Home Based Business Opportunities: Exposing the Multi Level Marketing Fallacy

View PDF | Print View
by: wholesalenewsleter
Total views: 217
Word Count: 1866

Many people spend their days wishing they could work from home and spend more time with their family. Unfortunately, most multi-level marketing schemes or MLM are just that, schemes that do not offer the the true promise of a home based business. I was taken in by not one, but TWO, multi-level marketing schemes. The first one is a well known cosmetics company and has been in business since 1963: Mary Kay. The second one was a just an established one put in new packaging: Amway as Quixtar. Read my story and take from my personal experience. Look for these signs when you talking with or researching a home based business "oppotunity".
First off, let me tell you that these two experiences happened close to five years ago. I know own and succesfully operate my own home based business through my online writine website. I do not know if the challenges that I had to deal with are still part of their busines structure that they show people during recruiting events. But, you can save time and heartache and money by reading about what my experience was. Be warned: Mary Kay and Quixtar are not the only MLM companies out there that offer the idea of big rewards and don't produce, there are others.
The Issues with the Mary Kay Opportunity
I will not argue that Mary Kay makes some fabulous make-up because I still use their products everyday. And, honestly, I loved selling it. I am personable and gregarious, so making sales was never an issue for me. I was a great saleswoman. I studied my products; their ingredients and how they benefitted my customers and my product demonstrations were enjoyable!
When I reflect on my Mary Kay business, I realize that my upline or "mentors" as they are called in this particular MLM were not business minded, they were just like me. Because of the pressures they had on them to carry a certain amount of inventory, they caused new recruits like me to fail from the start. Obviously no two women are going to sell exactly the same way, and after a few in home "spas", you get to know which items will sell and which ones won't. In my age bracket, women are looking for make-up like lip pencils and eyeliner, not anti-aging creams, lotions and potions. So I wanted to be able to focus on this area and keep my stock of cleansing products limited.
I was not allowed to do this since they said their business model was "tried and true" and why did I want to "reinvent the wheel"? I would have agreed with them if I had seen that their "tried and true" method was based on their actual sales. But I knew that wasn't true. I was told by my upline which products make the most profit for Mary Kay and that's what they wanted me to focus on since they know most women will only "try" selling Mary Kay as a business and will not stay for the long haul.
Another issue with Mary Kay is that they don't actually teach any business skills. My upline wanted me focus on making "cute" sales pitches for my home parties and not actually looking at the return of investment on the products I was selling. And in all honesty, it was not her fault. She was following the business model given to her by her upline. So why does this happen? You see, you do not really own your own Mary Kay business, you are a make-up saleswoman. But unlike being at a department store counter, you are doing it in other people's homes.
Why is Mary Kay NOT a REAL Home Based Business Opportunity?
When you are in business for yourself, you are not looking at making your suppliers rich by bringing in more business for them; you are looking at making yourself rich! So after carrying product I couldn't sell based on what I was told, and trying to finagle my hostesses into doing bigger shows based on what my upline taught me, there is another issue I have with the company. I was bullied and made to feel bad if I didn't bring new women to our "opportunity" meetings every month. Every single month, I was asked who my new "prospect" was by the "Red Jacket" in my upline. A "Red Jacket" is someone who has three other people in her downline. Mary Kay mentors never showed me how to create a business plan so I could achieve my sales goals. What I was taught was how to "sell" the Mary Kay "business opportunity" to other women.
Now in real business, the franchise idea is great and can be very successful if you have a good business plan. But Mary Kay is not, and never will be, a franchise. People who do have franchises are able to run their businesses as the see fit. In Mary Kay, you just can't do that. Mary Kay only allows certain things. Here is what they don't allow you to do:
"You cannot sell Mary Kay at a mall or sell products to other businesses."
"Do not sell them on the internet on your own personal website. We have a website designed for you, but you can't personalize it in any way and it will cost you extra."
"If you sell Mary Kay, it's the only beauty product you can sell. You can't mix and match with other similar products."
And so many women take this, hook, line and sinker! I have to admit, when I asked about selling to other businesses, I fell for what my Team Leader told me. Of course, she was just telling me what Mary Kay told her to say.
I was told that Mary Kay's core business model is based on making women's lives richer by giving them personal attention in the comforts of their home. If I sell at such an "impersonal" place like a mall or in a salon, how am I going to give that one on one attention? At first, the business opportunity seemed like a good thing. But later I found that is was all a lie. My official title for Mary Kay was an "Independent Beauty Consultant." But I was anything but. At our monthly training meetings, I was not allowed to put the products on anyone or offer personal skin care advice besides what was put in printed materials (which you have to buy!). I wasted more time acting like I was personalizing the make up, while trying not to get into trouble legally for not being licensed in cosmetology in my home state.
It just does not make sense, that Mary Kay wants you to be a "distributor" for their products as an "IBO" or an Indidivual Business Owner, but they will not allow you sell your products where you want, when you want to whom you want. Their business model says you can only sell directly to another person in the privacy of your or their home. Now what if other franchises, like Schlotsky's, only allowed their franchisees to sell their products from home? What if other avenues of making money, like catering large events, was forbidden?
Here's Your Sign: Mary Kay's Most Common Complaints that should send up a warning signal!
What failing in Mary Kay has taught me as a business woman:
Be wary of any company that bullies you into carrying inventory all the time. Real wholesalers might have minimum order requirements, but they won't penalize you by keeping certain products from you just because you haven't made certain sales goals. Wholesales make money when they sell you stuff and want you to buy whenever you can.
Run the other way if a "business mentor" cannot explain what your business model should look like. Mary Kay never discussed with me profit margin, how to market my business to get new customers or how to get a bigger return on investment or ROI. Mary Kay's business model wants you to build a business for them by signing up new people and building a downline. They give you gifts instead of real money and show you how much money you could potentially make if you follow their plan.
If a "business opportunity" does not require you to be legal in some way, then it is probably a scam. If you are looking at starting your own business, then you need either a city or state license to operate. Obviously, some businesses need certain types of licenses, but it's always necessary to get a business sales tax license from the state. If I were a true "business owner" selling Mary Kay, why wasn't I making any of the decisions? If I was not a licensed cosmetologist, how was I supposed to provide personalized skincare products and services without actually touching my customers? And even I did get one, the company policy said I couldn't do that since they did not want to be legally responsible for me if anything went wrong.
Never sell a product or service that has a lot of rules and regulations. If I had been able to sell Mary Kay, the way I know I would have made money, I would be driving a pink Cadillac right now. I had a low of independent, real business owners in the beauty industry who wanted to buy products solely from me so they could resale them. I could have been selling over $1000 dollars in Mary Kay cosmetics every month! But, I couldn't because my hands were tied. I couldn't even sign these women up as Mary Kay consultants becuase they woulnd't have been able resale the products in their establishments.
Mary Kay inhibits the growth of real "business owners" by only giving women the tools to sell their products, not grow a business. My guess is that the main company who sells and markets Mary Kay also sells it under different packaging and they don't want legitimate competition. I don't know if this actually happens, but I have my suspicions. It's how I have been able to rationalize how this company makes money. In the real retail market, this is not how business is done.
Mary Kay is not a true "business opportunity, not is it even a real "franchise". What it is is a Multi Level Marketing scheme, geared at bringing more people on to sell and buy their own products. This is shown through their lack of showing women how to build a true business and focuing on brand marketing through ridiculous training sessions and parties. It is shown in how they only allow a beauty consultant to sell a certain way and want her to constantly sign up more people. If you are looking for a true business opportunity and want to be a real business owner, then Mary Kay and other MLM's are not what you need. You should be in business to make money for YOU and not THEM!

About the Author

Author Bio: WholesaleNewsletter.com News and Sources for Wholesale Drop Shipping and Online Products Sourcing. Discover Drop Shipper Tips to Wholesale Marketing, and Finding Profitable Merchandise for Resell.

Comments

Add Comment