MLMs vs traditional marketing

Why is it that when someone hears that you are involved with a product that is sold through multi-level marketing they immediately discount the product as sleazy and tell you that you are clearly involved in a pyramid scheme? Don’t get me wrong. I did it too.

My mindset has changed. I am aware of an MLM company that is doing fantastic things. They make great products and spend money doing good all over the world. It made me take a step back and think about the whole stigma that is attached to network marketing. In doing so, I have realized that word of mouth, which is what MLM is based on, is a pretty good way to sell products.

Think about it. If your friend told you about a pizza place that they thought was amazing and had the best dough and freshest ingredients you’d probably order from that restaurant the next time you wanted pizza. You wouldn’t think it was questionable that your friend told you about the product and then you purchased it. You would try it because it was recommended. What if that same friend also shared with you their lavender essential oil and said that it was great for helping to moisturize your skin? Would you take the pizza recommendation and not the essential oil recommendation because one company markets their product in the traditional way and the other uses word of mouth and network marketing? If you are like most people, you would.

Word of mouth and personal testimonials are fantastic ways of getting information about a product and how it is actually used out there. Unfortunately, people think that when someone is sharing about a product that isn’t marketed in the traditional way that the product is less than a similar product sold in stores. People tend to discount what the product is and can actually do for them and think that the person is just trying to sell them something and is acting scammy.

Why do companies that spend millions of dollars on a 30-second Super Bowl ad get instant credibility? Is it because people think if they spent that much getting word out about their product that it must be good? How many products do you know that were advertised during the Super Bowl ended up as big flops? A lot of different beer ads come to mind. Remember Bud Light Platinum? No? Don’t worry. Nobody else does either.

How can MLMs get the same status as companies that market their products traditionally? Some people find MLMers pushy and that turns them off. Have you ever been to a car lot? Those salespeople can be pretty darn pushy yet people are okay buying from them time and time again. I think if when you are talking to a person that is promoting a product that is sold through MLM, you should listen to their message. Are they truly recommending a product they know, use and love? Or, are they just trying to make a sale or sell you on the idea of something? A lot of MLMs require a substantial investment from the distributors and require specific quotas be met. Not all do though, so there is a chance that a person who is talking to you about a product they use is really trying to tell you that you might like it too.

How do MLMs differ?

Companies that use traditional marketing spend potential product development and employee salary money on commercials that may or may not help promote their product. MLMs do it differently. Instead of spending tons of money marketing their products online, using commercials, doing product placement in movies and TV, and print media, MLMs provide compensation plans to their distributors. It is like being a salesperson that only earns commission.

The positives of MLMs are that their may be no income ceiling. The more successful a person is and the more people they have selling under them the more money they earn. You can look at Young Living’s compensation plan to see what I mean. The top earners bring in over $1.8 million per year. The earnings chart is available for anyone to see on the intranet. The flip side is that if you don’t sell anything or set anyone up under you that is promoting the product you won’t make any money.

Some people who have tried MLMs don’t like them because they are not that easy to become successful. So many people give up before they earn anything and then they get a bad taste in their mouth. For those that do stick with it and start to earn, they can make a lot. I personally know some people that are making “life-changing money”. They make their own hours and set their own goals.

One of the downsides of working for an MLM company is that you are not an employee. That means you don’t have any benefits. You don’t get on the company’s health insurance plan. You have to pay for all of your expenses out of pocket. However, you can write a bunch of those expenses off.

All I ask is that the next time someone approaches you with information about a product that isn’t sold using the traditional marketing method you take a second to listen because they may be telling you about a fantastic product that you never would have heard about otherwise.

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