John Oliver has a message for multi-level marketers: you may be dangerously close to operating a pyramid scheme. On Sunday’s episode of HBO’s “Last Week Tonight,” Oliver pointed out that multi-level marketing companies use a pyramid selling structure where individuals can make more money from selling products to their newly-recruited salespeople than from selling to actual consumers.
“MLMs hold out the hope that if you work hard, you can take control of your life, start your own business and help your family, but how real is the opportunity?,” Oliver said on the show, before showing news footage of a former distributor for nutritional supplement company Herbalife, who revealed she really made money only by selling to other distributors within the company. “If those earnings come primarily from selling product to the distributors you’ve recruited below you and their sales of product to the distributors they’ve recruited below them…that may be a pyramid scheme, and any business that is set up that way has a big problem.”
Oliver also showed hidden camera footage of an energy drink multi-level marketer explaining to a potential recruit that just by signing up other salespeople, you “kind of” get the money you spent purchasing the goods to sell, back. “That’s as reassuring as hearing a doctor say he kind of knows where your appendix is,” Oliver said.
To watch the full half-hour segment, check out the video below.