Multilevel Marketing Programs: Pros and Cons
When you hear the term “multilevel marketing” (MLM) or "network marketing," what is your first response? Do you want to turn and run? Or are you immediately ready to plunk down the startup cost and start selling and recruiting?
Let’s explore the nuts and bolts of MLMs and hear insights and opinions from fitness professionals on both sides of the fence.
“Traditional MLMs are known as ‘buyers’ clubs,’ as they primarily sell to distributors,” explains Kristen Horler, CEO and founder of Baby Boot Camp LLC and qualifying national marketing director for Juice Plus+®. “This means that the business model and profit center for the corporation are driven primarily by sales to distributors, not customers. Oftentimes, the retail cost of the products is inflated to the point where paying an annual distributor fee to ‘buy in’ and become an independent distributor makes the product more affordable.”
Horler notes that most MLMs have monthly order minimums that distributors (which would be you) must purchase in order to receive commission checks. “MLMs typically also require distributors to make startup purchases and seasonal purchases to remain active distributors.”
Examples of health- and fitness-related MLMs include Isagenix®, Beachbody®, Melaleuca®, Pangea Organics® and ViSalus™. Fitness pros join MLMs for a variety of reasons. Some join because they’ve experienced good results using the products; most want to supplement their day job income.
“I was presenting at a fitness conference, and another professional recommended the products I now use and sell,” says Sherry Catlin, 2004 IDEA Program Director of the Year, from Boston. “My body was changing, and I wasn’t happy about it. I looked around the conference and noticed many other fitness professionals weren’t getting the results they wanted from exercise and healthy eating alone, either. Within days people saw the change in my body and wanted to know what I was doing. The business avalanched from there, and I haven’t looked back since.”“My significant other and I joined for the product line,” recalls Tara Ballard, a certified personal trainer from Clemmons, North Carolina. “The company provided the clean, pure, organic, non-GMO nutrition that we desired. It wasn’t until we fell in love with the products that we considered sharing the business opportunity with others.”
A Revenue Boost
Danielle Thompson, co-owner with her husband of The Training Ground in Bakersfield, California, says they fell in love with a particular product line. After studying the MLM’s compensation plan extensively, they realized it could supplement their income. “The health and wellness field can be lucrative, but it is competitive. In personal training, if you don’t have an edge of sorts, you are grouped in with all the others. This company has helped separate our business from the rest because the products give amazing results and lead to a happier and more satisfied clientele.”
Not everyone believes in jumping on the MLM bandwagon. Tony Davenport, MS, certified spinal cord injury recovery specialist at Project Walk in Atlanta, has tried several MLMs in the past. He needed the extra money—desiring to create an income stream he could retire with—and he wanted to offer his clients a quality product he believed in. While he did find products he liked, and he felt better after using them, he never made money from sharing what he found.
“We all have busy schedules,” he observes. “MLMs take more time than is stated to develop. And if you don’t have a large client base or high turnover, then making profits becomes difficult. I also had to redirect funds from my budget to meet minimum spending requirements in order to get paid via the MLM.”
For more insights into this topic, please see “Can You Make More Money With Multilevel Marketing?” in the online IDEA Library (see the February 2014 issue of IDEA Trainer Success). If you cannot access the full article and would like to, please contact the IDEA Inspired Service Team at (800) 999-4332, ext. 7.
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