- First Things First
- Let’s Talk Money
- Sales Opportunities
- Support Structure
- Other Benefits
- Picking a Product
- You Can’t Take It With You
First Things First
Let’s Talk Money
- MLM: Multi-level marketing, sometimes referred to as ‘network marketing,’ ‘word-of-mouth marketing’ or ‘referral marketing.’ What this means is that you earn a small percentage of the customer sales amount for those recruited ‘under’ you. Each company has unique criteria and guidelines for the levels (generations) you can be compensated for. Amway is considered the pioneer in this space. (Please note that Wikipedia refers to it as ‘pyramid selling’ which a LOT of folks would automatically assume to be ‘pyramid scheme.’ It is not the same thing.)
- Party Plan: Any direct-to-customer sales that are typically constructed in a way that requires the salesperson to visit the location (usually a home) of the host to conduct the sales pitch and product demonstration. The host, in turn, invites their friends and family and typically earns credits for the product for free based on the attendee’s sales. Tupperware and Avon are probably the two most widely recognized names in this space.
- Direct Sales/Selling: Selling products directly to a person at a time. This stands in direct opposition to Party Sales, although both selling tactics are typically used in tandem by a salesperson. The Direct Selling Association is the governing body for this type (and many other) selling frameworks. Just because a company isn’t listed as a member does not mean they are a ‘bad’ company (criteria for membership is strict and takes awhile to earn and only the most worthy companies make the cut,) it just means you need to do further research.
- Pyramid Scheme: Also referred to as a Ponzi scheme. This includes any form of direct selling or MLM that does not sell any meaningful amount of product but rather relies solely on making money from recruiting other people and/or requiring your downline to prepurchase massive amounts of inventory, or a required amount of inventory to stay an ‘active’ salesperson. The DSA has an excellent one-sheet to help identify pyramid scheme operations.
A note on schemes: Straight up not cool or LEGAL. Many (M-A-N-Y) people assume that all forms of direct selling are a pyramid scheme. Please know this is simply not true. Properly structured direct sales companies are ethical and legal in their framework and compensation. Sadly there are always people within a structure that behave unethically or even illegally within the framework of a direct sales company. This is usually not reflective of the company or products.
Note: I have owned a retail store. I paid a LOT to purchase inventory (over $100,000,) pay employees, rent, electric, fixtures, marketing, insurances, and shrinkage (shoplifting.) Direct sales representatives do not have this overhead. The companies I purchased inventory from were compensated salespeople who made a commission as did their boss on all of my invoices. This part is not much different than direct sales.
- Your husband doesn’t want you to waste ‘household’ money on starting a business.
- Your mom keeps buying “questionable ingredients” essential oils from the kiosk at the mall and then complains of headaches to anyone within earshot and falsely equivalates that product to yours.
- Your girlfriend talks your lectures you about “all things pyramid scheme” and the one time she bought an overpriced baking mix at a home party and she was offered a chance to become a representative.
- Your husband cooks/does dishes/bathes kids without asking because you are answering emails from prospective clients or filling orders.
- Your mom tells her bunco friends about how much better she sleeps because of that “water steamer thing” and the oils you gifted her for Mother’s Day.
- Your girlfriend willingly invites her work friends over for wine and picky foods so that you can share your opportunity and products with them.