Roger Willco

Tin Promises - Nothing More Than Tin, Part 3 of 6

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Danni’s flawed thinking was by no means the result of stupidity. By then, she was living almost exclusively inside the MLM culture where critical thought was disparaged as negative and counterproductive. “Believe in the products, believe in the company and believe in your upline” was an oft-repeated mantra that actively contributed to critical thought suppression. This was simply one more indicator that Danni’s thinking had been crippled by her exclusion of influences outside that bizarre culture.

The year after the company’s fortunes began to decline, I again helped Danni organize her business tax records—this time on my own computer. Somehow, working with each expense category one at a time, I had no sense of how much her business was costing her in total. Years later, I ran across the spreadsheets I’d prepared to calculate her expenses. Yielding to my curiosity, I totaled her write offs for the year. I knew Danni had sustained substantial net losses in her MLM business; but I was not at all prepared for what I discovered. Her MLM business expenses, excluding what she claimed for housing and utilities—expenses she’d have had with or without her business, totaled nearly $50,000 for that year alone. I never tracked Danni’s finances; but I can’t imagine she received more than $20,000 in commissions, bonuses and overrides for the year. Extrapolating $30,000 in annual net losses over the course of our first 5½ years together, they would have totaled $165,000. However, with her savings exhausted after that time, Danni would have had to reduce her expenditures. That being the case, I have no basis for estimating her actual losses over the final three years of our partnership.

Throughout our time together, there was a constant influx of product shipments to Danni’s address. She received at least one shipment each week—sometimes two or three. We collected discarded shipping cartons in a corner of Danni’s garage; and every month or so we’d break them down so we could take them to our local recycling center. One day, while preparing our accumulated collection, I happened to notice that the addressee on a shipping label wasn’t anyone I knew. However, the street address was correct. Curious, I looked at several other shipping labels and discovered that many of them were addressed to people I didn’t know at Danni’s home address.

When I asked her about it, Danni explained that by ordering product under the names of her downline members, she was able to maximize her commissions and bonuses. “So you’re paying for the products?” I asked. “Yes,” she replied. “But they’re products I use or sometimes resell.” Still puzzled, I mentioned that I thought the company would surely object to that practice. “Oh no.” Danni said. “The company doesn’t care. Everybody does it and the company’s total commission payout isn’t affected.” My initial concern assuaged, I never mentioned it again. However, I remained uncomfortable with what seemed to me an irregularity that could have an adverse impact on those in Danni’s downline who served as phantom product recipients.

Although I didn’t know it at the time, I had stumbled onto a variant of “channel stuffing”, an illegal practice used by a company or sales force to inflate its sales figures. In retrospect, it’s obvious that this was part of the reason Danni always had a large surplus of product on hand, much of which she had to give away or turn at a significant loss. It could also explain—at least in part—Danni’s motivation for her inordinate personal product consumption. Her scramble at the end of each month to generate a product order in her own name large enough to qualify her for commissions on any of her or her downline’s sales only compounded her excess inventory load.

It was just one more seemingly inconsequential deception that added to many others. In combination, they comprised a huge ethical compromise for me that had accrued so insidiously I didn’t recognize it until much later. AMC's excellent "Breaking Bad" television series presents a useful metaphor for our insidious ethical downward spiral and it's eventual consequences. Bowing to lessons learned earlier in life, I scrupulously avoided doing or saying anything that could be construed as controlling where Danni was concerned. However, I was also asleep at the wheel of my own life. I consider myself to be reasonably bright; but even my attenuated exposure to MLM’s reality warp somehow immunized me against recognizing my part in the fraudulent deceptions that are now so painfully obvious.

Over the course of her latter years with the first MLM, Danni believed with all her heart that her advancement to “Level 4” would happen in the next three months. It was a target that had inexorably moved farther and farther out of her reach with each passing year. To this day, Danni believes in the company’s products and the MLM distribution model; and she attributes the company’s declining fortunes up to bad management decisions rather than on the model's inherent flaws. More to the point, Danni also believes that she was truly helping every person she recruited into what she remains certain was an outstanding business opportunity.

However, Danni’s efforts to keep new IBO’s coming in at a rate sufficient to offset the number of those she was losing couldn’t have succeeded. The company’s distributor “churn” rate in our community as well as nationwide was greater than 100%. In other words, the number of new distributor recruits was less than the number who were exiting the business. That development was a premier indicator of market over-saturation as mentioned earlier in this story; and it meant that new recruits didn’t have a reasonable chance to even recoup their expenses, let alone net a profit. This reality was totally divergent from the representations everyone involved in the recruiting process—including the company—made to them.

“Friends” of Danni’s—high-level distributors in the first MLM who could see the writing on the wall—recognized an opportunity to build a new downline in a different company from the ranks of disappointed colleagues. After nine years of steady losses (3½ years of which preceded our partnership) and at her friends’ urging, Danni finally abandoned her involvement in the first MLM and joined her friends’ downline in their new company.

By then, we could no longer afford for me to accompany Danni on her business-related travels; and I didn’t see what went on at the national events she attended. I did however, attend local trainings with her in another community as well as opportunity meetings she hosted in her home. These events followed essentially the same pattern as the first MLM’s—replete with instruction in deniable deception techniques and the ever present appeals to avarice.

A year after her move to the second MLM, Danni’s friends left that company, initially citing wrongdoing on the company’s part. However, they finally settled on a different explanation: While they’d been doing well, their downline had not. The inconsistency in their stories seemed to be completely lost on Danni; and she eagerly followed them into a third MLM. Again . . . more of the same.

Within months of her transition to the third company, my growing cognitive dissonance finally overcome me; and I withdrew from any significant supportive involvement with Danni’s upline, although I continued to assist Danni. Our household financial losses had begun to mount to the point they were no longer sustainable and our lives were diverging—eventually to the point that although we were still living in the same space, we existed in completely separate worlds.

Concerted efforts by our couple’s counselors to gain Danni’s cooperation in formulating a household budget and rationalizing her business involvements were unsuccessful. After months of upheaval, I reluctantly told Danni she would soon be faced with having to choose between her continued MLM involvement and me. Without hesitation, she replied that given that choice, she’d stay with MLM. Several months later, she spent an afternoon exploring yet a fourth MLM “business opportunity”. Sensing impending loss, I was hurt; and my anger became incessant. Our conversations were now nothing more than rehashes of the same old arguments in which my conduct was openly and inappropriately hostile. I’d come to see Danni as my enemy and my verbal tirades were frightening her. I began to find sleep nearly impossible.

Early one morning I found myself again lying awake, staring at a crescent moon through the bow window in Danni’s bedroom. I remember looking at the clock on her nightstand. It was 2:30. My mind began to process my predicament; and as I lay still, the realizations started to come—slowly at first, but soon flooding my thoughts in a relentless rush. My emotional fuel was exhausted. I was out of financial resources, even though I’d filed for bankruptcy a year earlier. I was smoking again, I’d become obese, I was constantly overwhelmed by fatigue and worst of all, I was hurting the love of my life.

(To be continued )

© 2014, Roger Willco, All rights reserved.

Links: Part 1, Part 2, Part 4, Part 5, Part 6
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Updated 12-28-2015 at 07:58 PM by Roger Willco

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