MLMs can be either friend or foe for the average MOMeo.
Mary Kay Ash had committed 25 years of her life to direct selling when a man she trained was promoted before her – at twice her salary.
She resigned from her prominent position and set out to create her own opportunities. What would come of her efforts was a multi-level marketing (MLM) company — one in which promoters of the company’s products are compensated for sales they personally make, and sales made by people they introduced to the company.
“I envisioned a company in which any woman could become just as successful as she wanted to be,” the late Ash is quoted on the company’s website.
Today, companies like Mary Kay Cosmetics, Amway, Tupperware, Arbonne, Avon and many others offer MLM business opportunities. However, the sheer number of companies in the MLM industry hasn’t helped clear confusion.
Are MLMs a MOMeo’s Friend or Foe?
For every success story, there is another who has failed miserably. Websites dedicated to debunking MLM myths watch their every move, lest they take advantage of too many.
While the MLM industry has its bad apples, not all are out to make a quick buck on unsuspecting entrepreneurs. Some offer quality products, career advancement opportunities and top-notch training. Finding the appropriate company just takes a little due diligence, and a dose of common sense.
Do your homework
Sarah Robinson, CEO and Founder of Direct Selling Leaders, Inc, offers the following advice on choosing a MLM company:
“It’s so tempting to get caught up in the emotion and excitement of the moment, but this is a BUSINESS we’re talking about. Research online, talk to more than one person.”
In other words, do your homework.
Prior to signing with any MLM you should know the company’s history. If they’re well-established, this includes their corporate track record and what evolution their business model has undergone since founding.
If they’re new, find out what credentials and experience their founders and corporate leaders bring to the table.
Understand the compensation package & business agreement
You wouldn’t accept a traditional paid position without knowing how you’d be making money, so don’t make an exception for a MLM. Most companies offer their sales force discounts on their products, but don’t assume that’s how you will make your money.
Find out exactly how you will be compensated for your sales, and at what rate. For instance, some companies reward larger orders by giving bigger percentage discounts. Find out whether you are compensated for sales made by people you recruit, and if so, at what rate and on what schedule.
Ask questions about what initial investments will be required of you, as well and if any quotas must be met to keep your status. Find out what marketing stipulations are applied to your status as a representative of the company. Most companies have articulated guidelines for their sales force; since the type and frequency of the marketing you do directly affects your profit margin, it’s important to know.
Avoid common gimmicks and pitfalls
Two of the most common gimmicks in the MLM industry are those boasting a low initial investment but requiring high monthly sales quotas. Be wary of recruiters who inflate their own successes to make the company more appealing.
Don’t fall for either. Critically examine everything you’re told. Ask to attend business meetings rather than guest events where fun is inflated and work diminished.
Know this takes work – and business sense.
As Mary Kay representatives often say, “this is so much more than lipstick.” You will be CEO, COO, Marketing Director, Customer Service and Public Relations Coordinator all at once.
MLMs are not a one-size fits all templates for success. As Sarah Robinson suggests “you’ve got to get some hard business skills.” If you know how to write a business plan, stay in the black, keep solid records and run a business from the ground up, great. If you don’t, seek out mentors, or don’t invest in a MLM.
The bottom line, MLMs can be either friend or foe for the average MOMeo. When started under proper pretenses and realistic expectations, they’re an excellent foot into the business world. When viewed as an all-fun, no-work path to get rich quick, they’re sure disaster. Set yourself up for success from the onset.
