As with any business venture, it’s important to manage your expectations when signing on with an MLM. Marketing materials may sell you the idea of making good money without leaving your house, but business ventures like these take time to deliver a return on investment. Not every sales agent will be making $100,000 per year right away or even five years down the line. Be realistic about how much you’re likely to sell and how much you’re likely to earn.
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“Retailers can generate a sense of excitement among consumers because the garments they purchase are unique to them,” says a LuLaRoe spokesperson. “Many retailers report that they use the unexpected nature of the shipment to build excitement among existing and new consumers for their new inventory. This also fosters a sense of cooperation among retailers as retailers will often refer consumers to other retailers to help consumers find the patterns that they seek.”
Mary (last name withheld) is a wife and mother who holds a master’s degree in nursing and works from home in Arizona. She bought her first pair of LuLaRoe leggings in 2015 and loved them. But what started as a fun social activity turned into a compulsion, and she found it taking over her life. “I spent more hours than I want to admit ‘hunting’ that pair,” she says. “I spent more than $3,000 in a month. I would lie to my husband about feeling ill so he would take the kids to their afterschool activities so I could be at home to watch pop ups. I would also drive as far away as an hour to attend LLR events.”
In a strictly functional sense, MLM is a way to exploit natural networks of acquaintances, with participants (predominantly women), first selling/recruiting others in their circle; these latter, in turn, do the same, and so (in the hopes of the MLM company) ad infinitum.. Many individuals participating in these networks do so part time. In due time they've sold all of their friends; success begins to fade. For this reason MLM companies are frequently tempted to make all sales final in the early stages so that inventories don't come trickling back.
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Multi-level marketing is a legitimate business strategy, though it is controversial. One problem is pyramid schemes, which use money from new recruits to pay the people at the top, often take advantage of people by pretending to be engaged in legitimate multi-level marketing. You can spot pyramid schemes by their greater focus on recruitment than on product sales.
In June 2016, Sophie (name changed) quit her job in the suburbs of Fort Worth, Texas to sell for LuLaRoe, a rapidly growing clothing company that offers self-employment opportunities to American women in the form of hawking hyper-hued apparel. LuLaRoe’s consultants told her—and tens of thousands of other mostly rural and suburban women over the past five years—that she could provide for her family, join a sisterhood of supportive women, and find meaning in her life again through the conduit of colorful, stretchy fashion—all for a reasonable upfront investment of around $5,000.
Establishing—and regularly updating—the company brand is critical to the success of the campaign. Multi-level marketers will identify the company’s primary goods and services, and then research the target market whose needs they’re meeting. Marketers and creative alike will make certain that the “personality” of the brand resonates with the general personality of the target customer; likewise, messaging will be regularly adjusted to reflect customers’ changing and growing interests.
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Even if you, or your wife, aren’t bothered by the pyramidal structure of multi-level marketing companies, even if you could make a ton of money by working for one, you still shouldn’t do it for this one reason alone: you shouldn’t ever want to commodify the sacrality of your relationships; you shouldn’t trade the genuine bonds of love for the cold economics of exchange.
Fast forward to 2017. LuLaRoe is the biggest MLM for women. “More than 80,000 women have paid around $5,000 for several boxes of low-cost clothing and worked as much as 80-hour weeks to outfit hundreds of thousands of suburban women in multicolored polyester. But according to a report that studied the business models of 350 MLMs, published on the Federal Trade Commission’s website, 99% of people who join multilevel-marketing companies lose money. Depending on how you look at it, it’s either a brilliant business model or a predatory practice — or a little bit of both.” (FTC)
A brand's reputation relies as much on the quality of a product as communication with the consumer. No marketing strategy can overcome poor products or service. Thus, consultants/distributors must be effectively trained, not only so they’re excited about the company and its products, but so they’re knowledgeable and can demonstrate those products confidently. Much of this will be accomplished through consultants’ direct uplines (as filtered through their upline’s uplines); however, the creation of attractive and easy-to-understand catalogs, brochures, direct-mail pieces and other marketing items will enable the consultant to quikly develop a professional image. (See also Catalog Marketing)
When you look at our hypothetical MLM, it’s hard not to notice that it pretty much works like a pyramid scheme: you make money by recruiting people below you. Instead of the people below you giving you and the people above you money in order to be part of the MLM — as in a traditional pyramid scheme — you (and the people above you) get a commission off the product purchases the recruits below you are required to make from the MLM. Distributors make little to no money selling product to people outside the company.
"If it proved effective for anxiety, depression and panic disorder, it may have other effects as well that could be useful and beneficial [but] this is a really early stage," says David Shurtleff, the acting director of the National Center for Complementary and Integrative Health. His organization's stance: "Take it one step at a time and do the work and really state where we are right now with the research," he says.
Whether they realize it or not, consultant leaders often use time-honored cult tactics of denial and blame to keep women within their sorority. A famous series of experiments from the 1950s conducted by Soloman Asch in England showed that three out of four people will deny evidence right in front of them if the majority says it’s not true. In the study, individuals were placed in groups where they were constantly contradicted by other members. When this happened over a length of time, they would start to agree with the majority—even though it was clear that the opposite was true. In MLMs, “you’re trained to avoid people who question whether this is a viable business or not,” Brooks says. “Which is exactly the same technique that cults use—they try to isolate you from people who question your belief system. I’ve been contacted by a number of people who deal with cult survivors, and some of their clients are former MLM people.”
What makes CBD so appealing is that it’s non-intoxicating, so it won’t get you high, though it “is technically psychoactive, because it can influence things like anxiety,” Jikomes said. Although much of the marketing blitz around CBD centers on the fact that you can take it without getting stoned, there isn’t much research looking at the effects of CBD when used in isolation, with a couple of exceptions. One is the use of CBD to treat seizures: CBD is the active ingredient in the only cannabis product that the Food and Drug Administration has signed off on — a drug called Epidiolex, which is approved for treating two rare forms of epilepsy. Animal models and a few human studies suggest that CBD can help with anxiety, but those are the only conditions with much research on CBD in isolation.
Trump’s Cabinet picks also have MLM links. First there’s his education secretary, Betsy DeVos, whose husband’s family fortune derives from its ownership of Amway, the world’s biggest MLM, with $9.5 billion in annual 2015 revenue on everything from soap to cat food. While the company’s sales have been in decline, falling from a peak of $11.8 billion in 2013, Amway remains the 29th largest privately held company in the U.S., according to Forbes.
Multi-level market (MLM) or network marketing is an American institution. Companies like Amway, Tupperware, Herbalife, Avon, Mary Kay and The Pampered Chef support huge networks of distributors and recruits who sell every type of product from dietary supplements to kitchenware to beauty products. Salespeople are called independent business owners (IBO) and generally work from their homes.
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A total of 29 states, the District of Columbia, Guam, and Puerto Rico have enacted laws that allow for the medical use of marijuana. Each state has its own specific requirements and conditions that must be followed for cannabinoids to be used legally. At the federal level, however, marijuana is still classified as a Schedule 1 substance under the Controlled Substance Act, meaning it is considered to be a substance that has the potential for dependency and has no accepted medical use. This also means that distribution of marijuana is a federal offense, a confusing predicament when it is legal in so many states. In fact, the U.S. Department of Justice reserves the right to challenge the states at any time they deem necessary, which makes many doctors very nervous (much of the reason why so many doctors don’t prescribe it or know much about it).
Cost is another consideration. Most CBD oils are sold in concentrations of 300 to 750 mg, although this may range from less than 100 mg to more than 2,000. A good indicator of price-point is the cost per milligram. Low-cost CBD oils usually fall between five and 10 cents per mg; mid-range prices are 11 to 15 cents per mg; and higher-end oils cost 16 cents per mg or higher. Given these varying per-milligram costs, a bottle of CBD oil may be priced anywhere from $10 or less to $150 or more.
“The FDA has tested those products and, in some of them, did not detect any CBD. It is important to note that these products are not approved by FDA for the diagnosis, cure, mitigation, treatment, or prevention of any disease, and often they do not even contain the ingredients found on the label. Consumers should beware purchasing and using any such products.”
None of these conditions exist anywhere in the real world. Markets change, trends come and go, customers are fickle and demanding, and competitors constantly enter/exit the market. There isn't an endless supply of people willing to serve as self-appointed salespeople in any market, anywhere - some of us have better things to do than sell overpriced supplements to our friends on Facebook. And there are almost always plenty of competitive alternatives to every consumer product. So what inevitably follows is point #4...
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There are new CBD companies coming online every week – these span the range from truly awful to really great. So how to choose the best? The quality of the CBD oil itself is obviously the most important factor – and many companies do take the quality of their products seriously. To reward those companies, we gave more weight to the quality of the product than any other category.
Even while the popular culture’s view of MLMs is shifting, FitzPatrick doesn’t think we’re yet at a tipping point where consumers reject them en masse. Trump’s election may help explain why. After the election, FitzPatrick says he sent out a newsletter to the many victims of pyramid schemes who’ve come to him for help, explaining the connections with Trump.
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