Makeup, jewelry, crafting supplies, kitchenware, essential oils…for just about any product you can think of, there’s a company out there that sells it through a multi-level marketing arrangement. You’ve probably thought of giving it a try – everybody else is doing it – but don’t know enough about it to take the plunge. Here’s what you need to know:
Multi-level marketing (MLM) is a business arrangement where individuals sell a company’s products directly to other individuals, often during a party at someone’s home. (Mary Kay and The Pampered Chef are two of the best-known MLM companies.) They get a commission on everything they sell and, if they recruit new salespeople for their “downline” chain, they also get a commission on what those people sell. MLM is different from a pyramid scheme in that you’re actually selling a real product with real value (instead of, for instance, a mailing list of potential contacts). And, with legitimate MLM programs, you don’t have to recruit anyone else. You can just sell your own products and be happy with your commission.
So…you’ve decided to take the plunge? The first step is to choose a product and a company.
Choose your product first
To be successful at MLM, you have to be selling a product you’re passionate about. But there’s a catch – your social network has to be interested in it, too. If you love nothing better than whipping up recipes in the kitchen, The Pampered Chef may sound perfect. But if everybody in your social network is a young, single professional who eats out all the time, you’re not going to get very far.
Choose your company
Some companies, like Tupperware, have been around for…well, forever. Then there are others that pop up and disappear seemingly overnight. A new company isn’t necessarily a bad company, but it’s safer to go with one that has an established reputation. Other things to consider include:
- Who’s running the company? What did they do before? How successful were they?
- Have any complaints been filed against the company? What for? How were those complaints resolved?
- What is the commission? How much of each dollar sold winds up in your pocket? How does that compare to other companies’ offerings?
- How good is their support system? Can you get a human being on the phone if you call? Do they offer website access you can use to run your business? What kind of training do they offer?
- How are their sales? Are people buying what they’re selling? Are there repeat customers?
- How do their startup fees compare? While having to pay to get work is generally a red flag, it’s common for MLM companies to require new distributors to pay for a starter kit, sample products, etc. Just make sure the charge seems reasonable for what you’re getting.
If you know someone who’s already a distributor for the company you’ve selected, she’d probably appreciate it if you signed up through her. Or you can just sign up directly on the company’s website. Do a little research to find out which is better for you (is the commission different, for instance?).
Each company has their own tools and systems, and most will give you some pretty clear training on how to get started. There are, however, some general tricks to being successful with MLM, no matter what you’re selling:
- Stick with the tried-and-true techniques. If you pick a company that’s been around a while, they’ve had time to figure out what works and what doesn’t. Don’t try to reinvent the wheel. Follow their systems, at least until you’ve had some experience.
- Be a resource, not a used-car salesman. Gone are the days when home parties consisted of somebody giving a group sales pitch and then sitting back waiting for the orders to roll in. These days, successful selling is all about being a resource. It completely changes the conversation from, “You have to buy something because I’m your friend and need you to support me,” to “What are your pain points, and do I have a product that will solve them?” A lot of business is still done at home parties, but more and more distributors are setting up displays, giving a very brief introduction, then encouraging everyone to enjoy themselves. They make themselves available, but they don’t push their products on people who came to socialize.
- Have a website. Not everybody wants to go shopping in someone’s crowded living room with 20 of their closest friends. Set up a website so that customers can shop online.
- Take advantage of social media. Again, though, the key is to be a resource, not a spammer. If you’re a Silpada consultant, for instance, you could have a blog where you talk about jewelry trends – and it would, of course, link to your business page. And don’t forget about Facebook, Twitter, Instagram, Pinterest, etc. Social media have made it possible for distributors to extend their reach way beyond their neighborhoods, much unlike the “Tupperware ladies” of our mothers’ generation.
Make no mistake – multi-level marketing is a good business. If you want to be successful, you have to treat it like one. It takes work. But there are many people involved in multi-level marketing who are far more successful than they ever dreamed they would be, and they’re having fun doing it. Could you be the next MLM success story?