Is MLM a Bad Word?
Is MLM a Bad Word? (Forbes)
by Jody Coughlin
Ever been confused about how a “home business” works? Of course you
have, so have we. Most people have heard the term MLM (Multi-Level
Marketing) and usually at the end of that the word, “scheme” is added –
giving the whole business model a bad name. Well…let’s change your
negative perception and tell you how your Great Aunt Joan, actually
earned that pink Cadillac from Mary Kay! It’s brilliant really…
Not only are “home businesses” or “MLM’s” very interesting, they are
successful. Many of the longest standing organizations in this country
have this business model. MLM is a marketing strategy in which the sales
force is compensated not only for sales they personally generate, but
also for the sales of others they recruit, creating a downline of
distributors and a hierarchy of multiple levels of compensation. Most
commonly, the salespeople are expected to sell products directly to
consumers by means of relationship referrals and word of mouth
marketing. Sounds legit right – so why the bad press?
Well MLM
companies have been a frequent subject of criticism as well as the
target of lawsuits. Criticism has focused on their similarity to illegal
pyramid schemes (hence the “scheme” reference), price-fixing of
products, high initial start-up costs, emphasis on recruitment of
lower-tiered salespeople over actual sales, encouraging if not requiring
salespeople to purchase and use the company’s products, potential
exploitation of personal relationships which are used as new sales and
recruiting targets, complex and sometimes exaggerated compensation
schemes, and cult-like techniques which some groups use to enhance their
members’ enthusiasm and devotion. Eesh!
However, as
aforementioned, you may know people that sell products from Mary Kay,
Avon, Advocare, Tupperware and the like. You know people who sell these
types of products because they believe in the products and the companies
that stand behind them. These companies empower those who sell their
products to actually establish their own businesses, selling the
products. This is very attractive to many entrepreneurial-minded people
who do not want to have a boss watching over them but also want some
pre-established structure and support. Most MLM organizations provide a
very robust infrastructure and great training as well as impeccable
rewards (hello free cars and trips!).
I recently spoke with San
Diego based, Vicki Martin, about her experience with Rodan + Fields.
Here’s her take on her home business and why the opportunity was so
appealing for her and her family, “The decision to join Rodan + Fields
Dermatologists came easily. Since 2008 the construction industry [which I
was previously in] has been hit hard by our economic downturn and my
income has been greatly affected. We were working harder for less like
many of our friends. Being part of Rodan + Fields Dermatologists is
allowing me to work with highly educated people who share a passion for
business and for teamwork. Building a recurring, residual income that
grows month over month is going to give my husband and I the peace of
mind and financial freedom that is so vitally important to our future.
My skin looks better than ever. And, I get to work my job around the
rest of my life instead of the other way around.”
So, the next
time you meet someone who runs a “home business” or “MLM” give them a
high five for taking their career and life into their own hands and
becoming an entrepreneur.
(source: Forbes)
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