Interesting MLM article

[Moxie]

https://qz.com/1039331/mlms-like-avon-and-lularoe-are-sending-people-into-debt-and-psychological-crisis/

 

I thought this was interesting.

 

I know a woman who has turned her living room into a store. I can't imagine how much she has "invested". Her DH claims she makes as much as he does but I'm pretty sure he is a liar.

[Guest]

I know someone who does LuLaRoe and is also a teacher. Her teaching job brings in less, but her dining room is now a "boutique". Also know a couple ladies who have quit full time jobs to do LeVel. None were wealthy to begin with, do it is possible.

[JIN MOUSA]

I found this quote particularly surprising.

 

"But according to a report that studied the business models of 350 MLMs, published on the Federal Trade Commission’s website, 99% of people who join multilevel-marketing companies lose money."

 

I think it's sad to see women who need the income and are willing to hustle get into something with such a low success rate (success being defined as making money). 

[Guest]

I found this quote particularly surprising.

 

"But according to a report that studied the business models of 350 MLMs, published on the Federal Trade Commission’s website, 99% of people who join multilevel-marketing companies lose money."

 

I think it's sad to see women who need the income and are willing to hustle get into something with such a low success rate (success being defined as making money).

What shocked me is that it costs $5k to join LLR. Kind of a brilliant marketing move. Make it expensive so it feels elite and exclusive.

[JIN MOUSA]

What shocked me is that it costs $5k to join LLR. Kind of a brilliant marketing move. Make it expensive so it feels elite and exclusive.

 

Plus, that $5k box of clothing is a complete mystery.

[FaithManor]

I know a couple of women who lost their shirts on Mary Kay, and others that did so in Amway, Quickstar, and some bath and body thing whose name escapes me right now.

 

The worst thing is the ruined relationships. The hard sell to friends, constant pressure to have parties, friends not liking the product and recommending to others, etc tends to kill the connections.

[kewb]

I read that article last week and I remember thinking "lularue is still a thing?" Everyone I know of who bought in is going out of business. I don't own any of their magic leggings. When I had looked into the company because everyone and their mother was telling me to get them I was turned off by their practices. $5k for a mystery box. No returns just credit. Thanks, but no thanks.

 

I do know some women who have successful pampered chef businesses but even they have slowed down or closed up.

 

Now it is all young living in my face. I hate their method of pushiness and will never buy one of their oils.

 

It is disheartening to see how many women get taken advantage of in the quest to help their families and be home with their kids. I only hope articles like this will help people not be taken advantage of.

[Catwoman]

What shocked me is that it costs $5k to join LLR. Kind of a brilliant marketing move. Make it expensive so it feels elite and exclusive.

Wow, I had no idea it cost that much! :svengo:

[amy g.]

Man, that was a depressing read. I'm honestly not even surprised that 99% of people lose money.

 

I left a church where the preist's and the decon's wives were using their position of power to push a MLM. Then I went through my FB feed and unfriended everyone who used their personal page to market a MLM.

 

I've been much happier since doing that. I honestly feel like the people who are most successful in these businesses are the ones without the decency to feel bad about taking advantage of "friends" for profit.

[Scarlett]

Well this confirms what I always suspected. Makes me really sad though.

Edited August 14, 2017 by Scarlett

[CadenceSophia]

Keep in mind that when they say "lose money", it probably means from a tax perspective. That means start writing off all the things that are allowed to be related to the business so you don't have to pay extra taxes on the earnings. Some people are very liberal with that -- writing off a portion of their electric bill, clothing, even while parts of their houses. I have done a couple MLM's and "lost money", but I got all of my product for free plus everything I could possibly consider a expense. It was pretty far from a losing endeavour but it looked that way on paper, on purpose.

Those high cost of entry MLM's probably do cause many to lose money, but most women do make at least a little from the others that don't expect you to have inventory on hand.

[solascriptura]

I know a few women selling Rodan and Fields. They keep saying that they are loving their paychecks from their second gig or side hustle and are looking forward to quitting their day jobs. Depresses me a bit. These are women that are nurses and doctors. Maybe they do want to sell cosmetics to rich women, but this country needs doctors and nurses!

[LauraBeth475]

I accidentally read this as men-loving-men instead of multi-level marketing and I was so confused until I got to the second comment.

[Catwoman]

I accidentally read this as men-loving-men instead of multi-level marketing and I was so confused until I got to the second comment.

:lol: :lol: :lol: :lol:

 

That might be a topic for a different forum... ;)

[MistyMountain]

I have a friend that seems to be really successful and making a lot of money at the moment with this newly formed hair products mlm. She has a lot of friends and it is a new product that works well and is expensive. Seeing her earn so much and needing money has made me briefly consider it. I know way less people and hate being pushy or making my social media all about something I sell and know I could not do as well as her. I think it will die down over time because there are only so many people who can regularly buy shampoo that is so expensive. It makes sense that the first people who get in can make a lot but then once more people sign up and they are on the bottom they will not earn much. I think over time though even the people who found success may not do as well. 99% is a very small number who have success.

 

It is sad to read about the people who started selling less with lularoe and everyone encouraged them to buy more inventory because that is how they earn money and then they got themselves into a bad situation.

Edited August 14, 2017 by MistyMountain

[Mergath]

I have a friend that seems to be really successful and making a lot of money at the moment with this newly formed hair products mlm. She has a lot of friends and it is a new product that works well and is expensive. Seeing her earn so much and needing money has made me briefly consider it. I know way less people and hate being pushy or making my social media all about something I sell and know I could do as well as her. I think it will die down over time because there are only so many people who can regularly buy shampoo that is so expensive. It makes sense that the first people who get in can make a lot but then once more people sign up and they are on the bottom they will not earn much. I think over time though even the people who found success may not do as well. 99% is a very small number who have success.

 

It is sad to read about the people who started selling less with lularoe and everyone encouraged them to buy more inventory because that is how they earn money and then they got themselves into a bad situation.

You have to keep in mind though that with these MLM businesses, they HAVE to appear successful and happy in order to sign up more people underneath them. I doubt that's actually the reality for most of them.

[EmseB]

I'm not defending MLM's in anyway, but I've read various statistics that most small business ventures fail and people lose money.

 

The scummy thing about MLMs, in my mind, is that when these consultants go under, corporate still makes money.  They are making money on people losing their life savings.

[solascriptura]

I have a friend that seems to be really successful and making a lot of money at the moment with this newly formed hair products mlm. She has a lot of friends and it is a new product that works well and is expensive. Seeing her earn so much and needing money has made me briefly consider it. I know way less people and hate being pushy or making my social media all about something I sell and know I could not do as well as her. I think it will die down over time because there are only so many people who can regularly buy shampoo that is so expensive. It makes sense that the first people who get in can make a lot but then once more people sign up and they are on the bottom they will not earn much. I think over time though even the people who found success may not do as well. 99% is a very small number who have success.

 

It is sad to read about the people who started selling less with lularoe and everyone encouraged them to buy more inventory because that is how they earn money and then they got themselves into a bad situation.

My two cents, only go into a mlm if you're willing to offend and lose friends. I haven't really known anyone (except those in MLMs ) that like them.

[luuknam]

I'm not defending MLM's in anyway, but I've read various statistics that most small business ventures fail and people lose money.

 

 

The numbers I've seen in the past say something like 2/3 fail, iirc... this article seems to confirm that, more or less:

 

https://www.fool.com/careers/2017/05/03/what-percentage-of-businesses-fail-in-their-first.aspx

 

There's a big difference between 1 in 3 succeeding, and 1 in 100 succeeding. Of course, I don't know how the tax write-off thing a PP mentioned factors into all this... but still. 

[MistyMountain]

You have to keep in mind though that with these MLM businesses, they HAVE to appear successful and happy in order to sign up more people underneath them. I doubt that's actually the reality for most of them.

She really is making lots of money right now. She is the only one I know though who is and it is very common to have a mlm business.

Edited August 14, 2017 by MistyMountain

[MistyMountain]

My two cents, only go into a mlm if you're willing to offend and lose friends. I haven't really known anyone (except those in MLMs ) that like them.

I will not be. It is not in my nature at all to do that. It was only a brief thought.

[J-rap]

I've never heard of many of those companies!  The only one I ever really liked and bought from consistently was Avon, back in the late 70's!  But the article explains that those early companies were more successful, because they were one of the few ways women could buy specialty makeup products, etc., back then (in smaller towns).  Now, women can buy so much of that online.

 

I have a friend who sells for a company part-time -- I forget which one.  She doesn't push it too hard, but she seems to travel with them a lot!  I see pictures of her on Facebook on cruises, at resorts in Arizona, etc. 

 

We once knew another couple who sold through an MLM.  Both were really immersed in it, full-time.  They went to our church.  They had two children and were fairly new to town and didn't know too many people.  We watched their children for them a couple times.  About six months after they came to town, they were suddenly gone.  Even the schools hadn't gotten notice.  No one knew where they went.  I always figured it had to do with the MLM they were involved in.

[Monica_in_Switzerland]

Gah.  After reading that I need to go wash my hands and brush my teeth.  Ugh, ugh, ugh.  

[Guest]

My two cents, only go into a mlm if you're willing to offend and lose friends. I haven't really known anyone (except those in MLMs ) that like them.

Yep. It is one of the reasons I quit my last hairdresser. She was always bringing up how great everything was going with her expensive face cream mlm 'business'.

[hjffkj]

I know a lot of women who sell MLM products. I have no idea how they are doing, poorly I'd imagine. But thankfully they are not the pushy type. Each one has invited me to a party and each one has accepted my polite response about how that is not how I shop for the products I buy. And we go back to our normal relationship. It has been wonderful. If any of them were pushy about it I'd be very blunt with them and tell them so before ending a friendship.

[Mimm]

For every person who is successful, there are many many more who aren't and the successful ones are only successful because the unsuccessful ones are there, paying money into the company. The unsuccessful ones are a necessary part of it. What bothers me is knowing that someone is only acting interested in my life to sell me something. I know someone semi-successful at Plexus who is only trying to form a friendship with me to sell to me. It's kind of depressing.

 

She might be the first person I know that's actually making money at it. But I don't know for sure that she is. Things like Plexus are the worst because they promise good health/weight loss/energy/etc AND say that you'll get rich. Who doesn't want to be richer and thinner? I know I do. :)

[EmilyGF]

A friend of mine just started MLM recently because we live in an affluent big city and NO ONE around us has heard of it! So she has had great sales so far.

 

But she has a day job that  pays well (even has a pension!) and only does this as a distraction from some things she has otherwise been brooding over.

 

I can't believe LuLaRoe marketing. That is whacked. I can't imagine buying "inventory" without knowing what will come. WT*?

Emily

[Ellie]

Too bad the article compares all direct sales companies to LLR. Tuuperware, Avon, Shaklee, Amway, Longaberger Baskets, Mary Kay, and others don't require their people to invest thousands of dollars, and although not all dealers/consultants/IBO/whatevertheyrecalled become independently wealthy, they don't lose tons of money, either. Direct sales is a good business model.

[mamaraby]

Too bad the article compares all direct sales companies to LLR. Tuuperware, Avon, Shaklee, Amway, Longaberger Baskets, Mary Kay, and others don't require their people to invest thousands of dollars, and although not all dealers/consultants/IBO/whatevertheyrecalled become independently wealthy, they don't lose tons of money, either. Direct sales is a good business model.

But Mary Kay does require you invest in inventory (http://www.pinktruth.com/welcome/frequently-asked-questions/).

 

And Pampered Chef will still pressure you to recruit for your downline because while you can make some money selling products, the most money is made by those who recruit and recruit and recruit some more. Except if you don't have more than a certain number of people below you, you don't make any money off their sales, the person above you does so there's always that pressure to recruit. This one I actually have experience with because I was a Pampered Chef consultant. Eventually I had run out of people to ask to host shows and I couldn't pay people to host another one.

 

Before becoming a Pampered Chef consultant, I probably would have agreed with you - except about Amway, we'd still have disagreed about Amway. Direct Sales is a good business model for the business and folks way up high. It is not a good business model for your average person who gets into it to sell stuff.

 

ETA: Pampered Chef was maybe a good source for kitchen tools back a decade or so ago, but that just isn't the case anymore. There are far more high quality products available on Amazon these days. I have lots of Pampered Chef stuff in my kitchen from when I bought stuff as a consultant or at bridal shower parties, but I am slowly replacing much of my older Pampered Chef stuff with better non-Pampered Chef products.

Edited August 14, 2017 by mamaraby

[Mimm]

It sounds like LLR could have been a good thing if they'd limited their number of consultants, and made way fewer patterns (you know, maybe only make the cute ones instead of all the ugly ones). That way consultants aren't competing with so many people and people actually want all the patterns. And being a consultant is even more "exclusive".

[EmseB]

 Direct sales is a good business model.

 

It's actually terrible for the consumer and the consultants. Padded into the cost is paying a paltry percentage of the actual price to multiple levels of consultants. For corporate, the MLM is in the business of selling businesses, the actual product is pretty incidental.  So it is a good business model for those at the top who don't rely on selling product to make ends meet.

[Serenade]

I have a friend who successfully sells Lularoe via live stream Facebook events. I only watched part of one of her events, but I thought it was mildly interesting. She opens the box and pulls the pieces out one by one, making comments on each. The sizes are all jumbled up. If people want the piece she is showing, they post in the group of the live stream. There is no pressure, and the only slightly annoying thing for me is that I get notifications each time she has an event. She has lots of events, probably weekly. She has a very successful career outside of this side job - she does it just for fun. She has a lot of pizazz in marketing, presentation and her own image, and she has a lot of friends, and I guess this enables her to be successful at Lularoe. I'm not interested in the stuff, personally. This 54 year old woman would look like a clown in that stuff, yet many people can pull it off and look good. I'm just not one of them. I've had no pressure to buy, either.

[PinkyandtheBrains.]

She really is making lots of money right now. She is the only one I know though who is and it is very common to have a mlm business.

If you get in at the beginning, and the new mlm becomes popular, you often are one of the few who make money.

[springnjoy]

If you get in at the beginning, and the new mlm becomes popular, you often are one of the few who make money.

Exactly! The few people I know who have been successful are the ones in at the beginning. 

I also feel like MLMs unfortunately give a bad name to many work from home jobs. I teach online part time. And whenever I say I work from home, people assume I'm part of an MLM and basically drop the conversation. My pet peeve is that MLMs won't just come out and say they're MLMs. Beach body, Isagenix, so many of their reps post on social media in "covert" ways w/o mentioning the company name. Then if you ask any questions, you find out it's an MLM. Just say so in the first place! If you want to spend your time that way - and endanger your relationships - go ahead, but at least be up front about it! 

I wish I had the courage to unfriend people who use their personal pages to sell their product.  :blushing:

[sassenach]

Man, that was a depressing read. I'm honestly not even surprised that 99% of people lose money.

 

I left a church where the preist's and the decon's wives were using their position of power to push a MLM. Then I went through my FB feed and unfriended everyone who used their personal page to market a MLM.

 

I've been much happier since doing that. I honestly feel like the people who are most successful in these businesses are the ones without the decency to feel bad about taking advantage of "friends" for profit.

A church we lived near in Florida had that going on in their entire staff and it was just SO WRONG. From the pulpit the pastor talked about having a "second stream of income."

 

I won't even host parties because it makes me feel weird in my position as a PW.

[ashfern]

 My pet peeve is that MLMs won't just come out and say they're MLMs. Beach body, Isagenix, so many of their reps post on social media in "covert" ways w/o mentioning the company name. Then if you ask any questions, you find out it's an MLM. Just say so in the first place! If you want to spend your time that way - and endanger your relationships - go ahead, but at least be up front about it! 

I wish I had the courage to unfriend people who use their personal pages to sell their product.  :blushing:

 

That's usually company policy. They are very strict about what you can & can't say on social media.

[Hikin' Mama]

Direct sales is a good business model.

My husband and I own a (successful) small business. I disagree with your statement.

[rebbyribs]

So is Usborne Books one of these MLM companies?  I've used a lot of their books with my kids, but I'm always put off by the "Join" and "Find a Consultant" on their site.  I hope they're not scamming a bunch of moms.

[QueenCat]

So is Usborne Books one of these MLM companies?  I've used a lot of their books with my kids, but I'm always put off by the "Join" and "Find a Consultant" on their site.  I hope they're not scamming a bunch of moms.

 

Yes, Usborne is an MLM.

[cintinative]

One of my friends just quit selling LLR. She said she totally agrees with the article.

 

I am still working through this long article but I agree on their point of the market being saturated. There are SO many people selling LLR.  I have another FB friend that sells LLR, Isogenix, and Jamberry. I fear for her financial situation after reading this. I had no idea the initial investment for LLR was so high.  

 

 

[Guest]

Exactly! The few people I know who have been successful are the ones in at the beginning.

I also feel like MLMs unfortunately give a bad name to many work from home jobs. I teach online part time. And whenever I say I work from home, people assume I'm part of an MLM and basically drop the conversation. My pet peeve is that MLMs won't just come out and say they're MLMs. Beach body, Isagenix, so many of their reps post on social media in "covert" ways w/o mentioning the company name. Then if you ask any questions, you find out it's an MLM. Just say so in the first place! If you want to spend your time that way - and endanger your relationships - go ahead, but at least be up front about it!

I wish I had the courage to unfriend people who use their personal pages to sell their product. :blushing:

My former hairdresser didn't have much on her FB page but if she posted anything about her amazing skincare product, 20 people would come out of the woodwork to comment about how much they also love it. Of course, they all sell it. It had to be some kind of requirement to comment on X number of posts per day.

[Ellie]

But Mary Kay does require you invest in inventory (http://www.pinktruth.com/welcome/frequently-asked-questions/).

 

And Pampered Chef will still pressure you to recruit for your downline because while you can make some money selling products, the most money is made by those who recruit and recruit and recruit some more. Except if you don't have more than a certain number of people below you, you don't make any money off their sales, the person above you does so there's always that pressure to recruit. This one I actually have experience with because I was a Pampered Chef consultant. Eventually I had run out of people to ask to host shows and I couldn't pay people to host another one.

 

Before becoming a Pampered Chef consultant, I probably would have agreed with you - except about Amway, we'd still have disagreed about Amway. Direct Sales is a good business model for the business and folks way up high. It is not a good business model for your average person who gets into it to sell stuff.

 

ETA: Pampered Chef was maybe a good source for kitchen tools back a decade or so ago, but that just isn't the case anymore. There are far more high quality products available on Amazon these days. I have lots of Pampered Chef stuff in my kitchen from when I bought stuff as a consultant or at bridal shower parties, but I am slowly replacing much of my older Pampered Chef stuff with better non-Pampered Chef products.

 

There's nothing wrong with recruiting (each company refers to it by a different name). If you like the product and are making some money, of course you'd want to share that with others.

 

Direct sales is still a good business model. Some people take to it, some don't; that some don't doesn't mean it isn't a good way to make money.

 

I did Tupperware briefly, and although I love my Tupperware, I'm just not into doing shows. :-)

 

[Wheres Toto]

Yes, Usborne is an MLM.

 

Although some of their books are also available other places, like Amazon.

[tdbates78]

If you get in at the beginning, and the new mlm becomes popular, you often are one of the few who make money.

Agreed. I have a friend who has a successful career but does Lipsense on the side for a hobby and discounts. She only sells online via her private lipsense Facebook page and she seems to be doing quite well with it. Lipsense is just getting popular around here and I never heard of it until she started selling. I've bought a couple (at $25 a pop they are $$) and wasn't too impressed so I just turned off the FB notifications.

 

Overall I find MLMs annoying. The worst, imo, are the Plexus sellers. I belong to a few Facebook pages for chronic illnesses and if you post about some symptoms it won't be long before a Plexus person responds with the suggestion to try out their "amazing life changing!" products.

Edited August 14, 2017 by tdbates78

[kewb]

 

Overall I find MLMs annoying. The worst, imo, are the Plexus sellers. I belong to a few Facebook pages for chronic illnesses and if you post about some symptoms it won't be long before a Plexus person responds with the suggestion to try out their "amazing life changing!" products.

Ugh, so true. Between plexus and young living my dh should be cured.

[alisoncooks]

Ugh, so true. Between plexus and young living my dh should be cured.

Or Isagenix.

(Or so my DH was told when he was dx with cancer. Healing on a cellular level and all that jazz...*)

*insert eye roll emoji*

[MyLife]

I have a couple of friends who sell different products, and they are not pushy at all. They are kind of like, "Hey, I sell this, if you are ever interested," and they leave it at that. Then, I have other friends that sell a product, and it is ALL THEY EVER TALK ABOUT. I feel like I cant even talk to them without being hit up to buy their product. It doesn't even feel like a friendship anymore. I think my biggest pet peeve is being added to FB groups for these products without being asked to join. Just suddenly I'm in some group for clothes, make up, books. I have to remove myself from these groups, which sometimes causes hurt feelings. Just my vent. I know it doesn't have much to do with the article.

[mamaraby]

Although some of their books are also available other places, like Amazon.

Used mostly. I remember when Usborne pulled all of their books from Amazon to focus on their direct sellers. They've kept them on smaller retailers like Rainbow Resource, but tbh if they ever pulled the, from there I'd probably just stop buying the few that I have bought. After my experience doing an MLM, I'm anti-MLM.

[CadenceSophia]

There have got to be a lot of MLM folks reading this and just being too shy to comment, probably because of forum rules. I'll jump in because I am not involved in any right now. I did beachbody for about 8 months and my experience was nothing like the rant going on here. Signing up to be a coach is what's they call their version of buying into the business. If you want to use shakeology, it is cheaper to purchase as a coach so that is savings #1. If you work the business you are making some income to make your own product less expensive, free, or earning money. There is no opportunity to lose money provided the shake and exercise programs were something you wanted anyway. Young Living and H2O at Home work the same way. I became allergic to shakeology and had a huge flare of my immune disease or I would have kept going. I made about $1700 in 8 months only posting on Facebook and while I am sure some people were annoyed, many many people came up to me in person and thanked me for my posts, asked health advice, were curious about my disease, and even donated money to the research foundation for it. Basically the entire thing was super successful on all fronts, except that I am a introvert and didn't actually want to talk to anyone lol.

Edited August 14, 2017 by CadenceSophia

[Catwoman]

You have to keep in mind though that with these MLM businesses, they HAVE to appear successful and happy in order to sign up more people underneath them. I doubt that's actually the reality for most of them.

That's an excellent point. If they're trying to get you to sign up, they're probably not going to tell you they're not making any money.