Feb
MLM: Are you selling selling?
Tim: I just finished a conversation with my nephew about a multi-level marketing opportunity that a friend of his is laying before him. We talked for a bit about the details. After listening for a while, I had a question for him:
“Do you make money by selling products people want at a fair price, or by convincing others to sell overpriced products on your behalf?”
My nephew is smart, and understood almost immediately what I meant.
Years ago, I was nearly roped into a scheme to sell house water filters. I would convince my circle of friends to buy a water filter for about $200, and I would pocket about $50. But, if I convinced my friends to convince their friends to buy water filters at $200, they would pocket $50, and I would pocket another $50.
Depending on your “downlines,” you could get quite a handsome sum. I examined the literature carefully and figured out that the actual cost of the unit had to be about $25. I went to a local hardware store, and, sure enough, I could buy a similar unit for roughly that cost. I decided I was not willing to sell a friend $200 worth of $25 water filter.
I absolutely believe in network marketing. Avon, Mary Kay, Tupperware – all of these are great American brands and great American success stories for the millions of men and women who sell desirable products at competitive prices. Marketing products requires investment in the hard work of marketing, whether it’s Michael Jordan promoting Nike or your neighbor promoting Jones Shoes out of a catalog in the comfort of your living room. (I rather like the idea of my neighbor getting a piece of the sweet endorsement action.)
There is nothing inherently wrong with network marketing, even when cash is exchanged rather than good will or a helping hand. But I caution you to think carefully about whether you want to sell products or sell selling.
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