Network marketing, MLM, direct selling

Jes , 3 Comments

I am worried about many of my friends. Most are new mothers and are looking for flexible work so that they can spend more time with their children. They are lured by their friends who promise flexible work and easy-to-earn cash.

There will never be cash that is easy to earn. If there is, it is most definitely a scam. If money is easy to be made, people will not have to look for you, many will flock to it.




Let's start with the definitions of some sales term.

Network marketing or direct selling is selling a product directly to your network. Due to your personal recommendations, there will be people who trust you and buy into the product. These people who listens to you will most likely be your relatives and friends. It is no wonder beauty and wellness products are most likely sold through this channel.

The product is not fake, the product is genuine.

However, there may be false claims, misinterpretations and definitely overpriced products. Why? The extra profits will have to be given to your commission, and also your managers who also have a stake in your commission. Network marketing is usually combined with Multi-level marketing (MLM), which means you are not just earning from the products you sell, but also by the people you recruit. The more you recruit, definitely the more you can earn.



Insurance companies work roughly the same way, with one difference: They don't charge membership/entry fees or force you to buy their products. They also give you a basic pay.

These direct selling methods are prevalent in this world and all industries as you do need the human touch in order to sell something. How MLM got such a bad name is because you will encounter some persistent friends/relatives who kept asking you to buy their stuff or join them. They also bought lots of products to sell them off but in the end, lost money when they bought a lot of stocks but were unable to sell them. Some of them wanted to exit and initially, the managers will promise an easy, free refunds with no questions asked, but we all know that money is not easy to get back.

What these companies promise is flexible hours, no targets/KPI, you earn more if you work hard, you see a clear path of progression and promotion and you are able to work from home. Some also promise drop shipping and you don't have to keep stocks!

No bosses, no fixed hours, work from home, splendid!


I have many mummy friends who signed on to this just to be able to spend more time with their family and still earn money. However, I don't think they know what they are getting into and this is not the way. They are not fully aware of the pitfalls and are lured by these easy-to-get-rich schemes. I tried showing them some articles exposing the potential drawbacks but all of them won't even consider my worries. Some companies that are well known:

Herbalife, Forever living, Amway, Mary Kay, Jeunesse, SBW, and also the famous Tupperware.

These products do work, maybe not cure cancers like some of them claim, but to get smoother complexion and detox? Probably. It's just much cheaper if you can find similar generic products. So people are in fact paying for the easy accessibility of the products.

It's not that the schemes are cheating you, but you have to be aware of what you are signing up for, instead of just buying into their memberships and paying for their products readily. Trust me, e-commerce is really not easy and I am into this business. You have to build up your reputation online and get into top listing and this takes time. For any new business, you need a few years so if they promise you can get rich fast, it is definitely not true. You have to invest at least 2 to 3 years into any direct selling in order to reap the rewards.

If you have friends or family doing MLM, just let them know not to sink in too much funds into this business if they can. Everyone has got to try and do this their way so better to let them lose some money and they will definitely understand it when they have no sales.

And as we all know, selling is never that easy.

Jes

If you have benefited from this post, support our first business venture at snackfirst.com or like us on Facebook!

3 comments:

  1. This comment has been removed by the author.

    ReplyDelete
  2. My experience is ...its the people who practise it make the different.
    There is nothing wrong with mlm or direct selling or network marketing. Its just another way of marketing the products or services. Its the person who present the biz or products that affect the name ignite company n the industry.
    Insurance don't pay basic salary unless u r NOT pay a commission.
    Anyway n whatever mlm companies have been in the market so long...still surviving. So I don't think it the industry ....its how the person practise n run the biz.
    Just like transitional biz. There are people who also spoil the industry too.

    ReplyDelete
    Replies
    1. Hi there,

      I don't think there is anything wrong with direct selling either. It's just that many sales people might choose to omit some information and that's normal, which is why I hope to shed some light on it. I am not sure which company you are referring to but the insurance agents I know are paid a basic salary, on top of that they are given commissions too.

      A company having survived long does not says anything about the methods. Sunshine Empire was a MLM company and in the end, the law still caught up with it.

      Delete