Saturday

Multi Level Marketing

I have been approached many times in my life about an “opportunity” to join in a multi-level marketing organization. I have always declined. God challenged me to clarify my opinion one day.

Multi-Level Marketing is Expensive:

1. It costs relationships. Multi-level marketing (MLM), by its very design and nature, changes my relationships. People are no longer only my friends or family, but must become—to some degree—prospects for the business. MLM requires by its very nature that you bring others into it. I have not been willing to pay that price.

Furthermore, some of the relationships that are spent are those of my family. MLM works well only if both husband and wife are equally committed to and enthused about “the business.” But even then, the time and attention siphoned away from my family relationships is hard for me to live with. Besides, I’ll miss our golf games on Fridays if that’s part of the cost.

And beyond all that, every successful MLM that I have ever seen (and I’ve seen a lot!) virtually requires my joining their social subculture in order to be “successful.”

2. It costs time. Any business endeavor will require an investment in time. Ten hours a week (such as is often quoted) strikes me as idealistic, but even if it is true, I have other uses for those hours that are more consistent with my long term (eg. ten thousand years and beyond) goals. Ten hours a week usually means ten hours on a quiet week and more on other weeks. But even ten hours a week comes out to 520 hours in a year, or the equivalent of three months of full-time work every year. I’d rather spend that with my family, or with baby believers, or even raking out my lawn!

3. It costs money. Likewise, any business will require a significant financial investment. Even if I don’t buy product to sell (but then what would I show my customers?), I must buy advertising, brochures, gas to attend meetings, costs for meals & conferences, meals for some meetings, bookkeeping paraphernalia, office space, etc. TANSTAAFL, you know.

4. It costs focus. MLM is, by its nature, an opportunistic business. That means that when I find an opportunity, I must seize it and make the presentation. (Rather like evangelism, though it’s an either/or situation. One can’t evangelize for both MLM and Jesus simultaneously. “No man can serve two masters…” and all that.) The inevitable result is a significant loss of attention to the task at hand, whether that’s groceries, landscaping, job search, or pastoring.

5. It costs reputation. Thanks to Amway, MLM has a really bad name in America: a low-life, get-rich-quick reputation. Of course, people involved in MLM aren’t always “low-life, get-rich-quick” people, but you’d be hard pressed to convince many Americans of that. They hear MLM and they begin to look at you differently.

6. It costs my values. The last thing I need is a values war inside me. Many people have observed a spirit of greed in MLM adherants. In my experience, this is a very (I repeat, very) common problem with MLM. Soon, often before they even sign up, people stop seeing a business and start seeing dollar signs. This is largely related to the way many MLM members promote “the business:” “Look at the potential,” they say. “Think of the things you could do with the money!” I know, this is not a given. It is a serious danger; one that I choose not to expose myself or my family to. I don’t want any of my family flirting with the lust of the eyes or the boastful pride of life.

7. It costs my self-esteem. When I am in MLM, I am associated with values that are opposed to my personal core values. I am part of a group that is considered “low-life, get-rich-quick” by people whose opinions I hope to influence. I get a dozen “No thank you” and a handful of “Hell No’s” for every “I’ll think about it.”

The official figures are that one out of every twelve presentations will be interested in the business and one out of every ten persons who signs up will do anything with it. (These figures come from Amway.) That means one out of every 120 people I take the time to make presentations to will be influenced by “the business.” That’s a lot of work.

The concept of “If you work hard at your business, you can be very successful,” is true for most businesses, most jobs. If I own a drug store and work with as much focus and dedication as is required to make a success of the MLM business, I’ll be a wealthy drug-store owner before long.

Benefits of Multi Level Marketing

Now, lest I be found guilty of one-sidedness, I should present some of the “other side:”

1. If your boss is involved, it may be the “politically correct” thing to do.

2. If you are willing to pay the price(s), MLM can indeed make you rich. My personal opinion is that nobody does it better than Amway, but then Amway has so many people and so much exposure that it’s hard to make it to the big time with them. (A note about startup MLMs: the support services are usually pretty skimpy.)

3. If everything goes exactly as planned (not a regular occurance in our world, but it does happen), you can end up with a sizable residual income, if the MLM company doesn't go bankrupt. (Most do.)

My Sources

Having said all that, it occurs to me that perhaps I should explain where my opinions come from.

I have studied MLM quite closely. I have a friend who is in an Amway offshoot and is probably going to be rich before he’s my age. He and I have spent probably 100 hours or more discussing Amway and other MLMs (he had studied several before joining his organization). He is a single man who is fanatically devoted to his group. He got a job as a taxi driver simply so he can have contact with more people to “present the business” to. He reads dozens of books, listens to hundreds of tapes and CD’s, hangs out with his “upline”, and attends lots of meetings. He makes several presentations a week and has built a substantial organization. He probably spends (or spent, when I knew him), 15 hours a week actively working on the business, but it consumed him.

I have also studied several MLM companies fairly intentionally. I’ve gone to meetings, read magazines and books, evaluated programs, propaganda, and merchandise. I’ve interviewed both winners and losers in a load of programs: NuSkin, Herbal Life, NSA, Quorum, Amway, Shaklee, Fuller Brush (yes, they went through a MLM stage) and a dozen or more others selling everything from diet plans to insurance and annuities to houses to home security systems to home computers. I’ve named Amway in my concerns above, but every single issue (or “cost”) that I raise above has been found in every single MLM organization I’ve looked at. No exceptions that I’ve yet found.

And last but not least. I have been personally involved in two different MLM programs. My experiences from the inside have confirmed everything I had observed from the outside.

Why did I join? I wanted to invest some of my “spare” time and make some money. It seemed like a good thing at the time. I had been approached by a man I respected. What did it cost? Every thing I’ve mentioned above and more. For years, I carried a sizable debt from the last endeavor. I know whereof I speak.

Conclusion:

Multi-level Marketing opportunities are everywhere, and they have a measure of truth in them. If you are willing to give your life to “the business”, you can make a lot of money in some of them. They are naïve (or worse) in their communication of how much work is required. That work is better spent, more cleanly spent, in other places.

2 comments:

Michael King said...

Per the conversation we had recently, I think there IS a way that those sorts of businesses can be run, but it is a bit divergent from how many seem to choose to engage.

1. Honesty -- you have to be VERY honest about what is involved. Paint the picture, but inform people that different levels of involvement require different levels of commitment -- and let them know what that actually looks like.

2. Non-manipulation -- you have to be VERY careful to not manipulate your friends and even strangers just to make money. In reality, no one likes being 'duped', and when people feel shafted, that is when relationships take a turn for the worse. It is possible to engage in Network Marketing businesses (where ultimately you're putting money in the pockets of friends and loved ones, often, instead of random business owners or Walmart) in a very upright fashion, but it's a choice to do it differently.

As for it competing with sharing the gospel: that is true to some extent. In my case, I'm really not an evangelist anyway. I don't really go around trying to get everyone to 'get saved' or to 'know Jesus'. It's not my style.

By the same token, I also don't try to get everyone I meet to try to join my Network either -- just the people who I perceive have the possibility to benefit from it in some way, either via the products, the business, or both.

And if we're honest, any major 'work' that we want to do for God requires money. And time basically is money in a different form, as I am required to work 5 days a week at a 'normal' job if I lack the money to be able to focus on ministry full-time. Thus, NOT doing a Network Marketing business, to me, carries as much loss of time if not MORE than if I become successful in a NM business model.

NM involves the VERY Christian principle of sowing and reaping many fold more than the amount sown, and over time if one remains consistent, honest, and non-manipulative, there are great gains to be made.

But at the same time, not everyone has the personality or whatever to be cut out for it. And if you know that is NOT you, then you're wasting your time trying. If you've never actually tried it though, you don't really know if you could be successful either. Nothing ventured, nothing gained.

I suggest that there are a good many people who are turned off by "MLMs" might actually gain GREAT benefit if they gave the products or business of a Network Marketing company a chance -- but as The Pilgrim stated, there are risks involved, especially if a company is a new startup -- it may not make it. Some of the longer-lasting companies such as Amway, Shaklee, Melaleuca, Nikken, and the like, have been profitable long enough that it's unlikely they will fold anytime soon. And if you like their products or business model, it might be a good fit for you. But it also might not be.

When someone loses a lot of money in a NM business, it's at the end of the day no one else's fault. I can't blame anyone else for my prior failures in NM. (and I have had at least 4 that I can think of). I also know that the main reasons for my failure were my own pride, stubbornness, lack of discipline and/or follow-through, and ignorance. When I assumed I knew more about something than someone who was VERY clearly successful instead of realizing there was something I needed to learn from them, I did it my own way and promptly failed. Pride's a bugger.

When you are able to see your own character flaws and work through them, a NM business can be VERY lucrative.

So as a counterpoint to the original post, there are benefits and risks associated with doing and with not-doing, and neither is better than the other. They're just different depending on what one's goals are. And while Pilgrim's goals clearly mean that he does best by not having an NM business, my goals are best accomplished THROUGH an NM business. Just some (lengthy) thoughts to ponder.

Northwest Prophetic said...

Excellent comments, as usual, Michael. Thanks for adding to the conversation.