You’ve seen the posts on your Facebook feed. You’ve been invited to the at-home parties. You’ve probably even been asked out for coffee in the guise of being recruited to a “team.”
Multi-level marketing (MLM) companies -- or direct sales companies -- have been growing at a steady pace for decades. But the old method of going door-to-door is getting replaced by a new, more subtle technique called “social commerce.”
That could mean posting a photo of your kids, talking about how wonderful your vacation was and how nice it was to spend time with them. Then, at the bottom of the post, is a nod to the multi-level marketing company that allowed you the time and freedom to make money while working from home.
Or it could be the post talking about your lifelong battle with weight or acne, with a before and after picture attached and a MLM company hashtag.
These are all ways people doing direct sales are reaching out to potential new customers through social media without having to pay for any advertising.
This kind of post on social media isn’t exclusive to moms or one specific company. However, there are a growing number of women quitting their traditional office jobs to work with a MLM company from home in order to spend more time with their children and less money on daycare.
One of those “mompreneurs” is Austin mother Amanda Barta.
Barta, a certified public accountant for 18 years, has two young daughters ages 4 and 6. After the birth of her second child, Barta said working full-time became increasingly difficult.
"I honestly never felt like I was present,” Barta said. "I was working 60 to 70 hours a week and honestly, everything was a struggle. I felt like I was in a daily turmoil of just rushing to get home so I could spend two hours a day with her."
Then, two years ago, several of Barta’s professional friends began selling skincare products by Rodan + Fields, the company behind the popular infomercial line, Proactiv.
At first Barta said she was skeptical, but she needed the extra money so she signed up and became a “consultant.”
Immediately, she said she started making money.
"I understood the business model. I understood that it was a business from day one so I worked it like a business from day one and so I was able to make money right from the get to."
Eventually, she made so much money with Rodan + Fields her paychecks surpassed her CPA salary, so Barta quit her office job to work from home.
While she still spends about 20 hours per week working through social media, she said at least she’s doing it at home with her daughters.
"When I look at the return, I'm like, 'It's 20 hours a week, I'm making just as much as I was there if not more, and that will just continue to grow," she said.
SO, HOW DOES IT WORK?
Barta has about 250 consultants working under her. She only recruited about 25 of them directly, she said. But each time she recruits a consultant, they are encouraged to recruit more on their own, so the team continues to grow.
Each time a consultant sells a product, the person who recruited you gets a small percentage of the sale. The more consultants, the more commission.
While the business model is in the shape of a pyramid, it’s not a pyramid scheme as long as the products or services sold can turn a profit.
According to the Direct Selling Association, 15.6 million people did direct sales in 2006.
Fast forward to 2016 and that number jumped to 20.5 million people.
The biggest age group doing direct sales are women between the ages of 35 to 44 followed by women between the ages of 44 to 54.
Some of the most popular multi-level marketing companies besides Rodan + Fields include Avon, Amway, Herbalife, Tupperware, AdvoCare, Scentsy, Beachbody and Plexus. Here is a list of some of the most popular MLM companies.
With stores and malls constantly closing, this may be the new way to do business.
"By far and large I would say more than 90 percent of my business comes through Facebook and social media,” Barta said.
We also met another multi-level marketing consultant for a clothing company called LuLaRoe.
Makenzie Tucker used to work a full-time job as far from sales as you can imagine.
"I have a college degree in animal science and I taught at Oklahoma State at the vet school there,” Tucker said.
Then Tucker got a call from a LuLaRoe consultant in Baltimore, Maryland and decided to quit her office job and sell the clothing out of a converted trailer.
"I wore scrubs every day, I would not have ever thought like, 'Hey, I think I'll sell dresses today,'” Tucker said.
LuLaRoe, a direct sales clothing company started by a stay at home mom, did a billion dollars’ worth of sales in 2016.
Unlike Rodan + Fields, consultants have to buy the inventory. It’s about $4,900 to get started.
HOW LIFE CHANGES WORKING A NON-TRADITIONAL JOB
Like Barta though, Tucker does a majority of her sales through social media. LuLaRoe only makes a certain number of clothes in a certain pattern, so there’s a sense of urgency to purchase the new merchandise.
"We post (the clothes) each week for sale on Facebook and once it's gone, it's gone. So if you see it on Sunday, you can't wait,” Tucker explained.
She also advertises the mobile store on Facebook, and is available for at-home parties.
"You have to hustle," Tucker said. "Before I planned a trip across the country, I called everybody I knew and said, ‘Hey I'm coming. We've got this truck. It's a lot of fun, you'll love the clothes. Do you want to have a party?’”
These kind of companies are changing the way we buy and sell goods while changing the way millions of families function.
"I feel very present -- I do,” Barta said about her new life with Rodan + Fields.
Barta recently reached the level of success as a consultant that qualifies her for a $1,000 per month car allowance. Rodan + Fields requires that the car be new, white and a Lexus.
As for how much money Barta and Tucker make, KVUE asked. But both women said it is against company rules to discuss salary.
However, Rodan + Fields does disclose on their website that only .5 percent of consultants made more than $50,000 per year in 2016.
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