The Essex-based mother of two Leanna Biagioni started her Avon business in January 2017 and says she has successfully grown her income year after year and is now earning £ 2,500 a month.
& # 39; Avon has allowed me to be there for my children and still generate an income & # 39 ;, says Leanna (37).
& # 39; It has allowed me to pay for private music education, days out and luxury extras in life such as days out and vacations. I never have to worry about birthdays and Christmas, which become very expensive as the children get older.
& # 39; My beauty products for Avon have grown every year and by 2019 I am on my way to growing my business by 100 percent compared to last year.
Leanna Biagioni earns £ 2,500 a month as an Avon representative and believes she will boost her business by 100% based on last year's success
While Leanna earns a respectable £ 2500 a month, Avon herself says that she and others could earn much more.
Lydia Coomber, Avon's head of external communication, told This is Money: & # 39; With digital advancements and hard work, many of our top representatives earn six figures for their beauty activities. & # 39;
Meanwhile, Mark Franklin says director of Usborne Books, who also has a direct selling company, says a top & # 39; organizer & # 39; earned £ 110,000 last year. It consisted of £ 85,000 in replacement commissions and £ 25,000 in personal sales commissions.
With promises of & # 39; earning from your first day & # 39; and be able to bypass & # 39; other obligations & # 39; It is not difficult to see why thousands of people have fallen for the ideals promoted by the direct sales industry, also known as multi-level marketing (MLM & # 39; s).
Franklin adds: & # 39; You get flexibility and a potential boost for your income to the level that is right for you. There are also personal and emotional benefits.
& # 39; You work closely with your community and learn new skills and build your own personal trust. Setting up your own company can make you proud and valuable. & # 39;
From makeup, children's books, travel, food and weight loss products With MLM & # 39; s you can sell a whole range of products directly through social media to your inner family, friends and customers at trade shows or to a wider international audience.
The direct sales industry is a very established sector, as Avon has been active since 1886. But the model became more popular in the & # 39; 70 and & # 39; 80 with women who participated in the sale of Tupperware.
Avon belt: this MLM started in the 19th century and gave women the opportunity to generate income by selling beauty products directly to the customer
Many celebrities have promoted some MLM & # 39; s products and even started it themselves. In the United Kingdom, for example, Jamie Oliver launched the Jamie At Home party plan in 2009.
Oliver took over the Tupperware model, where he recruited people to sell his pots and pans to home-organized parties in the UK – but he was forced to close this part of the company after a reported loss of £ 1.39 million.
But the MLM model has suddenly become more popular in the era of the gig economy and & # 39; side-hustles & # 39 ;.
Susannah Schofield, Director General of the Direct Selling Association: & # 39; In the era of sideways bustle, direct selling is becoming an increasingly attractive option for people who want to work flexibly or start their own business without the risk or financial expense involved. be accompanied by a franchise or start up yourself. & # 39;
Can you really earn a good income?
Consultants do not earn a salary, but earn money by earning a commission from the products they sell and can also earn a commission based on the performance of their & # 39; downline & # 39; (recruits).
To give the company a flying start, sellers often receive starter kits that they can get with a discount in some cases (see below).
|scheme||What is the buy-in?||Do you make money by introducing repetitions?||Commission from sale|
|The Body Shop||£ 45 for a beauty set worth £ 220||Yes||25-30% on sales. Bonus incentives include travel trips|
|Avon||Starter kits range from £ 15 to £ 90 (see below)||Yes||Commission ranges from 4-9% of total team sales. Managers earn an extra 3%. Bonus incentives include travel trips.|
|Live forever||£ 199.75 for the & # 39; Start your own journey pack & # 39 ;. Smaller packages such as the C9 Aloe Vera Gel (vanilla) cost £ 96.44||Yes||You keep a profit from selling products and you have the potential to earn bonuses by recruiting a team. You can earn a bonus through the combined effort of the team|
|Oriflame||The Skin Care Starter Kit is free with participation; Make-up Starter Kit costs £ 19.95 and the Mega Starter Kit with the first two kits plus 100 catalogs costs £ 66.95||Yes||Staggered discounts on all orders. Discounts are also applied to cumulative orders over a period of 20% from £ 1 to 30% at £ 130 and 35% for orders from £ 650|
|Usborne books||A starter package costs £ 48 for books worth £ 144.82||Yes||24% commission on sales plus other bonuses|
|Darceys||No minimum order||Yes||25% commission on sales. Other incentives are meal vouchers and vacations|
|Source: information comes from respective company websites, brochures and from conversations with some companies. Correct as of July 10, 2019|
Dr. Susie Mitchell, head of coaching at the Institute of Network Marketing (pictured below), says it is possible to make a direct sale succeed.
She worked for Juice Plus in the 2007-2015 field and then joined the company as a consultant manager in the UK and Ireland from 2015-2018.
Dr. Susie Mitchell says it is possible to earn a good income through direct sales and says that 80% of its success has to do with psychology, while 20% understands which company you work with
She says: & # 39; I worked part-time and within two years achieved the top position within the marketing plan and was well rewarded financially.
& # 39; You can earn a lot of money if you are committed, work the plan of the company, attend training and learn from others. & # 39;
Her biggest tip to make it a successful home business is to put the work into it.
& # 39; It is 80 percent psychology, understanding people and building good relationships and 20 percent mechanics, understanding the business model, training, etc. & # 39 ;, she adds.
Mitchell does not disclose her commissions or what she earned with her team at her time at Juice Plus, but says: & I have worked hard with my team to build an international team and a successful turnover from the great create products. My goal was with my success to buy a number of properties that I rent. & # 39;
Dr. Dominic Appiah of the University of Arden points out that the MLM industry is a very lucrative one, with the companies doing the model well: & # 39; In 2018, Herbalife, one of the most successful MLM companies, achieved a worldwide net sales of approximately $ 49 billion. & # 39;
& # 39; I earn more than £ 600 a month through Captain Tortue & # 39;
Jane Beer-Jones says: My Captain Tortue side-hustle came about one day while driving with my daughter Anna, 16.
Thinking about what I would do after I had run my own successful headhunting company, she suggested going back to work for Captain Tortue, a fashion / clothing company that I had worked with for five years when my children were very small.
I remembered that this period had been a happy and very social time in my life. Just four weeks after my entry, I had held two games, which were such a success that I reached my goal for the season.
I earn commission on every item I sell, and by hosting between two and four parties per month, I earn more than £ 600 a month, which is my main income at the Sevenoaks Rugby Club, where I work as a marketing and sponsorship executive .
My long-term goal with the company is to develop a team of consultants of my own, but for now I enjoy running the company and seeing where my sideline is going.
Jane Beer-Jones poses with her collection of Captain Tortue
But when it comes to distributors who earn an income, only a few make it to the top, where serious money is earned. Even those with teams in certain companies still have a long way to go.
According to a statement of the average gross compensation paid by Herbalife to members of the UK in 2016, the majority (73 percent) comes first to receive a discount price for products that they and their families can enjoy.
It is 80 percent psychology, understanding people and building good relationships and 20 percent mechanics, understanding the business model, training. – Dr. Susie Mitchell, head of coaching at the Institute of Network Marketing
In it, the company emphasizes the need for realistic expectations and adds: & Herbalife's chances of winning are like a gym membership: results vary with the time, energy and dedication you put into it … It's hard work . There is no shortcut to wealth, no guarantee of success. & # 39;
The report says that for the 11.8 percent of Herbalife members who are sales leaders with a downline, the average fee received from the company in 2016 was £ 5,029. These amounts are before costs incurred in the operation or promotion of their company.
Franklin explains that at a basic level, organizers who hold only one Usborne Books event earn only £ 20 a week. & # 39; If you only want to spend two hours on one event per week and use the money for the Chinese takeaway on a Friday, it's all up to you. & # 39;
He adds that those who work full-time can usually earn £ 450 and up to £ 2,000 – £ 3,000. & # 39; It varies depending on the time of year, but this type of income can give you the flexibility to take a month off and spend time with the family. & # 39;
Mitchell agrees that a very small percentage of people who work full-time have become millionaires. She adds: & # 39; They work incredibly hard and have been working with their companies for years. There will always be a different level of earners, in every organization. & # 39;
I earn £ 1,000 a month with Usborne Books
Vikki McDonald says: I knew the Usborne brand that had bought their books for my boys and had always loved them.
& # 39; Plus, I liked the ethos of the company – it is a family business and the family is still very involved more than 45 years after the company started. & # 39;
& # 39; It cost me £ 48 to get started, and this included a selection of about 18 books to show customers examples of products, as well as my own personalized website, where customers can place orders. & # 39;
& # 39; The impact on our lives is significant, not least financially. I earn 24 percent commission on the sale of each book, and my income averages around £ 1,000 a month.
& # 39; Especially in the past year, my income has allowed us to live stress-free.
& # 39; It has changed the outlook for us and we no longer have to shrink and save. & # 39;
Vikki MacDonald poses with her collection of Usborne Books, which specializes in making children's books in the UK
If you want to earn serious money through direct sales, you must continue to make efforts and direct selling on a small scale may not be sufficient.
The costs of running a direct selling company
What many new recruits forget to keep is that you also have to pay other costs.
If you organize a party at home with Usborne, you need a & # 39; cost package for a host host package & # 39; paying £ 2 and any refreshments you want to offer to guests.
A Victoria Sponge cake from Sainsbury & # 39; s for six people can yield £ 2.75 – so now your £ 34.78 commission based on £ 144.82 (the value of a Starter Kit) is reduced to £ 30.03 .
This also does not take into account any gas costs or does not charge your time.
Suppose you spent three hours organizing the party and bringing it to and from the location, which would mean that your hourly wage was £ 10.01.
Avons starter kits range from £ 15 to £ 90. Although many MLM & # 39; s offer affordable startup packages, many sales representatives do not take into account the cost of running a business that could cause them trouble
This would be £ 1.80 more than the UK minimum wage of £ 8.21 per hour for people over 25.
In some cases, reps are even charged more than regular customers.
Following the Usborne activities, sellers are charged shipping costs of £ 4 (if the order exceeds £ 120) and £ 5.50 if this is below this threshold.
Franklin explains the reasons for the pricing: & # 39; We offer a courier service, tracked and traceable. Orders from organizers collected from different customers are larger.
& # 39; That is a fixed amount, regardless of whether you organize books for £ 120 or £ 1500 – we will not charge you anything anymore. & # 39;
Questionable business practices?
Some have accused MLM & # 39; s of adopting questionable business practices, including putting pressure on the organizers (new representatives joining the company) to buy shares with their own money if they don't achieve sales goals.
The way MLM & # 39; s are structured – representatives are encouraged not only to sell products but also to recruit sales teams among them – is certainly suitable for creating such a pressurized environment.
Five things to know before you sign up with a direct selling company
1. Search for the DSA logo – the affiliated companies must adhere to strict industrial codes of conduct, which offer more rights and protection, a cooling-off period of 14 days, rapid payment of commission and bonuses and adequate training. A list of DSA members can be found here.
2. Choose the right products to sell Many brands sell their products through the direct-to-consumer retail channel, including Avon, The Body Shop at Home and Neal & Yard Remedies Organics, so there is a wide range of products to choose from.
3. Set realistic expectations
With direct sales, money is earned through commission on the sale of products. Be realistic about how much time you have to spend on your business: direct sales require time and effort.
Beware of individuals who make unrealistic claims that direct selling is a chance to get & # 39; rich quickly & # 39; – whether something that looks or sounds too good to be true is likely.
4. Know your rights (and those of your customers)
Familiarize yourself with industry codes of conduct to know your rights when you become a member, and learn more about maintaining good practice as a direct seller.
The DSA tells This is Money: & # 39; This is really important because huge reputational damage can be caused by bad practices by a small number of people. & # 39;
5. Watch out for rogue traders
As in many sectors, there are companies and individuals who can greatly damage the reputation of the wider industry.
Stay away from companies that ask you to spend large amounts of money to get started, or pressurize you to do things or buy things you don't want.
Source: the Direct Selling Association
While some new members are convinced that they would sell most of their money directly to the public, it is the recruitment side of the company that is also the core of many MLM & # 39; s – but this is only being revealed to new recruits as soon as they are more anchored in the company.
In addition, some have even claimed that their upline (mentors appointed to provide advice and support to representatives) omit certain information, pressurize them to lie to potential new recruits and exaggerate the benefits of the products they sell.
There are no suggestions that one of the companies mentioned here uses such tactics.
Proponents of direct sales, however, maintain that these tactics were used in the & # 39; 70 and & # 39; 80, but that the industry has since cleared its act apart from a few rogue sellers who mislead the facts.
Schofield says: & # 39; Industry codes of conduct lead to higher standards in the industry, and many companies have now signed these in an effort to compete for the growing number of Generation Z & # 39; s that want to earn in this way. & # 39;
Mitchell claims it is a different world now than when direct sales became popular in the & # 39; 70 and & # 39; 80: & # 39; part of it was not professional at the moment. Now that the right company works with you, it is suitable for so many employees who want a more flexible life, pick up children from school, work and private life on their terms. & # 39;
The dark side of MLM & # 39; s
Critics of these business structures compare direct sales companies with pyramid schemes and claim that the representatives are the & # 39; real customers & # 39; to be.
But Dr. Appiah points out: & # 39; MLM companies are not pyramid schemes; pyramid scheme & # 39; s are fraudulent schemes & # 39; s that are usually disguised as MLM business models.
& # 39; Unlike MLM, pyramid scheme & # 39; s do not offer real products for sale.
& # 39; Pyramid Scheme members achieve huge returns in a short time by recruiting new members. & # 39;
Hannah Martin, founder of online magazine Talented Ladies Club, who has been researching the MLM industry for years, says the companies all follow the same strategy and that the real business model is to make as much money as possible with representatives, not with customers.
"I have yet to find a company that differs from a structure that encourages and rewards recruitment over sales, encourages representatives to turn customers into customers by recruiting them in their downline," she says.
& # 39; If the model was based on sales, why would you recruit your customers? & # 39;
To & # 39; active & # 39; to stay or at their level, consultants are often needed to ensure that their downline (recruits) achieve certain goals.
Achieving these goals unlocks certain benefits (eg, vacations), sales benefits, and retains their position (eg, Leader) in the company, which Martin believes would confine people as customers.
The starter package packages vary with different direct sales companies. For example, with Oriflame you can get a starter pack for free, while the Mega Starter Kit costs £ 66.95
Martin claims: & # 39; Many will take the lead in sales pitch that say you don't have to build a team or have a required purchase sum, but if I dig deeper, I don't think that's true. Their compensation plans always require a minimum purchase to stay active and are heavily weighted for recruitment. & # 39;
Martin encourages people to study the compensation plans carefully: & # 39; You will see that the sales need never increases significantly for the higher grades. That's because success in the company is never about sales – it's about recruitment. & # 39;
She says that uplines accuse recruits of not working hard enough if they fail.
& # 39; It's all part of brainwashing & # 39 ;, she adds.
& # 39; The people I interviewed have done everything well – invested in training, followed their upline's instructions, and even put their children in daycare to work on their business – in some cases, they also worked every hour. & # 39;
When it comes to making false claims, Franklin points out that the industry is bound by an ethical code.
He adds: & # 39; We are taking action against the nature of a claim, even dismissal. & # 39;
Dr. advice Appiah in choosing the right MLM is to research the background of the company.
& # 39; Potential consultants who wish to join MLM should carefully consider whether the majority of their income comes from recruiting multiple members instead of selling; this may just as well be a pyramid scheme.
& # 39; I always recommend checking the background of these MLM companies before starting work for a company. & # 39;
Franklin says he welcomes the extra control that the industry is getting: & I think that many people are taking a closer look at our industry and that is not a bad thing.
& # 39; What we do can offer so much, but our industry can be misunderstood and I am happy that people can ask us questions. & # 39;
What MLM & # 39; s say in response to allegations of selling pyramids, making money with recruitment and brainwashing …
Nicky Butler, Captain Tortue: & # 39; This criticism is so frustrating because not all companies or leaders are the same, it looks a bit like having a plumber doing it badly and then deciding that all plumbers are useless cowboys … it's unfair and just not true.
& # 39; Pyramid sales are rightfully illegal. It is the different characteristics of selling pyramids that make it unethical and illegal, not the reference to the word & # 39; pyramid & # 39 ;.
& # 39; Almost all companies work in a management structure, which would be a pyramid, for example because your boss gets more money than you, because they have more responsibility and more experience / skills, their boss is in turn paid more for the same reason . I would be very surprised if you would outline your organizational structure and it did not look like a pyramid.
& # 39; Women are generally criticized as direct sales, as vulnerable, stupid and easily manipulated and abused, my experience is absolutely the opposite of this! & # 39;
Mark Franklin, Usborne Books: & # 39; I refer you back to the ethical codes of the Direct Selling Association (to which we subscribe) in terms of how the regulated industry does not consider one of the activities or techniques listed acceptable.
& # 39; The DSA holds all affiliated companies liable for such matters. They also have robust, independent complaints procedures for both sellers and customers if they want to escalate something outside of the company they have been in contact with.
Avon spokesperson: & # 39; It is important to make it clear that Avon is not a pyramid scheme, that it is illegal and that it undermines all the economic and social benefits that Avon continues to achieve.
& # 39; Avon is a direct to consumer model and offers consumer products directly to their door. The Avon multi-level marketing model is intended for sales representatives who want more entrepreneurial business opportunities.
Naast In addition to serving their own customers, Avon sales leaders train and train others to become successful reps, while earning commissions on sales generated by their recruits Avon takes the safety of its representatives and customers very seriously and takes the necessary action is taken if the behavior of a representative is not in accordance with the values of the company.
& # 39; The only costs to sign up are £ 15 and representatives receive one of four & # 39; Starter Kits & # 39; offered, but if the representative wants to invest more, they can – there is a variety of kits full of the tools and products needed to start a beauty process well.
& # 39; Representatives are not stuck and as long as they are aware of paying their invoices, they can stop at any time. There is no other expectation in terms of financial commitment.
& # 39; Representatives are automatically assigned to a sales manager or Business Development Manager to support them in achieving success, giving them the tools, training, networking and opportunities to grow their business. & # 39;
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