Multilevel Marketing
Over a lifetime, most people will come into contact one way or another with someone involved in a multilevel marketing business. Perhaps a friend hosted a party where attendees tried on clothing or jewelry, received a facial, or watched demonstrations on cookware or cleaning supplies. Before and after photos show up on Facebook, or someone wants volunteers to try new weight loss products or protein shakes.
A MULTILEVEL MARKETING BUSINESSis a system for selling products to the public through a network of distributors and is sometimes referred to as network marketing or direct sales. Most multilevel marketing businesses work through recruitment. One is invited to become a distributor (or consultant or associate or contractor) of a certain product. Upon becoming a distributor, income can be earned in two ways: First, by selling products directly to customers. Second, by recruiting others to become distributors.
Multilevel marketing companies are not pyramid schemes because they have a real product to sell and are regulated by the Direct Selling Association.
According to www.dsa.org,
18.6 million people were involved in direct selling in the United States in 2017.
As many as 5,500 people join a multilevel business every day—229 per hour.
The total estimated in retail sales from multilevel or direct sales businesses is $34.9 billion.
In the pages that follow, meet some local entrepreneurs who have worked to create multilevel success.
RODAN & FIELDSASHLEY LOEWENAshley Loewen is a consultant for Rodan & Fields and has been selling their products for two and a half years now. After one year of being a consultant, Loewen was able to quit her full-time job to work from home to be with her children and has managed to double her previous income over the past year and a half.
Rodan & Fields is an anti-aging skin care business that was founded by Dr. Katie Rodan and Dr. Kathy Fields, who are both Stanford-trained dermatologists currently practicing in California.
“They started out in department stores and realized that customers were coming into their stores and purchasing their product based on word of mouth, so they decided to go into direct sales,” Loewen said.
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Rodan & Fields has only been involved in direct sales for 10 years, with products available in the United States, Canada and Australia. The company offers several skincare regimens, but also has a variety of other skin products for sale as well.
Loewen became interested in Rodan & Fields after giving birth to her first child.
“I became pregnant with my first kid and developed Melasma, which is the dark patches of skin on your face. I went to different dermatologists in town, but nothing worked on me. I spent $800 getting a chemical peel. My skin looked amazing for 30 days and then the spots came back,” Loewen said.
After seeing Facebook pictures of women with Melasma finding successful treatment by using a Rodan & Fields product called Reverse, Loewen decided to give the product a try.
“What got me to jump in and use the product was that all the Rodan & Fields products come with a 60-day empty bottle money back guarantee,” Loewen said.
After using Rodan & Fields Reverse regimens, Loewen saw significant results after 60 days, not only in her overall complexion, but there was significant lightening of the dark spots. After 90 days, Loewen said she saw the biggest difference and the brown spot above her lip was completely gone.
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After such success with the products, Loewen decided to join the Rodan & Fields team as a consultant to receive the 25 percent discount.
“I started out to just get the products at a discount. I didn’t want to be the one that was bugging my friends, but I found it very natural to sell if you can find something that you love and will be telling people about anyway,” Loewen said.
Loewen says Rodan & Fields consultants do not have product inventory at their homes. All product sales are done online and are shipped directly from Rodan & Fields.
Rodan & Fields pays consultants in two ways: direct profit and commissions. Consultants receive a 25 percent discount on products, so they earn a profit on all retail sales. If they purchase $100 in product they earn an additional 10 percent.Consultants can build a team by recruiting others to be consultants as well. All team member sales will contribute to the total amount that is purchased each month. Once the team reaches $600 in product sales, the consultant’s commission increases to 15 percent. A consultant will also receive a 5 percent commission off of sales for team members up to five levels below them. The team leader at the top can earn a free Lexus if the team reaches $125,000 in sales per month.
“The best thing about Rodan & Fields is it’s your business,” Loewen said. “You get to decide what you want to do with it. You can build it to whatever you want it to be. If you want to make a couple hundred dollars, then you put in that much effort. If you want to make thousands of dollars, you put in more effor}t and you will have the potential to make that.”
SENEGENCEINTERNATIONALDR. JULIE SWIFT
Julie Swift, a periodontist in Topeka, became dubbed “The Lipstick Periodontist” after an interview for a dental podcast where she talked about LipSense lipstick from the company SeneGence.
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Swift became interested in SeneGence after she was invited by one of her friends to participate in an online party on Facebook.
“I didn’t wear lipstick often because it was always coming off on my mask while I was working. Another dentist suggested I try LipSense,” Swift said. “I always say that I reluctantly ordered my starter collection of LipSense because I didn’t believe it would actually stay on, but it did. I was hooked. That was a little over a year ago.”
Swift loved the product so much that she decided to become a distributor. LipSense manufacturer SeneGence sells a variety of long- lasting, anti-aging color cosmetics and skin care products. Joni Rogers-Kante founded the company in 1999 because she wanted to offer an opportunity for distributors to successfully live life in love and abundance—if they were willing to work for it.
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“I have never worked for any multilevel marketing companies before and I wasn’t sure I would like direct sales. For me, it has just been a different way to connect and share with friends about products that work,” Swift said.
Initially, she was hosting several online parties every week and spending 10-20 hours per week learning about the business and promoting the products. This allowed her to build a team of more than 80 distributors in less than a year. Now she spends only a few hours a week to focus primarily on her customers’ needs.
Swift said she was amazed at how many people are involved in multilevel businesses.
“I feel like most of us have a bias against this kind of thing, but in reality, it’s more prevalent than it has ever been, and I think part of that is because of social media, it’s easier to do,” Swift said.
Swift said a distributor’s success with SeneGence depends on how much time and energy the distributor is willing to invest in learning about the products and the business. She encourages new distributors to focus on their customers’ needs and wants first. Many times, returning customers become business partners.
SeneGence takes care of its distributors. Successful distributors have the opportunity to earn rewards such as jewelry, trips and stipends toward a SeneBlue car of their choice in addition to their other income from personal sales and commissions. Swift was invited to participate in the car program as early as last December.
HERBALIFE INTERNATIONALHEATHER BECKMAN
Heather Beckman has been with Herbalife International for 10 years. Beckman is the perfect example of how multilevel marketing can be a success story if the time, commitment and effort are put into making the business a success.
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Herbalife International, a global nutrition company established in 1980, is now in 90 countries with over 8,000 employees worldwide and a net worth of $4.5 billion in 2016. Herbalife offers a wide variety of nutritional products all which are highly regulated, containing zero fillers and have top quality ingredients.
“Herbalife has its own farms and farmers, so we can control everything that is harvested because we want a top- quality product. Everything from seed to feed is controlled by Herbalife,” Beckman said.
Beckman was actively looking for a way to make a supplemental income working from home so she could be with her small children, when she ran across an online ad from an Herbalife distributor. Beckman might have been more skeptical of the opportunity if she hadn’t already done extensive research online on the Herbalife products while searching for a supplement that could give her more energy.
“In order to sell something, I think you have to be able to really love what you are selling,” Beckman said. “After a week of trying Herbalife, my energy really went up. To be honest with you, I was still kind of skeptical. I thought, what is in this stuff? I didn’t want to be on any kind of stimulants. But it’s not. It’s just good nutrition your body can absorb.”
It didn’t take long for Beckman to start her Herbalife career. In the first month of selling, Beckman made more than $1,000 working from home. A year later, Beckman and her husband, Todd, opened a nutrition club called Lifestyle Nutrition located at 5658 SW 29th Street in the Barrington Village.
“The nutrition club was our hub. That is how we grew our business from it being just myself, my husband and no team, to a team of a hundred,” Beckman said.
Beckman said these types of nutrition clubs help validate Herbalife and its products. Lifestyle Nutrition sells Herbalife products and serves shakes and green tea. They also offer free wellness evaluations and conduct weight loss challenges. The nutrition club is for the community, but it also benefits Beckman’s distributors.
Herbalife distributors earn income in multiple ways. They receive a product discount, so items sold at retail generate a profit. As with other multilevel marketing businesses, distributors can recruit others to become part of their team of distributors and earn commission from sales up to three levels down. Bonuses can be earned based on total team sales.
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Income can also be earned through membership recruitment. Members are different from distributors because they don’t sell products. They pay a small membership fee and simply purchase Herbalife products for their own personal consumption at a discounted price. Distributors earn money on the total orders that members place.
“You earn what you are worth. That’s true for all multilevel marketing companies,” Beckman said.
Beckman has built her business to where she has distributors all over the United States. In addition to managing her teams and the nutrition club, Beckman travels with the company and speaks to other Herbalife distributors at training sessions.
“You can make as much money as you want to in this company. I love the opportunity of this,” Beckman said. “You can put all this time and effort to make somebody else’s dreams come true or you can make your own dreams come true.”
These multilevel business owners in Topeka have found success, but that is not always the case. According to a report for the Federal Trade Commission by Jon Taylor at the Consumer Awareness Institute, 99 percent of multilevel marketing businesses fail. This means that only one out of 100 MLM participants will actually make a profit. It is critical for people looking at joining a multilevel marketing business do their homework, not only on the products, but also on the sales potential.
TK
