Written by Rochelle Burnside | Last Updated February 24th, 2020Rochelle Burnside produces content on business services. Her advice has been featured in Forbes, Huffington Post, Yahoo Finance, and more.
Seventy-five percent of direct sellers are women.
Contrast that with the demographic make-up of the U.S. workforce overall: 47 percent are women.
While multi-level marketing isn’t the most heavily female-dominated field (speech-language pathology and dental assisting take the cake), it’s clear that the industry is made to appeal primarily to women. The social media pages of many network marketing companies display elegant script fonts, pastel colors, and images of happy mothers and smiling kids.
Then why is multi-level marketing, like so many other female-dominated fields, under majority male leadership?
My research indicates that women make up only 28 percent of MLM executive teams. We’ll break down my findings and talk about some reasons why this especially matters for multi-level marketing. Here are the stats from 100 MLMs' executive teams:
How does this compare to the traditional workforce?
You’re probably wondering why this is news. Indeed, only 33 of the Forbes 500 are women, and only 24 percent of Congress is female. This is despite a little over 50 percent of the U.S. population being female; women are underrepresented in leadership across the board. Even in an industry with conventionally feminine products, the beauty industry, women constitute 29 percent of executive teams. On paper, it seems that MLMs perform better than the traditional workforce; only two in five MLMs with primarily female audiences have a male CEO.
With multi-level marketing, we’re talking about another majority-female industry that’s often not so majority female at the top. Yet it’s not as simple as the beauty industry’s gender imbalance. Multi-level marketing is promoted as an industry where women reign in its workforce — that’s its biggest draw, and that’s what made three-fourths of its distributors women.
MLM representatives often call themselves independent business owners, boss babes, and self-employed CEOs. Company marketing campaigns usually lean into this idea, calling their representatives by these terms. And many template outreach messages from representatives contain something along the lines of being your own boss, setting your own hours, and making your own rules.
Conversely, the beauty industry positions itself as a distributor of products for women, not necessarily promising that its leadership will be women. Though you will find a majority-female workforce in the beauty industry, these employees have no illusions about being their own bosses. Their hierarchy is typically traditional. The path to promotion exists, but female leadership is still sparse. Why?
You’ve likely heard of the glass escalator: men advance quickly in female-dominated roles. It’s why we have mostly male principals but mostly female teachers, mostly male dentists but mostly female dental assistants. And you might have heard of the recently defined Paula Principle: women work below their level of competence.
Do these concepts explain why we have mostly male MLM leadership and mostly female reps, as it explains why we have mostly male beauty CEOs?
No — unlike the beauty industry, the path to promotion in an MLM has two separate tracks: promotion through the distributors’ pyramid, and promotion through an internal team of MLM employees.
Representatives are only Boss Babes and ShEOs over their downline, and they don’t have a say in the company’s overall structure. A distributor can become a Black Diamond through a compensation plan and be recognized by her distributing peers, maybe even receiving a nod from her CEO. But that doesn’t mean her CEO is considering where he can place her internally, and it certainly doesn’t mean he’ll take her advice regarding the future of the business and its compensation plan.
Take a look at a few MLM executives’ bios. Executives that begin as direct sellers within the company are the exception, not the rule. Generally, executives begin as part of the internal team and climb up a similarly internal ladder, not the pyramid’s ladder. Or, they’ll transition from the leadership team of another MLM or company.
The onboarding of executives has always been a different ballgame from the promotion of the general workforce. Outsider CEOs are on the rise, and employees in high-level positions don’t always have a guarantee of scrambling into a leadership team. But, in a way, nearly all of the executives in MLM companies are outsiders. MLM executives outline the terms, conditions, promotional path, and compensation plan for their reps. But they don't play this game themselves.
With multi-level marketing often touted as a field where women can lead and carve their own path, it seems counterintuitive to have an external executive team comprised primarily of men to define a compensation plan.
Why this matters
Every executive team wants to make a profit; male majority executive teams over female-targeted industries have the same goal. But this goal becomes exploitative when a company doesn’t have the best interest of its employees or consumers in mind. In the case of MLMs, our research found that 80 percent of distributors are in the bottom rank of the pyramid, averaging $0 annually.
The line between profit-driven and exploitative is blurry in this industry; it’s the thin line between an MLM and a pyramid scheme that the FTC is tasked with drawing.
This research suggests that more multi-level marketing companies tend toward exploitation than empowerment. Having men primarily manage the companies, create the compensation plans, and decide company structure over predominantly female representatives enforces this implication.
I considered companies with conventionally feminine products to be those that involved cosmetics, women’s jewelry, and women’s clothing with no product lines geared toward men. For example, though Nu Skin is a skincare and cosmetics company, it has a product line for men. Therefore, it was not considered a predominantly female-targeting product in my study.
Some companies have a broader definition of “executive team” than others. I included people considered on the companies’ About Us pages under executive team to be part of this grouping. For some companies, this included regional directors; other companies chose to exclude regional directors.
Eight companies did not have an executive team listed at all. For these eight, I found the CEO on LinkedIn to record gender. The remainder of the executive team was too difficult to track.