John Oliver Wants To Sell You On Why Multi-Level Marketing Stinks
John Oliver has a pitch for you. Yes, that’s right. In last night’s Last Week Tonight, he asked for just 30 minutes of your time to sell you on something that will change your life forever: an exposé on Multi-Level Marketing (MLM) schemes.
You may have seen the informercials but more likely, you’ve seen your friends on Facebook trying to sell you on them. The companies and products run the gamut from stalwarts Amway and Mary Kay to internet-driven newbies like Jamberry and LuLaRoe. If you’ve seen Herbalife, Rodan and Fields, or Avon products being shilled (or if you’re shilling them) on your Facebook feed, MLM has touched your life.
MLM companies promise to make you money in two ways. One is through the actual direct sales: you buy inventory for one price, and then sell it to your friends and family for a slightly higher price. But the real money for MLM sellers is bringing more people in under them. Each individual makes money when they bring in more individuals below them, and when those individuals then recruit more individuals below them, and so on.
The industry is indeed huge: it brought in $36 billion in sales in 2015, Oliver reports.
Discussing the settlement Herbalife made with the FTC earlier this year, Oliver highlights a clip of FTC chair Edith Ramirez saying that the word “pyramid” doesn’t appear in the legal complaint, but that it’s “not not a pyramid.”