Why multi-level marketing works for some and not others

1 week 6 days 15 hours ago Thursday, February 08 2018 Feb 8, 2018 Thursday, February 08, 2018 7:20:00 PM CST February 08, 2018 in News
By: Megan Judy, KOMU 8 Anchor
loading

JEFFERSON CITY - There’s a social media trend blanketing everyone's Facebook feed - women calling themselves “Boss Babe,” “Mom-preneur,” or selling their “side hustle.” There are companies galore - Rodan and Fields, It Works, Lip Sense - the list goes on. Multi-level marketing seems to be everywhere.

The Better Business Bureau defines multi-level marketing as a company that encourages distributors to build their own sales force by recruiting. Distributors then earn a percentage of the sales from their sales force. If it’s reputable, a multi-level marketing set up can be a great secondary income; if it’s not - it could be a pyramid scheme.

Erin Clark, a Jefferson City resident who quit her corporate job five years ago to start an It Works business, said the business has "tons of moms."

"It’s a ton of women," she said. "What a cool way to make an extra income with your kids.”

Clark said the freedom that comes from running her own business was a really attractive quality. Her husband, Aaron Clark, said he was supportive when she started her business, but he had no plans of joining her until he saw how successful she’d become.

Aaron Clark stepped away from his job as an undercover police officer for the Kansas City Police Department once he saw the success.

“I saw that we didn’t really have to have our full-time jobs anymore,” he said.

The Clarks had some years of success with It Works, but their business flat-lined.

“It was no longer growing even though we were working harder,” Erin Clark said.

After dabbling in a few other multi-level marketing companies, the Clarks have transitioned out of that business model.

Erin Clark said, “It wasn’t ever the product that’s the problem. For people like us, this is what we do for a living so we have to be able to build a sustainable income on product sales, not on your team of people religiously ordering - that is a pyramid scheme.”

The Clark's big beef with multi-level marketing is how misleading the hype is.

Erin Clark said some people may have earned a $100,000 bonus, but they may have spent $30,000 to get it.

"What do you do with $30,000 of vitamins or face cream or wraps?” she said.

Aaron Clark said it's not the easy work some people might think.

“The image that most people in this industry paint for those who are not in it makes it seem like it’s a dream. It is a lot of work. In my opinion, you don’t have more time because it’s not a traditional 9-5.”

Sherry Mariea, a business law and ethics professor at MU, said multi-level marketing models could easily be mistaken for a pyramid scheme.

“The main thing you’re looking for is - how much of the independent agent’s revenues comes from the direct sales of product vs. how much comes from their recruitment and commissions of the sales of those you recruit,” she said.

Mariea said Missouri has taken steps to regulate multi-level marketing companies by modifying existing deceptive practices laws.

Mariea thinks the model can work, if done correctly. 

“I think because we have such a high percentage of the workforce looking for better work/life balance that these types of models have some value to them,” she said.

A few weeks ago, KOMU 8 News posted to Facebook asking if any local moms have started selling products. Within about 12 hours, we received almost 100 responses and only a handful were negative.

A significant number of positive responses referenced Rodan + Fields. According to a company press release, R+F has become the #1 skincare company in the United States. Forbes reported the company boasted $1 billion in sales in 2016.

Most people responding said a key reason for taking on a multi-level marketing enterprise is a need for work/life balance.

While the Clarks aren’t working within a a multi-level marketing company anymore, Erin Clark said she still wants to empower other women. She and her mentor do a Facebook Live on Sunday nights called #mlm-exposed.

“It has to be a legitimate company that already has its kinks worked out, that has a plan that takes care of its customers, isn’t built on hype, doesn’t always dangle that next carrot that gets you through the next month,” she said.

Mariea suggested people resist the temptation to get in on the ground floor of a new company. The safest bet is to join a multi-level marketing company that’s been around for awhile and has proven it's making money off sales, not its people.




More News

Grid
List
COLUMBIA - The Columbia City Council is expected to adopt a resolution declaring its support for community-oriented policing at its... More >>
2 days ago Monday, February 19 2018 Feb 19, 2018 Monday, February 19, 2018 1:38:00 PM CST February 19, 2018 in News
REPUBLIC (AP) — Police have arrested a 13-year-old Missouri boy accused of threatening to shoot up a school with... More >>
2 days ago Monday, February 19 2018 Feb 19, 2018 Monday, February 19, 2018 12:42:00 PM CST February 19, 2018 in News
POPLAR BLUFF (AP) — A man has been acquitted in the fatal shooting of his former brother-in-law on the... More >>
2 days ago Monday, February 19 2018 Feb 19, 2018 Monday, February 19, 2018 11:34:18 AM CST February 19, 2018 in News
KANSAS CITY (AP) — A lawsuit filed last week alleges a Kansas City school allowed a violent felon to... More >>
3 days ago Monday, February 19 2018 Feb 19, 2018 Monday, February 19, 2018 9:22:00 AM CST February 19, 2018 in News
LEAWOOD, Kan. (AP) — Authorities say two children have died and three other people are critically injured in... More >>
3 days ago Monday, February 19 2018 Feb 19, 2018 Monday, February 19, 2018 7:28:00 AM CST February 19, 2018 in News
BOONE COUNTY - February is national wedding month. According to the National Association of Bridal Consultants , most couples begin... More >>
3 days ago Monday, February 19 2018 Feb 19, 2018 Monday, February 19, 2018 7:14:00 AM CST February 19, 2018 in News
COLUMBIA - A $2.7 million project to the Columbia sewage system will be introduced to city council Monday night. ... More >>
3 days ago Monday, February 19 2018 Feb 19, 2018 Monday, February 19, 2018 7:08:00 AM CST February 19, 2018 in News
ODESSA (AP) — An 80-year-old Missouri man who was convicted of abusing two young girls faces a possible... More >>
3 days ago Monday, February 19 2018 Feb 19, 2018 Monday, February 19, 2018 6:47:00 AM CST February 19, 2018 in News
BOONE COUNTY - A 10-acre fire threatened several homes just outside of Columbia Sunday. The fire was near the... More >>
3 days ago Sunday, February 18 2018 Feb 18, 2018 Sunday, February 18, 2018 9:04:00 PM CST February 18, 2018 in News
ROCHEPORT - With all 163 seats in the Missouri House of Representatives up for election this November, campaigns are getting... More >>
3 days ago Sunday, February 18 2018 Feb 18, 2018 Sunday, February 18, 2018 7:57:00 PM CST February 18, 2018 in News
LICKING - The Texas County Sheriff's Office canceled an Endangered Silver Advisory for an 85-year-old woman reported missing... More >>
3 days ago Sunday, February 18 2018 Feb 18, 2018 Sunday, February 18, 2018 7:30:00 PM CST February 18, 2018 in News
MONITEAU COUNTY - A California man was taken into custody after deputies reported finding a "substantial amount" of meth inside... More >>
3 days ago Sunday, February 18 2018 Feb 18, 2018 Sunday, February 18, 2018 7:20:00 PM CST February 18, 2018 in News
COLUMBIA - The City of Columbia plans to pull together a group of professionals from diverse backgrounds to work on... More >>
3 days ago Sunday, February 18 2018 Feb 18, 2018 Sunday, February 18, 2018 5:58:00 PM CST February 18, 2018 in News
CENTERTOWN - A warm, but blustery Sunday morning carried the smell of gunpowder over Rock Creek Road in Centertown, a... More >>
3 days ago Sunday, February 18 2018 Feb 18, 2018 Sunday, February 18, 2018 2:07:00 PM CST February 18, 2018 in Top Stories
COLUMBIA - The Columbia Police Department will soon be supplementing classroom training with online courses, according to Public Information Officer... More >>
4 days ago Sunday, February 18 2018 Feb 18, 2018 Sunday, February 18, 2018 10:14:00 AM CST February 18, 2018 in News
BOONE COUNTY - A fire destroyed a home on East Mount Hope Road early Sunday morning. Boone County Fire... More >>
4 days ago Sunday, February 18 2018 Feb 18, 2018 Sunday, February 18, 2018 9:53:00 AM CST February 18, 2018 in News
Eric Hosmer is leaving the Royals. Hosmer signed an eight-year contract with the San Diego Padres for for around... More >>
4 days ago Sunday, February 18 2018 Feb 18, 2018 Sunday, February 18, 2018 12:04:00 AM CST February 18, 2018 in Sports
COLUMBIA - More than 100 students gathered to compete in the 2018 Columbia Elementary & Middle School Scholastic Chess Tournament... More >>
4 days ago Saturday, February 17 2018 Feb 17, 2018 Saturday, February 17, 2018 5:22:00 PM CST February 17, 2018 in News
Columbia, MO
Broken Clouds 34°
12pm 38°
1pm 40°
2pm 41°
3pm 41°

Select a station to view its upcoming schedule:

Coming Up Next

11:00a
Rachael Ray
12:00p
KOMU 8 News @ Noon
12:30p
Inside Edition
11:00a
Jerry Springer
12:00p
Jerry Springer
1:00p
Maury

Tonight's Schedule

7:00p
2018 Olympic Winter Games
7:00p
Supernatural
8:00p
Arrow
9:00p
KOMU 8 News @ Nine on The CW
9:30p
Seinfeld