Multi-Level Marketing: What You Need to Know

A Sponsored Post

At this stage of my life, I have learned the value of many services offered to us through the AARP Foundation.  Recently, AARP launched a consumer education campaign to reveal the risks and rewards of multi-level marketing…which many women over 50 participate in.  I know people who participate in these opportunities for social interaction as much as extra money.

However, AARP made some interesting discoveries when they researched this type of work. First of all, of the more than 21 million Americans who participate or have participated in multi-level marketing (MLM) organizations, 90 percent say they got involved to make money. However, nearly half (47 percent) lose money and a quarter (27 percent) make no money, according to a new study released by AARP Foundation.

Their report, “Multilevel Marketing: The Research, Risks and Rewards,” explores the mindset, expectations and experiences of Americans who participate in MLM, or “network marketing” programs. The report reveals that two-thirds of participants said they would not join the same or another MLM organization again, indicating a need for interested individuals to become as knowledgeable as possible before they sign up.  In other words, do your homework first and foremost.

“Multilevel marketing is a $36 billion industry. People are intrigued by the opportunity to make money, but our research shows that they often do not. In fact, many lose money,” said Amy Nofziger, Director of Fraud Programs, AARP Foundation. “We have  witnessed many of our constituents joining these organizations, sometimes to their financial detriment. We want consumers to become better educated about MLMs before they invest valuable time and resources.”

They recommend the following….

Set your expectations and understand  the costs.

Recognize that MLMs require patience, persistence, and an investment of time and money. Make sure that you are clear on what you expect to get out of participating in an MLM, as well as what is expected of you from the MLM.

• Sixty-three (63) percent of participants join MLM companies to make money by selling the product or service to others.
• One-quarter (25 percent) made a profit. Of those that made money, more than half (53 percent) made less than $5,000.

Do your research.
Thoroughly investigate the company before pursuing the opportunity. Visit the websites of the Better Business Bureau and Federal Trade Commission to see if there are any complaints about the MLM company. Speak to current representatives, in addition to your contact, and recent participants. Conduct an online search of the company name featuring keywords such as, “work hours,” and “incentives” to see what others are saying. This should help provide a more realistic picture of what participating in that particular MLM is really like.

• Two-thirds of participants said knowing what they know now, they would not join the same MLM company again and 62 percent said they would not join another one.
• Four out of 10 (41 percent) respondents reported that the company misled them in describing their chances of achieving financial success.

Get comfortable with selling.
A big part of MLM is reaching out to your network. Do some self-inventory and make sure you are comfortable having sales and business conversations with close friends and family. Most MLM companies advise direct sellers to target their friends and relatives first as potential customers and prospective recruits.

• One-third (34 percent) of MLM participants were recruited by a friend and 12 percent were recruited by a family member.
• Also, 39 percent stopped participating because it felt awkward to pitch to friends and family.

The goal is to be jumping for joy in retirement….financially free and having fun with the people around us we care about.  With that in mind, we do not want to lose money or people because of our choices…so doing homework is very good advice.  If you are enjoying success in Multi-level marketing, then congratulations and understand AARP is just looking out for us.  You can always contact them with your thoughts.  I am glad to see that they research these areas which may be a detriment to 50+ individuals living comfortably and secure.

KEEP SMILING!!

Consumers can visit AARP Foundation’s website at www.aarp.org/MLMaware to review an executive summary of the research and gain more information on multilevel marketing opportunities. Additionally, individuals and groups can download materials from an educational toolkit designed to help make informed decisions about MLMs.

Research Methodology

The AARP Foundation commissioned GfK to conduct qualitative and quantitative research to understand the demographics, psychographics and behaviors of adult Americans who have participated in at least one multilevel marketing organization during their lifetime. The study used both qualitative and quantitative methods. Four focus groups were conducted, including men and women who worked as MLM direct sellers either presently or within the past seven years. Analysis of focus groups transcripts informed the development of an online survey that was administered to more than 1000 participants. The survey included 1,016 respondents, encompassing 601 Americans who were direct sellers for an MLM organization sometime in the past and 415 who never participated in an MLM before.

 

About AARP Foundation

AARP Foundation works to end senior poverty by helping vulnerable older adults build economic opportunity and social connectedness. As AARP’s charitable affiliate, we serve AARP members and nonmembers alike. Bolstered by vigorous legal advocacy, we spark bold, innovative solutions that foster resilience, strengthen communities and restore hope.

 

 

Disclaimer:  This is a sponsored, paid post from AARP.