You might not have heard of multi level marketing (MLM) but I’m pretty sure you’ll have been approached at some point by a friend in your network wanting to sell you make up, jewellery, aloe vera or greetings cards. They may even have tried to recruit you to sell these products yourself. Familiar brands such as Avon, Younique, Tropic, Forever Living, Phoenix Cards, Arbonne, Stella and Dot, Herbalife and Juice Plus all use MLM. So, is it profitable and should you be drawn in?
Since these companies frequently pop up on my social media timelines, I decided to spend some time researching them. I became fascinated with how they operate and how some even develop a cult like status amongst their reps, who become evangelical about the brand they are selling. It’s all very clever, but my conclusion is that while some people may have made real money selling these brands, very many do not. And this is why.
In most cases you can only make a decent amount of money not by selling the products but by recruiting more consultants to sell them (known as ‘downlines’). You take a cut of their sales, so that money flows up to you and, in turn, to whoever recruited you (‘uplines’). All the companies I have listed above say this is not their business model and it’s worth pointing out that pyramid selling is illegal in the UK.
As I said, my own personal Facebook timeline is daily taken up with friends selling this sort of stuff and I have been to numerous parties over the years where I have felt pressured to buy products to ‘help a friend’ with a young family who wants to start a business. In fact, I now believe that mums who want to earn money but feel they still need to be at home are being quite cynically targeted. They are often vulnerable and guilt ridden about not spending enough time with their children, so recruiters seize on this and convince them that MLM is ‘family friendly’. And that makes me feel pretty uneasy.
So, here is my advice on things to consider if you are thinking of joining an MLM:
How much will you have to pay upfront? Most of these companies expect you to buy their products outright and then sell them on, and that’s often a big initial outlay. You could end up with an awful lot of blue mascara or out of date super juice (check eBay for any of the companies’ products listed in the first paragraph for proof of this).
How real are the incentives they offer? Cars are a big one - that promise of a pink BMW can often mean in reality you have to lease it and you can only keep it if you maintain your monthly sales target. Trips abroad to motivational talks may only cover the cost of the actual event and not travel to get there.
Are the uplines ‘faking it to make it’? Look at their posts and ask yourself, can they really be making that much money and does their supposed wealthy lifestyle match with what you know about them? MLM sales managers are told to post about how amazing their new life is to lure new recruits in. You may notice they say very little about the actual products.
Don’t be a bot (or, as some other blogs cruelly label them, a ‘hun’) . Do your research, flip past the first page of Google and really look into the business you are buying in to. Is the make-up actually 100% natural, does the jewellry really never tarnish, can the juice cure cancer? And more importantly what state are the parent company’s accounts in and what are former reps saying about the brand?
If in any doubt seek financial and business advice, don’t rush headlong into anything and speak to your friends and family first - after all it’s their patience you’ll be trying once that first new sales kit arrives...