Multi-Level Marketing Schemes | June 12, 2019 Act 2 | Full Frontal on TBS

Let’s talk about
multi-level marketing. I know you probably
flinched when I said that. You’ve likely gotten Facebook
messages from someone you had one class with
in high school who reaches out like
hey, Slammy Sammy, you look older
since we last spoke. You want to buy some creams? They’ve changed my life. #GIRLBOSS, #POSITIVITY,
#SIDEHUSTLE. I married a cop! As much as you may
hate those messages, the women sending them
probably hate them more. They’re ensnared in
the growing industry of multi-level
marketing or MLMs, which mostly target women. It’s a thriving industry run
by some of our finest pieces of shit. REPORTER: Daily Beast reports
today on the vitamin selling venture launched in
2009 by a company called The Trump Network. It was a multi-level marketing
scheme along the lines of Amway or Mary Kay. The scheme pedaled a number
of diet products and sham nutritional
supplements, including a supposedly customized
vitamin regime requiring users to send in a urine sample. On the bright side, he
gave you a discount if you delivered your urine in person. Now what are MLMs? I’ll tell you what they’re not– pyramid schemes because
those are illegal. Here’s how multi-level
marketing works. At the top of our company,
we have a person selling say protein shakes for dogs. We’ll call them P. P makes money by selling
Skinny Bitch shakes, but also by recruiting
new salespeople. Let’s call them Y, R,
and A. P makes money off of everything they sell
and also off everything their recruits sell. And they can make money
off people they recruit. Oh my god. What a coincidental
arrangement of letters. There are tons of
multi-level marketing schemes in the United States. There’s LulaRoe, which sells
clothing, most famously leggings that look
like they were made by Lisa Frank’s blind sister. There’s Visalus, which
is not dick pills, but fitness shakes and powders,
which spiritually speaking are still dick pills. And there’s my personal
favorite, Vantel Pearls. Vantel sells cheap ass pearls
for much more than they’re worth in online
pearl parties just like this one, which is actually
from a different seller. But I’m going to show it to you
anyway because it is amazing. Hello again, pearlies. Today, I am going to be
shucking a hot pink pearl. Absolutely gorgeous. This is a juicy oyster. Here it is. [LAUGHTER] Oh yeah. Find my big, pink pearl. Just poke around
in it a little bit. Mmm. I could watch you shuck all day. Seriously, it is great that
this lady isn’t stuck in Vantel. But if she isn’t, why
does she have to give creepy hand jobs to oysters? MLM companies are thriving. According to the multi-level
marketing industry’s trade organization, the Direct
Selling Association, the number of Americans in MLMs rose from
15.6 million to 20.5 million between 2011 and 2016. And 3/4 of those were women. And it’s not because women
have a burning passion for waterproof lipstick. MLMs are growing at a time when
women’s options are shrinking. Over the past three decades,
the cost of childcare has spiked to
unaffordable levels. And since the US also doesn’t
have anything resembling paid family leave, many
women with kids are forced to drop
out of the workplace. There are actually fewer
mothers in the workplace now than in the late ’90s. How is it worse for women
now than in the ’90s? Back then, our national
pastime was writing articles about whether
or not famous children were still virgins. MLMs prey on this predicament. They promise you can make your
own hours, work from home, and be lifted by a group
of fellow ambitious women. It’s like the sisterhood
of the life-ruining pants. But while MLM companies are
making money hand over fist, the participants are not. 99% of people who join MLM
companies actually lose money. And the 1% who do profit do
so by recruiting new members and collecting
commissions from them before they ultimately give up. Companies like LulaRoe require
an especially steep buy-in. A typical new recruit might
purchase thousands of dollars in merchandise, which they do
not get to select themselves. Some might be cute
and easy to sell. But no one in the
fucking world wants to wear leggings that feature
a bee crawling up your cooch. Oh my god, that bee is going
to sting your big pink pearl. Then they’re stuck with
100 pairs of ugly ass bee cunnilingus leggings that– and this is true– even LulaRoe
says you can’t wear as pants. Fuck you, LulaRoe. I just spent my kid’s
college fund on leggings. I am wearing them as
pants, a cape, oven mitts. And I would probably
even be buried in them. And sometimes, the
products aren’t just ugly. You would open the boxes, and
it would smell like old food. And some of it would come in. And you would open the packages. And it would be wet. I reached up to my up
line on our team page. And I said, hey, I
got these leggings. And they’re soaking wet. Has anybody else got
soaking wet leggings? This is really weird. They smell like mildew. Perhaps like the
pearls, the leggings were also harvested from the sea. But the founders of LulaRoe
swear up and down that it is not a pyramid scheme. What that is it is
an uneducated opinion. They haven’t looked at
who we are because we sell product through to a consumer. And it’s highly
desirable product. That is not a pyramid scheme. Yes, who wouldn’t highly
desire products like these? [LAUGHTER] Stidham’s claim is a
little shaky though. The FTC says one of the– I’m sorry. They’re ridiculous. The FTC says one of the
hallmarks of an illegal pyramid scheme is a promise
that sellers will make money from
recruiting others rather than selling the product. According to former high
level seller Courtney Harwood, LulaRoe was all
about recruiting. They really pushed recruiting,
not so much sales at all. Recruiting,
recruiting, recruiting. I mean, if it’s a
warm body, take them. If it’s a warm
body, take them, sounds less like a
good business practice and more like John Mayer’s
personal philosophy. The women who sell for
MLMs work incredibly hard just to stay afloat. But they’d probably be
more successful if they started their own businesses. About 39% of small
businesses earn a profit over their lifetime
versus less than 1% of MLMs. The success rate is
so low, even gambling is a safer bet than trying
to sell MLM products. And they are destroying
women’s finances. REPORTER: So Konczal said
she invested around $11,000, but despite working more
than full-time hours, couldn’t make it work,
and in November said she was still over $4,000 in debt. REPORTER: Allie says she got
into 10,000 pounds worth of credit card debt in two years. Racks of clothes
and piles of leggings are taking over Kimberly
Jarrett’s house. We’re in my living room. And this is approximately,
I would say, about 550 pieces of LulaRoe. That is horrible. But maybe she can recycle
them into something useful, like I did with my
Beanie Baby husband. MLMs are the most despicable
form of corporate feminism. They use their “you
go, girl” branding to trap capable, ambitious women
in a worsening cycle of debt. If MLM founders actually
believed in empowering women, they wouldn’t scam them
out of their life savings, especially if all
they get back is leggings that make
it look like you’ve been bad touched by a bee. We’ll be right back. [APPLAUSE] [UPBEAT MUSIC]

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100 thoughts on “Multi-Level Marketing Schemes | June 12, 2019 Act 2 | Full Frontal on TBS

  1. Absolutely terrible. Since these clearly illegal operations are allowed to work, the main attack must be educating the masses.

  2. Usually a company, no matter their ethics (or lack thereof) starts with an attractive, functional and well-made product. Leggings designed by aliens (talking places like Neptune here)that are stored in less than pristine conditions before being shipped off to sellers along with pink pills that probably glow in the dark — probably have a limited demo.

  3. I knew back in the 70s that this was dumb (I was about 6 yrs old). My grandparents had a room full of Amway products and they've done just about every kind of pyramid-MLM since then. It's sad to see them now struggle financially because they have no retirement and very little SS income. It is sickening how these companies still exist.

  4. He says they sell their product to consumers, but they DON'T. They sell their products to employees who are supposed to sell them. A consumer would have a choice in what they buy.

  5. I wanted to just point out the graph at 3:24 is a little bit misleading.

    According to the visual, 15.6M in 2011 looks like about 20% of 20.5M in 2016. In result, because of the way the data is presented, it seems as if there had been almost 500% growth rather than roughly 140% between 2011 and 2016. 5M increase is still a significant change, but not as much as the graph suggests.

    Otherwise, I really loved your research and insight of this episode (and Sam B breaking her character!) I would be even more grateful if the team could pay extra attention to detail, especially when it involves numbers and statistics. Thanks a lot!

  6. Beware those "sell solar to your contact list" and other similar cold-calling scams.
    I pity the people who fall for trying to sell the bogus hustle, and tell them to google their company.
    As for the ones who buy into it…. Buyer beware. Double bills and false promises.
    If you want to go solar (good idea) do it right and get completely off the grid.

  7. How do Americans afford to have children, not only is there a cost to give birth but NO leave.?
    Canadians medical costs are covered entirely, and both parents are able to split parental leave for up to a potential 18 months. It astounds me the largest wealthiest nation in the developed world doesn't offer what every other smaller not as wealthy country does.

  8. How much does a pair of nasty leggings have to sell for.? Approaching gyms to consider selling their products might benefit the women, if only to get their costs back. Or donating them to schools or women's organizations for a tax receipt so they could at least then pursue a deduction.
    It's really unfortunate a company like that would scam those women. They are attempting to benefit themselves and their families and ultimately the company creates more problems for the women.

  9. As a dude that has never had to deal with any of this.. but has had to silently watch family and friends fall into this trap. God why can't we let women do the amazing things they're capable of. Not ONE lawmaker has had the tenacity and passion as Kamala, Warren, or that woman that made Ben Carson out to be the law-clueless fool we all know he is. Bernie is close. But when he's given time to grill someone. Nobody is touching the females of Congress.

  10. I continue to be amazed that when stories about MLM are done that Beachbody has avoided being name dropped.

  11. And those leggings and other clothes are garbage ‘fast fashion ‘ that end up in the landfill. Luluroe is demonic.

  12. women.. guess what . turns out you're capable of doing more in life than selling dogshit to your friends and being a "model".

  13. I don’t understand the point of making a MLM when they could just make a good product that could sell on its own. Lularoe has been a super popular brand, what’s killed them is the fact they are a MLM. Why couldn’t they just sell the leggings and profit from that?

  14. The youtube algorithm pushed me videos like the ones featured in this video based on me watching this….clearly the algorithm missed the point of the piece.

  15. Some MLMs actually advertise on sites like Indeed or Career Builder as legit jobs! They advertise with titles like “work from home administrative assistant.” They don’t tell you the name of the company unless you request more info.

  16. A family of nice people I somewhat recently became friends with invited me over because they wanted to talk about some type of joint business venture. I had talked generally about business and stuff before, so this wasn't a totally random topic.

    But when I got there, I saw these glossy brochures and printed literature, a mountain of branded products, and they started talking to me about how great it would be if we all could stop working jobs we hate, and be our own bosses, and make as much money as we want to work for. Then they actually made me sit and watch a promotional video that was at least 10-15 minutes.

    It was so uncomfortable it became excruciating. I began resenting their imposition and how I had basically become held socially captive while I endured this. Then they got to the part where I'd have to spend $700 to become a member.

    I politely but firmly told them no, I was not interested, and that I didn't want to waste their time. (Even though they were actually wasting mine.)

    Friends, don't do this to your friends!! We hate it!

  17. there also mlm’s target students. vector goes graduations and gives the impression they got permission from the school to be there. saying you get $18.50 per hour but really its $18.50 per appointment that you’ll only get a couple of because NO ONE WANTS TO BUY KITCHEN KNIVES!

  18. Sounds like she's just another delusional liberal snowflake with Trump Derangement Syndrome. Please seek Psychiatric attention ASAP.

  19. So would you call Tupperware a scam? I wouldn’t. I know people that make a very good living doing it. It’s just not for everyone.

  20. But who in their right mind would continue to stock these leggings in their living room if they can’t even sell them. If you can’t sell 5 why would you think you can sell 500? See how women’s brain work? And they wonder why….

  21. Recruit your employees! Then you can promote based on downline recruitment instead of the job they do and woe to any employee that doesn't participate. I saw it done in a city public works department. Might still be going on.

  22. The people at the top of the pyramid in these companies tend to be the first people to get into the program, often friends of the owners, or are charismatic sociopaths who have no problem being predatory and knowingly lieing to people for their own profit.

  23. I remember a timeshare mlm that a guy from the restaurant where my brother worked, he did a whole presentation for our parents. I knew it was a scam! I do hope the guy is okay, it was him, his wife and they have a kid.
    Wait, was Lia Sophia a scam too?

  24. They are so fugly that I’ll buy a pair from the Goodwill and wear it as a Halloween costume . Mah bey* will be Tony Robbins ! 😂🤣 #winning #club

  25. ViSalus client here….I smelled mlm from a mile away when I was introduced to it… But it actually helped to control my weight.
    I'm not reselling that stuff, just buying it for myself and using it for weight control, nothing else.
    Oh, and I'm from Italy so ViSalus is one of the rare ones we have.

  26. No wonder the US birthrate is declining for a fourth year in a row and is at an historic low – women are second class. Corporations and politicians can boast about the DOW and employment records but few make a decent wage, can afford a major illness, decent food, purchasing a home or going to college. Third world population.

  27. I had no idea what the brand of those awful leggings were but now I see the story I think they’re worse. Who would even wear that?

  28. As long as American corporatism enables and sustains the hijacking of the government and the economy, these scams will remain. In other words, these scams will never go extinct.

  29. Corporate America falls under a MLM business model too… You have a CEO that makes more money than anyone else in the business and has high and low end managers that make more than the individuals actually do the work or providing the service. Not all women get into these programs to recruit others and have a goal to supplement their income by offering a service or product to others.

  30. 3:51 i love you sam but what makes you think these women WANT to go to work after they had a child? maybe its their decision to be a stay-at-home-mom?

  31. My parents joined Amway but not very high up. I dont know what to do Im just a kid. We arent very wealthy so they see this as an opportunity to get wealthy. The people seem very nice and in the same type of place as us. Almost all of them are immigrants and not very educated. What should I do?

  32. There were several articles stating that the same actions you take to get people out of cults should be used to get people out of MLMs ! They also focus especially on Mormons and they have more MLMs than anywhere else! Check Vox also! I found five articles and none were positive!

  33. Now we have a new MLM in rideshareing. Tryp your newest way to get taken to the cleaners. Beware it,s just another scam waiting to take your money.

  34. I would start my own MLM but for some reason I feel like they're illegal for minorities since all the ones that are in business are owned by white people

  35. Sister in-law drained my brother inlaws bank account on MLM he had no idea she thought she would get rich selling costume jewelry. Now she having a tough time stuck with all this cheap costume jewelry which is worthless. The woman who got her into this made money off her now she won't even return her calls.

  36. I remember a woman involved in an MLM because the cost for her daughter's cancer treatments were unaffordable, and she was selling like three different company products.

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