An Honest Look at Multi-Level Marketing

You've looked into a multi-level marketing company. In all honesty, I think everyone has, but we treat them as taboo. We seem to feel that society places them at a level just below prostitution and drug dealing, so we don't dare talk about them, or ask questions openly. Although I am not in a Multi-Level-Marketing company, I think that society is overly harsh. I'm unashamed to say that I have looked into a few of them. In doing so, and in talking to other people about them, I have heard so many generalizations, both for and against multi-level marketing companies. I want to lay out the different things I've heard, then explore them. Behind every generalization is a grain of truth, or in some cases a lot of truth. Before I do, I am not a part of a multi-level marketing company. My wife is, and I have turned down a few offers, so I know most of the generalizations.

Generalization #1:

It's a pyramid scheme that leads you to leach off of underlings

Strictly speaking, pyramid schemes are illegal in the United States. As defined by the trustworthy wikipedia, "A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products or services." Essentially, a pyramid scheme sells nothing, but requires you to trick people into paying money into the scheme in order to make your money back. Only the people high on the pyramid make money in this way. Multi-level marketing isn't that way. First off, you sell actual products, that alone disqualifies it as being a pyramid scheme. Secondly, a person at the bottom level can make more money than the person above them if they make a lot of sales. In fairness, the systems are designed so if you do sign people up below you as a distributor, you make a percentage off of each of their sales. Usually it isn't more than 10-15% though. It is a decent amount, but the companies structure it this way so that you coach the people under you and help them succeed. 

Generalization #2:

It will help people

It might. I know of plenty of people who make a decent wage from these companies. I also know people who try them out, have to invest a decent amount of money into them, and give up. It takes work to get a business like this started. Another name for these companies is Network Marketing. If you don't have a network, or if you aren't a social person, you might not be successful. In fairness, if you aren't a social person, it might help you become more interactive, but you are investing money on the premise that you can change. Will it work? Maybe. Will it help you? Maybe.

Generalization #3:

It'll make you a millionaire

It's possible, but it won't be over night, and it probably won't be within a year or two. People sometimes get the impression that they just need to talk to a few people and the idea will grow naturally and organically. Unless you've discovered the MLM (Multi-Level Marketing Company) for the water from the fountain of youth, it will take work. If you want success, you have to put in time and effort, just like anything in life. Like I mentioned before, if networking and talking to people isn't your thing, this will be miserable work. Most startup companies don't make money for the first year or two. MLMs try to do a bit better than that, but my wife has been in hers for a month now. We're in the hole $200, but it's about to the point where we don't have to invest any more of our funds into it. I don't think she'll be able to pay herself for another couple months, but we're definitely not going to be millionaires by the end of the year from this. However, within a couple years, there are plenty of people who make five and six figure incomes from MLMs.

Generalization #4:

It's a scam

You hear this one all the time. Real MLMs aren't scams, but there are fake ones. Do your homework. As I mentioned before, pyramid schemes are illegal. This doesn't mean that people don't try them though. My home state of Utah is #1 in the nation for Ponzi Schemes.  Research the company. It doesn't matter if your bishop is the one with the business proposition. If you don't research the company, then you are a poor investor, and you'll likely lose your money. In researching, you might also find out that the MLM is about to go under. MLMs bubble and pop all the time. Before you get into one, do your homework.

Generalization #5:

It turns you into a person that sees people around you, your friends and family, as just another sell

It can, but it shouldn't. People now-a-days are tired of being sold to. It gets old. You don't want to be the person that feels like they have to go to their grandmother to sell some knives in order to make a sale. I've been a sales person, a telemarketer (the other group on the same level as prostitutes and drug dealers). I know how to push a sale. If you treat your MLM business like a job, than you should leave your work at home when its time to be at home, with family or with friends. You'll burn a potential friendship really quick by trying to sell someone something they don't want. 

The example of the right way to sell to everyone was shown to me by my old construction boss. He was a Doterra distributor. He would carry around little sample bottles of oils and he would give them to people that had some sort of ailment or hurt. I watched him give out frankincense oil to an elderly couple with all sorts of inflammation problems. He said try it, it works for me. If you don't like it, throw it away. The tried it and liked it and he sold them a lot of oils after that, both to them and their kids. It was with this man that I came the closest I've come to joining a MLM. I am completely sold on Deep Blue. I like peppermint ok, but deep blue is wonderful. Because I wasn't sold on all the other Doterra products, I didn't feel right handing out bottles of lavender saying that it would cure their burns or diabetes. If you aren't sold, then you shouldn't sell. It's that simple. If your market is strictly sales, this might not be entirely true, which is why people hate sales people. If you are a network marketer, you have to believe it, or you will burn bridges of trust with your network.

Conclusion:

If you're looking into a MLM, that's just fine. Hopefully this helps. If you've heard any other fun generalizations, post them in the comments below! I'd love to do a part 2 of this post! 

I'm also going to do an article series about different MLMs. If you are in a MLM and want some free exposure, I might feature you. Email me with the template at the bottom of this page, or message me on Facebook and we can talk!