Hi there! My name is Ampton and I’m writing this piece to talk to people who are considering joining or have joined MLMs. It’s also for people who are worried about those close to them in MLMs, to give them some talking points in order to make sure everything’s above board. I’m not going to say that joining an MLM is a bad idea, because it does work for some people, but just like any major financial decision, it’s definitely something to consider carefully. For the purposes of this article I’m mostly going to compare joining an MLM to other jobs or sources of revenue, to try and highlight areas of concern.
MLMs are a tempting thing in a shitty economy when jobs are scarce and when time is scarcer. People want to make money on the go, on top of a regular job, and based on their own elbow grease. I’m a freelancer, I get it. What people generally get promised in joining an MLM is a secondary revenue stream that can be a lot of money if you’re willing to do the work. It has a lot of the freedom of having your own company, without a lot of the stickiness that comes with starting such a company. This pitch definitely works, because a lot of people have joined MLMs, but that doesn’t mean that the rewards will be easy to come by for all.
It’s here that I ask my first question: why do you think that you, specifically, will succeed in this MLM? Lots of people have done it before you and most of them haven’t become millionaires; according to the income disclosure statements provided by MLM companies, it looks like around 98% of people will only break even or make a small amount of money at best. The stats are against you, so what can you specifically bring to this role that will make you better than the others? Are you particularly good at sales? Do you have a wide social circle that’s interested in this kind of product? Do you know that you’ll be one of the first people in your area to get into this company? Imagine that by selling at the lower levels of this company, you’re applying for one of the high-income positions; what will get you hired over other people? It’s a sticky question, because we’re all imbued with our own good qualities and no one likes to think of themselves as inadequate, but it’s more about being suited to a role. If you’re pretty sure that the MLM model matches your skills and abilities, then go ahead.
If asking this question has made you realise that you really are good at sales, or at the social aspect of network marketing, or at the organisational skills required to run a home business, why not look into doing that instead? MLMs can be quite restrictive, because you’re selling a set list of products for a set price, and you’re competing with other representatives from your MLM. If you really do have a knack for small business, why not follow some passion you’ve had for a while and do that instead? Sure, it’s scary as hell starting a business, but based on what MLM companies themselves say, your start there will probably be financially scary too, since you start out in the 98% with no assured income.
One of the advantages of owning your own business is that you get to choose what stock you have, build relationships with suppliers, and set your own prices. This means you can tweak your prices and have sales when you need to, and you can switch up your product and where you get it from to meet market demand. One of the things I would find annoying about MLMs is that you have a set list of products to sell, and no control over your own prices. What’s more, people who are leaving the MLM company frequently sell their stock at a discount, so if people really like the products they might be able to get it cheaper. You need to have a plan for how you’re going to counter these market issues.
Another important question to ask yourself is: who is your target customer base, and how are you going to reach them? This is an unkind and possibly hilarious comparison, but if I was selling weed, I’d never make it big by just having my immediate friends buy it, or by forcing it on people who don’t want it or use it. The circle of people you know probably won’t be enough to sustain yourself financially, and trying to sell by networking with strangers is going to alienate a lot of people and make them uncomfortable, as well as having a pretty low hit rate. If I messaged all my Facebook friends and asked them if they wanted weed, it would definitely alter the dynamic between us, and it might alienate them from me. No, I want to be aiming for people who actually want my product. That’s the point of advertising and having storefronts; you’re trying to sift through the general population and find those people who are interested in what you have to say. It’s also a lot less work to advertise to a million people than it is to message or speak to hundreds or thousands, and the hit rate is probably pretty similar.
My next question is: are the products you’re selling desirable? Does their quality match their price, and if the price is high, do you have evidence their quality is high also? I see people in MLMs claim often that the reason their products are expensive is because they’re really good, and that’s fair. But if you’re going to make such a claim, you should make it using evidence that came from people or groups unaffiliated with the MLM. Probably my best example of this is essential oil MLMs. There are currently no regulations on essential oil quality, and terms like ‘therapeutic grade’ do not have a defined meaning. You’d want to get outside testing on your essential oils to confirm their purity is high and they do not contain contaminants or fillers; you can’t just trust the company selling it. Similarly, for makeup MLMs, you’d want some endorsement from professional makeup artists and reviewers to confirm that the product is good. Bonus points if it’s compared to other makeup in the same price range to confirm that your product is the one worth having. Cheap makeup and essential oils are often pretty decent, so you need a reason for people to pay the difference to get yours!
Question number four: are you the customer? Of course, if you like the products, you’ll have some of them in your personal use. But if you’re being pressured to buy a lot of products from the company, or to use them up in increasingly creative ways, you might just be the customer of your MLM and not the rep. This becomes increasingly clear if you’re being told you should have lots of the product bought and stored up, just in case a customer wants it. If you were a perfume salesperson at a department store, you would probably wear perfume, because it shows you stick by your product. But do you need to own all the different types of perfume in the store to do your job? Or multiple bottles of one perfume? If you’re buying the product and people aren’t buying it off you, then … you’ve just bought the product, and you’re the customer. It’s an easy trap to fall into with MLM, because having product on hand is very useful. Just don’t let yourself stock up too much, and make sure you have a plan to shift what stock you are building up.
Number five: have you been told by other people in the MLM, or by the MLM itself, that the real money is in recruiting? You were recruited by someone; is that person really fixated on having a big team, and do they encourage you to try and recruit people too? Remember, if everyone is being encouraged to recruit, that means lots more competition for you, since you’re all selling the same stuff at the same price. There’s a reason franchises are zoned carefully to ensure a lack of cross-competition. It’s pretty hard to sell your product if everyone you know has already been solicited to join your company! You can get around this if the MLM is young and it’s new to your area, because it means the market is mostly untapped and you’ll probably do well. But if you already know other sellers for this MLM in your social circle, then they got into the market first, and you’ll have a steep uphill climb to make sales. Be wary of MLM companies that have a heavy focus on recruiting, because they may not make the wellbeing of their sellers a priority.
Last question, and thanks for your patience: what kind of training are you getting from the MLM? A lot of MLM training can be focused on telling you to improve your own behaviour and thought patterns, especially the Law of Attraction type material. It is definitely important to have the right demeanour when doing sales, but managing a business takes a lot of boring skills like market research, time management, finance management. Your training from your company shouldn’t focus only on changing your personality or behaviour. When they do spend a lot of time doing that, ask yourself: what is their end goal here? If you started working at a café and their training was less about food hygiene and customer service and more about telling you to cut off your negative friends and family, or telling you that you needed to avoid thinking in certain ways, would you find that unsettling? The people who care about you won’t be concerned about you starting a job that’s going to be beneficial for you. They can also observe you from outside, which is hard for people to do to themselves, and notice changes in your behaviour or values. Listen to them and their concerns about the way you’re handling your business, and if the MLM is telling you to consistently ignore them or cut them off when they are otherwise good to you, you should regard that as a red flag.
If you’ve made it through all six questions and not seen any red flags or felt a nagging sense of concern, then that’s a good thing. Own it, own your business, and I hope you do really well. If you are worried, then I implore you to do research on your own about what concerns you. Your MLM and the people you know in it will probably provide their own perspectives and maybe try and limit how much research you do, but this was your financial move and you deserve to do as much research as you need before you do anything. Getting pressured into a financial decision is bad no matter who’s doing it.
Feel free to comment if you’d like me to expand on any of these points. If I can’t help, I’ll refer you to someone who can, because there’s a pretty decent network of support around people joining MLMs. My dearest thanks for reading,