S1 E3: Yes, I Would Like To Swim In Cash

Speaker 1 Hey, I'm Paige DeSorbo and I'm always thinking about underwear.

Speaker 3 I'm Hannah Berner and I'm also thinking about underwear but I prefer um full coverage.

Speaker 5 I like to call them my granny panties.

Speaker 2 Actually I never think about underwear.

Speaker 6 That's the magic of Tommy John.

Speaker 7 Same, they're so light and so comfy and if it's not comfortable I'm not wearing it.

Speaker 10 And the bras soft, supportive and actually breathable.

Speaker 7 Yes Lord knows the girls need to breathe.

Speaker 14 Also I need my PJs to breathe and be buttery soft and stretchy enough for my dramatic tossing and turning at night.

Speaker 16 That's why I live in my Tommy John pajamas.

Speaker 17 Plus, they're so cute because they fit perfectly.

Speaker 18 Put yourself on to Tommy John.

Speaker 19 Upgrade your drawer with Tommy John.

Speaker 1 Save 25% for a limited time at tommyjohn.com/slash comfort.

Speaker 21 See site for details.

Speaker 22 Ever feel like you're carrying something heavy and don't know where to put it down? Or wonder what on earth you're supposed to do when you just can't seem to cope?

Speaker 22 I'm Hesu Joe, a licensed therapist with years of experience providing individual and family therapy.

Speaker 22 And I've teamed up with BetterHelp to create Mind If We Talk, a podcast to demystify what therapy is really about.

Speaker 22 In each episode, you'll hear guests talk about struggles we all face, like living with grief or managing anger.

Speaker 22 Then, we break it all down with a fellow mental health professional to give you actionable tips you can apply to your own life.

Speaker 22 Follow and listen to Mind If We Talk on Apple Podcasts, Spotify, Amazon Music, or wherever you get your podcasts. And don't forget, your happiness matters.

Speaker 23 Hey, dream listeners. If you like this podcast, you're going to love the book.
Yeah, I wrote a book. It's called Selling the Dream, and it's coming out March 12th, 2024 on Atria.

Speaker 23 It's about all of your favorite characters from MLMs and some that you've never even heard of, I hope. Check it out.

Speaker 23 Previously on The Dream.

Speaker 23 Can you just tell me a little bit about yourself? I know a lot about you because you're my grandma.

Speaker 25 I live in Corona, Michigan, and I'm 81 years years old and I love every morning.

Speaker 23 Mary Kay, Malaluca, Pro Tandem, Herbal Life, Ladara,

Speaker 23 Young Living Oils.

Speaker 25 I always told myself that I could do better with my money than some other people could.

Speaker 26 We miss the significance of what these organizations are doing if we only look at them in financial terms.

Speaker 25 It may look like a small opportunity to some people, but for her, it was a way for her to use her graciousness and be able to communicate that.

Speaker 26 It's really impossible to separate questions of gender from questions of business strategy, right?

Speaker 26 They weren't selling products, they were selling women's products, and they weren't just using salespeople, they were using women.

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Speaker 22 Ever feel like you're carrying something heavy and don't know where to put it down? Or wonder what on earth you're supposed to do when you just can't seem to to cope.

Speaker 22 I'm Hesu Jo, a licensed therapist with years of experience providing individual and family therapy.

Speaker 22 And I've teamed up with BetterHelp to create Mind If We Talk, a podcast to demystify what therapy is really about.

Speaker 22 In each episode, you'll hear guests talk about struggles we all face, like living with grief or managing anger.

Speaker 22 Then, we break it all down with a fellow mental health professional to give you actionable tips you can apply to your own life.

Speaker 22 Follow and listen to Mind If We Talk on Apple Podcasts, Spotify, Amazon Music, or wherever you get your podcasts. And don't forget, your happiness matters.

Speaker 1 Hey, I'm Paige DeSorbo, and I'm always thinking about underwear.

Speaker 3 I'm Hannah Bruner, and I'm also thinking about underwear, but I prefer full coverage.

Speaker 5 I like to call them my granny panties.

Speaker 2 Actually, I never think about underwear.

Speaker 6 That's the magic of Tommy John.

Speaker 7 Same. They're so light and so comfy.

Speaker 9 And if it's not comfortable, I'm not wearing it.

Speaker 10 And the bras, soft, supportive, and actually breathable.

Speaker 7 Yes, Lord knows the girls need to breathe.

Speaker 14 Also, I need my PJs to breathe and be buttery soft and stretchy enough for my dramatic tossing and turning at night.

Speaker 16 That's why I live in my Tommy John pajamas.

Speaker 17 Plus, they're so cute because they fit perfectly.

Speaker 18 Put yourself on to Tommy John.

Speaker 19 Upgrade your drawer with Tommy John.

Speaker 1 Save 25% for a limited time at tommyjohn.com slash comfort.

Speaker 21 See site for details.

Speaker 24 And now, a next level moment from AT ⁇ T Business. Say you've sent out a gigantic shipment of pillows and they need to be there in time for International Sleep Day.

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Speaker 23 I've told you that multi-level marketing can be super secretive. These companies go to great lengths to not reveal much about themselves.

Speaker 23 And yet, the whole point of this business is to get the word out, exploit your social network, you know, get people preaching about how joining the company will change their lives.

Speaker 23 But what happens when you actually join?

Speaker 23 Whenever we've tried to find that out, just as regular people on the outside, you know, folks who aren't signed up with any sort of MLM, the answer we get is,

Speaker 23 we'll tell you once you sign up.

Speaker 23 I mean, all we want to know is how few people actually make money or why it's so hard for them to make money or how much money can they make or all, you know, the things that you would ask if you're trying to get a job.

Speaker 23 So in order to get a real sense of what it's like to join an MLM, we joined an MLM.

Speaker 23 One of our producers volunteered for the job. Mackenzie Kassab started out in public relations, working for the kind of beauty brands you find in a high-end department store.

Speaker 27 Yeah, so I used to work for Bumble and Bumble in-house, and then I also worked at an agency where I had clients like

Speaker 27 Ferragamo, Max Mara, a lot of fragrances. It was really fun.
So my job was to pitch stories to magazines for the product. So to try to convince them to write about the perfumes.

Speaker 27 And then hopefully they would write about it in their magazines.

Speaker 23 And then you got to work on the other side of that.

Speaker 27 Yeah, and then I switched at some point and started working in editorial where I was writing about those things.

Speaker 27 So writing about the retail industry and writing about fashion collections and makeup and trends and, you know, that kind of thing.

Speaker 27 And then also my cousin sells Rodan Fields. And I see...

Speaker 23 She's skincare, right? Yeah, skincare.

Speaker 27 And she's always posting about it on Facebook. Really, the only interaction I see is between her and her mom,

Speaker 27 my aunt. Yeah.
So, I mean, I haven't asked her about how her business is going, but I'm a witness to it on Facebook and it doesn't look easy.

Speaker 27 But I come from a PR background. I know how to pitch and sell trends and brands.
I feel like if there's anyone in this office who can get out there and make this work, it's me.

Speaker 23 I'm Jane Marie, and this is The Dream, Episode 3.

Speaker 23 Yes, I would like to swim in cash.

Speaker 23 So we started looking around for an MLM that would play to Mackenzie's strengths.

Speaker 27 Yeah, so what did we look at? We looked at It Works,

Speaker 27 which you kept describing as saran wrap, and I thought you literally meant to wrap food up.

Speaker 23 But it turns out it's actually to wrap your thighs. Mm-hmm.

Speaker 27 For what, slimming? Mm-hmm. Okay, just to slim your thighs.

Speaker 23 And then there's like vitamins and stuff. Great.

Speaker 31 Day one of the it works system is your wrap day.

Speaker 31 Start your results in just 45 minutes with that crazy wrap thing the powerful botanically based cream formula gives tightening toning and firming results So we looked at that

Speaker 27 But we ultimately rejected that one because it seemed a little too over the top just gimmicky and not believable. Yeah, and it's claims and

Speaker 27 I would say that I have refined tastes when it comes to beauty products. And also my experience and work is

Speaker 27 more on the luxury side of things. Yeah.
So I kind of wanted to stick with something that was more on brand personally. Right.

Speaker 27 So that if I started pitching this stuff in my Facebook feed, my mom wouldn't be like, why are you selling saran wrap for your thighs?

Speaker 23 And we looked at a bunch of other makeup companies and some more vitamins.

Speaker 27 Yeah, a lot of health. Yeah.
Forever Living was another one. Right.
Based on aloe.

Speaker 23 And Unique.

Speaker 27 Unique. Yep.

Speaker 27 We ultimately went with Limelight because I think it felt the most legitimate just in terms of,

Speaker 27 I mean, if we're honest, the way it looks. Limelight is something that I could see myself being attracted to.

Speaker 27 It's like modern packaging, really contemporary design, clean, minimalist.

Speaker 27 The products look decent. There's nothing.
crazy about it. There's no saran wrapping your thighs or anything like that.

Speaker 23 It all looks like pretty much regular makeup. I mean, they do some crazy eyeshadow palettes, but for the most part, it looks like regular makeup.
And then they have some trendy things.

Speaker 23 They have like that collection of black-ish lipsticks.

Speaker 27 Yeah and no no crazy claims, no hard, I mean no blatantly hard sells on anything.

Speaker 27 It's just like it looks very much like other makeup websites, except you know you scroll a little bit more and there's a big section about recruiting people or

Speaker 27 joining.

Speaker 23 But other than that,

Speaker 27 it looks very much like...

Speaker 23 like Sephora. Yeah.

Speaker 27 Yeah. I mean, in terms of the pictures are really professional looking.
You go on some of these websites and pictures are like low-res.

Speaker 27 And so, yeah, in terms of, in terms of professionalism, it looks pretty professional.

Speaker 27 I mean, it is, if I didn't know that it was an MLM and I kind of missed that part, that large part at the bottom of the website, yeah, it's something I probably in everyday life would think, cool, this looks.

Speaker 23 Like makeup. Yeah.
Yeah. Great.
Yep.

Speaker 23 Not only did this brand seem sort of classy, it had a storied history as well. To give you a little more background on Limelight, we need to go back in time to the 1950s on Broadway.

Speaker 32 You don't know it, but right now, Manhattan is getting itself dialed up for the evening.

Speaker 32 Chorus kids are checking in backstage.

Speaker 32 Box offices are getting busier.

Speaker 23 This company was birthed by another company called Alcone, and Alcone got its start as a theater supply company in the 50s. The owner was a guy named Al Cohen.
Get it? Al Cohen? Al Cone?

Speaker 23 They supplied almost everything you'd need to put on a good Broadway show. Lighting and some hardware, but also eyelashes and makeup.

Speaker 23 And then in the 80s, this other Broadway hardware store, owned by the Mullardy family, they bought Alcone.

Speaker 23 And their first big claim to fame is that they supplied makeup to the original production of the Blue Man Group. That is some serious makeup.

Speaker 23 After running a successful makeup store in Manhattan, they got into TV, selling products on QVC and HSN. And then in 1996, they launched their own line of makeup.

Speaker 23 Meanwhile, they're still killing it on Broadway as the exclusive makeup suppliers for The Lion King and some other shows. I'm not really up on my mid-90s Broadway.

Speaker 23 But through the magical alchemy of both the popularity of their makeup and the HSN success, it seems they get the idea to start an MLM, Limelight by Alcone, in 2015.

Speaker 23 Here's one of the founders of Limelight, the daughter of Vincent Millardy, the guy who brought Alcone to fame. Her name is Michelle Gaye, and she's speaking directly to you from one of her many, many,

Speaker 23 many Facebook videos where she pumps up her sales force using her sleepy children as cheerleaders. Hello, vampire!

Speaker 23 Hi, guys!

Speaker 33 We are just jumping on. We're about to go to bed.
These are my kids. But before we put everyone to bed and before I go to bed, we have a a big announcement.

Speaker 23 What happened, guys?

Speaker 23 You broke the sales record. You broke the sales record.

Speaker 33 You broke the sales.

Speaker 27 Yay!

Speaker 33 You guys want to say good night to them, the awesome vempire?

Speaker 23 Good night, everyone. Bye.

Speaker 23 The limelight vampire is now tens of thousands of women strong.

Speaker 23 We don't know exactly how many distributors there are because that would be like like a normal business practice and that's not what these companies do.

Speaker 23 And the French beauty brand, Loxitan, recently acquired a 40% stake in its U.S. business.
One more thing for clarity. During production of this show, Limelight went international and became Lime Life.

Speaker 23 But because we started reporting the story before the rebranding when everyone was still calling it Limelight, we'll keep calling it Limelight.

Speaker 23 Once we started looking deeper into this quote-unquote opportunity, we found that one of the most appealing things about Limelight is how normal and likable the owners seem.

Speaker 23 The co-founders are this duo of pretty ladies, Michelle and her niece Madison Millardy. They dress in like anthropology and you could picture them shopping at home goods just like us.

Speaker 23 We found this YouTube video that made them feel really down to earth, like they were aware of the stigma around MLMs and it did not apply to them.

Speaker 30 But for those who don't know me, my name is Madison Millardy and I'm one of the co-founders of Limelight. I have an amazing opportunity for you that is going to change your life.
I'm just kidding.

Speaker 30 That's how most direct sales companies start their pitches when they're trying to get you to join, but that's not what I'm here to do.

Speaker 23 Despite what Madison just said, the company does run a lot like every other MLM nowadays. There's recruiting, there's parties, weird price structures, etc.

Speaker 23 We hadn't heard of Limelight before our research, which is weird seeing as how both McKenzie and I were deeply involved in the beauty business for many years. I was a beauty editor as well.

Speaker 23 But if you've seen it anywhere, it was probably in your Facebook feed. Like most MLMs these days, the business is social media based.

Speaker 23 On their website, you can see the products and retail prices, but nothing else about how the business really works.

Speaker 27 There are no details about

Speaker 27 what happens after you become a seller.

Speaker 23 So there's like a firewall. Pretty much.
Like, give us your social security number and then you can see.

Speaker 27 Literally, because they need it for payment.

Speaker 23 Oh,

Speaker 27 it just tells you like once you once you sign up and you have access to like the back office kind of um

Speaker 27 then i guess you would see what the wholesale prices are because you don't have access to that so you actually don't even know um

Speaker 27 i mean you know the 168 or nine dollars for the starter kit right um but aside from that you don't know what the wholesale prices are So you don't know that the lipstick is listed for $20 on the website

Speaker 27 as a beauty guide. What would I be buying them for? I have no idea.

Speaker 34 A lot of times people say to me, Well, I love the idea of limelight. I just don't know how to sell.
Every one of our top salespeople has said that to me at some point.

Speaker 34 And the reason why they're successful is they don't sell.

Speaker 23 We are all about sharing.

Speaker 34 We're shares people. So it's really for

Speaker 34 all the beauty guides. They know that just sharing the product is all they really need to do to be successful.

Speaker 27 I am hoping to find out that it's as easy as they make it sound.

Speaker 23 I can't wait to hear what actually happens when you get past that firewall.

Speaker 27 Yeah, me too. I mean, I hope I get in.

Speaker 23 What if you log in and you spend the $169 and then like the face of the Wizard of Oz comes on your computer screen and it's like...

Speaker 23 You've unlocked the secrets to eternal life. And then

Speaker 23 like millions of dollars still out of your keyboard.

Speaker 27 Well, right until you get to the millions of dollars part. If you've ever looked at any of these other businesses like that, that is the type of language that they use and the visuals.

Speaker 27 So it's not that far-fetched.

Speaker 27 But I will keep you posted.

Speaker 23 Okay. We sent Mackenzie off with the company credit card and a tape recorder to capture the beginnings of what will surely be an amazing, life-changing journey.

Speaker 27 So I'm here enrolling to be a beauty guide in training for Limelight by Alcone.

Speaker 27 I've already gone through step one, which is to pick a basic starter kit based on my complexion or three choices, light, medium, and dark. So I chose mine.
Now I'm filling out my information.

Speaker 27 They're asking for things like three different phone numbers. They're asking for my email address.
And I actually went and created another email address just in case this all goes south.

Speaker 27 Now into this part, set up your website.

Speaker 23 Okay,

Speaker 27 so

Speaker 27 signing over my life right now along with my credit card and my home address

Speaker 27 okay so now we get to review my order and the basic starter kit is $169

Speaker 27 tax is $16

Speaker 27 and then I need to choose shipping so I'm gonna go with regular

Speaker 27 which brings my total now to $196

Speaker 23 to click

Speaker 27 and complete enrollment.

Speaker 27 Okay, I just got a notification saying your amazing journey starts here. This company and your limelight business is all about you.

Speaker 27 Shortly, you will begin your online training through emails sent from our company at Limelight by Alcone.

Speaker 27 Okay, it then tells me there's a lot I can do while your starter kit is in transit. I can announce this new venture to the world through social media and email.
I can begin my online training.

Speaker 27 I can start planning a grand opening party. I have no idea what that is.

Speaker 27 I can contact my leader for tips on how to, and this is in capital letters, start strong.

Speaker 27 And then the two co-founders, Madison and Michelle, say, we can't wait to see how you grow this simple step into one of the best decisions of your life. With love and limelight, Madison and Michelle.

Speaker 23 Okay, so tell me, so you signed up this weekend?

Speaker 27 Okay, so I signed up this weekend and it's now day four.

Speaker 27 I've had 21 emails from them so far, not including like your package has shipped, your order's gone through.

Speaker 23 That stuff's separate emails.

Speaker 27 Yeah, I'm not counting those. I'm talking emails that are like

Speaker 27 motivational

Speaker 27 announcements of new products.

Speaker 23 Are you feeling motivated?

Speaker 27 I would say motivated is probably not the word I feel right now. I got this packet today.

Speaker 27 I I was only able to print out 39 pages before we ran out of paper.

Speaker 27 So I don't know how long it actually is.

Speaker 27 But like by the time I go through the emails, click through all the links, print out the material, even in terms of just acquainting myself with the brand. I mean, this is almost a full-time job.

Speaker 27 Maybe not in terms of tasks, but in terms of sort of mental commitment, because my uplines contact me and they'll send me text messages to ask how I'm doing.

Speaker 27 You know, I'm getting contacted at night. I'm getting contacted at 11 o'clock on a Saturday night before a deadline.
Oh my God, another one.

Speaker 27 I'm a beauty guide in training and I,

Speaker 27 until I hit $1,000 in sales. So once I hit $1,000 in sales, I get promoted to beauty guide and I can do that over any time period.

Speaker 27 But there's something called the Fast track program, which they really encourage. And that is hitting the $1,000 goal in 40 days.

Speaker 23 Okay.

Speaker 27 Which sounds like challenging from the beginning.

Speaker 23 Well, you're like four days down already. I've lost four days.
Having just having to read all this shit.

Speaker 27 Right. And I haven't received my product yet.
I don't even know what I'm selling yet. I haven't seen anything.

Speaker 23 But the clock's ticking. The clock is ticking.

Speaker 27 Yeah. And so I started looking through.
This is actually probably the most interesting and I guess useful, but also intimidating packet that I've received.

Speaker 27 I'm not sure what this one is called, but it's sort of like what you need to do to make that thousand dollars in sales.

Speaker 23 In 40 days.

Speaker 27 In 40 days.

Speaker 23 Oh, it has a table of contents?

Speaker 27 Yeah, apparently it was 44 pages.

Speaker 27 And the suggestions.

Speaker 23 Wait, why do you need to do the fast track? Do you get some sort of special balance?

Speaker 23 You get,

Speaker 27 I don't even know.

Speaker 27 I mean, I'm trying to wade through. There are tables and graphs and charts and so many numbers.

Speaker 27 I'm not a numbers person, and they certainly don't make it easy by just having lists of numbers everywhere. But

Speaker 27 yeah, I don't know. If you do it in 40 days, you get like discounts on products or like free samples or I don't know what, but there's something.
There's some incentive. Okay.

Speaker 27 So they outline what they suggest you do to get through this fast track program.

Speaker 27 And just to give you an idea, they are suggesting that I make over 30 faces in 30 days.

Speaker 23 Do you even know 30 people in LA?

Speaker 27 First of all, no, I don't. So unless I go sit in Starbucks and offer free makeovers, I don't know how this is going to happen.

Speaker 27 But on top of that,

Speaker 27 the other snag is that I don't have products.

Speaker 23 Oh, right. They haven't arrived.

Speaker 27 Well, even if they do arrive, I'm not giving you a makeover. I picked the starter kit for my own complexion, and we do not have the same skin tone.
We don't have the same eye color.

Speaker 27 So what I got for myself is not going to work on you.

Speaker 23 We can try, but

Speaker 23 but I don't think you look like a mime.

Speaker 23 Like an ICP, a juggalo. You can make me over and do a juggalo.

Speaker 27 But they actually do, because apparently not everyone knows 30 new people a month to make over, they outlined some potential quote unquote faces that you could reach out to.

Speaker 23 I don't know.

Speaker 27 Your baby.

Speaker 29 Yeah.

Speaker 27 The waitress or checkout clerk who wishes to earn more than she is currently.

Speaker 23 Oh.

Speaker 23 So it's recruitment. Oh, oh, oh, oh, okay.
Sorry.

Speaker 1 Yep.

Speaker 27 I hadn't gotten to page 37 yet. The challenge is to the purpose is to build your business.

Speaker 27 And then the intention, though, is to let people know about your business and your skills as an educated beauty guide and as a business leader. And then you should be using that opportunity to share

Speaker 27 your success story. and recruit new people.

Speaker 23 Well, doesn't that seem like something for next year?

Speaker 23 You're not successful yet. You're in the hole.

Speaker 27 Well, I actually am in the hole because I've spent now $200.

Speaker 27 If I get through this 30 Faces in 30 Days challenge, I earn a 20% commission on my $1,000, which is $200.

Speaker 27 So I break even. But that's not taking into account the fact that I have to buy other products to make over people like you with different skin colors.

Speaker 27 And that I have to host parties where I need to serve people food and drinks, I assume.

Speaker 27 They also suggest all of these theme parties, like one is My Ties and Makeup, where I'm supposed to give out Lays to people. So I've got to go buy some Lays and stuff to make My Ties.

Speaker 27 I don't even know what's in a MyTie, but a lot. A lot.
So I need a lot of liquor.

Speaker 23 Just get them drunk enough that they can't drive to CVS and buy regular makeup.

Speaker 27 Get them drunk enough so they don't notice that I can't do their makeup and I'm not a good makeup artist.

Speaker 23 In addition to the $196 we spent on the $169 starter kit, there are other mandatory expenses we didn't see coming.

Speaker 23 There's a $10 monthly website fee, a $75 annual member fee, and then the optional cost of marketing your business, as if marketing a business is optional.

Speaker 23 They don't really supply you with much in terms of catalogs or flyers. Those you have to buy from them.

Speaker 23 Nor do you get business cards, but they've got that covered with a Vistaprint partnership prominently advertised on their website where you can buy them.

Speaker 23 And then there's also the cost of shipping, the cost of hosting parties, the cost of replacing discontinued and expired items in your kit.

Speaker 23 But there was at least one way to save money, and that was by getting products at wholesale. Or so we thought.

Speaker 27 The other thing that's that's not transparent is they tell you in the beginning, you know, you get things at wholesale prices, so, but they don't ever tell you what the wholesale price is.

Speaker 27 So I'm sitting here, I did a bit of research in advance, and the figure I found was that on average, most cosmetics are marked up 78%.

Speaker 27 I was kind of assuming it would be something like that. So I log into the back office after I've paid my $200 because I don't have access to any of that information until I pay.
And the markup is 20%,

Speaker 27 meaning I'm getting a 20% discount

Speaker 27 on

Speaker 27 the retail price.

Speaker 23 So they're having you eat the difference, basically, of what a cosmetics company would normally make.

Speaker 27 Yeah, exactly. So they're offering me a retail price.
Like, they've definitely already marked it up at least. I mean,

Speaker 27 we can have someone look at the quality of the products but I don't think it's costing them $10 to produce this two inch portable lipstick

Speaker 23 to find out we called a friend of mine who recently finished up a ton of research and development for her own makeup company Julie Fredrickson has a marketing background and she just launched stowaway cosmetics When she was getting ready to start her business, she traveled the world looking at factories and processing plants and talking to distributors and branding people.

Speaker 23 We sent Julie a handful of limelight products to analyze, and she said that this makeup was all very standard. Middle-of-the-road ingredients and packaging.
Nothing horrible, but nothing amazing.

Speaker 23 Julie said that lipstick we were curious about, it probably cost the company about $2 a tube to make.

Speaker 23 So what about the prices then? We compared Limelight to other brands, and the retail price tags look a lot like the high-end collections you see at like Bloomingdale's or Saks.

Speaker 23 There's a $24 lipstick, an $84 eye cream, a $36 foundation. And then there were also some wild cards, like an eyeshadow palette that retails for $188.

Speaker 23 What?

Speaker 23 Some of this makeup is crazy expensive. But the company actively denies this in its literature, as if calling something a good deal makes it a good deal.

Speaker 27 Buzz marketing is so important for us because it helps us keep our prices low.

Speaker 23 What? Right. What?

Speaker 23 This is a feeling we had over and over again as we learn more about this business. Like this company seems to be gaming us at every opportunity.
You have to buy catalogs and business cards, as I said.

Speaker 23 And there's a mandatory website fee, as I said. But perhaps most galling of all, they pay you through a proprietary visa debit card, which has the following fees attached.

Speaker 23 There's a $1 monthly service fee, a $5 fee if you don't withdraw anything for 90 days. It's a buck fifty to use any ATM, but you can only take out 500 bucks at a time.

Speaker 23 If you want cash back at a store, that's a $5 fee. There's a $1 transfer fee if you want to put money into your own bank account.
$20 will make that a wire transfer.

Speaker 23 And if you lose your card, it's $6.95 to replace it. And that's an abbreviated list.
We didn't want any of you to die of that fatal combination of boredom and fury.

Speaker 23 We're going to pause this conversation with McKenzie for just a minute so that I can turn to my producing partner, Dan Gallucci, and ask a few questions.

Speaker 23 He's been looking into the legal side of this for a long time, and we'll be hearing a lot from Dan this season.

Speaker 23 But I keep getting the hunch over and over again as we dive into what happens behind the scenes at MLMs. I keep getting the hunch that something is weird here.

Speaker 23 I mean, not necessarily illegal, but wrong.

Speaker 23 So Dan, something just came up in our reporting. Okay.
In a discussion between Mackenzie and I about the pricing of this makeup from Limelight by Alcone.

Speaker 23 Okay. So Mackenzie's selling makeup through this company and she,

Speaker 23 as a distributor, gets the makeup at a wholesale price. And what we noticed is that the wholesale price is in a lot of cases.

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Speaker 36 Instacart, we're here.

Speaker 1 Hey, I'm Paige DeSorbo, and I'm always thinking about underwear.

Speaker 3 I'm Hannah Bruner, and I'm also thinking about underwear, but I prefer full coverage.

Speaker 5 I like to call them my granny panties.

Speaker 2 Actually, I never think about underwear.

Speaker 6 That's the magic of Tommy John.

Speaker 7 Same, they're so light and so comfy.

Speaker 16 And if it's not comfortable, I'm not wearing it.

Speaker 10 And the bras, soft, supportive, and actually breathable.

Speaker 7 Yes, Lord knows the girls need to breathe.

Speaker 14 Also, I need my PJs to breathe and be buttery soft and stretchy enough for my dramatic tossing and turning at night.

Speaker 16 That's why I live in my Tommy John pajamas.

Speaker 17 Plus, they're so cute because they fit perfectly.

Speaker 18 Put yourself on to Tommy John.

Speaker 19 Upgrade your drawer with Tommy John.

Speaker 1 Save 25% for a limited time at tommyjohn.com slash comfort.

Speaker 21 See site for details.

Speaker 23 The same or around the same as the retail price of comparable products in the marketplace. Okay.
In addition to that, the markup at limelight between the wholesale price and the suggested retail price

Speaker 23 hovers around 20%,

Speaker 23 which is way, way, way, way, way lower than industry standard. So

Speaker 23 we looked at some numbers and let's just start with the eyeshadow since this is the one that people say is closest to Urban Decay.

Speaker 35 Okay.

Speaker 23 For a distributor to buy a six shadow palette from Limelight, their wholesale cost is $51.20.

Speaker 35 Okay, so $51 wholesale.

Speaker 23 That seems like a lot. Now, compare that to Urban Decay, which the product does get compared to often.

Speaker 23 Their six shadow palette, the highest price, like if it's not on sale or anything, what you're going to pay is $29 retail. Got it.

Speaker 23 So Line Light's wholesale price is way higher than Urban Decay's retail price. So my question for you is: since the company is basically building in like a crazy markup into their wholesale price,

Speaker 23 they're making all the profit they would ever need to make off of selling everything at the wholesale price to their own distributors.

Speaker 23 Is there a name for for what they're doing here, like making the distributor the end consumer?

Speaker 35 Yeah, there is. It's called a closed system.

Speaker 23 Dan, in his research, spoke to an attorney named Doug Brooks. He'd been working on franchise law for about 35 years and class action lawsuits against MLMs.
And he described what a closed system is.

Speaker 23 That type of closed system where all of the money is coming from people who are trying to participate to earn money in the system.

Speaker 23 You're just transferring money from the later entrance to the earlier entrance. And that is the classic definition of a pyramid scheme.

Speaker 35 And that's illegal.

Speaker 23 If anyone's making a profit, you're making it from within the pyramid.

Speaker 35 So I'm assuming they have a way of getting around that. Right.
And you can't necessarily prove that the distributor is paying the retail price or the wholesale price.

Speaker 35 Is there an incentive for the distributor? There is.

Speaker 23 Yeah, according to the compensation pack, you get a bump in commission when you hit a certain retail amount. Right now,

Speaker 23 so while Mackenzie's building up her kit, it would behoove her to purchase items from her kit at a retail price to reach the level of an activated beauty guide.

Speaker 23 So if she spends $1,000 on her kit, but she buys all the stuff through the retail site, there's absolutely an incentive.

Speaker 35 So there's an incentive for the distributor in order to try and squeeze money out of this any way that they can, which we know is objectively difficult.

Speaker 35 There is an incentive for them to pay retail pricing, as opposed to if you were doing the same thing for Chanel and the wholesale was 40 bucks and the retail was 65 or something.

Speaker 35 There's a huge disincentive to buy retail. Right.
You know, if you could buy wholesale.

Speaker 23 Right.

Speaker 35 So Doug and I were actually talking about a case the FTC brought against an MLM called Burn Lounge. It was in 2007.

Speaker 35 They were an online music store. And believe me when I say their business model was complicated.

Speaker 23 I was going to guess they were a vape company.

Speaker 35 I thought they did like workout stuff.

Speaker 23 None of the above.

Speaker 35 Yeah, exactly.

Speaker 23 Complicated music store.

Speaker 35 And so the FTC was

Speaker 23 Can I just interrupt you?

Speaker 23 Don't we have enough of those?

Speaker 35 Well, apparently not in 2007.

Speaker 23 Oh, okay. Okay.
Yeah.

Speaker 35 Or

Speaker 35 the case was brought in 2007. So, yeah, no, they were early.

Speaker 23 They were early.

Speaker 35 So the FTC was trying to prove that they were a closed system and that all of their sales were internal. That if there weren't commissions being paid to the distributors, their sales would drop.

Speaker 35 Early on, Burn Lounge was ordered to stop paying this multi-level compensation, and the demand for its products plummeted.

Speaker 35 And the Ninth Circuit was able to use that fact to say, you really don't have retail demand for these products.

Speaker 35 Once you took away the recruitment incentives,

Speaker 35 no one was buying these products. That was strong evidence that this was a pyramid scheme and not a legitimate company.

Speaker 35 The other thing that we know about this put limelight up against urban Decay.

Speaker 35 They're right next to each other in the store. But Urban Decay costs roughly $29

Speaker 35 and Limelight costs $64. Yeah, half as much.
So who's going to buy Limelight? Nobody. Okay.
So how do they stay in business?

Speaker 35 And what I would say is they stay in business by selling to their distributors because they make all their money through wholesale, which is what you originally said. Okay.

Speaker 23 All right. So what the hell?

Speaker 23 I feel like if I were honestly trying to sell this makeup and I'd invested the the 200 bucks and then I saw all this nonsense going on behind the scenes, I hope I would be the kind of person who would call it a day at this point.

Speaker 23 And then I probably wouldn't tell anyone how I got suckered and then I'd delete my Facebook and then disappear into obscurity, which is what most people do.

Speaker 23 But now we have a lot more questions than answers about what's going on in this world. So we can't call it quits just yet.

Speaker 27 I think the easiest way to fast track and get promoted from Beauty Guide and Training to Beauty Guide in that 40 days is to just buy your own product.

Speaker 27 If you invest $1,000 in your business by way of samples, brushes,

Speaker 27 they have makeup remover, things like that, then you can be promoted. That's the easiest way to do it.

Speaker 23 So the first thousand dollars doesn't have to be sold to like people that are going to use the makeup. You can actually achieve your next level.

Speaker 27 None of this has to be purchased by outside people.

Speaker 23 Well, we keep seeing posts on the internet and people talking about how much debt they're in because of MLMs. And

Speaker 23 when you read stuff like that, where it's like, I put $3,000 into this makeup thing and I'm in debt and I couldn't sell it and it's a scam, you're like, well, yeah,

Speaker 23 we all knew that. Right.
You know? Right. But are you starting to have any sympathy for those folks?

Speaker 27 Yeah, it's funny because, okay, so last night I was thinking about it from the perspective

Speaker 27 of a small business owner. So I started thinking, again, $200,

Speaker 27 investing $200 in a small business is nothing. I mean,

Speaker 27 that's nothing. That's your custom stationery.

Speaker 27 Investing $1,000, if I am legitimately thinking of this as a small business, as an actual business venture, investing $1,200 or $1,500

Speaker 27 is really reasonable.

Speaker 27 I mean, that's not... an exorbitant amount of money to kickstart a business.

Speaker 23 Plus, they tell you, like, you do have to do all of of this stuff in order to make this work. And so you kind of have to tell yourself, well, I can either give it my all,

Speaker 23 which requires me to invest a lot more than I thought I was going to because they're not upfront about it.

Speaker 27 Both in time and money. Is it ever, I just want to see on a piece of paper, like, is it mathematically possible to make any money? To make money.

Speaker 27 Maybe we're going to get it and be blown away and wonder why this is like the world's best kept secret.

Speaker 23 Okay, so it's been 11 days since McKenzie signed up to be a beauty guide, and finally her kit has arrived. Suspense.

Speaker 23 This is gonna be like the first audio unboxing

Speaker 23 tape. In the box, we found two lipsticks, a mascara, and a few blushes, a beauty blender, a cleanser, a face cream, a stack of catalogs, and then an errant USB cable that puzzled both of us until huh?

Speaker 23 What is this?

Speaker 23 That's like an iPad.

Speaker 23 At the bottom of the box, we found this shitty iPad-looking thing that was made out of cardboard, and it was preloaded with some exclusive content.

Speaker 23 When I got involved with Limelight, I didn't know anything about direct sales.

Speaker 37 All my friends, after they got their Limelight products, and they loved them so much, and every single one of them called me saying, I've never felt more beautiful.

Speaker 23 After playing with the makeup, I bet you're dying to know what it's like. Here is my personal and professional opinion.
It's gross. I hate it.
It smells bad.

Speaker 23 The packaging is unhygienic and cheap looking. And the foundation actually felt like wearing noxima all day.
But according to them, Mackenzie's all set now to start living the dream.

Speaker 23 She has access to this site. She has her box of gross makeup.
Nothing can stop her now.

Speaker 23 Okay, so you just got off the phone with your upline. Yes.
What did she tell you to do?

Speaker 27 She told me me to treat this as a brick and mortar business on Main Street. First, you would have an open house where you invite your friends and family.

Speaker 27 Then you would encourage them to use word of mouth to expand your business a bit. Then you might start investing in marketing and PR for yourself and your business.

Speaker 27 I did voice some concerns about the cost of doing the parties as they suggest them. She told me, People aren't coming to buy wine and appetizers.
Don't spend money on that or decorations.

Speaker 27 Invest in products to show them because that's how you're going to win them over.

Speaker 27 I got a list of products that I should be investing in.

Speaker 27 I need to look at the prices because this is not cheap, but she suggested getting several shades of foundation based on what skin tones my friends are. Eyeshadows, a finishing spray, the primer,

Speaker 27 and then she also does this really cool demonstration.

Speaker 1 I'm actually into this.

Speaker 27 So she asks everyone to bring their dirtiest brush to the party. Then they vote on who has the dirtiest brush.
And then she uses this magic cleanser.

Speaker 23 Soap?

Speaker 27 Um,

Speaker 27 I use soap.

Speaker 27 Well, I mean,

Speaker 23 okay, Martha Stewart,

Speaker 23 why don't you start a blog? I did. Oh, I used to have a beauty vlog where I showed people how to clean their brushes with soap.
With soap.

Speaker 27 She, she, she really just instilled upon me the importance of building up my kit so that I can demonstrate on people.

Speaker 23 But she just sold you a shitload of product and she's going to get a portion of that and

Speaker 23 her work is done for the day.

Speaker 27 I actually forgot about that part until you just mentioned it. I really

Speaker 27 I really forgot that she does make money off of

Speaker 27 I really

Speaker 27 for a minute was like

Speaker 27 it didn't occur to me as it was happening that that's what was happening. Truly, it it really just felt like she was giving me pointers so that i could just be my best hashtag girl boss um

Speaker 27 i feel like you just got conned i also feel like i just got i have a grocery list of a thousand dollars worth of product i need to buy you know and the funny thing is i went into this knowing that that's how she makes her living and i still fell for it

Speaker 23 it is really disappointing embarrassing All right.

Speaker 27 Well, I wasn't embarrassed until you brought it up.

Speaker 23 I would be embarrassed if I were you.

Speaker 27 Fine, I'm embarrassed.

Speaker 23 It's true.

Speaker 23 She just made like a couple hundred bucks on this phone call.

Speaker 27 Yeah, and that sounds really easy. I mean, she literally was doing, unloading her dishwasher and playing with her child as we were speaking.
She did tell me that

Speaker 27 the real money comes from recruiting people.

Speaker 27 That is way more lucrative than selling a couple hundred dollars worth of products at a party.

Speaker 23 I asked Mackenzie how she was feeling as she tried to get promoted from beauty guide and training to beauty guide to whatever comes after beauty guide.

Speaker 27 Yeah, I'm feeling

Speaker 27 sort of like I'm already failing in a way. I know it's ridiculous because I know why we're doing this, but at the same time, I mean, I don't fail at things.
I keep doing things until I succeed.

Speaker 27 And this is something where

Speaker 27 I feel like a hamster in a wheel. I just keep running in circles and nothing is, it's not getting better.

Speaker 27 And at the end of the month, when I'm $5 short or $9 short of making my goal, I'm reset to zero.

Speaker 27 So it really does constantly feel like it's an uphill battle that I'm just not cut out for, which is just not a good feeling.

Speaker 23 We're doing this for fake, for the show.

Speaker 23 But we know a lot of you are doing this for real.

Speaker 23 And we see you.

Speaker 23 Next time on the dream.

Speaker 35 Occasionally it gets dark and the finger gets pointed at you and you're told that if you fail, it's your fault.

Speaker 31 You know what? If people are making money in your company and you ain't,

Speaker 31 it's not your sponsor's fault.

Speaker 27 It's not the system.

Speaker 23 We don't have a very good system.

Speaker 31 It's not your product's fault. It's not the company's fault.
It's not customer service's fault. It is your fault.

Speaker 23 The Dream is a production of Little Everywhere and Stitcher. Written and reported by me, Jane Marie, Dan Gallucci, Mackenzie Kassab, Lyra Smith, and help from Claire Rawlinson.

Speaker 23 We are edited by Peter Clowney. Our fact-checker is Michelle Harris.
The Dream is executive produced by Laura Mayer, Chris Bannon, Dan Gallucci, and me.

Speaker 23 We appreciate you subscribing, rating, and reviewing the show wherever you listen.

Speaker 31 And we're back live during a flex alert. Dialed in on the thermostat.
Oh, we're pre-cooling before 4 p.m., folks.

Speaker 3 And that's the end of the third.

Speaker 10 Time to set it back to 78 from 4 to 9 p.m.

Speaker 13 Clutch move by the home team.

Speaker 10 What's the game plan from here on out?

Speaker 31 Laundry? Not today. Dishwasher?

Speaker 10 Sidelined.

Speaker 31 What a performance by Team California. The power truly is ours.

Speaker 17 During a flex alert, pre-cool, power down, and let's beat the heat together.

Speaker 1 Hey, I'm Paige DeSorbo, and I'm always thinking about underwear.

Speaker 3 I'm Hannah Bruner, and I'm also thinking about underwear, but I prefer full coverage.

Speaker 5 I like to call them my granny panties.

Speaker 2 Actually, I never think about underwear.

Speaker 6 That's the magic of Tommy John.

Speaker 7 Same, they're so light and so comfy, and if it's not comfortable, I'm not wearing it.

Speaker 10 And the bras, soft, supportive, and actually breathable.

Speaker 7 Yes, Lord knows the girls need to breathe.

Speaker 14 Also, I need my PJs to breathe and be buttery, soft, and stretchy enough for my dramatic tossing and turning at night.

Speaker 16 That's why I live in my Tommy John pajamas.

Speaker 17 Plus, they're so cute because they fit perfectly.

Speaker 18 Put yourself on to Tommy John.

Speaker 19 Upgrade your drawer with Tommy John.

Speaker 1 Save 25% for a limited time at tommyjohn.com/slash comfort.

Speaker 21 See site for details.

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