It is reported that there have been a total of 138 ancient pyramids discovered in the Egyptian desert as of 2008. Many of these pyramids were constructed to be tombs for deceased kings and pharaohs that once ruled the land. They were built by thousands of workers who spent countless hours erecting the amazing structures.
Similarly, the Utah Valley is home to many pyramids as well. More than 30 multi-level marketing companies, commonly known as pyramid companies, house their headquarters in Utah Valley. Multi-level marketing (also known as network marketing, direct selling and referral marketing) works with the idea that by distributing a company’s product through a network of contacts and having them do the same will build a network of sales that commissions will be paid through.
According to research from Jon M. Taylor of the Consumer Awareness Institute, the state of Utah has the highest density of MLM companies in the entire nation, with over 62 companies. Nearly each company brings in millions, sometimes billions, of dollars in revenue each year and influences the business environment all around.
Impacting the Community
Three of the biggest and most successful MLM companies affect Utah Valley’s economy by providing jobs, sponsorships and other opportunities to those who live there.
In 2011, Nu Skin Enterprises brought in $1.74 billion in revenue and broke ground to expand their Provo campus headquarters downtown. The anti-aging product company has a history of being active in sponsoring BYU athletics, the Utah Jazz dancers and other public events throughout the state.
Xango’s world headquarters are located in Lehi, where the company has a number of corporate office buildings that are five stories high and 120,000 sq. feet each. Xango is also the jersey-front sponsor for Real Salt Lake, and is active in the community.
Nearly 1,500 people work at the corporate offices for Morinda, formerly known as Tahitian Noni, at its campus in north Provo.
In a valley that is home to two universities and nearly 70,000 students, the effect of some of these MLM companies has a direct impact — many students work at these companies and get to see the business model in action from an insider’s point of view.
Kyle Durfey recently worked internally for an MLM company while attending school at Utah Valley University, and is now working to jump start another network marketing business, F21 – an all natural sugar blocker.
“Before I knew anything about MLM’s, I thought they were sleezy,” Durfey said. “You hear bad things about it, but when I started working at the call center, it was nice to be able to see the different business model. Once you get into it and you see what the companies actually do and how they treat your distributors and you see the whole opportunity, it makes it seem much more realistic instead of just that scam that people think it is like.”
Like Durfey, many other students get their start in call centers in similar companies. Andy Lewis, a UVU student, worked taking phone calls at doTERRA for a number of months, and said he wouldn’t be opposed to working for similar companies later in his career.
“I’d totally work for one. If I was able to start in a new and upcoming company near the beginning, I would do that because they are really the only ones who make bank,” Lewis said. “If done right, I think it can be great. If the product is good and the system is done right, it’ll do well.”
With some of the complexities that come with student life, network marketing opportunities may be an enticing way to earn money while attending school.
“A lot of times you can’t get a good solid job because your school schedule changes every semester. One of the most appealing things is that people can make their own schedule, work when they can, and still do full time school and do well in it,” Durfey said. “If you don’t know anything about MLM, they all sound too good to be true, but after working in one and seeing how people actually do make that much money and they can work from home and do really well, it opens your eyes to the fact that there are other ways to make money than a nine to five job. Plus, you can potentially earn more than you would make doing summer sales.”
Ryan Lewis, a BYU student, recently joined F21 as a distributor, and said he likes his chances at success despite a rough start.
“It’s an interesting concept. It seems so simple, yet it’s so hard,” Lewis said. “It’s a business model that has worked but also failed. The hardest thing is to try and get people to trust you.”
It is true that MLM companies do not have a good reputation of trust. Many companies have a history of legal disputes and accusations of falsities promised to them.
“You try your hardest to make it sound as legit as it is, but everyone thinks you have an angle. They think you have been schemed and they don’t want to be apart of the scheme. But, really, it’s referral business and that’s a model a lot of businesses are turning to now.”
Josh Day, a UVU student, worked at Xango as a customer service representative and IT specialist
“Honestly, after working there, there’s no way that anyone could ever talk me into doing one,” Day said. “From what I’ve seen, the only way you’re going to make money is if you get in right when it starts, which means that you either have to be good friends with the person starting it or family.”
As mentioned earlier, Utah has the highest density of MLM companies in the nation, but the reason for that is unclear. A few years ago, Deseret News reported 88 percent of the Utah County population was LDS. Some believe there is a link between this statistic and the number of MLM companies based in Utah Valley, but aren’t completely sure.
“If you look at most of the companies, they are run by big families,” Day said. “I would say the way the Church is family-orientated has impacted why MLM’s are big on family and getting them signed up as well.”
Ryan Lewis believes MLM companies capitalize on the high number of returned missionaries in county to help further their business.
“It’s very much a network valley,” he said. “People are all about networks and referrals. That sort of goes back to the missionary experience because you have these returned missionaries who have a close group of friends at home and from the mission, people they can connect to and work with.”
Durfey said he feels the number of second languages spoken in utah county helps further companies development.
“There are so many different languages available because a lot of the times success is found in expansion of the company and the ability to grow,” Durfey said. “There is an advantage to having so many mature young people that speak languages here. There are a lot of people that are business-minded around here, so there are people that are trying to start their own thing or are interested in that sort of thing. With two schools around and young people trying to do business, it’s a good market for it.”
Thousands of years have past since the first pyramids were built in ancient Egypt, yet they still stand today. Only time will tell if the pyramid companies of Utah Valley will be able to survive in the same manner.