If you haven't seen a Thirty-One party advertised on your Facebook newsfeed, then you probably don't have a pulse. It must be the age group that I'm in of twentysomethings turned thirtysomethings with small children, but it seems like almost every week a friend is posting about an upcoming Pampered Chef party or another "amazing business opportunity" everyone just has to be a part of.
Apparently, this phenomenon has a name and may often be referred to as the rise of the MOMTREPRENEUR. If you have one of these women in your newsfeed, the odds are that you're going to be barraged with constant friendly advertisements about their newest promotional skincare product, Mary Kay lipstick, or trendy Lia Sophia necklace.
I hate to use the S-word here (SCAM), but the Federal Trade Commission estimates:
99% of MLM sales representatives lose money, making “even gambling look like a safe bet in comparison.”
Doh! That doesn't sound too good. I personally would rather pump my life savings into a slot machine at a glitzy Vegas casino than throw a home jewelry party. Unfortunately, these parties are rarely presented as a money drain. Most of my Facebook friends seem to firmly believe that fill-in-the-blank home party venture is going to CHANGE THEIR LIVES AND CHANGE YOURS TOO.
If you don't know anything about the home party phenomenon, here is a cheat sheet of some of the most popular ventures, according to HomePartyRankings.com:
On the one hand, I totally understand the motivation behind multilevel marketing. It can be really hard to make ends meet when you have kids. You may not be able to even afford childcare in order to get a part-time job. If you want to make extra cash, why not join a fun, female-friendly company as a consultant to earn extra money on the side?
But, but, but—there are also scam alert websites for such businesses, like PinkTruth.com. There you'll find many less-than-glowing Mary Kay testimonials with "the real story behind Mary Kay cosmetics." While some may call the site biased, you can find testimonials like this:
"Another reason I became a consultant was the income opportunity. I have been in Mary Kay two years and three months and I have yet to make a dime. I took a $3,000 loss on my taxes this past year. Despite my sales, my expenses far outweighed my earnings. By the time I paid for PCP, office supplies, and seminars, all of my hard work was for free."
In my non-expert opinion, these multilevel marketing business opportunities seem like so much more trouble than they're worth. I can't tell you how many friends I've seen begin advertising their new "consulting" business—and even be so aggressive as to send private messages to ask if I'm interested in their products—only to watch their business ventures naturally fizzle out a few months later.
And that's where you get to the worst of the problem. Most of these "opportunities" rely on abusing established friendships and relationships for profit. To "grow your network," you need to get your friends to purchase products from you and often to bring them into the fold of selling crap as well. Most of these products can be purchased elsewhere at similar or even lower prices. But "momtrepreneurs" want you to purchase from them because you are friends or acquaintances and you can help them personally profit from a sale. Despite what these companies claim, that is not a great business model. What it is is borderline friend/family abuse.
I think if a mom can really give one of these MLM opportunities the old college try and make it work, good for her. (You go, girl!) But these businesses deal way too heavily in peer pressure and guilt to make money. It seems almost impossible to separate the momtrepreneur from the person who was once your friend without feeling continually pressured to buy her crap.
I've gone to a few of these parties myself, and I've had a pretty okay time. I went to an MLM jewelry party and enjoyed some wine and cheese. I even spent 30 bucks on a snazzy costume cocktail ring that ended up turning my finger green. I'm not speaking ill of this specific company because I still wear the ring on occasion—green finger be damned!—but I absolutely dreaded the part at the end of the party where all the guests were put on the spot to sign up to host their own party to get more free crap.
Multilevel marketing just isn't for me. I'm also finding it harder and harder to be graceful with my friends that join the latest MLM business as a consultant. If I'm missing something, please clue me in. Is it possible to make money as a momtrepreneur without driving all of your friends away?