Establishing—and regularly updating—the company brand is critical to the success of the campaign. Multi-level marketers will identify the company’s primary goods and services, and then research the target market whose needs they’re meeting. Marketers and creative alike will make certain that the “personality” of the brand resonates with the general personality of the target customer; likewise, messaging will be regularly adjusted to reflect customers’ changing and growing interests.
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You’ve probably encountered a situation like this. Or at least know someone who has. If you haven’t experienced this kind of in-person pitch, you’ve likely seen old high school friends or an aunt on Facebook or Instagram posting about an amazing business opportunity that involves selling eyelashes or health supplements or essential oils for something that can be described as a “multi-level marketing company.”
One final tidbit I'll leave you with. On average, 99.95% of network marketers lose money. However, only 97.14% of Las Vegas gamblers lose money by placing everything on a single number at roulette. So if you're thinking about joining a network marketing plan, and aren't dissuaded by the facts I've presented, consider instead going to Vegas and placing all your money in a single pile on number 13. Sooner or later you're going to have to take my advice and just stop now.
The Federal Trade Commission issued a decision, In re Amway Corp., in 1979 in which it indicated that multi-level marketing was not illegal per se in the United States. However, Amway was found guilty of price fixing (by effectively requiring "independent" distributors to sell at the same fixed price) and making exaggerated income claims. The FTC advises that multi-level marketing organizations with greater incentives for recruitment than product sales are to be viewed skeptically. The FTC also warns that the practice of getting commissions from recruiting new members is outlawed in most states as "pyramiding".
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LuLaRoe also says it invests “considerable time, resources, and talent” to support its “independent retailers,” as it calls its consultants. If they experience financial or psychological hardship through operating their businesses, it says it’s not the company’s fault. “Retail is not for everyone,” says a LuLaRoe spokesperson. “Retailers own their own business and make their own decisions…The success of any business depends on its leader’s own respective and independent business goals, and the strategies they employ to achieve those goals.”
Take Rodan+Fields, a skincare line developed by the dermatologists who created Proactive. It’s supposed be top-notch stuff. When they initially launched the product, they went the traditional retail route. Estee Lauder then bought the company for an undisclosed amount and continued to sell it through traditional retail. Sales of Rodan+Fields were surprisingly lackluster, however, so its former owners bought the company back and implemented the MLM model. Sales of the product skyrocketed to over a billion dollars. They’d claim it was thanks to the word-of-mouth marketing MLMs facilitate. I’d venture to guess it had more to do with the fact they have a captive customer base amongst the hundreds of thousands of distributors who are required to make minimum purchase amounts each month and recruit other distributors who will have to make minimum purchase amounts each month too.
“The standard dosage, I would say, is around 20 mg per serving,” says Joshua Tavares, the general manager of Clover Grocery, which sells a wide variety of CBD products including gummies, tinctures, and topical lotions. (Tavares describes the shop, which also sells artisanal potato chips, as a “bougie bodega.”) “The main benefits that we touch upon when selling the products are that CBD is helpful for anxiety and providing you with a sense of calm. I would say it’s our top seller since we brought it in. The CBD category in general is really booming right now for us.”
The basic question that needs to be asked is this: If this product or service is so great, then why isn't it being sold through the customary marketing system that has served human society for thousands of years? Why does it need to resort to a "special marketing" scheme like an MLM? Why does everyone need to be so inexperienced at marketing this! Is the product just a thin cover for what is really a pyramid scheme of exploiting others? But more on that later.
It was not until August 23, 2005 that the State Council promulgated rules that dealt specifically with direct sale operation- Administration of Direct Sales (entered into effect on 1 December 2005) and the Regulations for the Prohibition of chuanxiao (entered into effect on 1 November 2005). When direct selling is allowed, it will only be permitted under the most stringent requirements, in order to ensure the operations are not pyramid schemes, MLM, or fly-by-night operations.
Even ex-accountants are willing to practice the crudest of high-pressure selling tactics, at least when it comes to "signing people up." The end justifies the means, when it comes to getting people to come to the "meetings," where the objective is to get a materialism frenzy going at high pitch through a slick speaker or video. The reasons for this "confidence building" should be obvious by now, but here we are considering the relationship cost associated with the "success" of the MLM.
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