Updated: Jul 24, 2020
MLMs are a highly debated topic. While so many people are against them, there are just as many who support them. What is the big deal? Are they the devil incarnate or a profitable side gig? Do they rob the poor and pad the pockets of the rich or do they help families make ends meet? Just type "MLMs" into Google and the results are less than flattering. For giggles, I did exactly that and these are the resulting titles:
How MLMs are Hurting Female Friendships
Multi-Level Marketing Businesses and Pyramid Schemes
MLMs and Recessions: How to Spot an MLM and Say No
MLMs like Avon and LuLaRoe Are Sending People Into Debt
MLMs Sell the American Dream and Steal Your Money
MLMs like Young Living and Doterra are Using the Coronavirus to Recruit New Sellers
I mean, this seriously sounds like a group of predatory companies. Why would anybody support them? On the other hand, we all know several people who are distributors for these companies and they seem very happy with their roles. We would also be hard pressed to find someone that has never bought a MLM product. So again, I ask, what is the deal?
What is a MLM?
Let's start at the beginning shall we? According to Wikipedia, (I'm not shooting for scholarly articles people, just reliable ones) "multi-level marketing (MLM), also called network marketing, referral marketing, and pyramid selling, is a marketing strategy for the sale of products or services where the revenue of the MLM company is derived from a non-salaried workforce selling the company's products/services, while the earnings of the participants are derived from a pyramid-shaped or binary compensation commission system."
While we're setting the record straight, let me also make one very clear distinction. I'm talking about multi-level marketing businesses not pyramid scheme. Some may declare that they are one and the same but they are not. Pyramid schemes are "fraudulent schemes, disguised as an MLM strategy. The difference between a pyramid scheme and a lawful MLM program is that there is no real product that is sold in a pyramid scheme. Participants attempt to make money solely by recruiting new participants into the program. The hallmark of these schemes is the promise of sky-high returns in a short period of time for doing nothing other than handing over your money and getting others to do the same."
So for clarifications sake, I am talking about the companies that indeed do sell a product. Whether those products are any good, is another post for another day.
As I mentioned earlier, there are a ridiculous amount of articles telling you why you shouldn't join an MLM. After reading a large portion, and by large I mean like 25, they all seem to have several reasons in common. Below are listed the most common reasons why "experts" and I use the term experts loosely, say you should avoid them:
MLMs rely on recruiting, not selling.
The MLM model makes it impossible to earn money.
MLMs incentivize their reps to buy from them.
MLM are unpaid sales reps, not 'business owners'.
MLMs are not regulated - you have no way of knowing if they are a fraud.
MLMs damage relationships.
MLMs operate like cults.
I can honestly see why all of these are bad. I know people who have experienced each and everyone of these. With everything else in the world, we tend to let the few ruin the whole. I have avoided being a promoter/influencer/director (whatever you want to call them) for years. I've been with one company for over 2 years and most don't know it. I really just wanted my discount and didn't want to come across as preachy or pushy. I totally GET why people avoid them.
Yet, people still join them. I want to break these down and really get into them. Lets start with the first one, MLMs rely on recruiting and not selling. For some, I'm sure this is true but most that I have encountered do give you a percentage from each sale made. However, I have found that some offer more prolonged and sustainable income from recruiting others. Once, you recruit someone, you typically get a signing bonus for that person and a small percentage of their sales as well. However, there are some that offer nothing for signing others. It depends on the individual company.
The next three reasons kind of go hand in hand for me. It's all about the loss of money. You're set up to never actually make any money, you have to buy inventory and while you may own the inventory, you don't own an actual business. Again, all of these may be true for some. You HAVE to do your research! Not all are like this. All of them do have a fee to become a seller, these fees can be as small as $35 or as high as $499. Yes, you do go into debt to begin. I can't argue with you there. Not all require that you hold inventory though. Now, most MLMs have evolved to a point where the sales are all online and while having tangible things for customers to try helps, it is not mandatory.
Now to the last financial issue. I can't argue this one. You own nothing but your personally owned products. If you decide to quit, your customers are just moved on to someone else, however, if done correctly and with the right expectations, you could get a sense of being your own boss. You only get out of it what you put into and essentially your outcome is wholly dependent on you.
We've already addressed the fifth reason to an extent. True they are not regulated, but as long as they sale a product, they are an MLM and not a pyramid scheme. My other issue with some of the health/wellness companies is that they do their own testing and research and are hardly ever verified by third parties. I'm a skeptic at heart, I look both ways at a round-a-bout, so this has always made me skittish of their claims.
My favorite arguments against MLMs are the social stigma ones. They damage relationships and are like cults. I get it, but I've found that most of these stigmas come from people who are doing it badly and were socially awkward to begin with. We all have that chick from high school, that we didn't really talk to, message you about their new MLM.
So again, why do people do it? I'll start by telling you why I do it. I'm a distributor for one company and an artist with another. One of these, I hardly ever talk about. I'm almost embarrassed to be associated with them and will probably be leaving it as soon as I find a suitable replacement for all of its products. While I love the products, there have been so many people who have done it badly that I honestly don't want to be associated with promoting it. Plus the market is saturated with people who sell it or sell something similar. I silently collect my discount, use great products and keep my head in the sand. As for the other, Maskcara Beauty, I have a massive passion for it. This product has literally made a big difference in my daily life. I want to shout it from the rooftops. I was talking about it even before I became an artist, so why not try to make a little side cash off of something I was promoting anyway.
I'll admit, joining Maskcara was an agonizing decision. I was already part of one that I didn't do anything with, but I also wasn't losing money with.
**I want to stress that part. I did my research and while I didn't promote it, I wasn't spending any more money than I would have if I wasn't a distributor. I would have bought the product anyway and as a distributor, I got an extra discount.**
This boils down to what I think is the most important thing, DO YOUR OWN RESEARCH! Just because your cousin sells Tupperware and can pay for her kids braces with the profits doesn't mean its a good fit for you. Don't go out searching for something to sell. If you do, you won't be passionate about the product and your customers WILL know. Once you find a company, how many sell it in your area? If the market is saturated, who are you going to sell it to?
I didn't just want to use my experience as an example. I asked two other women who are killing it with MLMs to share their reasons for joining. I personally buy products from both of these women and can honestly say that I love them.
Social Marketer for Modere
Most people see weight loss product and run for the hills, trust me I get it. Been there, have a t-shirt to prove it. A t-shirt that was 2 sizes bigger than the one I'm currently in, so there’s that.
So let me start by introducing me, and the company I am now partnered with that has transformed my life and allowing me to help others do the same! My name is Ashley Craddock, your average nurse from a small town, wife, mother and Jesus lover… but I do cuss a little. I was disgusted with my body after my second child and post-partum depression did not help at all. I started on a weight loss journey in April of 2018 and, well to my surprise, I was a little more dedicated than I thought, because 49lbs later I was a new person thanks to Weight Watchers. But I hit that dreaded weight loss plateau and there were plenty of days I felt like I could just regress and forget it all. Stress also plays a huge factor in weight loss and our household was caving living paycheck to paycheck… I felt like my back was against the wall. I was praying for a way to earn extra income without completely removing myself from the home but how was that even possible?
One Sunday evening scrolling my evening news, aka Facebook, I ran across a post for a toning, tightening weight loss product that looked like pudding on a spoon… Ill admit I was skeptical but I wasn’t losing anymore so what the heck, I asked what it was and from there I’m buying the product, reading all about the benefits and was like hey I could promote this and in an instant I was a newly found social marketer (sounds super professional right?!)
People hear the word MLM and think it’s a scandal, it ain't real and there is no way you can make an income from your phone. Well… game changer over here with social retail, and with a dual sided compensation plan its almost like you cannot go wrong, you literally can make money without growing a team at all.
So what business is this? Modere! A clean-living company that has been around for 30 years that strives to create 10 million healthy homes from cleaning products, personal care, weight loss, skin care, vitamins for your health and wellness and much more. And the best part its all-natural products that are gray water safe and kid friendly.
Every product I have tried thus far has been a life changer for me. The weight loss products dropped me in inches, actually 6 pant sizes in 7 months. The probiotics have helped my gut health and keeps things regulated, and the skin care is the first of its kind absorbable collagen. And the energy, was insane!! It was really a no brainer after trying these products, that I needed to share these products.
I never believed in my wildest dreams business would boom like it did, financially this has been a true blessing to my family in more ways than one. I feel like I was able to find a side of me I didn’t know existed. I've been able to help others find their confidence and feel good again. I'm able to support our family from and family from anywhere to $500-$1000 extra dollars a month and I am still baffled at it most days.
My takeaway from all this, take the risk! Do not doubt yourself. If an opportunity is presented, do it. If you are not happy with you, then change it. Do what it takes to love yourself and take care of yourself because the people around you deserve you at your best and no less. Do not sell yourself short, you’ve got this!
Color Street Stylist
I am a stylist for Color Street; Color Street is 100% real nail polish in easy to apply strip form. No dry time, no smudges, no chips. I bought by first set of nails, not having worn polish in 12 years, to help out a friend! I never had any intentions of ever selling them because at the time, I already had a very successful skincare side gig.
After putting on my first set, I was blown away. I tried my second set and knew immediately this product was different from all the rest. I messaged my friend and literally asked for the down and dirty of the business. I learned they get paid weekly with monthly bonuses, earn 25% straight out the gate, and there was no monthly product minimum I needed to purchase personally. The latter was most important to me as I had been required to purchase close to $100 in personal product each month.
I sat on it for about two more weeks before I made my decision. I worried what would my friends think about me doing ANOTHER direct sales business? Would I have the clientele to make it worth while? Would my husband support me in another wild adventure. I quickly realized I had my biggest cheerleader cheering in my corner (my husband) and to heck with the rest!! I took a leap of faith, not worrying about what people thought because ultimately, they don’t pay my bills. I have some friends that support me whole heartedly and are some of my best customers, some that don’t even acknowledge what I do, and some that cheer me on from the sidelines, and I respect and appreciate every single one of them.
After one super short week in the business, I reached my first promotion. At that moment, I knew I had made the right choice. Because of this business and the extra it brings in for my family and I, we get to enjoy the finer things, enjoy more experiences, and reap all the benefits. This business is not easy, but it’s simple. Not easy in the fact that there are many late nights. Not easy in the fact that we are still so new and are experiencing growing pains. Not easy in the fact there is so much judgement towards people who do direct sales. But simple in the fact that it’s one product to learn, weekly trainings to help me be successful, and a team atmosphere that thrives on your personal success.
Would I change anything about this business! Yes! The fact that I allowed my fears to hold me back before opening my mind to the opportunity.
So, lets sum this up...
Are there bad experiences, yes! But again, I think it is YOUR responsibility to do the research to see if its for you. I didn't want a company that required you to hold your own inventory. Who has the money or the space for that? But if it's something you don't mind then maybe one of those companies will work for you. Most importantly, find what makes you passionate. Ashley, Tara and myself talk about how amazing our products are. If you don't feel that way, don't bother! Your lack of excitement will come across and you won't be nearly as successful as you want to be.
My advice to you is to figure out what you want from it and set REALISTIC expectations. You're not necessarily going to hit the ground running. Some companies have training that you have to go through first just to learn how to promote their products and what is and isn't. Set goals! If you don't have goals, you don't know how much effort that you need to put into. You want a little extra cash? Do several hours a week. You want a whole other paycheck? Well, that's going to take a lot of work. You get what you put in but you also have to research your company and know what you'll get in return. That is where I think most people make their mistake.
I've included both Ashley's and Tara's links above. Please take the time to check their products out as a "Thank You" for helping me with this post. If you guys have any questions about MLMs in general, let me know. I can either talk you off a ledge or empower you to do great things.
Multi-Level Marketing Vs Pyramid Schemes - South Dakota Consumer Protection, https://consumer.sd.gov/fastfacts/marketing.aspx