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]