By Ebony Chappel
Many people have a love or hate relationship with multi-level/network marketing (MLM). For some, enticed by that attention-grabbing first introduction, it is the equivalent of the dream boat significant other they’ve always dreamed of, attractive and full of promise – a path to independence, wealth and prosperity.
For others, burned by the sting of rejection from disinterested prospects or worse, financially burdened due to a chain of unfortunate events, it is nothing more than a well-dressed fallacy. Is MLM a honeymoon or a nightmare? Move beyond the stereotypes and consider the facts. MLM is a business model in which a distributor network is needed to build the business. Usually such businesses are also multilevel marketing in nature in that payouts occur at more than one level.
According to the Direct Selling Association, a national trade association of the leading firms that manufacture and distribute goods and services sold directly to consumers, the industry is experiencing tremendous growth globally. Numbers from 2013 show revenue of $178.5 billion. Jodi Holmes, 36, said as an already established hair salon and wellness spa owner, MLM made sense to her. “I have always thought outside the box, I knew I would have to work in the corporate world for some time but that was never my passion,” she said. “I always saw myself doing more than just clocking in and doing the nine to five thing. I always wanted to be my own boss.”
Although Holmes enjoyed the freedom of working for herself the past eight years, she realized balancing the long hours behind the stylist chair and the demands of a music career left her with little time for family life. A chance meeting resulted in her being introduced to what she describes as a “life-changing opportunity.”
“It was very interesting, I ran into an old friend of mine I hadn’t seen in a long time and she wanted to share some things that had changed in her life,” said Holmes. “She seemed very excited about it so I set aside some time to see what she wanted to share with me.” Following that conversation, Holmes attended a live demonstration led by leaders of the company her friend represented. She was able to get information and ask questions before signing up. “It was awesome to me,” she said. “It showed me how to maximize what I was already doing as an entrepreneur. It made sense.”
The concept was a company that sells discounted travel offerings to members using a format similar to a wholesale retailer like Sam’s Club or Costco. For a monthly fee, members are able to purchase international excursions, resort stays and cruise packages at a fraction of the original retail price.
If members choose to come aboard as sales representatives, they are able to also earn residual income based on their own sales of the product as well as those acquired by team members they recruit to join them. This business model is similar in other MLM companies such as Amway, 5LINX and USANA. The hierarchy structure and heavy focus on recruitment are two things that made Nicholas Brown of Fort Wayne feel uneasy.
“I went to meetings with other companies and it wasn’t for me but when I ran across the business I’m currently involved with, the guy gave me the whole presentation and in all honesty I was still leery,” he said. “I analyzed a lot of different opportunities, there are a lot out there and they all offer the same type of situation; high earning potential, the freedom of working for yourself. This company offers the same type of deal,” said Brown. “This company, they want you to sell insurance and financial services but there is lots of pressure to recruit more people. I started as a representative, but you can move up to regional vice-president and there are hundreds of regional vice-presidents.”
Brown, who began his first business as a teenager selling hats and other goods, said his fears were eased a bit due to the product he is selling. The business Brown represents requires its recruits to become licensed insurance agents, a requirement he said made him feel more comfortable. “This particular industry, insurance and financial services, it has to have some type of legitimacy.”
Although Holmes had no feelings of apprehension or regret following her choice to join the world of network marketing she urges others to do their research thoroughly before deciding to pursue this particular path.
“I don’t understand why people get that idea,” she said referring to the Ponzi scheme comparisons. “There was no way for me to misinterpret anything that I learned from the very first presentation I went to.” She added that contrary to the belief of some, multilevel marketing is not a path to overnight success or a get rich quick scheme. “You have to definitely know what you’re getting into,” she said.