My personal Facebook feed is like a magnifying glass for certain phenomena. Given a population of adults that are predominantly in their mid-twenties to early-thirties, some of the most important life transitions– graduations to weddings to babies– are right there to observe. And transitions like these go deep; they impact personalities and behavior.
Anyway, as I’ve been playing anthropologist in my head these last few years, one unexpected trend has spiked for women in my age group: a preoccupation with MLM companies. These include: Mary Kay, Avon, Stella & Dot, Premier Designs Jewelry, Lia Sophia, Scentsy, Thirty-One, It Works!, and Body by Vi, to name just a few.
What is an “MLM” exactly?
“MLM” stands for “Multi-Level Marketing.” This is a type of company that recruits average joes and janes as salespeople for their products while simultaneously deeming them recruiters of more salespeople like themselves. The neverending loop of recruiters-recruiting-recruiters is incentivized by the fact that salespeople earn commissions on any sales made by people “beneath” them (people they helped sign up with the company).
In case that explanation wasn’t completely clear, here’s a great visual to drive it home:
While these products are sold at in-home “parties” and “classes,” most of these sales representatives are given e-commerce websites as well (a subdomain of the company’s larger website), which include their name and contact information.
Now, before I go on, I just want to make one thing clear…
in order to protect the innocent
Being recruited by an MLM company at some point is practically a rite of passage for females here in the States! There’s nothing unusual about having at least one friend at a time who is a sales representative (also referred to as a “consultant”) for Mary Kay, Avon, Stella & Dot, or some other cosmetics/accessories company, and there’s nothing unusual about the women themselves.
I think I can safely theorize the recent spike in female MLM sellers on my Facebook friends list has a lot to do with the fact they’re settling down, becoming mothers, and wanting a way to make a living while staying at home with their families. There’s nothing unusual about this, either.
But this mindset is one MLM companies deeply and powerfully exploit. Some will even go as far as to bring religion into their pitches, suggesting their opportunity may be God’s will for women’s lives. Almost all inject a large dose of “girlfriend speak” into their materials, giving their sales team the warm glow of family– a sisterhood.
Who wouldn’t want that?
Unfortunately, beneath the deception that manages to rally so many decent women are some sad facts.
99% of MLM sales representatives lose money, making “even gambling look like a safe bet in comparison.”
This figure comes from a highly detailed report submitted to the Federal Trade Commission, based on income tax reports.
And if this number isn’t enough, look no further than the Pink Truth website for many real-life chronicles of women who “went all in”– specifically from the Mary Kay camp. Here is a small sampling of what you will find there:
“One of the main reasons I chose to become a [Mary Kay] consultant was so that when I decided to have children, I would have the flexibility to work this business around my family. I shortly found out that this was not true in this business… I realized that I would have been better off working part time for eight hours on the weekend and have my family watch my son. Then I could be home every night with him and not off at skin care classes.
Another reason I became a consultant was the income opportunity. I have been in Mary Kay two years and three months and I have yet to make a dime. I took a $3,000 loss on my taxes this past year. Despite my sales, my expenses far outweighed my earnings. By the time I paid for PCP, office supplies, and seminars, all of my hard work was for free. I also was told to get to “profit level” inventory which was $4,000+ wholesale. Once I reached that I found out that the company was going to be making product changes to the complete color line so my products would eventually become obsolete. I felt like I just couldn’t keep up with the changes and the limited edition items. I also became tired of warm chattering. I did not want to live my life thinking of everyone as a prospect….
I have learned a few things from this experience. First of all, Research, research, and research some more. I should have done my research before diving in to a new business venture. Also, never listen to advice from someone who is making money off of you. Most importantly, if it sounds too good to be true, it probably is….”
Note that this woman was a team leader of Mary Kay consultants and was allowed to drive one of the iconic pink cars as reward for the huge time investment that entailed. Proof that things aren’t always what they seem!
inherent flaw: supply and demand
By now you may be wondering are all MLMs really so bad? I like ____’s products! Could the reason these are unsuccessful money-makers be on the representatives themselves– who lack talent, or ambition, or a large network of friends?
Mm, yes, it’s possible that these are hindrances for some individuals.
However, there is an inherent flaw in the business model that sets women up to fail: they’re being coaxed into selling a product with far too much supply and not nearly enough demand to keep up.
Remember the recruiters-recruiting-recruiters “pyramid scheme” aspect I mentioned earlier? Consider for a moment the fact that all of these women being recruited are in direct competition with each other! Heck, they’re even in competition with the company’s main website!
There is no tangible way of differentiation available. Sure, you may be the nicest representative in your geographical area, but when it comes down to it? Your customers can always just order online– from the company’s main site and not your subdomain. Same thing either way. Same presentation, even. Total sameness.
You don’t have a brand. You’re simply a minion of someone else’s.
desperation and the “ick” factor
As a result of not having a brand and selling product that doesn’t have nearly enough demand to go around, you can bet some women’s metaphorical claws are going to come out. Most women, when driven to such a peak of frustration, will quit the program. But others… well, here’s a true story:
I once attended a “surprise” Mary Kay party disguised as a women’s networking group meeting.
As it were, a representative had volunteered to host the group that week and, without warning, substituted her presentation time with a full-on Mary Kay party in which we all were asked to remove our makeup and try on the samples she had brought with her.
As the meeting went on, the Mary Kay lady talked up her cosmetics in an aggressive tone, and at one point openly bashed the skin care line another attendee was there to promote.
Then just a half hour or so later, in a bizarre twist of events, she segued into a recruitment presentation. In this presentation, she asked us how we would like to have so much money that we would never need to worry about it again! …Ugh…
Truth is, I suspect it was this woman’s sunk investment and desperate need of cash that was speaking to us that night. In a setting in which women were regularly supporting each other as cheerleaders and allies, it was as if we all suddenly had targets on our backs.
I hate to think that this same sort of behavior occurs between desperate sales representatives and their long-time friends and family, but it does.
on a positive note
So. Is there ever a reason to join up with an MLM company? Actually, I think there is! If you and/or your friends are fanatical supporters of a company or product, by all means, save yourselves some money on the bulk purchases you’d have made anyway!
Finally, I can’t wrap this article without giving you a reminder that profitable alternatives for home businesses are out there! For instance, you can use the web to sell handmade goods, or open an online boutique with dropshipped or wholesale goods of your choosing…
These sorts of routes require more decision-making and footwork than signing up with an MLM does, for sure. You’ll have to devise a strategy, choose a name, set up a website, etc. But if you plan it right, it will all pay off in good time.
Now I’m anxious to hear your thoughts on all this! Have you ever been involved with an MLM? Let us know in the comments!
P.S. This post now has a follow-up called, 5 Real ‘Work From Home’ Alternatives to Scammy MLMs like Mary Kay, Stella and Dot, and Scentsy.