Recent efforts of direct-sales organizations at Purdue have received criticism from students who argue that such companies profit off naiveté through false advertising.
A week ago, before the start of his lecture, a student claiming to be from a student organization that helps with internships approached Rafael Lang, a physics and astronomy professor.
Lang said he doesn’t have time to scrutinize these requests, and they’re almost always from legitimate student organizations and good-hearted volunteers. The student was a representative for direct-sales company Southwestern Advantage, who pitched to the class the benefits of its summer-internship program.
Derek Crane, a junior in the Polytechnic Institute, has heard Southwestern Advantage talk in two of his classes. Crane said the first time a representative came into one of his classes, the representative pitched an internship. Afterward, they handed out little yellow slips asking for student information.
“I filled it out and looked to my left to see my peers not filling (the slips) out,” Crane said. “Shortly after I passed my slip in, a peer tells me it’s a multi-level marketing organization. He said they make you buy books and go door to door and sell. He had refused to pass out the yellow slips to get people’s information.”
The next time Crane saw a Southwestern Advantage representative — at the start of Lang’s lecture — he sent a message in his class group chat warning students not to fill out the form.
Southwestern Advantage said its program is meant to offer college students sales experience, but is not for everyone. Trey Campbell, communications director for Southwestern Advantage, said the company is very clear about how its process works during interviews, including with money.
“Just like not everyone who starts at Purdue as a freshman finishes with their degree or makes straight As, we are like every other organization that has people who experience varying levels of success,” Campbell said. “Our business model is based on helping students improve year after year in their ability to serve the educational needs of families. Our company is only successful if students are able to succeed.”
Timothy Luzader, director of Purdue’s Center for Career Opportunities, made a distinction between multi-level marketing, pyramid schemes and direct-sales organizations. He said the easiest way to differentiate between pyramid schemes and MLM programs is that a pyramid scheme is recruitment-based, whereas MLMs concentrate on selling products. Further, not all direct-sales organizations operate as MLMs.
Campbell said Southwestern Advantage does not use a multi-level marketing model.
“Southwestern Advantage is not a multi-level company, it is actually single-level,” he said.
After a Southwestern Advantage representative came to her class, Emily Geary, a sophomore in the College of Liberal Arts, sent a petition to the class chat to ban Southwestern Advantage and similar companies that she believes prey on students. It currently has 120 signatures.
Geary said at these types of direct-sales organizations, interns are required to purchase starter kits for their own “personal businesses,” then sell them to someone else.
“They disguise it as an investment, but it’s really just fueling their business and not yours,” Geary says. “They literally sell the same product twice: once to the direct seller and again to the consumer who buys from the direct seller. The company earns double when their direct sellers break even.”
In Southwestern Advantage’s program, the intern goes door to door selling educational materials, according to the company’s website. The intern pays for the materials, and keeps the profit difference once the materials are sold.
Speaking about multi-level marketing programs in general, Geary said interns must arrange and pay out of pocket for their travel.
“None of it is reimbursed ... probably because they tell their recruits that what they earn at the end of their ‘internship’ will cover the travel and living expenses, and whatever is extra can be used the way you want it to,” Geary said. “If you’re lucky you might also get temporary housing.”
Geary’s petition claims such companies often advertise that interns make thousands of dollars on average, but that after taking into account the hidden costs associated, the intern takes home far less than promised and sometimes even ends up in debt.
Campbell said that Southwestern Advantage’s program has long been a breeding ground for successful careers and an opportunity for students to gain soft skills that are not taught in a classroom setting. He also stressed they keep parents informed throughout the process, and require a consent form from parents before interns enter the program. The program includes a week of training in Nashville, Tennessee, that covers product knowledge and the basics of running a business before the student starts selling.
“To be clear, the summer program that Southwestern offers is not for everyone. In fact, it is for very few,” said Shayne Merrick, a Purdue alumnus who spent six summers selling books with Southwestern Advantage, and now works at a sister company of Southwestern Advantage called ThinkingAhead. “What Southwestern offers is a program that helps young people develop the skills, confidence and independence needed to succeed in a career through practical application of running a business during the summer months.”
The CCO echoes the sentiment that Southwestern Advantage’s program is only for certain people.
“As is the case with all other employers that recruit at Purdue, the opportunities that direct-sales companies offer to students are not for everyone,” Luzader said in an email. “There are many students whose experiential learning pursuits would better fit their career goals with other types of employers, or through focused involvement with undergraduate research.”
The two direct sales organizations most active in recruiting on Purdue’s campus are Cutco/Vector Marketing Corporation and Southwestern Advantage, according to Luzader. He said the CCO has “invested time in vetting both of these organizations and considers them legitimate employers.”
While other colleges and universities have reached similar conclusions, Southwestern Advantage is banned from several U.S. campuses, including Harvard University and the University of Idaho.
Luzader said he encourages students to use a variety of resources when researching employers. One of these is the Career Research Portal, a joint effort by Purdue Libraries, the CCO and other campus offices to provide subscription to 14 sites that are reliable sources of information on prospective employers.
“It’s important for students to learn as much as they can about any employer of interest to them,” Luzader said. “Checking the internet is one strategy to pursue.”