Because my business office is above the garage, I go for days without shaving and generally give the impression that I’m a bum, folks often approach me with new business opportunities. Not real business opportunities but those that fall under the category of “creating multiple streams of income,” better known as network marketing. I have nothing against network marketing and consider it a legitimate way to make money. What galls me is when people try to pretend it’s something that it’s not and try to sell benefits that aren’t really there. Multilevel marketing businesses simply allocate a very large percentage of their revenue to paying independent reps instead of hiring a sales staff, renting office space and advertising.
For example, several years ago I guy tried to get me to sell noni juice. I don’t even remember the name of the company. What I do remember is the talk I listened to from the company’s founder. He was very upfront. He said multilevel marketing only works if the product costs little to produce but has some ethereal or mystical quality for which people are willing to pay a premium. In other words, the product must have extremely high gross margins in order to compensate all the reps up and down the pyramid. I spent a few hours analyzing the noni juice line and determined a liter of juice that retailed for $29.95 cost no more $2 or $3 to produce. Which means at least 80% of the sale price went to paying independent reps.
One of the original multilevel marketing companies was Amway. They now go by Quixtar. While this is a legitimate enterprise, I have never understood their recruiting approach. Here is a company with ample brand equity, yet whose reps will never tell you the name of the company they represet unless they are sitting in your living room. They always talk about a “business” opportunity or a part-time “business.” In fact, if anyone ever approaches you about a “business” but seems to go out of their way not to tell you the name of the business, you can almost guarantee its Quixtar.
As long as I am on the subject of multiple streams of income, LaPriel and I have developed a new business opportunity for all you looking for some residual income. It is a special seasoning package guaranteed to help you lose weight. We have spent years perfecting the secret formula for this meal replacement.
The concept is simple. Twice a day instead of your regular meal, eat a cup of beans sprinkled with this special seasoning. Due to a patented chemical reaction, you’ll feel full, fulfilled and the weight will just fall off. Each package is all-natural and sells for $1.95. That’s less then $4 per day plus the cost of beans. Its proven. Guaranteed.
{ 4 comments… read them below or add one }
Hi J.D.,
I am a distributor (new title is independent product consultant or “IPC”) for a company called Tahitian Noni International. The company you mentioned may be the company I work with… sounded like something that one of the founders & current president, Kelly Olsen, would say.
Could be, Hiro. Good luck with the sales.
I didn’t realize Amway had changed names. Not that I would know considering that they never actually tell you the name of the company when they are giving you the pitch. We had some good friends try to get us into Amway years ago, but I am the world’s worst salesperson and really good at saying no (I’ve also been hit up by every home show business out there). They always had secret phone calls to make and meetings to attend. And they had pictures of things they wanted to buy all around their house–goals, I guess. It just gave me the creeps. A bit cultish, actually. They didn’t stick with it very long, either.
Kell, you’ve hit on one of the subcurrents of network marketing I have always found disconcerting. So much emphasis is placed on recruiting other recruits with making money being the primary hook and so little time spent on the product. And yes, it can be a bit cultish.