This is my absolute favorite video about the direct sales, or network marketing (NWM), industry. (In this blog, I’ll use the terms interchangeably.)
Some people get it, and some just don’t.
Whenever someone refers to direct sales as a pyramid scheme, I think about chain letters where you send $10 to 10 people and so on and so on and eventually you end up with a really big sum of money if people continue to be recruited into the scheme.
Or, I think about when Bernie Madoff cheated investors out of their live savings and contributed significantly to the financial mess that happened in 2008.
Or I’m reminded of certain NWM companies from the past that required you to buy in with $3000, which gave you a garage full of product that you could had to sell to make back your investment.
Then there are the companies where the top-level earners are actually making more money from their motivational product sales than the from the company’s products. (But I digress: that’s not so much pyramid-y as it is scammy.)
I don’t think all direct sales companies are pyramids. I think there have got to be some legitimate companies out there where…
the products aren’t overpriced
you’re not paying exorbitant monthly “technology” fees (c’mon people, I work in the tech industry and I am certain it does not cost $20 a month per distributor for website hosting and back office)
there are no costs associated with getting paid (such as you have to buy x amount of products to be qualified to get paid on your sales, and when you do get paid, you have to pay a money transfer fee)
the compensation plan isn’t overly complicated
…but I am still looking.
I was with Avon more than 20 years ago, back when you had to hand out books and take orders and deliver the orders. I found it not worth my time. In the early 2000s I tried a nutrition company. The products were overpriced and the compensation plan was a challenge. For more than a decade I took a hiatus from the industry, but I still liked the idea that you could create a passive income stream (where you promote products or services that people love and buy repeatedly without (much) additional effort on your part).
A couple of years ago I signed on with another nutrition and skincare company. Social media has changed the industry. I realized that even though that company had some really cool products, they weren’t unique. I discovered that other companies had the same offerings. There are a variety of other reasons I don’t promote that company anymore, which might be the subject of a separate post.
I dabbled with two other companies after that. One had a really cool humanitarian slant to it, but it more home-party oriented than I wanted. Another was a sports app — such a really cool concept (as I mentioned, I’m in the tech industry), but it was just too “ground floor” for me and I couldn’t imagine coughing up money every month during the ongoing beta because I would NEVER have recommended the app to anyone with all the bugs…I didn’t even let all the people I had signed up ahead of time know they could test it…I dropped out shortly before my sign up charge and monthly billing fees were going to kick in. I still see people complaining about it and one of the guys that was a few levels up from me just became an uber driver so I gather the app hasn’t taken off like everyone thought.
Anyway, I believe in the industry. I do not think all direct sales companies are schemes (technically they may be pyramids, but what organization isn’t?). I am open to finding the right company but not in a hurry. I like hearing about people’s companies, but I don’t like being added to groups or spammed on social media. My research is what gave me the idea to start a blog.