On last week’s episode of Teen Mom 2, we saw Leah Messer get introduced to the multilevel marketing scheme (“MLM”) that has been flooding her followers’ Instagram feeds all year. The (obviously staged) scene shows Leah working out at the YWCA with her friend Liz, who recruits her into LipSense, an MLM company that sells lipstick. Liz assures Leah that “with the social media following you have… I think this could be big. You and I could build a team.”
With the way MLMs function, it’s no wonder Liz’s pupils turned into giant dollar signs as she recruited someone with Leah’s social media numbers. These type of companies, such as LipSense, LuLaRoe, and ItWorks!, involve the sale of products directly from a distributor, such as Leah, who independently markets and sells these products online. The distributor sometimes makes money from sales, but almost always makes far more money when they get others to become distributors. Any distributor who signs up through Leah is in her “downline”, and Leah receives commission from their sales and recruitment efforts. Leah profits within the “upline” of her recruits, as does YWCA Liz, and whoever signed her up, and so on. So if you’re one of the very few at the top of the pyramid, with people below you making sales and recruiting their own downline, you might make money. If you’re at the bottom, you will lose money, likely stockpiling products to boost your discount and maintain the minimum inventory while trying to make sales on social media.
If the compensation details seem a bit complicated, that’s because it is deliberately complicated to make it more difficult to sniff out the scam. Check out the documentary Betting On Zero, which is about the enormous predatory MLM company Herbalife, to see this convoluted scheme in action.
While this is the first time we have seen a Teen Mom join an MLM on the show, LipSense is not the first MLM product they have hawked on social media. Leah herself used to be a Mary Kay salesperson, all four of the TM2 girls were into Scentsy at one time, and now Kail has her own LipSense hustle. Perhaps the most notorious Teen Mom pyramid schemer is Mackenzie (Douthit) McKee from Teen Mom 3. Remember her?
Mackenzie entered the MLM world when TM3 got the ax, hawking Kyani and a wannabe Fitbit watch. A Type I diabetic, Mac claimed the watch somehow monitored her blood sugar so she didn’t have to check it anymore (I’m unsure whether this was before or after she blacked out behind the wheel due to blood sugar levels and totaled her brand new car). When Mac got word that fans were accusing her of peddling a pyramid scheme, she went on a SnapChat rant saying that anyone who works for a company with multiple levels of management is also a part of a “Triangle”, therefore “Everything’s a triangle!” Clearly shapes and birth control are not her thing.
I am disappointed that MLMs have weaseled their way onto our episodes when we’re already bombarded with them within the boundaries of social media. More than likely, if you have any kind of presence online, you see sales pitches for AN AMAZING BUSINESS OPPORTUNITY!! from acquaintances who might consider themselves “entrepreneurs” or “small business owners”. Just when you’re about to be impressed with how far they’ve come since getting all C’s in high school, you realize that they’re just trying to sell you a $60 Ace Bandage for your stomach that supposedly makes you lose weight because of some magical goo and vaguely natural-sounding ingredients.
Here’s an actual conversation I had with an “ItWorks!” peddling Facebook friend:
These “small business owners” are just pushing product in an attempt to make money and rise in the ranks of the pyramid triangle. Advertising an opportunity to work from home selling women’s products makes it obvious that MLMs target stay-at-home moms, most of whom don’t have the benefit of a Teen Mom’s social media following and are very, very likely to lose money. Some MLMs allow distributors to have an online store so they don’t have to rely entirely on social media, but it will cost them a few hundred dollars. In the meantime, these distributors may be losing friends and damaging familial relationships when people get tired of being targeted by the increasingly desperate sales pitch.
Since Leah’s “business” is being touted on MTV, I’m sure she was hoping to get a boost in her downline. So I decided to become a next-level Teen Mom fangirl & email Leah pretending to be a potential customer who was also interested in becoming a distributor. I asked specifically about start-up costs and how to have a successful LipSense business. The latter, she ignored:
She was so sweet & nice in between all the copied & pasted bullshit.
A $55 startup fee is pretty typical when looking at the startup fees of other triangles. But this $55 would get me absolutely nothing but membership; I would still have to purchase product to sell. Leah told me I would get 20-50% off, but she also mentions that the discount is contingent on how much I’m buying. Until I grow my “business” to the point that I’m buying enough product to boost my discount (which could take years, or never happen), I’m paying $55 just for the ability to purchase their lipstick for a mere 20% off retail. If the lipstick is $25, and I buy it at 80% and then turn around and sell it at full price, I’m making $5 per lipstick sale. And that’s ONLY If I manage to find someone to buy my bunk product at the retail price, which is a tough sell when you can google “LipSense sale” and see a market saturated with distributors who are discounting their product in an attempt to move it.
My intention here is not to specifically pick on Leah’s MLM du jour – many, many of these awful companies have made a handful of swindlers VERY wealthy off of the ignorance and desperation of poorer people. The government agency in charge of identifying pyramid schemes – the Federal Trade Commission –seems rather laissez-faire about the whole thing, and doesn’t provide specifics about what makes a pyramid scheme illegal, stating “If the money you make is based on your sales to the public, it may be a legitimate multilevel marketing plan. If the money you make is based on the number of people you recruit and your sales to them, it’s probably not. It could be a pyramid scheme.” With language like “may be”, “probably”, and “could be”, it’s clear that we are lacking laws and official regulations to protect the public from these predatory business practices.
So the next time the MacKenzie McKee of your hometown tries to pitch you some product from their AMAZING BUSINESS OPPORTUNITY, shut it down. Tell them thanks, but no thanks, and maybe send them a link to John Oliver’s incredible piece about MLMs. Or do the subtly-bitchy Lana Lyse thing and ask them specific questions about the legitimacy of the product which you know they cannot answer (as seen above). Even better, send them a link to this article, and then have them send the link to three friends, and then their three friends can send it to three friends, and so on and so forth until I have a downline and can put “Small Business Owner/Entrepreneur” on my LinkedIn account.