The investigative journalist Roddy Boyd has some excellent reporting on a multilevel marketing company (read: pyramid scheme) called ViSalus:
ViSalus is a multilevel marketing company that promises ordinary folks a shot at financial success based solely on their skill at building a sales group that essentially draws on personal social circles: A distributor must recruit customers (usually starting with friends, neighbors, relatives) who are asked to enroll still others as customers, who are then encouraged to bring in more new members to the sales group.
The Miami sales conference was designed to reinforce the secular theology of economic independence and self-help advocated by ViSalus — and other multilevel marketing enterprises. For 60 years, such companies have used their sales gatherings to dangle the prospect of a path away from corporate drudgery or limited means…
Yet the company’s prospectus shows that on average for the first six months of this year the typical customer spent $240 versus $1,286 by distributors. This seems odd if ViSalus is claiming its distributors are not required to buy products…
Perhaps ViSalus’ high churn rate can be explained by additional Southern Investigative Reporting Foundation analysis from data disclosed in the prospectus: This year through June, the typical distributor for ViSalus bought on average $1,286 in products but earned only $1,638 in commissions, netting $352.
These MLM schemes always end in tears, for everyone but those at the top. There are lots of dodgy smaller companies and far too few reporters like Boyd who know how to dig into them.
The American companies exploiting cheap labor include Walmart, Sears, and Disney this time. ProPublica’s Justin Elliott notices that Disney-owned ABC’s report has an interesting couple of paragraphs:
Late Tuesday the Associated Press reported that Disney was also among the brands produced at the factory. For its original report on the factory fire, ABC News was told by a Disney representative that the company’s third party supplier assured them none of their orders had been placed at the Tazreen factory.
“We extend our deepest sympathies to the families who have lost loved ones in this horrific tragedy,” a Disney spokesperson said in response to the AP story. “Our records indicate that none of our licensees have been permitted to manufacture Disney-branded products in this facility for at least the last 12 months. We have been working collaboratively with governments, NGOs and other companies to address the issues associated with manufacturing in Bangladesh and we are committed to continuing these efforts.”
Fortunately the Associated Press had boots on the ground in Dhaka to prove that Disney’s statement to its news arm was false.
— USA Today publisher Larry Kramer says he’s not planning a paywall for his paper anytime soon because it’s not “unique enough,” reports The Wrap.
He’s right about that. USA Today is about the last paper I can imagine having a successful paywall. Setting up a meter to charge heavy readers who visit the website more than 15 or 20 times a month might enable them to get a few bucks while maintaining ad revenue. But I doubt the paper has a lot of those heavy readers online, and the ones it does have probably aren’t intensely connected to the newspaper.
If you’re going to charge people, you have to have something they need or want that you do best. And USA Today just doesn’t.Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at email@example.com. Follow him on Twitter at @ryanchittum. Tags: ABC News, Disney, Roddy Boyd, small cap stocks, USA Today