MLM’s: What’s the Beef?
June 5, 2009 § 8 Comments
Recently, Matt and I have begun recruiting for a business venture that follows a Multi-level Marketing (MLM) or Network Marketing business model. This has generated some curiosity, skepticism, and in some cases downright disgust, all of which are understandable reactions, but I wanted to directly address certain concerns, and hopefully educate and dispel any myths that may be infecting my friend’s list.
Somewhere down the line, MLM’s got a bad wrap, which is unfortunate, since some of the oldest and most respected companies in the US follow this simple business model. Companies such as Avon, Mary Kay, Amway (though they have gotten some bad press due to bad behavior from individuals, the Company itself is not bad–but I’ll address that later) and a slew of other household names like Tupperware, Pampered Chef, PartyLite, Creative Memories and on and on use this simple marketing tool and business model to give stay at home moms and industrious entrepreneurs across the US and globally the freedom to make as much or as little extra income as as they put their minds, time and energy too.
The premise is simple: What is the best way to promote a product or service but through word of mouth? We choose where we eat, what movies we see, and many of the products that we buy based on the advice of our friends and loved ones. Years ago, some brilliant business person realized that if you cut out the retial middle man and just sold a product or service directly to your friends, who told their friends , who told their friends and so on, that word would spread quickly and efficiently, and income and profit could be distributed more evenly across the board to the people that matter. It’s not an underhanded or manipulative manner of promotion at all– to the contrary, it is simply human nature– we trust the advice, wisdom and word of our friends and family.
In the past few decades or so, there have been underhanded and manipulative uses of this business model. But since the business model is merely a tool like any tool– money, a hammer, a wood chipper– it is only as evil as the hands and purposes to which it is put. You can either chip wood with it, or dispose of a body, but one is it’s proper and intended use, and the other is quite obviously not. Because of the “pyramid schemes” that busted wide open in the 80’s many people have become jaded, cynical, and downright dubious of anything that has even the slightest whiff of being an “Evil MLM.” Which, given some of the horror stories, and the broken hearts and wallets strewn in the wake of such bad business, is completely justifiable.
But please allow me to say that not all companies are created equal. The fact is, as I stated earlier, there are many respected and successful companies that use this valuable tool properly and respectfully of their distributors and their consumer base. Many of the world’s wealthiest individuals either support, promote or utilize network marketing– names such as Trump, Kiyosaki, Buffet, Sir Richard Branson, and many respected economists and financial wizards agree– this is a model that works, and if worked ethically and properly, generates a very real income for very real people.
Small business makes up half of the US economy. And of that, HALF of small businesses are home based. And of THAT one in five of Americans have a network marketing business, and one in three of Americans use some network marketed product, whether that is Avon, or Pampered Chef, or Shaklee or what have you. I bet if you were to go through your medicine cabinet or kitchen right now, you might find an item that was network marketed. Where do you think that Tupperware set Grandma gave you came from? Not Walmart, I can guarantee that.
My point is that in this economic climate, folks are looking not only for work, but for hope,and a simple and efficient (and ethical) way to put food on the table and keep a roof over their heads. And many want the freedom that owning their own business guarantees. It’s certainly not for everyone, and it is no cake walk– whatever one chooses to do, it will take hard work and perseverance in order to actually make a living at it. But isn’t that life?
Anyone who promises easy money, or huge dollar signs over night should be given a wide berth. But the fact is that many fortunes have been made through this type of business model. Some have been lost too, and the wreckage is strewn for all to see. But there is such a thing as personal responsibility. It is the individual’s job to exercise wisdom, discernment, research, and due diligence to whatever endeavor they undertake. And the internet, as a tool, has the same shortcomings as every other tool. For good or bad you can find any spin you are looking for in the vast morass of information and opinion that is out there. No one escapes unscathed from the black hole that the Great Webiverse creates. So be aware of that as well. If you look for bad press, no matter how good the product or service, you WILL find it.
So the next time someone approaches you with an idea that smacks of “MLM”, ask yourself a few questions; how well do you know this person? Do you trust their integrity, discernment and wisdom? What exactly are they telling you? And if you go so far as to check out the company they are promoting, does it seem above board, with a straightforward product, compensation plan and hierarchy? All network marketing companies will have an upline and a downline, but does it seem that no matter how hard an individual works, they never get ahead? And trust your gut. If after looking into it and hearing your trusted friend or family member out, you still don’t feel comfortable, then politely decline. This may not be the business, business model, or right time for you. But maybe down the road that could change. Just have an open heart and mind to the possibilities of having a useful tool in the right hands for incredible leverage in your life.