do you want to see it?” she screams again.
And then’… boom’… a crash of digitized cymbals’… a burst of fireworks at the foot of the stage’… crazy swirls from the spotlights that finally train on the projection screens above.
And the people clap and scream as they see’… unveiled for the first time’… the new web portal for NutraMetrix health supplement products.
“Here it is!”
Her name is Michelle Roberts; this is her second convention with the company. And after her unveiling she’s still pretty worked up in the dim corridors backstage.
“I have such passion and belief in the Nutraceuticals division,” she says, breathing perhaps a bit heavier than normal and her eyes lit up with fervor. “The reason I’m not afraid to speak on stage is because I believe so passionately in what I do and how we’re going to change the medical industry.”
Changing the medical industry is but one plank in the platform of the company that dare not speak its name. Call it Isotonix, SNAP, Royal Spa, Java Trading Co., Motives Cosmetics, PetHealth or any one of a dozen product lines, but it’s all the same thing: Market America. And it wants what every other multi-million dollar international company wants: to grow exponentially.
Except Market America isn’t exactly like every other multi-million-dollar international company. For one it’s driven by roughly 125,000 independent distributors who operate their concerns as home-based businesses, many of them people like Michelle Roberts who apply ferocious zeal to the cause.
“I’ll get up in front of a hundred thousand of them if that’s what it takes,” Michelle says.
For another, Market America is more than a company. It’s a lifestyle’… a culture’… a promise made from the power of perseverance and unwavering faith in the system.
And this is their annual convention.
Here’s how it works:
There are things every household needs, things that are regularly purchased for the functioning of that household – detergent, plastic wrap, light bulbs, shampoo and deodorant – or maybe it’s something you didn’t know you needed, like herbal supplements or high-end skin products’… it doesn’t matter. Suppose you could order these things at cost from a centralized distributor and get a kickback on what you spent. Suppose further you could cut your friends in on the deal and get a kickback on what they spent. Now imagine your friends going out and doing the same thing, with a piece of everybody’s money coming back to you.
The business model is known by many names, some of them unflattering. But the current terminology is multi-level marketing, or MLM.
Proponents of MLMs say that the companies afford them passive income and hassle-free lifestyles – both big selling points for recruitment. Detractors say that most people who get involved actually lose money while only a small percentage at the top of the pyramid clear the serious dough.
Whatever the case, Market America is one of the big dogs. Founded in 1992 in a two-bedroom apartment by JR Ridinger, who had previously sold for MLM granddaddy Amway, the company’s 2005 stats claim $360 million in sales, with 125,000 worldwide distributors moving a field of over 700 products.
Market America went public in 1994, but in 1999 JR Ridinger and stockbroker Gilbert Zwetsch agreed to pay about $2 million in settlements after allegations that they fraudulently inflated the price of the stock. Ridinger’s share of the tab was just over $400,000, and he has called the situation “a misunderstanding.”
In 2002 Ridinger led a move to buy up the stock and today it operates as a private company. Its most recent legal woe is a lawsuit brought against it by Steve Sawyer, a former director, in March 2006 concerning his severance package, a case that has yet to make it to Guilford County Superior Court.
It’s Saturday, Day 2 of Market America’s 14th annual convention in Greensboro, the company’s hometown. It’s a big deal: Andy Aldridge, director of public relations for the company, says they sold in the neighborhood of 20,000 tickets for the four-day event, $260 a pop, including a seat at Saturday night’s banquet at the Sheraton Four Seasons. Convention tickets sans banquet seating run $195 American.
Attendees come from the United States, Canada, Taiwan and Australia – the countries where Market America operates. They will begin expansion into Hong Kong in the next year. The event, part variety show, part infomercial, part motivational conference and part evangelical revival, is said to have a $20 million impact on the city.
“The coliseum loves it,” Aldridge says. “It’s the largest non-sporting event [held here]. Only the ACC Tournament beats us.”
The house lights are low and spots incandesce the 3/4-thrust stage. Three projection screens, big as the ones in the better Las Vegas sports books, form a tri-fold up to the rafters. The backdrop colors morph from red to white to star-studded blue. A camera on a boom crane moves in an arc around the performance space and production assistants clad in black with headsets and laminates scurry backstage, where a full-blown crew monitors camera angles, sound bites, output levels and pyrotechnics.
After the NutraMetrix rally Loren Ridinger, senior vice president of Market America and wife of president and CEO JR Ridinger, takes the stage and brings out a string of individuals who have made the business model work for them, successes one and all.
Loren’s been there from the beginning, the days when JR ran the business from their home with Marc Ashley and Joe Bolyard, who lived in the house as well. The two men now serve on the executive board.
Loren Ridinger is what the old pulp-fiction detectives would call a classy dame – high color on smooth skin with a sienna mane of well-kept hair – and in the world of Market America, she’s a celebrity. On stage she’s as comfortable as a talk show host as she trots out the moneymakers.
There’s Dr. Jonathan Davis, who talked about why he didn’t want to get involved with the company.
“I had no time and no money,” he says. “Ever hear that one before? Now I have a home in New York and a home in Lake Norman. I have a beautiful fiancÃ©e, and I have a life. I’m retired!”
There’s Sandy Cox, who found out about the company after a wrong number and has now risen to the status of director.
There’s David Whited, who says he was thrown out of junior college and introduced to the business by his brother-in-law using the “takeaway close.”
There’s Keith Doyle, a field vice president in a generously cut sport shirt that reveals the tattoo on his right forearm and the bling on his wrists and fingers, who says, “A sale is not about you, it’s about the people you know.”
There’s Tony Bowling, a middle-aged guy in a sharp, bone-white suit and his tall redheaded wife Pam. Tony says his sponsor to the company dropped out years ago.
“I hear he’s selling cars now,” he says. “Who do you think made the right decision?”
“If you stay in the business long enough and you treat people right,” his wife says, “you have to be successful. It will work for you.”
And there’s Elizabeth Weber who used to call herself Betty before she became the division’s top earner. She’s got a canary yellow skirt ensemble and a thick Boston accent.
“I used the ‘classic evaluation’ approach,” she says. “I used the ‘fear of loss.’ I was gonna talk to twenty people a day. I didn’t care if they were at a red light – I’d tell ’em to roll down their window. ‘You wanna know how to make 2,100 dollars a week? Pull over!'”
In between testimonies Loren Ridinger repeats bits of jargon – “When in doubt, blurt it out,” “the mall without walls,” “the plan” – and plugs the annual leadership school in Miami: “What’s the point of being here today if you’re not committed to next year?”
And then, to a fanfare of horns, Executive Vice Presidents Marty Weissman and Dennis Franks take the stage.
Weissman, an egg-shaped businessman who grew up in Queens, NY, was a star salesman by the time he reached his mid-twenties and made enough to retire by the time he was 46. He got involved in multi-level marketing as a sideline and became an investor with the company, serving on the executive board.
Franks was once a center for Dick Vermeil’s Philadelphia Eagles and the 1971 Michigan Rose Bowl team (he also acted as advisor and has a bit part in the Mark Wahlberg movie Invincible about Eagles teammate Vince Papale). His face is vibrant and ruddy and his shoulders strain the corners of his suit jacket. He’s also in the million dollar club, one of the few who have earned that amount in a single year through direct sales, and a successful member of Market America’s executive board who lives and works from Greensboro.
“That’s how I’ve made my living the last twenty-five years,” he says.
The two make an unlikely pairing onstage – the diminutive New Yorker and the bearded and tanned former lineman – but they effectively get across the message about one of their products, the Championship Blend nutritional supplement, and its superstar poster boy Joey Cheek, who is on hand today topromote the product.
Joey, Weissman says, “fell in love with Market America.” He speaks of Cheek’s dedication to discipline and craft, saying, “He was building it fast to last’… sort of like our business.” And then he introduces the youthful Olympian, who marches through the crowd on the floor holding an American flag, his gold medal hanging around his neck.
And the fireworks go off once again.
Cheek hypes the product – “It’s a pillar; it’s your bedrock” – a portion of the proceeds of which will go to his charity, Right to Play. The house lights go up and Cheek exits as the Olympic theme music blares throughout the cavernous space and the flashbulbs pop and burst.
Backstage Weissman says afterwards, “It’s not so much about selling product. Yeah, it was his gold medal that attracted us, but his love for his charity, that’s what enticed us.”
Celebrities make up a big part of Market America’s annual gathering. Yesterday Jennifer Lopez made an appearance (J-Lo’s apparently a big fan of the skin products) and pop singer Ashanti is booked for Saturday. Ashanti also performed at the bat mitzvah of JR and Loren Ridinger’s daughter Amber in Miami in 2005.
JR Ridinger is rich, make no mistake about it.
Outside the rear entrance to the Sheraton Four Seasons, on a brick rise under the portico, is parked a yellow Porsche Carrera GT. A convertible. With a winking red light on the dashboard indicating an armed security system.
In the lobby just outside the Guilford Ballroom men in tuxedos buy drinks for women in gowns who shimmer with shiny accoutrements. They mingle and buzz outside the doors, defining a large circular swath by the bar. On the fringes people in street clothes sit at the iron tables or the lip of the waterfall pool, sipping drinks and watching, pointing, whispering.
The Guilford Ballroom has been opened to its fullest expanse to accommodate 249 tables, 10 seats per. Roughly 2,500 prime rib dinners will be shuttled from the industrial kitchen to the throng; 2,500 salads will be tossed; untold thousands of glasses of tea will be poured.
A stage is set on the space by the dance floor, not as splendorous as the set-up in the coliseum but impressive nonetheless: bunting and drapery and a stars-and-stripes podium with the eagle icon; five big red, white and blue stars hang behind a drum kit.
The giant room, as big as eight basketball courts, thrums with activity as wine bottles go dry and silverware clatters on empty plates.
Tuxedos, ball gowns, recycled bridesmaid frocks, rented sartorial atrocities, tailored waistcoats, trendy lapels, neckline dips, backline dips, up-dos, braids, body glitter, cummerbunds, band collars, chandelier earrings, teardrop pendants, strappy shoes with torturous heels and, smashingly, a kid who looks in his twenties wearing white tails with a top hat, gloves and a cane.
The room is diverse, with plenty of white people and a healthy smattering of blacks and browns. Asians make up a significant demographic.
“About a third of our distributors are Asian and/or Mandarin speakers,” Aldridge says.
At the front of the ballroom, in a prime table by the stage, the executive board of Market America sits and smiles, lit from above. Among them are Marty Weissman, Loren and JR Ridinger, Dennis Franks and his wife Nancy, Joe Boylan and Marc Ashley and their well-kept women. Two other men stand to the side of the table with their hands clasped in front of them.
“They stand there to prevent sales people from coming up while they’re eating,” Aldridge says.
When the lights dim and the room settles Marty Weissman takes the podium to introduce with warm smiles the man behind the Market America machine, the engine that makes it go, JR Ridinger.
JR was scheduled to address the faithful that afternoon at the coliseum but he felt under the weather. This evening’s oratory, Aldridge says, will be brief.
“He’s on for like five and a half hours tomorrow,” he says, “if he can do it. “He’s more man than I am, five and a half hours under those lights. He’ll sweat through his shirt, his jacket. He’s an amazing public speaker.”
And the man himself bounds to the stage, a kinetic mass, a frenetic dynamo, a man with the energy and gravity of a tiny sun in a tuxedo jacket that’s beginning to rumple and a black necktie that glimmers with stones.
He’s got a little bit of a Jerry Lewis thing going on.
He paces and shuffles; he throws his arms wide; he struts and postures. No podium will contain him.
And in terms of working the room, he kills.
“Have we had enough reality TV?” he implores. A light roar surges from the crowd. “Well I’ve got my own reality TV show!”
“We’re gonna be a Fortune 50 Company,” he boasts. “We’re MLM-ing Amazon.com, is that what you want to hear? We revolutionized an industry and it evolved into something else!”
He talks fast and loud, hitting all his notes, using call and response to engage the crowd. He posts a 9-point flow chart of the master plan on the overhead screens, smaller than those above the coliseum stage but big enough to get the message across.
And he deflects criticism of the business model, a model so perfect and structured that it could conceivably revolutionize the way business is conducted.
The only thing stopping them is that most people don’t really want to do it.
“They call it a pyramid,” JR tells the crowd. “They call it a Ponzi. The Social Security racket – that’s a Ponzi. The traditional business model with a few guys at the top and a bunch of workers below – that’s a pyramid.”
And, “What’s wrong with networking? Every business networks. We just have a better way of paying ourselves.”
And, “They have a problem. We have a solution.”
After dinner and the speeches, awards will be presented to the year’s biggest movers within the company. Then they’ll move the tables of the dance floor and a DJ will spin tunes interspersed with performances by a live band. The party will last until 1 a.m. and beyond.
“When somebody starts with me and chooses the two-to-three year plan,” JR Ridinger is saying, “they’ve already made their decision. Is this making sense to you guys? Ooh’… light bulbs go off. This’ll hit you on the way home.”
He’s up on the stage at the coliseum, has been for about an hour, since just after the people started rolling in this morning.
Through body heat and friction he’s already trashed the first suit of the day – the white shirt is withered, the dark jacket rumples at the shoulders, the red necktie leans askew.
“Everybody knows two people who are ready, willing and able to do it,” he says, the sentiment spelled out on the overhead screens. “Does everybody understand that?”
He’s got a tiny remote in one hand and a green laser pointer in the other. He pulls up charts and diagrams and talks of the “ABC pattern,” the 2-3 year plan versus the 45-year plan, the “trial run,” the 10-3-2 philosophy, the “second look,” the “90-day fast track,” “coring.”
“Lead me to your people,” he says. “Some of you are in a rut. You’ve got to do some things to go out and meet people. Join a gym, get involved in a charity’… all these people become suspects.”
He moves to a demonstration table at stage right and fills a large kitchen funnel with dried black-eyed peas, diverts the flow into a big glass jar.
“You’ve got to fill the funnel,” he says, and when some of the beans spill,” he jokes, “that’s the one-half or one-quarter dilution.”
Again he kills.
The funnel analogy is outlined in a Market America marketing tool, a book called 10 Steps to Source Duplication available for $6 through the company website.
You can buy it here at the convention too, along with makeup and tumblers and herbal supplements, Polos and sweatshirts and logo Ts and a jacket stitched from swatches of the American flag. There’s website advice and a money-grab booth and seminar tickets and pamphlets galore, too, all out in the concession ring.
Out there standing by a hot dog hut, Chuck Dashiell, in from New Jersey, takes a break from this, his eighth Market America convention.
Chuck, who calls the business plan “outstanding,” has a day job.
“I sell communications equipment for a small company,” he says, “but not for long. I’m making the transition. As soon as I’m earning the same amount of money [through Market America] as at my day job I’m gonna make the transition immediately. I control this. I can pick the people I work with. That’s what attracted me.”
The biggest problems he faces, he says, are, “time management and my personal enthusiasm. I’d rather spend time on this business than my day job.”
Since he began with the company in 1998, Chuck has gotten checks that range from $300 to $2,100.
“I’m just trying to build it to where it’s consistent,” he says.
On stage, JR’s got eight folks he’s pulled in from the VIP section, four each at two long tables on the stage, one representing the slow track and the other the fast. He moves down the line of representatives like the host of “Family Feud,” role-playing and troubleshooting. As he traverses the promenade, black-clad production assistants pull people from the crowd and hand-colored rectangles of thick paper throughout the room. Audience members assemble on the stage and in the pit around it. At the appropriate time the barely-audible drumroll loop kicks in and the house lights go up and’… there it is!’… a visual aid demonstrating the exponential power of the business plan! Using actual people! People who have already signed up with the company!
“And that,” says JR Ridinger, his arms spread wide, “that’s the difference between the fast track and the slow track.”
A stampede of applause and cheers.
“You get it?”
And to further illustrate the point’… to really hammer it home’… he moves to one side of the stage. Where there’s a large white wheelbarrow. Filled with dried black-eyed peas.
The wheelbarrow tilts and dumps the beans, bushels of them, barrels of them, through a giant red industrial-sized funnel. They skittle through and collect underneath.
He moves quickly to the demo table and drops two beans in a big glass jar, rattles them at the audience, shouts at the two black-eyed peas and dumps them on the ground.
He switches the empty jar for a full one and shakes it with both hands like a rattle while the audience, worked into a full frenzy, cheers over the volume of his words.
He shakes the jar and slowly a handful of walnuts rise from the depths of the black-eyed peas until they sit atop them.
“It goes to show you,” JR Ridinger says, “the biggest nuts rise to the top.”
Out in the concession ring Pat Hubert of Charleston, SC wets his whistle at a tiny table that encircles a post. It’s his first Market America convention.
“I’m a newbie,” he says. “I just got in and my sponsor was smart enough to realize how important this [event] is for growing my business. He made sure I was here.”
He got in through his brother-in-law, whose direct sponsor had approached the two of them about a year and a half ago.
“They were DJs together,” Hubert remembers. “He called us and said, ‘You gotta get in.'”
Like so many before them, Hubert and his brother-in-law resisted.
He called us about six months later, and then he called us again. We finally took a look at it and we were like, ‘Wow.'”
Their friend who got in earlier, he says, is doing very well.
“He and his girlfriend both drive Cadillacs. He’s showed me 8,600-dollar checks. That’s what he’s getting a week. His girlfriend is one of the [company] speakers. Dollar-wise, I don’t know, but this is all he does.”
He adds: “The proof is in the pudding.”
And these things are true: Many have prospered under the business plan as set forth by JR Ridinger. And many have failed. But the numbers make a sort of mathematical sense: If you can get three people under you and they recruit three people each, and so on and so forth, you can make enough money to quit your job, to buy a boat, to drive a Porsche Carrera and festoon your Ã¼berwife with diamonds and pearls.
But you need to have faith in the product and the plan. You have to believe.
And Pat Hubert believes.
“I haven’t personally made any money yet,” he says. “Oh wait, I guess I have. I got one $300 check.”
To comment on this story, e-mail Brian Clarey at email@example.com.