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How Not to Break Into Sales or Entrepreneurship: Multi-Level Marketing Companies

Alison Ringo KAS Placement

by Alison Ringo

Last Friday in downtown Los Angeles I found myself surrounded by some of the approximately 20,000 attendees of an “International Training Event” for a Multi-Level Marketing company. Eavesdropping on these earnest, energetic visitors to the Convention Center was at once eye-opening and depressing.
 
 

What Are They?
 

If you’re familiar with Avon or Mary Kay, you’re familiar with the prototypical Multi-Level Marketing (MLM) companies. Depending on where and when you grew up, you may even know a friend’s mom (or a friend) who’s made a respectable chunk of change as an independent agent through Avon or MK.
 

The MLM agent’s goal, in addition to promoting the product or service the company promotes (cosmetics in the case of Avon, deregulated services in the case of this LA event), is to recruit new agents under themselves. Agents, often called “independent business owners,” typically have to pay an entry fee to join the MLM company.
 
 

What’s The Problem?
 

However, not all MLM companies are Avon or Mary Kay. Far from it. Their angle is to market themselves as a way into entrepreneurship and business ownership. Unfortunately, perhaps 10% of MLM “business owners” make a profit after their buy-in, especially the lower down the pyramid they are.
 

Listening in to the conversations around me, I heard as many bad sales (and just plain interpersonal interaction) techniques in about twenty minutes as I have in six years of sales recruiting. I made the mistake of asking one attendee what this event was, and I was immediately bombarded with the hard sell. And this was on Sunday, at the end of the training event. So much for direct marketing training, I guess.
 

As someone whose career is based on helping sales and marketing professionals match up with solid companies — with myself and my colleagues sometimes interacting directly with the entrepreneur who founded our client company and got it off the ground — listening to the dreams of big money talked up around me made me sad… and a little mad.
 
 

The Bottom Line
 

Sales and marketing careers are not for everyone, and business ownership is for even fewer. If you’re going to go fishing for a career in sales or marketing, perhaps with the intention of being your own boss, multi-level marketing companies are nothing but red herrings.
 

On the plus side, their training events certainly seem to be a boon for the hospitality industry. Perhaps hotel group and event sales is a surer way to go?
 
 

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