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Should you try multi-level marketing?
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If you need to make more money, and who doesn’t, you may have considered joining one of the many multi-level marketing programs (MLM) that exist. Some of the most popular are:
Avon
Tupperware
Longaberger
Mary Kay Cosmetics
Pampered Chef
PartyLite Gifts
Herbalife
MonaVie
Amway
Multi-level marketing, also known as network marketing, is a form of direct sales. Each sales person is an independent distributor selling to customers in person at their home, office or by phone. They purchase their products at a discount and make a profit selling them at retail. Sales people make money from their own sales and from the sales of others whom they recruit into their network as independent distributors.
There are many nutritional products that are sold by MLM but in order to become a distributor, no special training in health or nutrition is required. The nutritional companies provide informational materials and training but it does not appear that there is any oversight as to the qualifications of these sales people to advise customers on nutrition and health.
Many network marketers get started because they found a product that they like, such as a nutritional supplement, and begin to sell it in order to buy their own supply at a discount.
MLM companies describe the profits and financial freedom that can be attained by recruiting several sales people to work in your network all of whom make monthly sales of which you get a portion. So the distributor figures, “Why not give it a try?” and begins to recruit fellow distributors.
In actuality, statistics show that most MLM participants do not make a profit. Many end up losing money that they paid stocking up on inventory in order to meet sales quotas.
The Federal Trade Commission (FTC) has a list of tips for choosing an MLM company. They suggest that you beware of any company whose plan is based on commissions earned more from the sign-up fees that come from recruiting more sales people than from selling actual product.
Be sure to research any company that you are considering becoming a distributor for. Examine its compensation plan carefully. If distributors are paid primarily from the fees charged to new distributors, then the plan is an illegal pyramid scheme.
Also look at the products being sold. If a customer can go to a store and get a comparable product for the same or lesser price, then what incentive do they have to continue buying the product? If the only incentive is the money to be made by joining the company as a distributor, and large quantities of product must be purchased to meet income goals, then consider carefully your plan to become a distributor and recruit others into your sales network. Because when the sales don’t materialize for these people, your “network” will fall apart.
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