Speak to your lead in a way that gives them what they’re seeking in life. Are they looking for financial freedom? Or do they just want to take control of their business life? Are they in this to help others? Take them from their idea of success and show them how they can reach that with your help.
Français: devenir pro du marketing en réseau, Español: tener éxito en las redes de mercadeo, Deutsch: Im Network Marketing erfolgreich werden, Português: Alcançar o Sucesso com Marketing Multinível, Italiano: Avere Successo nel Network Marketing, 中文: 成功进行网络营销, Русский: преуспеть в сетевом маркетинге, Nederlands: Succesvol zijn in netwerkmarketing, Bahasa Indonesia: Sukses Di Pemasaran Jaringan, العربية: النجاح في مجال التسويق الشبكي, Tiếng Việt: Thành công trong việc kinh doanh theo mạng
MLMs blur the line between ‘contractor’ and ‘customer.’ That’s because participants aren’t just required to sell products – they’re required to recruit other people, presumably in the same general geographic area, who also sell the same products. When you recruit someone, you’ve just created a competitor, which will decrease your own sales. What you gain from recruiting that person (i.e. the cut from his sales) is never enough to offset the loss of your own sales, and thus, your income.
Ami Chen Mills Shaking the Money Tree captures the “stink” of MLM pathology and culture most vividly. Hold your nose, and dive into major deja-vu at http://www.metroactive.com/papers/metro/10.03.96/cover/multilevel-9640.html
“You see, if you can convince ten people that everyone needs this product or service, even though they aren’t buying similar products available in the market, and they can convince ten people, and so on, that’s how you make the real money. And as long as you sell to a few people along the way, it is all legal.” Maybe…
Thus, a parallel or “shadow” pyramid of motivational tapes, seminars, and videos emerges. These are a “must for success,” and recruits are strong-armed into attending, buying, buying, and buying all the more. This motivational “shadow pyramid” further exploits the flagging recruits as they spiral inexorably into oversaturation and failure. The more they fail, the more “help” they need from those who are “successful” above them.
Founded in October 2016, the LuLaRoe Defective/Ripped/Torn Leggings and Clothes Facebook group was initially intended for posting pictures of holey leggings. Now it has more than 30,000 members and has become a place for women to share pictures of ugly merchandise, screenshots of vicious consultant behavior, and to upload documents from the numerous lawsuits against LuLaRoe. (At last count, there are nine ongoing legal battles.)
To represent MLM distributorship as a “business opportunity” or “additional income stream” or “side hustle” – let alone claiming that it’s a way to get rich – is manifestly deceptive and a complete misrepresentation. To succeed in an MLM, you must essentially con your downline into buying tickets for a plane that has already taken off.
But we have reason enough to know, having read this far, why the distraction is needed. Unbridled greed suspends good judgment. When the eyes gloss over in a materialistic glaze, common sense is a stranger.
Direct selling does not necessarily incorporate the endless chain of recruiting that makes MLM so controversial, and is not necessarily unethical. However, the modern direct selling industry is utterly dominated by MLMs. According to the Deceptive Direct Selling Association (DSA), the industry’s trade association and lobbying arm, 97% of its members are MLMs as of 2017. The distinction between direct selling and network marketing, which many MLMs hide behind to maintain their legitimacy, is therefore essentially meaningless.
“Retailers should absolutely never put their personal financial situation at unreasonable risk to establish or operate their retailer business. Period,” Lyon says. “If any retailer is encouraged to do that, we do not support it.”
The difference between a MLM and a pyramid scheme can be blurry, both legally and practically. It’s never been legally defined in the US by a statute, but the FTC defines it as whether a consultant can make an income by selling to the public alone without having to recruit consultants underneath them. “Not all multilevel marketing plans are legitimate,” the FTC states in its literature on MLMs. “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. Pyramid schemes are illegal, and the vast majority of participants lose money.”
Business failure of any type is traumatic on the relationships involved, but in most small businesses there is at least the chance of success. And this is never the case in an MLM, unless “success” can be defined as profiting off of the failures of others.
If money is needed that badly, why not simply ask friends and family for help rather than taking money from them under false pretenses–and also selling them a bill of goods? By “sponsoring” them, you have not only conned them and profited at their expense, you have made them feel like losers, since they are not able to make a success of the hopeless MLM concept.
“I can’t believe you call yourself a Christian,” one retailer wrote to someone trying to sound the alarm. “Where is the Jesus in you?” Even when consultants wake up to the fact they’ve been hoodwinked, many don’t warn their friends to stay away. That’s because if you speak out against any of LuLaRoe’s rules or mishaps, the community could publicly shame and harass you for being negative. “I can’t believe you call yourself a Christian,” one retailer wrote to someone trying to sound the alarm. “Where is the Jesus in you? I have to block you due to your constant-gross-delusional-uneducated opinions of LLR.” If you reveal you are struggling to make sales, you might be told to stop playing the victim, that you’re not putting in enough effort, to be more enthusiastic, and, of course, to buy more inventory.
The main sales pitch of MLM companies to their participants and prospective participants is not the MLM company’s products or services. The products/services are largely peripheral to the MLM model. Rather, the true sales pitch and emphasis is on a confidence given to participants of potential financial independence through participation in the MLM. This is referred to as “selling the dream”.
This is yet another answer your might give to “Why Network Marketing”? Financial Freedom. Branding yourself along with your product is a key to your network marketing success. With other competition in the marketplace, you are the key difference that can make or break your financial freedom. Having a great product is a good start, but without a positive attitude and an excitement that only you can bring, you will never achieve success in network marketing.
Jump up ↑ Taylor, Jon (2011). /00017-57317.pdf “The Case (For and) Against Multilevel Marketing” (PDF). Consumer Awareness Institute. https://www.ftc.gov/sites/default/files/documents/public_comments/trade-regulation-rule-disclosure-requirements-and-prohibitions-concerning-business-opportunities-ftc.r511993-00017 /00017-57317.pdf. Retrieved 2018-04-08.
And typically I did. Instead, with other companies, you can get rep pricing without signing up! I’m not averse to MLMs that have special products that you can’t get elsewhere, but I don’t see it being good to get roped in to end up even going into debt to buy more just to stay “active” with a company.
Once you are ‘in’ you can start making money by selling merchandise or services directly, and will also start making commissions on the sales of those you recruit. So, to succeed, you need not only to dedicate to selling the product or service of the company but should also be ready to sign up and train others to sell these products and services.
Marketing innovations are not rare in the modern world, as evidenced by the success of Wal-Mart, which found a more efficient and profitable way to distribute goods and services than the status quo, providing lasting value to stockholders, employees, distributors, and consumers. But this is not the case with any MLM to date, and after 25 years of failed attempts, it is time to point out the reasons why.
↑ Jump up to: 6.0 6.1 Krige, Detlev (2012). “Fields of Dreams, Fields of Schemes: Ponzi Finance and Multi-Level Marketing in South Africa”. Africa 82 (01): 69–92. Error: Bad DOI specified. ISSN 0001-9720.
Jump up ↑ Mitchell, LaTonya M (22 September 2014). “Warning letter to dōTERRA International, LLC”. US Food and Drug Administration, Public Health Service. http://www.fda.gov/ICECI/EnforcementActions/WarningLetters/2014/ucm415809.htm. Retrieved 8 November 2014.
In most MLMs you will have no choice. You are going to have to sit through meeting after meeting after meeting after meeting. You are going to be “motivated” to coerce your friends and family to hear “the pitch.” This is the way the “dream” is planted and fertilized. Get used to it.
an endless chain of new distributors: a standard franchising model is protected and franchisees buy into a specific segment of the market with the understanding that they will not be directly competing with other franchisees within the same brand – MLM imposes no such limits and actually encourages exponential growth
This is a list of companies which use multi-level marketing (also known as network marketing, direct selling, referral marketing, and pyramid selling) for most of their sales.
If you’re tempted to join an MLM, we hope this has helped give you a more balanced view than the spiel offered by your rep. (If a friend is considering joining one, please send this article to them before they commit!)
MLMs sell themselves using self-empowerment language and sparkly beauty products. They’re #girlboss mythology repacked for Christians and Mormons; entrepreneurialism for women brought up believing men should be the breadwinners; and a peppy dream for millennials who were told they could do anything.
Of these second-wave MLMs masquerading as women’s empowerment, LuLaRoe is queen. More than 80,000 women have paid around $5,000 for several boxes of low-cost clothing and worked as much as 80-hour weeks to outfit hundreds of thousands of suburban women in multicolored polyester. But according to a report that studied the business models of 350 MLMs, published on the Federal Trade Commission’s website, 99% of people who join multilevel-marketing companies lose money. Depending on how you look at it, it’s either a brilliant business model or a predatory practice—or a little bit of both.
“Right now, I make more doing hygiene than recommending products to people, but maybe in four or five years I could retire as a hygienist,” says Donald. “Because people don’t realize that you actually have to work and put in a good few years before you start seeing money — it’s like any business. You can’t open your doors and expect to be rich tomorrow.