Mary-Kay, Beachbody, doTerra, Plexxus, Pampered Chef, Younique, Jamberry, Avon, Lularoe, Tupperware, Shaklee. These are all companies whose sales model could be described as “direct-sales”, “multi-level marketing”, or as the critics would call it, “pyramid scheme.” I’m hesitant to use that last phrase because there are some legitimately illegitimate Ponzi schemes that don’t actually have a tangible product or help anyone, and in contrast many of today’s direct-sales companies really are helping people work from home and they’re providing customers with good products.
(I’m especially impressed with, and indirectly affected by, Beachbody, because as we all watch our friends get in shape and grow in self-discipline, it’s inspiring, and true change is happening, even for those of us who don't sign up but see what nutrition and exercise can do.)
However, if you’re thinking about signing up for one of these companies as a rep, I do beg that you pause and reconsider. Here are some questions to ask before “taking the leap”:
1) Does the company really have your best interests in mind? Don’t trust the motives of the founders of the company or the people at the top of the pyramid. Here’s a dead giveaway: If they sell their products on their website without using a consultant portal, or even worse, if they sell their items directly through Amazon, you can be quite assured that the company cares more about their income than yours.
Also, ask yourself, “What’s at risk for the company if I fail?” If “absolutely nothing” is the answer, that should give you some pause.
2) Does your sponsor really have your best interests in mind?
There’s a good chance that you know and love the person who is trying to get you to sign up for this. She really is probably an awesome person. But none of us can ignore the fact that she is motivated by money to get you to sign up. Whether reps realize it or not, they are painting their lives with the company as being ever-so-rosy because they want other people to sign up so they can make money. Deception—or even just exaggeration or wishful thinking—is an unfortunately pervasive element when it comes to these things.
3) Are you willing to burn bridges with acquaintances and make them feel used by you?
Unfortunately, I’ve found myself in this situation multiple times: Someone I haven’t seen in a long time or possibly haven’t even met adds me on Facebook, acts interested in what I post, messages me privately to ask me how I’m doing, and at some point pops a question centered around “Would you be interested in trying out this new…”
Immediately, I feel used by this person. I wonder if any of what this person said was genuine or if she was just trying to meet a quota.
I try not to be offended easily, so I get over it. But this can really hurt or offend some people. No matter how awesome your product is, please know that once you start posting about your “business”, people will unfollow your account and maybe avoid talking to you in face-to-face interactions as well. Just a heads-up. You should especially ponder this carefully if you’re a Christian who is trying to genuinely hold out good news of Jesus, which does not have a buy-in price.
4) Are you willing to put your friends in potentially uncomfortable situations for your own gain?
Of course your true friends can discuss things openly with you and will most likely want to help you reach your goals. But if your income now rests partially on your friends’ shoulders and their connections, they might feel a little obligated, as if your financial success depends on their social connectivity. That’s not really fair.
5) Is signing up as a rep really making you “a business owner”; did you really “fire your boss” and become self-employed?
I’ve spent the last 16 years living with business owners (my dad and my husband) so I get kind of twitchy when someone uses that phrase lightly. Did you have to take a huge risk, come up with a product, design a logo, create a website, figure out all the legal stuff, hire an accountant, create a pay scale and marketing campaign, hire, fire, and train employees, have every single family dinner interrupted with phone calls, deal with customers who are threatening to sue you or willfully neglecting to pay you, and sometimes work 80-90 hour weeks? Do you know what it’s like to not have one true day of vacation all year long because other people are depending on you for their family to eat and you have to make sure you’re on top of things?
Though direct-sales reps work hard (possibly as hard as I just described) and business ownership looks different for everyone, I really hope you’re realizing this is usually not the same thing as entrepreneurship and the blood-sweat-and-tears American dream. (I'm serious about the blood part. My husband's arms have been torn by monkeys. But that's a story for another time.)
6) Is this product truly unique and valuable?
Many of these companies truly provide good products. I’m not sold that certain pricey protein shakes are any better than a plant-based meal replacement protein powder you can get from Amazon for a fraction of the price. And I’m not convinced that some products are worth any money at all. But Usborne books, Jamberry nail wraps, Beachbody DVDs? I’ve tried really hard to find cheaper products of their caliber and came up with nothing. I will gladly go through a MLM rep to purchase excellent products I can’t get anywhere else that are actually going to last a long time. But some of those supplement and weight loss brands? I’m not convinced those products are actually good for anyone.
And even if a product is good, is it worth joining the company? Will you be buying so much of this product that you need a rep discount and downline to support your own spending? In that case, is it possible you’re spending too much?
7) Did you find out about this product soon enough that you can really find "financial freedom"?
If you’re hearing about this product from a friend, that means that all your mutual friends have most likely already heard about it. And the later you are to the game, the less likely you are to acquire clients.
Remember that the people who are trying to sell you on becoming a rep also need you for their own success, so they might not be completely transparent about how much money they’re actually making. If someone just became a rep and still relies on her day job for income, can you really trust that she’s making good money and that you—who will most likely make less money than her—can make good money?
8) Do you know multiple people who have become successful after working hard with this company?
Out of all the friends and family members and acquaintances I know who have ever been involved in a multi-level marketing company, only three of them have made good money doing it. I’m happy for them, but really. Three. Two of them have been with their company for upwards of 15 years; the other joined her company before anyone had ever heard of it. I know many, many more people who signed up as a rep and worked extremely hard, but have been hurt and lost money in the end…after already damaging connections with people who didn't want to see or hear a sales pitch every single day.
Am I just a grumpy keyboard warrior? I hope not. I’m a friend, and I aim to be a cheerleader for women, so I want them to succeed. I write this post because I have seen way too many friends fail, and it wasn’t for lack of effort on their part. It’s because this is a slippery business.
This weekend I went to a yard sale and found that a lady was selling the rest of her Lularoe leggings (probably 40 pairs or more) for $5 each. Her facial expression was pained yet relieved when she said the business didn’t work out for her, and she seemed very happy to take my $40 for eight pairs, even though I’m sure she was still losing money on the deal. (One pair normally costs $25.)
I was sad for her all day, and also sad for all the remaining Lularoe consultants (a close friend being one of them) who have to try to compete with closeout prices like that. I love my leggings, and I’m not trying to diss the company---let me know if you need a consultant because my friend rocks!
But direct-sales company have a disturbingly high failure rate. My heart is broken because they target moms who want to be able to quit their jobs and stay home with their kids. Oh how I admire women who desire to do that! Unfortunately, the pyramid model is designed to rip off those at the bottom. Some women are cut out for it and get in early enough to succeed, but too many lose money and burn bridges. I just beg that you ask yourself these questions and really think before jumping in!
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My name is Hope.
I'm 26, married to a former skater dude, and raising little people ages 6, 4, 3, and squishy-baby. I like lime green and sarsaparilla, and I wear my Crocs until they melt. (Florida problems.)
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