Maybe Starting a Multi-Level Marketing Business Isn't Such a Bad Idea

As part of my February list of how to make more money, I suggested that people might want to consider multi-level marketing as a way to add some extra income to their household. Two of the companies I used as examples were Mary Kay and Avon. The response was mixed: some thought it was an ok idea while others hated the thought of any sort of multi-level marketing business.

Well I was recently emailed a note from my cousin who happens to be a Mary Kay sale person. She sent me to this article from ABC News that details a bit about the organization. Here are some of the highlights related to the money making:

At the Mary Kay Cosmetics Career Conference last month, thousands of veteran cosmetic sellers and hopefuls were banking on the so-called "lipstick indicator," the idea that times may be tough, but women still buy skin care products and makeup. Just ask the nearly 2 million (and counting) independent sales consultants for Mary Kay, some of whom have already made fortunes.

"Have you heard anybody say I'm going to cut back on my mascara? Have you heard anybody say I'm going to use my moisturizer every other day?" she asked the crowd.

In fact, a growing number of Mary Kay saleswomen are finding that marketing lipstick, moisturizer and mascara can be the key to making ends meet in a tough economy.

"For me personally, last year I made three times what I made working on a full-time job," said Courtney Armstrong, 34, who started with Mary Kay eight years ago and works 35 to 40 hours a week, in addition to raising three children under 6 years old.

For some saleswomen, the question is how to get started in a new, full-time, lucrative career. Others are looking to work from home and bring in a little extra money each week to make up for lost family income.

Although selling Mary Kay products can be lucrative, most of the sales consultants earn about $100 a week.

"You know, we have women who, like Courtney, started the business to earn $50 a week, and we probably have a lot of women in the business who are earning $50 a week. Then there are two of the national sales directors who, in recent years, have earned more than $1 million in commissions in a single year. So the range is broad and there's everything you can imagine in between."

The article has a video with it that's fairly interesting. Check it out if you get the chance.

Ok, so you're probably not going to get rich doing this (though you could), but an extra $50 to $100 a week isn't bad -- a few thousand dollars over the course of a year. Of course there's the time commitment to take into account. $100 a week for five hours of work is much better than $100 a week for 20 hours of work. :-)

The article also linked to an older piece on Avon. One of the interesting comments here:

The economic downturn has boosted the number of Avon ladies, and although people's budgets are tight, Avon CEO Andrea Jung says the company hasn't taken a hit.

I've heard this quoted before -- that when the economy goes down people looks for ways to make extra money and companies like Mary Kay, Avon, Amway, etc. sign up massive amounts of people.

Anyone out there taken up a multi-level marketing business recently? Or maybe started another business of some sort to make extra money?

Comments

[Robert W]

The beauty of a 'M l M'company or business is you don't have to do MultiLevel to earn money.
Direct sales with good customer/client service can provide a income to make a change in your balance sheet, not including tax breaks, write offs.

10 yrs direct sales have provided an stay at home income for this Dad.

[Walt]

I am a part of Fortune High Tech Marketing. We are a network marketing company that makes life more convenient. We don't sell products there is no buying tons of crap to pack in your garage. We act as the "middle man" between a customer and the companies they use everyday. There is no extra fee or money to pay all the customer does is route their existing account through the FHTM site and then they can sit back and enjoy upto 25% off of their bill. You actually save them money. Whats not to love? It is a great way to earn extra income and the best part is that you can start making money within days.

[jeffinwesternwa]

Simply put, I'd bet MORE folks LOSE $$ than make $$ doing M L M.
Still reminds me of the Amway guy and Avon lady of 30+ years ago, but, I'll admit, imagine if you work hard at ANYTHING you WILL be succcessful. Still doubt anybody is gonna get hundreds (or more) dollars for a little work, it rarely works that way in life so M L M ers, please try to convince me otherwise?! I hear the ads ALL day for the "3 step plan", etc, etc, I see the Mary Kay lady, etc., etc., ....I was self-employed as a financial planner for 16+ years and until the final year, NEVER worked less than 45~ hours a week, 50's,60's hours being the norm...SO WHO is making good money ($25 an hour or MORE) working "limited part time" w/ MLM (less than 10 honest hours a week)????

[Bill]

My wife has at least 10 different acquaintances who sell or are starting to sell Mary Kay. She gets a tad annoyed when she gets 7 of the same catalogs in the mail from the different consultants trying to get her to host a party or come to a sample thing. She says some make money and others just spend a lot of money getting all the samples ready.

As for my wife, she took her Photography skills and started a photography studio and is doing quite well for 10-15 hours a week.

[Personal Finance]

I think MLM has a bad reputation, but there are some great opportunities out there. The main reason people fail at MLM is because they do not have the right expectation and dont understand MLM's. I have done a lot of research on MLM and there are some good companies with very good products/services out there. I have been involved with one have kept my costs very low and last yea made a decent income of $1120 in about 7 months with costs about $200 including one time registration fee.

I think MLM is great for extra income, if you willing to do some research and work. A few months ago i wrote a lengthy post on MLM.

[Erin]

There are a lot of legitimate MLM or as they call themselves, direct selling opportunities. What I found in my research though is that the ones who make big bucks are those who focus just as much or more on recruiting new sales reps as selling the products themselves. In most (but not all) of these organizations if you recruit people you either get a % of their sales, or your own commission % goes up. So these organizations can be good for a little extra money, but if you really want to make big money like some of the women cited in the article you have to be a good recruiter. Which is not for everyone.

[Jim]

I think there are certainly *better* MLM's out there. Avon and Mark Kay seem to be among the better ones. But still I doubt most people make much if any money off these. A lot of people are not cut out for sales.

I think Avon & Mary Kay probably work better than most MLM cause they have a decent quality product. Many MLM's are selling utter garbage at over inflated prices.

But its not a get rich scheme. Consider this, the article quote above says there are 2 million Mary Kay salespeople. Mary Kay's website said they had $2.4 billion in total sales in 2007. That works out to roughly $1200 in sales per salesperson on average. Then subtract costs and company profit and your average Mark Kay sales person is maybe making a few hundred.

[Beth Bridges]

The "trick" to success with an MLM is the same as any business: work on it consistently and treat it like a business not a hobby. If someone does put regular effort into it, an MLM is great because you don't have to reinvent the business wheel - you just promote and sell.

Another great benefit of being involved in MLM's is that they usually have great business and personal development training...at no cost!