With layoffs continuing and jobs difficult to find, a lot of people are signing up for direct selling opportunities as a way to create their own income. Mary Kay reported a 22 percent increase in its new sales force in the first quarter of 09. Avon reported a 51% increase in March in active representatives selling its products. Hundreds of companies promising beautiful skin, free legal advice, reversed aging, magical effects of tree bark, reduced mortgages and unique wealth systems are targeting those desperate for generating income.
As you know, I love entrepreneurial opportunities and am seeing thousands of people who saw their layoff as a wake-up call for releasing a long dormant dream. And there are legitimate options for starting your own business and being “recession-proof.”
But I get tired of the continued misrepresentations by so many of these MLM companies. Here are just a few snippets of recent questions:
Dan, do you have any information on this business? I have signed on as a consultant and I feel like it requires much more time than my upline will admit to.
Hey Dan, Would you check this out and let me know what you think about this? I would appreciate it. According to this guy, this is not something I would have to have meetings for or do any selling…..it’s all done through the Internet. He says that people that aren’t making money just simply don’t have the right leader.
Dan, I am selling make-up products from_____. I also am selling another line of products that I really like. Now they are telling me I can’t do that. I thought I was in business for myself.
These are common questions – and require more in the way of answers than space here allows. Just be very clear – MLM companies are notorious for misrepresenting what is really needed for success. Because there is so much pressure to recruit new distributors, they are very tempted to say it doesn’t really require any selling or much of your time. Neither could be farther from the truth.
If it could just be done on the Internet, why would they care about signing you on? They could just push a button and magically grow their business. But it doesn’t happen that way. It doesn’t matter how great the products are or how wonderful the company is — the bottom line is that it takes thousands of hours and thousands of people contacts.
Now I know many people are looking for ways to be more in control of their lives and time and MLM offers that. But just as there are a lot of mismatches in regular jobs, there are many mismatches in the MLM arena. And here’s the primary reason: Most multilevel marketing companies are promoting a fundamental falsehood, namely, that anyone can be a great salesperson; they just need the right tapes or coaching. That is absolutely false. Most people will never be good enough at selling to make a living at it, especially the nose-to-nose selling required in MLM. And no, don’t tell me now it can be done on the Internet. To succeed in MLM you need to be able to connect with people and have an ability to handle rejection. Most people don’t.
The success of the few comes at the expense of all the other people, the little people who waste their time and money pursuing a goal they can never reach. And that’s my problem with 99% of multilevel companies. You are encouraged to make money on your ability to use other people. Selling is an honorable profession. If you can sell you can provide a valuable service to your customers, taking advantage of no one in the process. Be cautious of companies that provide one solution to everyone’s dreams. Have you been interviewed as a reasonable candidate for what is required, or have you just been recruited as one more number in someone else’s “downline?” If you are building your own MLM business, would you hire Uncle Fred as a salesman if you had to pay him?
The median income for a direct salesperson is $2400 a year, with only 10% of sellers doing as a full-time job, according to their own Washington, D.C. based Direct Selling Association. Fewer than 1% of all MLM distributors who sign up ever recapture their original investment and earn a profit.
Do your research. Yes you can start your own business, but make sure it is something that “fits” you and where you have a reasonable chance for success. A home cleaning service or selling those great cheesecakes you make may be a perfect choice for you.