* Why 10 years? Because that amount of time really seems to matter. For example, according to research, since 1956 thousands of different MLM, Multi Level, or Network Marketing companies have opened their doors; and to date only +/- 50 MLM companies have found a way to celebrate their 10th anniversary and still remain in business today. Now, to be completely fair, we should also point out that each and every company on our list was at one time a start-up company too.
Any business must carefully consider supply and demand. For example, if the ReVo Corporation thinks that it will have a full-fledged fad on their ovoid sunglasses next summer, perhaps they should plan to build and distribute, say, 10M units. This involves gearing up factories, setting up distribution and dealer networks, and carefully managing the inventories at each level so that ReVo will still have credibility with their distributors, retail outlets, and the public the following year.
While this is the most difficult point to make, it is perhaps the most important. Anyone who has any experience with an MLM has strong feelings, either for or against, and this is the problem. Polarization runs deep.
LuLaRoe’s messaging is filled with positive language: “I believe in you” is the company’s unofficial tag line, and body-positive imagery floods its website to showcase its large selection of flattering plus-size outfits. “It’s hard to find plus-size clothing that actually looks good—that makes you feel like you look good,” Sophie says. “That’s why there’s such a customer base for LuLaRoe.”
The main pitch of most MLMs is passive income – the promise of being able to sit back and relax while someone else does all the work. But if everybody wants to “let someone else sell the products,” who will actually do the selling?
In 1991, some distributors in the MLM FUND AMERICA began to produce their own, improved recruitment material. They were summarily fired, which did not please them since many of them were founding members who had “gotten in early.”
So why are MLM promoters obscuring this? Who is in control of the supply “knob,” carefully and skillfully managing the size of the distribution channels, number of salespeople, inventory, etc., to insure the success of all involved in the business? The truth is chilling: nobody.
Jump up ↑ News, A. B. C. (December 16, 2017). “Former NXIVM member says she was invited into a secret sorority, then branded”. http://abcnews.go.com/US/nxivm-member-invited-secret-sorority-branded/story?id=51617201. Retrieved February 10, 2018.
But wait, did you know the average MLM associate quits after just 4 months? That means that you will need to recruit 5 new people (another 125 prospects) every 4 months just to keep from going backwards. And guess what, this applies to your entire organization!”
In a normal sales business, you are hired and promoted based on a holistic assessment of a variety of factors: one’s character, temperament, and contribution to the company and its profitability. In an MLM, there are no qualifications to join and you advance based on one factor alone: recruitment. The problem is that as the market saturates at an exponential rate, the pool of potential new recruits rapidly dries up, and new distributors must sink lower and lower and engage in steadily shadier and more desperate practices to build their downline. Far from being the behavior of “just a few bad apples,” as the MLM industry would have you believe, this practice is encouraged and rewarded by a system that prioritizes raw recruitment numbers above all else. This virtually guarantees that the ones who make the most money in MLM are the ones with the fewest scruples – which is unsurprising, given point #6…
The final figures are out… and the news is better than even expected! The Network Marketing and Direct Sales profession hit a new record in 2013 with $178 BILLION in global sales. That’s up from $167 Billion in 2012. Network Marketing is BIG business!
Water.org is an international nonprofit organization that has positively transformed millions of lives around the world through access to safe water and sanitation. Founded by Gary White and Matt Damon, Water.org pioneers innovative, market-driven solutions to the global water crisis — breaking down barriers to give families hope, health and the opportunity to break the cycle of poverty.
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.
In mainstream terms, it’s most similar to franchising, where a business operator buys the rights to a specific brand and in turn receives support from the company that owns the brand. But there are two big differences:
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.
Look up CEO’s and other company leaders. Keep the same things in mind as when you investigated companies. Is the company leadership reputable and law-abiding? If company leaders have been accused of carrying out scams or have had legal trouble, you may want to avoid this company.
Fed the fantasy of achieving the all-elusive American dream, many of them are being wooed by multilevel-marketing companies. Known as MLMs (or “direct-sales”), the current US administration is stocked with their cheerleaders: Betsy DeVos, the secretary of education, is married to a cofounder of Amway; Ben Carson is a spokesperson for a vitamin MLM called Mannatech; and president Donald Trump used to have an MLM, Trump Network, and was a spokesperson for another.
The longest-running, most trusted, well respected and relevant Direct Selling Event in the World. “Direct Selling” encompasses the terms “Network Marketing,” “Social Selling,” “Party Plan” and “Multi-Level Marketing.”
There is some stigma attached to networking marketing, especially with regard to multi-tier and multilevel structures, which attract pyramid schemes. Still, the appeal of network marketing is that an individual with little skill but a lot of energy can create a profitable business for themselves with little monetary investment. A good rule of thumb, according to the Federal Trade Commission, is that single-tier network marketing operations tend to be more reputable, but multi-tier schemes in which people make money based on the number of distributors they recruit — rather than self-generated sales — can be problematic. Some reputable examples of single-tier network marketing operations are Avon, Mary Kay and Excel Communications.
To be fair, MLM isn’t the business style for everyone. You do have to look at your personal network as a potential customer base, which requires a delicate balance — one that not everyone enjoys. That was the case for Nadia Manes, a 34-year-old from Oakville, Ont., who recently dabbled in selling Arbonne. “Did I like the product? Yes,” she says. “Did I like harassing people and convincing them to sign their paycheck over to me so they can get a new face wash? Absolutely not!”
↑ Jump up to: 1.0 1.1 Carroll, Robert Todd (2003). The Skeptic’s Dictionary: A Collection of Strange Beliefs, Amusing Deceptions, and Dangerous Delusions. John Wiley & Sons. pp. 235–36. ISBN 0-471-27242-6. Archived from the original on June 26, 2009. http://www.skepdic.com/mlm.html. Retrieved June 29, 2009.
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.
In 2016, the US Census Bureau stated the median rural household income is 4% lower than it is for urban families, and income inequality is also higher. The US government tried to help people understand the risks before joining these kinds of companies, but MLMs had their way. In 2012, federal legislation passed requiring all franchise companies to provide a disclosure document with information on weighing the benefits and risks of signing up. However, MLMs poured money into lobbying and flooded the FTC with more than 17,000 comments from consultants saying the disclosure would be a burden, and asked to be excluded. The FTC complied, and now MLMs aren’t required to disclose information on risks to interested consultants.
“One of the unique facets of this business is that the victims are also perpetrators,” Brooks says, speaking generally of MLMs. “You’re trained to recruit your friends and family and neighbors.” He points out that when you onboard someone underneath you, especially if they live in your town or are in your friendship group, you are essentially creating a competitor. It’s as if you open a Subway sandwich shop and then encourage your neighbor to open a Subway right next door—and everyone is already sick of sandwiches.
Honest confession: until we recently we thought MLMs were fairly harmless. In fact, we’ve even unknowingly profiled them on our site (we weren’t aware some businesses were MLMs). While they didn’t particularly appeal to us, we didn’t see the harm in them.
It turned out to be a savvy choice. In her category, two major competitors have recently declared bankruptcy, while Costa’s company has seen astronomical growth. “There’s a retail disruption happening,” she says. “Traditional bricks-and-mortar is suffering big time.” Peekaboo Beans, on the other hand, is thriving — by 2015, it employed 700 consultants, had paid out $1.7 million in commissions and its revenue had grown by an average of 70 percent every year.
Such a transparent appeal should make people suspicious. “Why the bait?” “Are they trying to ‘get my juices going’ so that my brain turns off?” “Couldn’t they show people doing more wholesome things with the money they make?” “If this is really a legitimate opportunity, why not focus on the market, product, or service instead of people reveling in lavish materialism?”
Regardless of all the vehement denials, MLMs are all to some extent pyramid schemes, and pyramid schemes are illegal. Sure, some are “getting away with it,” but so did the Mafia for decades. It is hard to stop a juggernaut, especially one that has taken such pains to look legitimate and misunderstood, that is highly organized, and that has so much money from its victims to propagandize, lobby, and defend itself. And so the exploitation goes on.
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.
Thus the MLM organization becomes exploitative, and many high-level MLM promoters have been shut down, the “executives” incarcerated, for selling the fraud of impossible success to others. Other, larger MLMs have survived by hiring large batteries of attorneys to ward off federal prosecutors, even bragging about the funds they have in reserve for this purpose.
With their leggings falling apart, parties going dead, and debt ballooning, going-out-of-business (GOOB) sales have proliferated. As a result, potential customers now know they don’t have to pay retail price for products: They can just type “LuLaRoe going out of business” into Facebook and find heavily discounted items. This makes it even harder for the consultants still in the game to make money, as they are competing with women who are undercutting their prices in an attempt to squeeze every last penny out of their remaining inventory.
The Federal Trade Commission warns “Not all multilevel marketing plans are legitimate. Some are pyramid schemes. It’s best not to get involved in plans where the money you make is based primarily on the number of distributors you recruit and your sales to them, rather than on your sales to people outside the plan who intend to use the products.”
The unfortunate “distributor” at the bottom is the loser, and once this becomes apparent beyond all the slick videotapes and motivational pep-talks, good people start to get a bad taste in their mouths about the whole situation.
I’m sure you’re wondering now; can you actually make money with Network Marketing? The answer is “YES”, you can, but only if you are willing to do the work to grow your network, to really sell the product or service. You have to really believe in yourself and the service or product you are selling if you are going to achieve any level of success. You do not only have to be willing to SELL to the end consumer, you definitely have to be willing to put in the time and effort to train others, and to get them ENTHUSIASTIC over the product or service as well. It takes some time and dedication, but if you believe in yourself, you believe in the product or service and are willing to put in the hard work, you CAN succeed beyond your wildest dreams in Network Marketing!
“There was a point in time where I had $8,000 worth of inventory sitting in my home while I was running up to food banks to feed my family.” Sales started to decline in the third month. Her consultant group told her it was because she didn’t have enough inventory, so Ashley followed their advice and bought even more. As sales continued to decline, she used her income-tax rebate to buy more, but it didn’t keep her sales from bottoming out at $500 a month. “There was a point in time where I had $8,000 worth of inventory sitting in my home while I was running up to food banks to feed my family,” she says. “I really feel like I failed my family.”
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.
^ Jump up to: a b Merrilees, Bill; Miller, Dale (1999). “Direct Selling in the West and East: The Relative Roles of Product and Relationship (Guanxi) Drivers”. Journal of Business Research. 45 (3): 267–273.
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.
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.
In June 2016, Sophie (name changed) quit her job in the suburbs of Fort Worth, Texas to sell for LuLaRoe, a rapidly growing clothing company that offers self-employment opportunities to American women in the form of hawking hyper-hued apparel. LuLaRoe’s consultants told her—and tens of thousands of other mostly rural and suburban women over the past five years—that she could provide for her family, join a sisterhood of supportive women, and find meaning in her life again through the conduit of colorful, stretchy fashion—all for a reasonable upfront investment of around $5,000.
“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.”
It’s no wonder being able to make money without having to work a traditional 9 to 5 is super appealing. Full-time permanent employment is increasingly hard to find, and research confirms it. According to two 2015 studies, one by the Organization for Economic Co-operation and Development (OECD) and the other by the United Way of Toronto, the economy is increasingly dependent on precarious employment — which disproportionately affects young people aged 15 to 24, particularly women and people of colour.
LuLaRoe gives these women a way to have it all: a career, new friends, body confidence, extra money, all with enough time left over to be an excellent mother and wife. “Want to earn full-time income for part-time work? Ask me how!” reads a sign that was sent out to new consultants last year. Stidham often promotes the idea of her company being a perfect part-time job for mothers by talking about being a single mother of seven hustling out of her home—even though she was already remarried and her kids grown before LuLaRoe was founded.
Non-MLM real-world businesses that offer products of interest to friends, family, etc., such as insurance agents and small retail shop owners, seem to be more circumspect in dealing with personal relationships in all but a few rare (and grievous) cases. But the MLMer is recognizable by duplicity of friendship overtures, overbearing glad-handing, full-time prospecting, outrageous initial deception, and social callousness. This is no accident, but rather sheer desperation. How could it be otherwise? For the active MLMer is in a hopeless bear trap: with hubris as one steel jaw and oversaturation the other.
I recommend you consult with a professional before ingesting any essential oils. Consult a Medical Doctor, Naturopath, or clinically trained Aromatherapist who knows you and is aware of your medical history, as well as any medications you are on. With this information, the professional can tailor a regimen that works for your body.
MLMs often teach their participants to recruit their best customers. What kind of normal business turns one of its best assets into a liability? Imagine if the local Starbucks started encouraging all its best customers to open up their own Starbucks, where all the customers would, in turn, be encouraged to open up their own Starbucks. How long before there are too many Starbucks and no paying customers left? Which brings us to point #2…
Jump up ^ “The Bottom Line About Multilevel Marketing Plans and Pyramid Schemes” (PDF). FTC. Archived from the original (PDF) on May 8, 2012. Not all multilevel marketing plans are legitimate. Some are pyramid schemes.
Nothing irritates a die-hard MLMer more than the preceding argument. If you point out the absurdity, for example, that if “the pitch” at an Amway meeting were even moderately accurate, in something like 18 months Amway would be larger than the GNP of the entire United States, then listen closely for a major gear-shift: “Well, that is absurd, of course. Not everyone will succeed, and so the market will never saturate.”
There’s no minimum amount, It’s an investment that you do for yourself and to help other people. You shouldn’t make a decision based on the amount or what it costs, but rather on what it can bring to you as a result.
That self-help-tinged speak is a common thread among MLM companies. Arbonne’s tagline is, “transform your life and the lives of others.” Part of Stella & Dot’s appeal, says Berendson, is that, “the [company’s] name stands for the CEO and Chief Creative Officer’s grandmothers, and the business is all about empowering women and creating a business her way on her own time.” But that enthusiastic brand loyalty might be part of the reason for the persistent negative perception of MLM companies, which have sometimes been described as, “cult-like.” If you’re not in the community, that much enthusiasm can be off-putting.
When considering whether or not to engage in the fast paced world of network marketing, one of the most important things you can do to prepare is to identify the overall demand for the product or service you are looking to promote. By identifying the level of demand for the product/service you are promoting, you can be more effective in connecting with the individuals or groups interested in the items.
During the Mary Kay heyday in post-war America, consultants would invite their friends to in-home parties (think Tupperware) or go door-knocking to sell their products in their neighborhood (think Girl Scouts). However, in the digital age, the game has changed. Consultants who had previously run out of doors to knock on or neighbors to invite over had to put their goods in a car and drive to the next town for fresh clientele. Now they just form a group on Facebook, fire up a Live video stream, and sell to eager customers across the country, like their own miniature Home Shopping Network.