Inside the Gold Coast’s MLM ‘mum cults’

They’re not illegal but they are controversial, and the Gold Coast is the unofficial capital of multi-level marketing companies – with our mums their biggest target. NAMED

For Gold Coast parents, they are becoming the curse of the school playground.

Kate Golle, Kimberley Welman, Leila Stead, Kira Love, Chani Thompson, Kristie X Ord … they’re manifesting abundance in dollars and followers, but their business practices are creating discontent with their content.

Kira Love has 16.6k followers on Instagram

Perhaps you think you’re attending a morning tea for new mothers … until out come the products and the promotional spiel.

It’s all part of the culture of the multi-level marketing mums.

Unlike pyramid schemes, MLMs are legal. Think Tupperware, Avon and Amway … or newer entries like doTERRA, Younique and SeneGence.

Kimberley Welman has 46.1k followers on Instagram

These companies ‘direct sell’ their products through a network of independent distributors. The distributors earn money by selling the products, as well as recruiting new people beneath them.

However, for a business model that is a sector of direct selling, MLM sales tactics can be surprisingly indirect according to former reps.

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“We were also told to set groups up helping people to get healthy and then message anyone that joined about the products … and then recruit them,” says one who spoke anonymously to a women’s business advice group.

“We were told not to use the word ‘selling’ as it triggers negative thoughts amongst most people – the word ‘sharing’ is more appropriate.”

But as long as most of the scheme’s money comes from selling a product, instead of signing up new people, then it’s not an illegal pyramid scheme. However, many MLMs make buying the product a requirement of moving up in the organisation.

Multi-level marketing has become the curse of the playground. Picture: istock

Yet what’s not in question is why the Gold Coast is the unofficial MLM capital and our mums the biggest target.

After all, women make up 75 per cent of direct sellers in Australia – and MLMs love to frame themselves as empowering women; Younique calls itself ‘a sisterhood with a mission to uplift and empower women around the world’.

As for the city itself, we’ve always been the spiritual home for entrepreneurs and have hosted more than our fair share of get-rich-quick schemes. Besides, when it comes to selling a lifestyle online – whether the product is make-up, cleaning products or weight-loss pills – this city sells itself as the perfect aspirational backdrop.

In 2019, SBS program The Feed investigated MLM practices and almost every scene and every talking head was on the Gold Coast.

Indeed, the literal money shot of the opening scene featured a local hotel conference room filled with MLM-wannabes chanting ‘I love money and money loves me’.

And it seems nothing has changed. Just last weekend, The Island at Surfers Paradise played host to ‘Money Mastery, powered by Juice Plus+’ and presented by Juice Plus+ salespeople.

Juice Plus+ is, you guessed it, a multi-level marketing business selling powdered juice in tablet form.

In February 2020, the Juice Plus Company Australia Pty Ltd was fined $37,800 by the Therapeutic Goods Administration (TGA) for alleged advertising breaches relating to vitamin products for “promoting the products for a condition that is not permitted for this medicine, and health professional endorsement of the products.”

That fine was significantly more than the $25,000 paid by former celebrity chef Pete Evans, with the TGA adding that “direct sellers of these (Juice Plus) products should be aware that they have the same legal obligations as the company when advertising therapeutic goods”.

The MLM sector is worth $1.4 billion annually in Australia.

This shared responsibility seems to be one of the few areas of equality in the MLM world, where everyone is promised the possibility of making millions … but incredibly few actually do.

Indeed, while the local sector is worth $1.4 billion annually according to Direct Selling Australia, research shows all the profits are concentrated at the very top of the company.

In fact, a major study into MLMs by the US Federal Trade Commission found that 99 per cent of recruited representatives not only did not make money, but actually lost money.

This devastatingly high rate of failure is part of the reason why Australia’s Consumer Action Law Centre is calling for laws banning pyramid schemes to be updated to capture multi-level marketing businesses that are misleading the public.

The UK’s Edge Hill University advertising and marketing lecturer Dr Máire O’Sullivan has also conducted research into MLM’s advertising tactics on social media and is damning of their practices.

“Some of these companies have an alarmingly cult-like mentality, they practise ‘love bombing’, and encourage you to cut out anyone who isn’t supportive of the MLM or has concerns about the business model. That is alarming and abusive behaviour.”

Not every MLM business is problematic, but we need more safeguards to ensure that our residents, and especially our mums, are not being lured into a business model that over-promises and underdelivers.