Imagine for a moment that it’s 1970 and you’re an entrepreneur who has just created an incredible new line of soap. Which of the following options sounds like the easier way to quickly get your product out there and turn a profit?
- Pack a suitcase full of samples, board an airplane, rent a car, drive to Macy’s headquarters, convince the retailer to carry your soap, and, if it chooses to, have the store inflate the price and pocket a hefty percentage of your sales.
- Call up a friend named Mrs. Debbie Smith — known as a social butterfly — and strike a deal with her where she buys a bunch of your soap every month, resells it to friends at a low price, pockets a little cash, and also tries to convince her customers to join in on the fun and sell your soap to their friends. Under this model, Debbie and her minions would pay you in advance for the inventory, so it doesn’t really matter if they’re successful in selling your stuff. Either way, you’re sitting on a big pile of dough.
Back in the day, the second option (also known as network marketing or multilevel marketing) was a highly innovative business model. Over the years, it spread to countless industries — cosmetics, food, wellness, and even real estate, to name a few — and made a whole lot of entrepreneurs filthy rich.
Today, however, this is a highly outdated approach to running a business that I strongly recommend you avoid.
Why Tech Destroys Debbie
As an entrepreneur, you may look at companies like Herbalife and Avon and think, “Wow, it would be awesome if I had 100,000 representatives across the country selling my goods. They’d write me a check every single month, guaranteed, and it’s up to them to hawk the stuff. I could make billions!”
Even ignoring the fact that Herbalife came close to being declared a pyramid scheme, assuming Debbie Smith gives you the best shot of becoming a billionaire is extremely shortsighted.
Have you forgotten about the power of technology and the reach of e-commerce?
According to a recent survey, 88 percent of consumers trust online reviews just as much as they trust word-of-mouth recommendations from their friends and family. You read that right: These days, Debbie’s sales pitch to her friends is just as effective as a random Yelp review written by a user named SoapScum3000.
Today, you’re much better off setting up shop online and embracing digital marketing strategies and traditional PR to drive buyers to your site. If your product is as great as you think it is, your early customers will leave a breadcrumb trail of great reviews across the internet, urging both friends and total strangers from across the globe to become loyal customers.
Rethink Your Reach
Not yet convinced? Here are three more reasons why network marketing shouldn’t be part of your business plan:
1. Aunt Selma isn’t such a great seller. How many Avon reps are honest-to-God sales experts? How many went to cosmetology school? How many believe in their heart of hearts that Avon is the best brand out there? It’s safe to assume that “very few” is the correct answer to all of these questions.
A vast majority of sales reps working for companies like Avon and Herbalife see their jobs as side gigs that keep them busy and put some extra cash in their pockets. Do you really want this type of person serving as the face of your company?
You’re better off staffing your sales and marketing teams with full-time experts who have a real passion for what you’re doing.
2. Cousin Julian doesn’t want your jewelry. Back in the 1970s, people enjoyed getting invited to Tupperware parties. Aside from TV and radio ads, this was really the only way for consumers to learn about new product lines.
Today, getting invited to these types of events is just plain awkward. How many times have you rolled your eyes when a long-lost friend or family member messaged you on Facebook — or, worse, called you — to ask if you’d be interested in coming to her house and checking out some tacky-looking jewelry over wine spritzers?
In an age when consumers are doing their own research online, reading reviews, and easily finding products that tickle their fancy, network marketing is only making people feel uncomfortable and pressuring them to buy products they’re really not interested in. This is not a recipe for earning repeat business.
To educate consumers about your product without that pressure, keep your digital resources stocked with all the information a wandering buyer would want to know. Make reviews easy to find, and provide them with your contact information — for when they're ready to connect.
3. Grandpa Homer would rather stay home. Today, right now beats right next door. Modern consumers enjoy the convenience of shopping whenever they like. Even your grandma and grandpa are electing to ditch their daily trips to town for the convenience of e-commerce.
It may only take a few minutes to drive to someone’s house to pick up an order of vitamins — but you still need to coordinate schedules and conduct the transaction at a reasonable hour. Nowadays, it’s easier than ever for consumers to buy products online whenever they want and get them delivered right to their doorstep. You just can’t replicate that experience with network marketing.
You’ll find more success by prioritizing a digital sales platform — whether it’s your website, Amazon, or another outlet — and letting your customers buy from you at their own convenience.
Once upon a time, network marketing provided the promise of an unlimited workforce with an unlimited reach. Today, technology is filling that role — and doing a much better job of it.
Do yourself a favor: Trust that your amazing product can sell itself without the help of Mrs. Debbie Smith.