Multi-Level Marketing is not a new concept.
The approach is simple:
- You sell a product.
- You get others to be loyal customers.
- You then convince them to sell the product themselves. You get a cut of their sales.
- In the future, if the person you recruited gets people selling under them (called their “downline”), you will receive a cut of that as well.
So on and so forth until everyone is a self-made millionaire.
Multi-Level Marketing has been around for a long time.
We all have been to Tupperware parties, Amway parties, or Mary Kay parties.
There is nothing inherently wrong about being involved in this sort of a side hustle.
Although, often times, lines in the sand get drawn when your bestie posts 47 pictures in a row on Facebook of how she is “living her dream” with “financial independence”.
Especially since you know her personally, and she had to borrow money to pay her car note this month.
While there might be an extremely small exception to this, most people involved in Mid-Level Marketing make very little money.
If you are one of the lucky ones to get in on the “ground floor”, the experience can be a lucrative one. If this describes you, enjoy it while you can, as MLM businesses tend to have a short shelf life.
This is due to the actual business plan itself being incredibly flawed.
By the time you get to the third tier, the fourth tier, and the fifth tier, and everyone is taking their cut, the juice is barely trickling out from the squeeze.
Most consumers understand this. Any product that needs to be marked up so significantly that a gaggle of people can have their due share isn’t a product you want to purchase.
No matter which side of the MLM coin you fall on, one thing is 100% clear:
If you are affiliated with an MLM, you are not an “entrepreneur”.
You are a “salesperson”.
There is nothing wrong with being a salesperson. Salespeople can make boatloads of cash if they get good at their craft. Every company on earth needs a reputable and knowledgeable salesperson.
But the fact remains, if you’re selling sub-par supplements. Or earrings. Or Tupperware. Or candles – out of a catalog to your closest friends over wine and appetizers, you are not a “businessman” (or woman).
Here are 3 reasons why:
Reason #1 Multi-Level Marketing is NOT Entrepreneurship:
You do not control the product or the cost.
There are no bigger variables to whether or not you will succeed in business other than “what” and “how much”.
An entrepreneur needs to decide – with painstakingly thorough detail – exactly what they will put to market.
They then need to decide on a price point.
After a great deal of market research and studying behavioral patterns, decisions are made.
Many times, a company will have to go back to the drawing board, as theory doesn’t always translate into practice.
This is a never ending, ongoing process as you refine, tinker, introduce new products to market, and try to meet the needs of your customers.
None of this occurs in Multi-Level Marketing.
You get a notice of a “hot, new product”. You buy the “hot, new product”. You sell it at a mark-up.
That’s the very definition of the word “salesperson”.
Reason #2 Multi-Level Marketing is NOT Entrepreneurship:
You are more concerned with getting people in your “downline” than actually selling your product.
For a legitimate business, sales trumps all else.
Many metrics must be looked at. The cost of client acquisition, marketing budgets, client loyalty, returning customers, etc.
But all else pales to the cold, hard sales numbers.
In an MLM situation, you are less concerned about actually selling the product than you are with finding other people who are willing to sell the product under you in your “downline”.
Yes, you’ll make a buck here and a buck there by selling your protein shakes, but the real money lies in the power of exponential results – which can explode in the future.
You begin to think to yourself,
Hmmmm, if I can get 10 people, and they can each get 10 people, and then they can also get 10 people……..
All of a sudden your priority shifts from getting people to buy your stuff to getting people to sell your stuff.
Ever notice how MLM’ers on social media are always looking for people to “join their team”?
Yeah………there’s a reason for that.
Reason #3 Multi-Level Marketing is NOT Entrepreneurship: Legitimate criticisms of the business model are not addressed. Because you’re a “hater”.
We all get criticized from time to time.
Want to see how much courage you’ve got? Go start your own business.
People will come out of the woodwork to put you down.
I’ve been called a hack, an idiot, a charlatan……..I was once accused of “renting children” for my fitness photo shoot last year to make more sales!
However, I absolutely love real, constructive criticism of the way I do business.
I hire advisers to help me when I need it, and outsource certain tasks to those with more experience and expertise than I have.
Ask a Multi-Level Marketing salesperson about the business plan, and criticize it, and you’re slapped with this:
You must be a “hater”.
You must be a “corporate clone”.
You are just “small minded” and you don’t “believe”.
Did you know that Mark Zuckerberg pitched the idea of Facebook to 5 people, and 3 of them turned him down?
Did you know that Colonel Sanders didn’t sell one piece of chicken until he was 65 years old?
Did you know that everyone thought Alexander Graham Bell’s telephone would fail?
Do you want this to happen to YOU?!?
Notice these statements. They’re all emotional pitches and fluff.
None of them mean a darn thing.
I once asked an MLM’er if they were concerned about the tiered, flawed business model.
They responded with a picture:
As stated from the inception of this article, there is nothing wrong at all with being a salesperson.
Salespeople are just trying to make a living. They sell stuff. That’s what salespeople do.
Always keep in mind what you’re doing – and be true to yourself.
You need to create, to analyze, to streamline, to improve upon, and to work relentlessly at your product, your sales funnels, and your organizational systems if you’re running a business.
It takes a bit more to be an entrepreneur than a filtered picture on Instagram with a #yolo after it.
Yours in entrepreneurship,