What is multi-level marketing? You might recognize some of the bigger
multi-level marketing companies out there. Tupperware, Avon and Mary Kay are
some of the best-known direct sales and multi-level marketing (MLM) organizations
in the world. But hundreds of companies rely on hundreds of thousands of independent
sales representatives to sell their products directly to consumers.
Direct sales means that the salespeople go directly to the customer to
sell something. They don't have a bricks and mortar store.
Multi-level sales can have different definitions, but often it means that
there are levels of profits that salespeople can make from a sale. For example,
salespeople might get a share of the profits from goods that are sold by other
salespeople they recruited.
People who view direct sales as "get rich quick" schemes are often disappointed
when they realize it takes a great deal of focus and initiative to succeed
at direct sales. That's true whether the products are cosmetics, cleaning
supplies, scrapbooking tools, edibles, containers, nutritional supplements,
clothing or even wine.
Some people get into direct sales to get a discount on products they love
or to make some extra money. For others, it's a career.
"If you're working for a direct sales company, there are two streams of
revenue," says Synara Brown. She's the senior executive director for Wildtree
in Wisconsin. Wildtree markets grapeseed oils and preservative-free culinary
"There's the revenue you get when you sell product, and there's a secondary
stream of revenue you can earn on the sales of your organization," Brown says.
"If you want to get into the higher revenues, you need to build a team. There's
no expectation that you should do that, but for people who are income-oriented,
you have to do that because you can't sell enough product on your own to make
the income you're hoping for."
What she's describing is classic multi-level marketing. While it can vary
from company to company, MLM plans are usually structured so representatives
earn a small percentage of the sales brought in by any sales representatives
they recruit to the company, and possibly from their recruits' recruits.
"Whether I'm at home at night with my kids or sitting at a baseball diamond,
I'm getting paid because there are probably 500 people in my organization
working that night," Brown says. Even so, Brown says she still typically puts
in 40 hours per week.
Top-performing Mary Kay salespeople earn pink Cadillacs (or other automobile
models). Pamela Kanderka, a senior sales director, has been earning pink cars
since 1991. And she's done that working less than full time.
"In the beginning, it ranged from five to 15 hours per week," Kanderka
says. "Today it ranges five to 25. Each year is different, depending on my
goals and where my family is at. I have a baby, 22 months old, and was able
to basically work only a few hours per week while on maternity leave. My income
did not skip a beat because of the large downline [sales] and customer base
that I've built over the years."
Alicia Deibert currently does direct sales for two companies: Norwex, which
makes cleaning products with reduced chemicals, and World Ventures, a vacation
and entertainment club. However, she began in direct sales selling Partylite
products with her mother.
"I was in university, and it was the best, most flexible way to make some
extra money and spend time with my mother," she says. "I enjoyed learning
the direct sales business from my mother, my mentor."
Today, Deibert says she only dedicates about 10 hours per week to direct
sales, but those are 10 solid hours -- more intensive than 10 hours in a typical
"I like knowing that if I require extra money, I'm able to put more time
into the business and therefore make more income," Deibert says. "The wonderful
thing about direct sales is that you also earn residual income from others
who join your team, or from repeat customers who order from your website."
MLMs are set up that way to encourage representatives to help build the
sales force. Brown does that by setting out information about business opportunities
at every home party she holds.
"I never know who's looking for additional income, who might be looking
for a career change, who's miserable in their job. You just never know," Brown
says. She was an occupational therapist before getting into direct sales almost
nine years ago. She says few people would have expected her to be interested
in direct sales, but she wanted a work schedule that allowed flexibility to
work around her growing family's schedule.
Crystal Williams is someone who first started in direct sales -- at Avon
-- because she needed a job after moving to a new town. More recently, she
decided to expand her direct sales experience by adding Tupperware. She knew
she needed to put in the work now to reap the rewards later.
"Right now, every week I probably put in 45 to 50 hours. I'm calling, setting
up parties. I go to vendor fairs. I'm sending out postcards -- I'm all over
the place," Williams says. Her success with Avon, which she still represents,
gave her a roadmap to succeed at Tupperware.
"At Avon, I became a manager, and I'm looking to become a manager with
Tupperware, as well," Williams says. "Tupperware's my main focus now because
Avon comes so easily after all this time -- but I'm doing well at Tupperware,
As with Williams and Deibert, this isn't Brown's first stab at direct sales.
Brown worked almost three years at a different company, but realized she could
earn more under Wildtree's compensation plan. She also liked that Wildtree's
products were edible.
"For most people, that's a line-item budgeted expense. Very few people
say, 'Money's tight, so we're not going to eat this month,' but they might
forego other things."
No matter how great the product, most people who fail at direct sales aren't
disciplined enough to work unsupervised. "If you're doing it on the side as
a part-time thing, it can be hard to stay focused and motivated," Deibert
"The biggest challenge for most people is being independent and not having
people tell them what to do and when to do it," Brown adds. "It's about being
a self-starter, getting your work done and not getting distracted by a sunny
Deibert says goal-oriented self-starters can do well in direct sales. "[It
takes] someone with drive and a persistent and personable personality, as
well -- someone who likes to have fun and is not afraid to put themselves
out there and get rejected once in a while."
Williams says MLM salespeople need to feel comfortable with themselves
and their products. At the same time, they need to present their products
without coming off too strong. Training is important in direct sales. It can
range from online training to national conferences. Usually it's optional,
but most salespeople agree it's worth investing some time in training.
"I'm not required to attend any trainings, meetings, conventions or conferences,"
Deibert says, noting that people who choose not to take advantage of the training
and meetings are only hurting themselves.
"The more training, the more successful you are," Kanderka says. "We have
large conferences two to three times a year, and regular small meetings weekly
Brown takes full advantage of the national and leadership conferences available
to her, but says most people learn best by doing the job. "It's a bit like
riding a bicycle," she says. "You could watch a YouTube video and I could
tell you how to do it, and explain it really well, but at the end of the day
you've got to get on the bike and ride."
Before any type of training, you first need to commit to a company. Most
require a buy-in, which often goes toward sample products. Some start-up costs
are higher than others.
"The starter kit [at Mary Kay] was $180, plus inventory," Kanderka says.
"But each consultant can choose how much, if any, inventory they carry on
Williams netted over $900 in sales within her first 60 days, so Tupperware
covered all but $30 of her $99 starter kit.
Brown liked the fact that her $99 buy-in at Wildtree was for $230 worth
of edible products. "If I'd decided to buy the kit and give the company a
try, but it didn't work out, I could still eat the contents of my kit."
Not all companies require buy-ins. "Partylite and Norwex were no-money
start-ups. It was a great way to start my own small business without putting
a lot of money upfront. The only requirement was to fulfill sales quotas,"
Deibert says. "In direct sales, your effort reflects your outcome, but I would
caution people from spending a lot of money to get involved in direct sales."
Brown says almost everybody knows someone who has failed in direct sales,
but this shouldn't stop them from trying.
"There's a misperception that you can't be successful in direct sales,"
Brown says. "But if you can exercise a small amount of self-discipline, be
incredibly coachable -- actually follow the training as prescribed -- and
really try for at least three months, I think a lot of people will see success."
Kanderka says focus is crucial to success. "You can only chase one rabbit
at a time, so stay focused. Don't jump from career to career or MLM to MLM.
Help enough other people get what they want, and you will get what you want."
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