I find it hard to believe that someone could make $250,000 profit in her first year of selling anything, except perhaps for crack cocaine or heroin. On the other hand, if that’s for real, an upfront investment of $8,000 is hardly a “ton of money”.
It will be interesting to see how the recent “recall” and refund news will hit the reps, since they are on the hook for that money.
One thing a woman I know did was start up a ‘wholesale’ Facebook group in her area. She posts new items once a week, you send her the money, and she orders through wholesalers (which a few bucks for her). It’s a lot of organization, but it seems successful
I’m going to move this to IMO.
John Oliver’s segment on mid-level marketing.
First of all, as others have noted, mid-level marketing (MLM) schemes are set up specifically to funnel gross profits from lower caste marketers up to the top. Advocates often argue that the point of direct sales MLM is to cut out storefront and third party distribution costs, but the way they are structured means that every step of the way an additional hit against profit occurs. Instead of paying one distributor to stock and sell the product, it requires many layers of recruitment. It is the very definition of a pyramid scheme, and like pyramid schemes, the only way to really get rich is to recruit a bunch of people below you to create a layer of profit flowing up. And because virtually all [DEL]pyramid[/DEL] MLM schemes require the end seller to invest in (i.e. purchase) inventory without any guarantees if the product cannot be sold, what they are really doing is creating a sales organization in which their sellers aren’t just paid on commission but penalized for lack of sales, which isn’t how any reputable company operates, nor do reputable companies sell their junior level employees about the millions they can make in flashy hard pitch presentations. (Okay, Microsoft got pretty close during the Steve Ballmer era, but that says something about corporate culture of the pre-dot-com bust.) With MLMs, you either recruit enough people that you get significant revenue, or you are just a flunky funneling your profits (or perhaps your own money) to someone else. There isn’t much middle ground and it certainly isn’t for people who don’t feel comfortable pressuring people to buy their product whether they need it or not.
MLMs did make some kind of sense in the pre-Internet era, when a new product that was not easily to convince distributors to stock or offer as competition to existing lines but appealed to a segment of the population with the spare time and social connections to do casual marketing. Avon, Tupperware, and Discovery Toys were all legitimate companies selling quality products that began as mid-level marketing type schemes (largely in the “party plan” format of having a social event centered around presentation of the products) but eventually moved into retail sales or direct online sales as their primary outlet as public awareness of the brand grew. There are also sex toy sellers who primarily sell by this method because they can’t stock their products in “normal” retail outlets and they can sell to a demographic that wouldn’t otherwise shop at sex implement outlets.
However, today it is far cheaper and more effective to advertise on line (perhaps paying for favorable reviews and direct advertising) than to do the labor of recruiting an army of semi-competent salespeople and dealing with distribution networks, and MLMs are largely scams or means of selling faddish products like LulaRoe that conventional retailers wisely avoid stocking because they don’t want to be stuck with a large inventory of unpopular clothes once the fad ends.
For the o.p. instead of joining an MLM why not look for a craft hobby or other trade that you can do part time and make products that can be sold through Etsy or other online niche market sales outlets? Although it takes some effort and may require some initial investment for tools and learning curve, if you find something that is popular you can make some side money producing real goods that others will value rather than being pressured into buying, and you’ll have the pleasure of both bringing something useful or appealing into the world and developing a new skill set. It probably won’t make you $250k a year unless you happen to be really lucky and driven to success, but nobody is making that selling LulaRoe either unless they’ve recruited every friend and family member into doing the same and collecting their vig from the proceeds.
Stranger
I recently started working part-time in the promotional products industry, and I’m actually enjoying it quite a bit. I won’t say what company I hooked up with, to avoid using the board for the wrong purposes, but they make it very easy. They handle the inventory and billing; all you do is seek out the companies who might need products with their name and logo on it, get their artwork, take the order, submit it, and boom, there’s a check in my mailbox a few days later.
I definitely thought it was MLM when I first heard about it, but I researched the hell out of it and it had great reviews. And it only required a refundable $85 start-up fee, and unlike LLR, there’s no inventory in my house (except some free samples they sent me). So far so good!
It’s a ton of money if you start with nothing. In fact she started with debt and went further in to debt to buy in. Everyone has to start out buying in at $5k at least (maybe more now). And also keep up a minimum order to stay in business.
She’s in the top sales bracket in the country - definitely not the norm.
Dunno what else to tell you. She worked her ass off to get where she is.
Different niches, and in many cases different types/brands of products. You might as well ask why both Walmart and Target stay in business. Or why Starbucks stays in business when you can buy coffee at the gas station that’s a mile closer to your house.
A coworker has been pushing MLM products on us. I talked about it here.
He and his wife are still going at it, amazingly. I suspect they’ve lost a lot of money on it, and are in denial about it.
I doubt they’ll still be doing it a year from now…
An old high school friend of mine started pitching that stuff on Facebook. They are indeed aggressively unattractive clothing items. My wife owns a couple pairs of leggings that she fortunately only wears for laying around the house purposes.
Same friend shifted from posting about normal stuff on Facebook to all sales, all the time. Post after post about “Here I am relaxing in my LLR after a hard day!” nonsense. Then she started in with Pampered Chef and something else, at which point I had to just block her stuff because otherwise 95% of my feed was shit being marketed at me.
Agreed with the earlier comment that I can’t trust any modern company who relies on MLM schemes to move their product in these days of direct internet sales. The only reason to stay with the MLM is to fleece the down-level sellers.
Largely because you can walk in and buy a product immediately and walk out. And both have taken big hits from Amazon.
More relevantly, they’re different business models. Target doesn’t rely on a friend of a friend to sell me Market Pantry applesauce and then badger me to also sell Market Pantry items with a five thousand dollar investment so they can get a few extra pennies.
Exactly; in several threads about MLMs, someone mentions that they’re interested and willing to buy the product but do not want to get involved in selling it, but the existing MLM victim’s only interest is in building a downline. No one seems to want to actually sell any product.
The two that I see clogging my facebook feeds from friends around the country are:
Stella & Dot - jewelry
Rodan & Fields - skin care
If your need is to waste a lot of time and money in order to potentially damage a lot of your personal relationships, I suspect a vast number of them could be right for you.
I work with a handful every year doing lighting for their shows. I take theirmoney. It’s beautiful because that’s the opposite purpose of a MLM.
There is no such thing as a MLM with a good reputation.
There is no science behind any MLM, only woo and a cult of personality.
Okay, responses done, lemme tell you what I’ve seen from doing half a dozen to a dozen MLM shows a year for the past 25 years or so: it’s all bullshit. One of the ways that I know it’s all bullshit is that I’ve seen the same people on stage as VPs or Double Black Diamond Sales or some other cocked up title or supposed expertise and they give motivational speeches about how great the founder of the company is. I’ve seen one guy 3 times in a month at 3 different companies.
Sometimes they remember to mention how great the products are, but that’s really secondary to the message of how awesome the founder is. It’s also likely that the founder is really founders and they are a married couple. Usually the founders were “just like you” and they had this great idea on how to get rich and now they’re sharing that with you so your life can be better, too. “They’re just saintlike geniuses!” There appear to really be only 3 variations on the founder’s story.
I’ve seen the heads of companies come back to town just 8 months later with a new company. Sometimes they are even hawking the same products but with new labels. Internet research has shown me that this is usually because of a divorce or an investigation; MLM’s are like boiler room operations, apparently.
Oh, and a lot of these companies are based in Utah.
The ones at the top appear to be friends who help each other fleece the public. They are not in it to sell anyone any product, they are in it to sell the idea of a better life to people who are desperate enough to spend money and spend a day in order to listen to nothing in hopes of being able to get something.
My wife has run into plenty of these over the years with various friends hosting “parties” and trying to get their friends to attend and place orders.
The one thing in common that all of her friends that get into these MLM gigs is strangely enough, they are all people really bad with money/numbers/math.
They are the ones who can’t tell you what they paid for their new car but only that it was a great deal because of how much their monthly payment is.
The ones who carry large credit card balances but think it’s okay because their cards offer “cash back” on purchases.
The ones who think they are being responsible by putting money into their 401Ks but then use them as personal lenders.
Whenever they tout “I made this much $$ selling my stuff” I take it with a grain of salt since I know they are never figuring in up front money, money spent on inventory, time, etc. etc.
I’ve got a handful of friends who do Jamberry. A couple of them will admit, as mentioned upthread, they sell it purely to get the vendor discount. The others claim to love the product. Ditto Posh (skincare line).
I have a friend who had a very bad experience with Mary Kay a few years ago. If anyone asks her for MLM advice she automatically points them to the Pink Truth website.
Most of my “selling” friends are SAHMs. There are also some who are doing it for extra money and don’t have the flexibility to take on a traditional PT job.
My wife has been selling Younique makeup for about a year. I only agreed with her that it was OK because the only upfront expense is the starter kit which cost £69 and (supposedly) contains over £100-worth of makeup. So worst case, a relatively small amount of money has been spent on products she can use herself. There is no ongoing commitment to spending anything else (e.g. mandatory seminars, minimum orders). I think she initially thought she might be able to bring in a few hundred a month. In reality, she’ll do well to net that in a year. She’s too nice to go for the hard sell and too nice to bully people into signing up for her ‘team’ so as I explained to her at the time, treat it as a hobby business where you might make some pocket money and you’ll be fine, don’t think it’s the secret to early retirement. Even then, it caused an issue with a close friend of hers through posting too much on Facebook. That’s blown over though and she seems to enjoy doing it, though after reading this thread and the linked one I’ll just double-check she isn’t spending money on stuff that isn’t already sold (I’m 99% sure she isn’t).
For the reasons above, it could be worth the OP looking into this. I don’t think the product is amazing, just decent quality makeup at a reasonable price that is probably dissimilar enough to Avon for the overlap not to matter too much.
I did make decent money selling sex toys at home parties, but I worked for the distributor, not an uplink. I quit when I got pregnant. I was tired in the evenings, and no one really wants to buy sex toys from a pregnant woman 
A good friend had made a killing at Amway, and they are invited to speak as “double black diamond” or whatever. Awesome for them, but I still don’t want to do it.
I saw that John Oliver piece, and it introduced a new documentary about MLMs. Many of them (Herbalife was one that came to mind) are moving into developing nations and taking advantage of people there. :eek: One person they showed was a Hispanic woman who said in Spanish, with subtitles, that her husband never passes up an opportunity to remind her of the 8,000 monetary units she “invested” in this scheme, and lost.
My exwife got into NuSkin in Japan ahead of the crowd. NuSkiin was going to “open” Japan in a few months but the Special People[sup]TM[/sup] knew about beforehand so they could enrich themselves at the expensive of the Fools[sup]TM[/sup].
I happened to be one connection away from the Special People[sup]TM[/sup]. As an American living there with a Japanese wife apparently we were attractive targets because it was easier for me to obtain products and she would have all of her [del] potential suckers[/del] friends and family.
As potential early investors in the Japanese market, we were given the closed, off-the-record Presentation for Special People[sup]TM[/sup]which was a complete contrast with the Presentations for the Fools[sup]TM[/sup] which was shared widely after the market opened.
There wasn’t any bullshit about how wonderful the founder was, or how much people’s lives would be better or even how good the products were. It was cash, cash cash. NuSkin was doing this well in the States, had done that well in whatever other country they had opened and they expected to make more money in Japan.
One guy’s sales pitch was that this was at least a more legitimate company than last several he had gotten into, which were even worse scams. Another admitted the reason they sell vitamins is that it’s impossible to sell their sales targets in shampoo alone.
It was a backstage chance to see the sharks in action. People who became the Black Diamonds (Blue Hawaiian Black Diamonds?) and sound soooo sincere were letting their greed show.
I wasn’t interested, even if you could make lots of money. My ex-wife liked it and she did OK with it, simply because she found a couple of people who put so much work into it and she got lucky. However, she lost life-long friends who invested a ton of money and walked away with nothing but boxes of unsold, overpriced vitamins.
That alone is a reason to run away! 
QFT
One of my friends was briefly entertaining the idea of a pyramid scheme. He knew it wasn’t legitimate, but would be close to the top of this particular one, was letting greed talk to him. I pointed out that even if he happen to make money, it was going to be at the expense of those who wouldn’t. Are you really going to be fine with that?
This is what I was thinking. To the OP I’d say don’t trust what people say about how much they are making through their MLM unless you are close enough to know that they wouldn’t lie to you and you know they are reasonably good with money. People can be embarrassed to be seen as a failure or sucker, or they can be unreasonably optimistic about how they’re going to make so much money in the future despite how they’ve only lost money so far.
I agree with most everyone else about it would be much better/safer to get a part-time job. Or there are more and more flexible jobs like TaskRabbit or InstaCart or others. I can’t vouch for any of those specifically, you would definitely need to do research, but I don’t think you’d go into debt on those unlike with MLMs. Or just spend the time that you would spend working on an MLM trying to find ways to cut down on your spending if you haven’t already done that.