Some people don’t want to give out their SS# to become a rep. The companies need these to file taxes with the IRS. I understand concerns about keeping your SS# private. One alternative is to get a Tax ID # from your state. (Update: One reader shared there is a way to get a discount from doTERRA without your SS#.)
Build new leads. In network marketing, leads are potential customers. You’ll need to keep finding new leads if you want to keep making money. There are various ways you can find new leads, and you should use multiple strategies to attract the largest market possible.
Personal interaction is also useful. Always have business cards on you and be ready to talk about your company. You never know when you may come across someone who is interested in what you have to offer.
But having devotion to a company despite evidence that they are not telling the truth or that their products are not superior taints the reputation of all MLMs and their reps. It’s frankly uncalled for.
Another common practice is “channel stuffing” – requiring distributors to buy large minimums of company product, ostensibly for retail sale or for “personal use,” which serves to inflate sales numbers to give the appearance that an MLM is more sales-driven than it really is. However, the only support materials usually provided by their recruiter(s) are ones that promote the signing on of more new distributors. As a result, many a person out there has a closet full of Mary Kay cosmetics that they don’t need, and can’t sell. Type the name of any well-known MLM into eBay or Craigslist and you’ll see evidence of what becomes of that “investment” of “just a few hundred dollars” made in order to achieve new wealth and prosperity in ten hours a week from home.
As non-employees, participants are not protected by legal rights of employment law provisions. Instead, salespeople are typically presented by the MLM company as “independent contractors” or “independent business owners”. However, participants do not possess a business in the traditional legal sense, as the participants do not hold any tangible business assets or intangible business goodwill able to be sold or purchased in a sale or acquisition of a business. These are the property of the MLM company.
Let’s just suppose that “X” has been reached today in a particular MLM; the number of possible units sold at this price has just been exceeded, and you happen to be a starry-eyed prospect sitting in an MLM meeting listening to the pitch. Now consider: Does anyone in this company know about “X”? Does anyone care? Is the issue being suppressed on purpose for some other motive? Since we are supposing that the market saturation number “X” has been reached, everyone joining the MLM from now on is buying into a false hope. But that is not what the speaker will be saying. He will be telling you, “Now is the time to join. Get in on the ‘ground floor’.” But it is all a lie, even though the speaker may not know it. The total available market “X” has been reached and nobody noticed. All the distributors will lose from here on out. Could this be you? How could you possibly know at what point you will become the liar in an MLM?
Whichever oils company you decide on, one of the best decisions I made was to take oils with me wherever (almost) I go. This carrying case is the perfect size to take while on the go or traveling so you always have your oils with you should the need arise.
In FUND AMERICA, the “approved materials” showed what a great man the founder was, depicted the depth of his management experience, showed him in mood shots, etc. It is easy to swoon in admiration of such a powerful, visionary man, dedicated to bringing this wonderful opportunity to common Americans like us.
Jump up ↑ Vowell, Nicole (September 25, 2014). “2 Utah companies respond to FDA warning over health claims”. Deseret News. http://www.deseretnews.com/article/865611752/2-Utah-companies-respond-to-FDA-warning-over-health-claims.html?pg=all. Retrieved 26 October 2014.
Jump up ↑ Sataline, Suzanne (May 11, 2007). “Health Claims by Sales Force Boost Supplement Firm; Mannatech’s Products Attract the Gravely Ill; Disclaimers on Labels”. The Wall Street Journal. https://online.wsj.com/news/articles/SB117884606430799400. Retrieved July 8, 2007.
Multi-level marketing, abbreviated as MLM, also called pyramid selling, network marketing and referral marketing, is a controversial marketing strategy for the sale of products and/or services where the revenue of the MLM company is derived from a non-salaried workforce (also called participants, and variously known as “salespeople”, “distributors”, “consultants”, “promoters”, “independent business owners”, etc) selling the company’s products/services, while the earnings of the participants is derived from a pyramid-shaped commission system.
Independent non-salaried participants, referred to as distributors (variously called “associates”, “independent business owners”, “independent agents”, etc.), are authorized to distribute the company’s products or services. They are awarded their own immediate retail profit from customers plus commission from the company, not downlines, through a multi-level marketing compensation plan, which is based upon the volume of products sold through their own sales efforts as well as that of their downline organization.
In fact, Hassay draws a link between MLM’s popularity and the employment opportunities (or lack thereof) available to women. “If you look at ’40s and ’50s, which was the heyday of direct selling, women could be teachers or nurses. There were no other opportunities,” he says. “So, if you wanted some independence, direct selling Tupperware or Avon was all there was.” Unsurprisingly, considering the challenging realities of the job market today, Hassay believes we’re in the midst of a second MLM heyday right now.
So concerned, we felt the need to write this article, as we know mothers are a big target group for MLMs (read on to find out why). So if you are considering joining one, please do read this first – and forward to any friends tempted by promises of ‘income opportunities’.
The main issue with MLMs is in the way they usually work. Rather than your profit coming from the actual products you sell, it comes from recruiting people into the business as sellers under you (your ‘downline’) and making commissions on their sales (and their downlines).
But one woman’s trash may be another woman’s treasure. New consultants are reporting getting boxes full of old merchandise that appears to be from merchants who went out of business—the ugly stuff others couldn’t sell. “While LuLaRoe may resell some inventory returned in original packaging and in new condition to its employees in its company store,” LuLaRoe CMO Lyon says, “LuLaRoe prefers that product that is returned in original packaging and in new condition be used for donations or giveaways only.” Consultants dispute that claim, posting pictures of “new” merchandise with old patterns and tags that have been marked up by other consultants.
As a result, many women sign up unaware of just how hard the system makes it to earn a living selling for a MLM. “I’m trying to make it work the best I can without letting my family know I pretty much signed up for a pyramid scheme,” says Kayla, a consultant in her twenties who lives in rural Wisconsin.
Study your products and know them well. It’s your job to sell these products, so you should dedicate yourself to knowing everything about them. You’ll need to plan how you will pitch the product to potential customers, how to answer any questions or doubts they may have, and any relevant research or studies that support your product.
^ Jump up to: a b O’Donnell, Jayne (February 10, 2011). “Multilevel marketing or ‘pyramid?’ Sales people find it hard to earn much”. USA Today. Archived from the original on May 4, 2011. Retrieved April 5, 2011.
“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…
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.
Can I ask what you think about their claims about their oils being special b/c of permeability? I looked into that and was told that all EOs can permeate cells and that EOs are not permeable so not sure what they are getting at. Thanks! And what does clinical grade mean?
The upper echelons of LuLaRoe’s consultant community have a reputation for being vicious to their downline. “It’s like the policy police,” Ashley says. “‘We’re going to find you, stalk you, tell on you. How dare you guys say a single word bad. We’re going to shame you.’”
Although each MLM company dictates its own specific “compensation plan” for the payout of any earnings to their respective participants, the common feature which is found across all MLMs is that the compensation plans theoretically pay out to participants only from the two potential revenue streams. The first stream of compensation can be paid out from commissions of sales made by the participants directly to their own retail customers. The second stream of compensation can be paid out from commissions based on the sales made by other distributors below the participant who had recruited those other participants into the MLM; in the organizational hierarchy of MLMs, these participants are referred to as one’s “down line” distributors.
BioPerformance was an MLM that sold “gas pills” claimed to improve fuel economy when added to an automobile’s gas tank; the product was found to have no effect whatsoever on car fuel economy and in 2006 Texas’ Attorney General shut down BioPerformance for being an illegal pyramid scheme.
“It’s micro-entrepreneurship,” he says. “[Multi-level] marketing is just a form of direct selling. And it’s really about compensation. There’s single-level or multi-level, and that doesn’t mean anything other than how I get [paid]. People get all hung up on, ‘Well, it looks like a pyramid, so it must be a pyramid.’ But every company in the world looks like a pyramid!”
Some people may think this is the definition of a pyramid scheme, or believe that Multilevel Marketing (aka MLM) is synonymous with Pyramid Scheme. However, there is a massive distinction between MLM and Pyramid Schemes. You wouldn’t call Mary Kay Cosmetics, or AVON a pyramid scheme, would you? Both of those companies are prime examples of Network Marketing or MLM companies. The distinction comes in how the company compensates its employees or distributors. When a Network Marketing company’s primary compensation is for recruiting rather than selling, then it could very well be considered a pyramid scheme, which actually, is illegal.
Network Marketing is a business model that relies on a distribution network to build the business. Network Marketing business structures are Multilevel Marketing in nature, as the payouts occur on many different levels. You might hear the terms Person-To-Person Marketing or One-on-One marketing, which are just other ways of describing Network Marketing. Basically, network marketing involves the direct selling of merchandise or services. Some popular Network Marketing businesses you most likely have heard of include; Avon, Mary Kay Cosmetics, Amway and Herbalife Ltd.
Hassay isn’t wrong. Pyramid schemes require participants to recruit new members who have to pay to play, and they use income from those new members to compensate older recruits. Often, there are no sales of actual product; it’s all about reeling in rookie sellers, often with the promise of amazing sales incentives: cars, trips, six-figure salaries. Incentives play a role in MLM, too — Arbonne consultants can earn a monthly cash bonus towards the lease or purchase of their own white Mercedes-Benz, while Rodan + Fields sends top sellers on trips to pretty amazing destinations, such as Maui or California’s wine country. But sales are key, says Hassay, so while there is recruitment, it’s not the primary focus of the business. In that way, successful “uplines” resemble mini-CEOs, driving strategy while someone else does the hands-on selling.
And this is one of the reasons why most MLMs aren’t ethical – they sell the dream that anyone can be successful with their ‘opportunity’. They don’t make it clear that only a small percentage of people who join them will make a liveable income (or any income at all).
Despite their popularity, this type of company doesn’t exactly have the best rep. Though pyramid schemes are illegal in Canada, the perception that all MLM companies have pyramid-like qualities is a lasting one, aided in part by rumours of sketchy business practices and bad press about the industry. For example, LuLaRoe, which reportedly requires new consultants to purchase $5,000 worth of inventory when they join, was hit with a $1 billion class action lawsuit last October that says, according to the Chicago Tribune, “the [California] firm encouraged women who wanted to sell its leggings, skirts and other clothing to take out loans, run up credit cards and even sell their breast milk, then left some in financial ruin with unsold goods… As many as 80,000 people paid thousands up front for inventory.”
A February 10, 2011 article stated “It can be very difficult, if not impossible, for most individuals to make a lot of money through the direct sale of products to consumers. And big money is what recruiters often allude to in their pitches.”
So, yes, money can be made with MLM. The question is whether the money being made is legitimate or “made” via a sophisticated con scheme. And if MLM is “doomed by design” to fail, then the answer is, unfortunately, the latter.
Jump up ↑ Washburn, David (2005-08-06). “Metabolife will plead guilty, end tax probe”. San Diego Union-Tribune. http://www.signonsandiego.com/news/business/20050806-9999-1b6metabo.html. Retrieved 2007-04-11.
Jump up ↑ “Women say they were branded and traumatized by secret group’s doctors”. CBS. https://www.cbsnews.com/news/nxivm-women-say-they-were-branded-traumatized-group-doctors/. Retrieved 13 November 2017.
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.