How 'that crazy wrap thing' took over Facebook and drove more than $1 billion in sales

I've started seeing promotional weight-loss posts from people I know on Facebook and Instagram.

Sandwiched between party photos and wedding announcements, the posts show stomachs, legs, and arms before and after application of "this crazy wrap" that can "tighten, tone, and firm" with "minimized appearance of cellulite" and "fast and lasting results" in "as little as 45 minutes."

They similarly endorse "fat fighter" pills, eye cream, menopausal supplements, "greens" powder that can "detoxify, energize, and alkalize," and "defining gel" that does wonders.

These people, mostly women, also tell me they're making thousands of dollars selling this stuff.

As if that weren't enough, they're inviting me to join.

Many of these women are selling products for a company called It Works!

If you think their product or the business opportunity sound too good to be true, then you're not alone. What you might be surprised to learn is just how many people are involved and how much money the company is making.

It Works! is a multi-level-marketing company that claims a staggering $538 million in revenue last year and $1.2 billion in three years, with more than a million recurring customers. The cosmetics upstart is powered by a global network of 100,000 distributors who do most of their sales through social media - a 21st-century version of the direct-sales business model popularized by Avon.

The company has done all of this despite its main product, "that crazy wrap thing," having no clinically proven long-term benefits. 

What makes It Works! so successful? Tech Insider flew me down to the company's Florida headquarters to peek behind the curtain. 

'A customer-generating machine'

The It Works! headquarters in Palmetto, Florida, are as sleek as anything you'll find in Silicon Valley. It's a 50,000-square-foot office with a big stone It Works! sign out front, It Works!-branded vehicles, an It Works! fountain, a rooftop bar with a putting green, and a giant metal slide from the second floor to the first.

It also has a relentlessly uplifting vibe. The word "FREEDOM" is written in giant green letters on one wall, and those letters are covered in stickers on which distributors have written personal goals like "retire husband," "pay off house," "kids in private school," and "NEW CAR."

Each day at 3:05 p.m., all of the It Works! corporate employees stop what they're doing to give each other high fives.

Inside his corner office overlooking the Manatee River, the man who built it all, CEO Mark Pentecost, told me about the wonders of multi-level marketing.

"I think it's the greatest industry there is because the American Dream is back alive," he said. "I was a teacher and a coach and now I'm the CEO of a multimillion dollar company."

Pentecost got his start as a public school teacher in Michigan. Looking for extra cash, he dabbled in a few direct-sales companies including Excel Communications, where he got to work with billionaire Kenny Troutt. He raised money to start his own business after buying a deserted church and converting it into high-end condos.

When the entrepreneur came across a body wrap that created the appearance of rapid slimming, he knew he had his product.

"I watched my wife try it. She was ecstatic with the results, and I watched her call her girlfriend right away to tell her what had happened," Pentecost says on the It Works! website. "Her girlfriend said that she wanted to try it, and they hung up. It wasn't 30 seconds later, her girlfriend called back and said, 'My daughter was listening, and she wants one for her chin. Is there something for the chin?' That was when I knew that we had a perfect product for direct selling, a product that people would be excited to share with their friends and family."

Pentecost had a flash of inspiration in naming his company.

"You literally would show someone the product or tell them, and you could wait three seconds, and they'd go, 'If this works ... Does it work?'" Pentecost told me. "Almost always, there'd be something with 'it works. We said, 'We've gotta call the company It Works!.' Some people are like, 'You can't name the company that.' There's a lot of genius with that."

It Works! was founded in 2001 and turned profitable in three years. Things really started picking up in the past five years, however, thanks to the rise of social media.

"Direct sales is people-to-people talking," Pentecost said. "In the old days, when I first started in the industry, you could go to a mall, hang out, meet people, start a conversation. Today's gathering place isn't the mall. It's Facebook."

 It Works! now sells dozens of skincare and nutritional supplements, but the Ultimate Body Applicator, aka "that crazy wrap," is what gets people through the door.

Company revenue soared from $27 million in 2010 to $538 million in 2014, according to numbers provided by It Works!. 

"We're a customer-generating machine," Pentecost said.

Nearly all of those sales go through that network of 100,000 distributors - an army of stay-at-home moms, hairdressers, and teachers who serve as a PR team, marketing department, and sales force rolled into one. 

It's getting those distributors on board that is It Works!'s greatest achievement.

'A job that's all about fun'

It Works! distributors are told that by following the company's "steps to success" they can have a fun and flexible job, get out of debt, and even get rich.

One It Works! video features a cartoon woman named Jan explaining what it means to be a "wrapreneur extraordinaire."

"It means days filled with friendship, a job that's all about fun, and a life of freedom," Jan says. "But it wasn't always this was. Not long ago, I was a stressed out working mom with a boring job, just trying to make ends meet, when I saw this amazing picture on Facebook."

"I thought no way, those results are unbelievable. So I had to try it. I went to a wrap party, and in just 45 minutes I experienced those unbelievable results for myself," she says.

"Before I knew it I was earning free wraps and cash and having a blast doing it. Best of all, the checks kept getting bigger and bigger every month. I was able to pay off my credit cards and student loans with this crazy wrap thing. Now I've quit my job. I'm able to spend more time with my kids, and my family is living debt free. I've got the life I've always dreamed of, and you can have it too!"

Is it really that simple? Well, to start, the cartoon glosses over the labyrinthine rules that a distributor will learn when signing up for It Works!.

It takes a $99 investment in a "starter kit" to join the company. Then, a distributor has to spend a minimum of $80 monthly on products for herself or resale, with extra costs for things like hosting wrap parties or running a website. She earns commissions based on how many "loyal customers" and other distributors she can enroll in It Works!.  

The most successful salespeople can rise from the lowest rank - "distributor," where the average earning was $752 in 2013 - to the highest rank - "diamond ambassador," where the average earning was more than half a million dollars. If you look at this chart from It Works! that rise looks easy: 

But the truth is that the vast majority of salespeople earn nowhere near enough to live on.

Indeed, the average salesperson earned only $937 in 2013 - and that's before subtracting the costs of joining and staying in the company, which can be around $1,000 yearly, much of which goes to buying It Works! product.

In fact, it seems that many distributors are spending more to be a part of the program than they are earning.

 

In short, getting rich as an It Works! distributor is not easy.

Now while this may seem controversial, that's how things work with lots of multi-level marketing companies, and It Works! has not faced any major public legal issues.

Meanwhile, some distributors really are living the dream - and inspiring everyone to try to do the same. 

'How do you separate your faith?'

The most successful distributors are the ones who completely buy into the It Works! lifestyle and never stop selling.

Ashley Sinclair, a 33-year-old distributor from Lubbock, Texas, is one of the company's ten highest earners. As I spoke with her via Skype in Pentecost's office, she told me she can find a new customer anywhere - she recently even converted one person while waiting in line for the Starbucks bathroom. 

Sinclair had been skeptical about It Works! at first. She found out about the company when someone she'd known from junior high messaged her and told her about this crazy wrap. Sinclair deleted the message. The boutique owner and mother of two "was not interested at all" in adding anything to her schedule. 

"But something kind of kept drawing me back to the product and wondering if it worked," she said. "So I called her two weeks later, jumped in, and never looked back." 

She was used to working retail with a $10,000 montly overhead, she said. The monthly buy-in for It works! is about $100.

"I looked over at my husband and said, 'I am going to make us a million dollars. Like, this is it,'" she said. "And he just said, 'That's awesome, will you make me lunch?'" She laughed. 

Now, she and her husband have both quit their previous jobs and they tend to her It Works! downline full time.

I asked if she ever tries to separate the rest of her life from her It Works! involvement.

"I had a very hard time at the beginning sort of wanting to separate," she said. "I tried to at first. I really did try to at first … I created two separate [Facebook] profiles, and I immediately had to delete that and just say, you know what? This is me. It Works! is a part of who I am. Just like I wouldn't separate posting about being a wife, posting about being a mom, posting about how much I love guacamole at Chipotle, you know, these are all things that I love. My relationship with God, It Works! - it's all integral. It's a part of me. You can't separate it, I don't think. I don't think it's smart to separate it."

Pentecost's son Kyler is another of the company's top salespeople. He was working in a law office in Washington, D.C., a few years ago and wanted nothing to do with the family business, he said.

He ended up getting involved when his sister, Kami Dempsey, persuaded him to show some It Works! materials to the women in his office. They went nuts for the before-and-after photos and begged him to let them try out the wraps, he said. Soon after, Kyler attended an It works! distributor event and was moved to tears by the level of devotion and joy he saw.

"It's something that really touches you," Kyler said. "And I remember going to my first event and being like, 'I will never see this in a law firm.'" 

Kyler soon quit his job and ditched his law school plans. Now he makes his own hours, traveling to see clients and other distributors and always wearing an It Works! T-shirt in hopes that someone will stop him on the street and turn into a customer. He's also got a huge "downline" of distributors working under him - 7,000 or 8,000, he said, who help beef up his commission checks.

Kyler is never really off the clock. Whenever he meets someone new, he has them Facebook friend him on the spot so they'll see his It Works! promotions. 

Kyler explains that Instagram hashtags are the best way to reel in new customers online. 

Personally, I've come across It Works! materials when checking hashtag associated with everything from Kim Kardashian photo shoots to medical treatments.

Last Mother's Day, the company sent out green capes emblazoned with "#supermom" to distributors who have kids. Those distributors then took photos of themselves with their kids, hashtagged the photos #supermom, and appended gushy captions about how much they love It Works!. That way, every other person in the universe who'd hashtagged a photo #supermom on Mother's Day was guaranteed to see promos for It Works! if they clicked the hashtag.

I asked if It Works! had also cracked Pinterest, the most female-dominated of all online social networks. Kyler told me he doesn't personally use it, but he does know of another male distributor who has crafted his own Pinterest profile full of womenswear inspiration and will occasionally drop in strategic It Works! promos. 

"He's a high-fashion woman on Pinterest," Kyler said. "That's his persona ... And he has all of these followers and then occasionally he's like, 'Oh my goodness, when I'm looking to tone up, this is what I use.' And then he gets customers. But it's not him. It's like, another persona. It's like catfishing."

Kyler prefers to keep things real on his social profiles. He said he tries to make sure his Facebook page doesn't look like "a pharmacy ad or GNC," the supplement chain store. He doesn't want people to feel like he's selling to them - he wants it all to seem like just another part of his life. 

I ask him if he has a rule of thumb to keep from inundating his friends and family with It Works! information. 

"I would say that It Works! is a very large part of my life," he said. "It would be like saying, 'How do you separate your faith?' I know that sounds weird, but it's just part of what I do. It's part of what I believe helps people."

It Works! does what it can to cultivate this obsession in all of its distributors.

The company brings top earners to headquarters for training bonanzas, complete with guest speakers and fun events. This summer, 7,000 distributors from all over the world headed to Palmetto, Fla., for a "green carpet" event. Here's video of a recent "green carpet."

Kyler's mom, Cindy Pentecost, takes the lead on many of these projects. As soft-spoken as her husband is gregarious, she claims to be on a divine mission to keep the It Works! extended family together. 

"We believe God has drawn them to this company," she says of the company's distributors and customers. "We prayed them in. And now we want to be good stewards of their lives and their families."

 

 

 

So does it work? 

While people at It Works! went on and on about their devotion to the company, no one gave me a convincing explanation of the science behind the body wrap that the entire business hinges on.

When I asked Mark Pentecost what the wrap actually does, he was vague: "It's herbal," he said. "Four or five things are going on. It's a detox using herbal, all-natural … detoxing the area and feeding the area. There's about five or six all-natural things happening there to tighten, tone, and firm." 

It Works! Global's product coach Krista Rapa demonstrated a wrap on one of the company's office employees. She showed me that you're supposed to stick the wrap, which is covered in lotion on one side, to the body part you want to tone, tighten, and/or firm. After you stick it to your body, you use either plastic wrap, tight clothing, or an It Works!-branded "fab wrap" to keep the wrap in place.

"The lotion that is on the applicator is just going to be absorbed into her skin and it's just gonna help her to tighten, tone, and firm up," she said.

When I asked what the active ingredients were, Rapa couldn't tell me.

"There's a lot of different things," she said. "I should've brought a list."

Then someone handed her the wrap box, and she read the back. 

"You'll see all the ingredients," she said. "The active ingredients are all of the herbs and botanicals that are in here. They all just work together."

People using the wraps are instructed to drink a lot of water for optimum results. Why?

"Basically, we say it helps to … Everyone needs water," Rapa said. "So it just helps with keeping you hydrated and making the applicator work better."

"The minute you start drinking water, it intensifies," Kyler chimed in. "You can feel it more. You can tell the water is, I don't know, activating. People show up skeptical. We embrace it. You'd have to be silly not to be skeptical."

It Works! claims to have a doctor who explains how products like these work at training sessions, but he was unavailable when I visited Florida.

Over the next several weeks, I asked multiple times to speak with the It Works! doctor and was told he was still unavailable. Finally, PR head Kate Martin Carlson told me this: "Due to the fact that the It Works! wrap is a cosmetic, the FDA limits the claims that can be made about cosmetic products."

To get another perspective on how the wrap works, I spoke to an unaffiliated medical professional. Dr. Bill Sukala, a Sydney-based clinical exercise physiologist, attributed the supposed slimming shown in It Works! promos to something simple: sweating.

"I am unaware of any product in existence that you can apply topically that will melt away fat and cause weight loss," he said. "If you wrap yourself in plastic, with or without the herbal lotion, you will probably sweat a bit more than usual and lose water weight on the scale. But this is a short-lived effect and the water will be replaced with the next meal or drink."

"[Body wraps] won't give you long-term weight loss," a Washington, DC-based doctor named Elizabeth Tanzi told WebMD. "They can temporarily make you feel a little thinner, and when you look at the scale the pounds can go down a pound or two. But that's water weight loss. It's a temporary phenomenon."

We also tested a pack of wraps at the Tech Insider office and had mixed results.

When I sent Carlson our before-and-after photos, however, she responded with more qualifications. The best results are actually visible 24 hours later, she said. Plus, a full wrap treatment consists of using each of the four wraps in the kit on the same body part, three days apart. Also, you're supposed to watch what you eat before and after wrapping - never mind that drinking more water and watching what you eat for 12 days straight could result in weight loss with or without a pack of wraps.

Of course, the company is careful in how it markets the product, avoiding verifiable claims like "weight loss."

"The terms 'firm, tone, and tighten' are overused and ambiguous marketing terms that mean different things to different people," Sukala said. "How do they quantify 'firm, tone, and tighten' for consumers so they actually know the product is working?"

An island in the sun

Since I left Palmetto, the Pentecosts added to their real estate holdings. They bought an island.

Yes, Mark and Cindy are now the proud owners of Little Bokeelia Island, a land mass off the coast of Florida for which they coughed up $14.5 million.

"I like to make money like Warren Buffett, but I like to relax like Jimmy Buffet," Pentecost told the Bradenton Herald.

It Works! distributors caught wind of the purchase and now, they're celebrating Pentecost's victory like it's their own:

It reminded me of Mark Pentecost's statement that direct-sales marketing is "the American Dream back alive."

It sounded like a bit of an overstatement at first, but now I get it. The American Dream's not about everyone having a piece of the pie. It's about everyone believing they can get it if they work hard enough. And if there's one thing It Works! is good at, it's selling that fantasy.