My Honest Appraisal of Multi-Level Marketing

In this article, I'll take a look at MLM in two distinct ways.  So please, when you read the first part here, don't stop there; you need to read the rest of the story.

MLM's beginning: Decency assumed

I was first introduced to Multi-Level Marketing in the early 1960s, when my mom was involved with Nutrilite Products.  At that time, the only company with an MLM home-business opportunity was Nutrilite, and the business had a very different model than we commonly see today.

The innocent beginnings of MLM

Back then, Carl Rehnborg, the man who developed Nutrilite, had the idea that anyone who used this amazing dietary supplements (and later, the Edith Rehnborg Cosmetics and Nutrilite Household Products) would benefit so much from them, that he or she would just naturally want to tell others about them.  "So," he thought, "why not let them earn a little compensation for that?" 

And, so was born MLM.

It was a revolutionary idea in marketing that benefited many people through the first years of Nutrilite Products.  But, as with so many good ideas, things got a little out of hand.

MLM's mutant twin

Carl Rehnborg was a really decent man, as well as being a genius.  But, he assumed that everyone else had the pure motives he had.  Subsequent events proved that this was not the case.  His company was taken over by a couple of characters with very different priorities, who morphed the MLM business model into a kind of lotto.  Instead of focusing on the personal connection between people and the sharing of a product that would make their lives better, Amway™ turned the model into a get-rich-quick scheme that was so egregious, it brought down the wrath of the FTC.

Forced by the FTC to adopt (at least officially) new standards of conduct, Amway™ (now known as Quixtar^®), continues pretty much in its old ways (with some cosmetic changes).  On paper, it is compliant with FTC regulations; but, from what I've seen, its business model — in practice — tends to thumb its nose at federal guidelines and regulations.

That is what most people see as Multi-Level Marketing; and, there are a lot of companies out there doing things pretty much the way Amway™ has been doing it.

That's one reason why I hate MLM.

A trail of tears: What I've seen in MLM

The second reason I hate MLM is all the shattered dreams and broken spirits that litter this trail of tears. 

Like many people, my first experience with a Multi-Level Marketing (MLM) company (post-Nutrilite) was not all that wonderful.  (In fact, the company was Amway™ — a fact that I'm almost ashamed to admit.  But, hey; everyone's allowed one lapse of judgment.  Right?!?)  What I saw was:

• A lot of hype, but no real substance.
• An awful lot of grueling work, and nothing much to show for it.

I recognized this pretty quickly and got out.  (And, when I was introduced to Young Living Essential Oils, I had essentially zero interest in pursuing it as a business.  I joined for the product discount, period.)  But, the friend who introduced me to Amway™ continued to struggle on.

Hanging on to crumbling dreams

The truth is: Basically everyone I knew who was involved in Multi-Level Marketing was awakening to the terrible fact that his or her hopes were false hopes.  They had given themselves so thoroughly to the MLM dream, sacrificing their todays for the prospect (no pun intended) of a brighter tomorrow.  But, as they approached the point of burn-out, nothing was working.  Physically, mentally and emotionally — and sometimes financially — drained, all they wanted was to pack it in; but, they were so thoroughly vested in their MLM pursuits, they saw little choice but continue.  They were desperately hanging on, even as their dreams crumbled around them.

But, something else I saw was that these people were banging away at a duplicatable system, rather than building connections with other people.  Their emphasis was on finding that one person who would make them rich, of realizing their dreams of the good life — however delusional those dreams might be.  There was little thought of working hard at an honest business (except for the short term, until they hit the MLM lottery) or of helping others meet their needs.

In other words: They were looking for a short-cut to Easy Street, not an honest business.

Training: The missing element in MLM endeavors

It became readily apparent to me that, besides having very unrealistic goals in mind, the thing these people lacked was training.  They had no sense of professionalism.  Yes, they went to meetings and heard these great stories of how some goof-ball turned his goof-ball friends into millionaires.  It was all very exciting, entertaining and inspiring; but, it never dealt with the real issues of having a real business; of getting the training that would make them professionals in a solid marketing industry.  It was all pipe-dreams; and, as a result, these poor people were riding an emotionally-laden roller-coaster of futility.

Instead of getting these people all pumped up and setting them loose on a system (which generally only makes money for those selling the system), what was needed was some coaching on how to think about the business (it is not a lottery) and how to connect with other people in a meaninful way.  Two of the best resources for this kind of coaching that I've found are:

• Tim Sales (the guy who did Brilliant Compensation and Professional Invitor). 
• Michael Oliver (the author of How to Sell Network Marketing Without Fear, Anxiety or Losing Your Friends!

Both Tim and Michael present the business in a business-like, professional manner, without hype or selling false dreams.  My feeling is that, if you want to work a MLM business, their materials are foundational.

Great Expectaions / Realistic Expectations

So honestly, do I think that MLM is viable?  Do I think that you can make good money doing it?  I'd have to say, "That depends."

• There are some people who have the Midas touch.  Whatever they put their hands to turns to gold.  For them, MLM provides an unparalleled business opportunity, where a few months or years of work can provide life-long financial security.
• There are some people who, for one reason or another, have an unlimited source of personal or business contacts.  If they get the proper training and act in a professional manner, establishing themselves as an authority in the eyes of others, they can build very good businesses that allow them to pursue their dreams in life.
• There are some people who lack any special talents or business advantages; yet, through their efforts at learning the MLM business and professional approach to working it, manage to build good businesses.  For some, they can work their MLM business full-time; for others, it makes a very nice second income.
• Their are some people who really are not interested in having a business, per se; they just want to have something they can do from home, as they have the time.  Maybe their primary interest is in being able to stay home with the kids; yet, they can't really afford to be without some added income.  For them, MLM provides the ideal business opportunity.  They can do it with essentially no start-up costs and no inventory or other overhead expenses.  Depending on their circumstances, they can start making money right away, and build over time, earning as they learn.
• There are some people who have no business sense and no common sense.  They want to make lots of money; but, they don't want to have to do any real work.  They want to buy into a system that will do all of that for them — automatically.  I'm afraid that these people are destined to bounce from one company to another and never find what it is they're looking for.

You know the kind of person you are.  You know if you have the business sense, ambition and people skills to do this kind of work.  Much of it comes down to motivation: That having your own business and being your own boss is important enough to you to get the training you need to work your business in a professional manner. 

You also need discipline and perseverance.  MLM — done right — is not a get-rich-quick scheme.  There is no magic formula.  I've never seen an automated system that works.  You get out of MLM what you put into it — as long as you learn what needs to be put into it.

And so, despite my initial experience with Multi-Level Marketing, as well as my underlying bias against it (that is, my distaste for simply trying to build a huge downline, instead of selling products), my honest appraisal of MLM is that it truly is a valid and sustainable business model.  Done ethically, professionally (with the proper training) and with a realistic set of expectations, it can be a wonderful and fulfilling experience.