FACTS VER­SUS FIC­TION

The Star (St. Lucia) - - COMMENT - By Janeka Si­mon

Talk to some peo­ple about “net­work mar­ket­ing”, and they’ll tell you it’s the best thing since co­coa tea – an op­por­tu­nity to achieve a level of fi­nan­cial in­de­pen­dence that many peo­ple only dream about. Others tell less glo­ri­ous tales, speak­ing of ru­ined friend­ships and even ru­ined lives.

I re­cently read an ar­ti­cle which as­serted that net­work mar­ket­ing is “forc­ing peo­ple into debt and psy­cho­log­i­cal cri­sis”. The sad sto­ries de­scribed therein were very typ­i­cal of many anti-net­work mar­ket­ing screeds. Women (for some rea­son, it’s usu­ally women) shell out large sums of money for start up in­ven­tory, find the mer­chan­dise dif­fi­cult to sell, and are pres­sured by the per­son who re­cruited them into the net­work to con­tinue mak­ing pur­chases and sign­ing up more vic­tims.

These tales con­trasted with my so­cial me­dia feeds, which, in the past two or three years, have been in­creas­ingly filled with friends and ac­quain­tances rhap­sodiz­ing about their ex­pe­ri­ences with net­work mar­ket­ing pro­grammes - Global Wealth Trade, To­tal Life Changes, and Cutco, among others. How could a busi­ness model be both de­struc­tive and di­vine? I needed to find out more.

Net­work mar­ket­ing is not a new idea – the Cal­i­for­nia Per­fume Com­pany (you might know it as Avon Prod­ucts) was founded in 1886. Com­pen­sa­tion struc­tures vary, but most op­er­ate sim­i­larly. Peo­ple func­tion as in­de­pen­dent dis­trib­u­tors of a prod­uct or ser­vice, re­cruit­ing others into the net­work to in­crease mar­ket pen­e­tra­tion and sell­ing po­ten­tial. Each seller is usu­ally drafted into the net­work by a friend, fam­ily mem­ber or ac­quain­tance. Re­cruiters are re­warded for their ef­forts by earn­ing a com­mis­sion on sales made from their “down­line” – the peo­ple they have re­cruited and the peo­ple re­cruited by their pro­tégés.

That’s the con­cept, but what’s the re­al­ity? I ques­tioned some peo­ple who I knew were in­volved in Global Wealth Trade (GWT), one net­work mar­ket­ing pro­gramme ac­tive in Saint Lu­cia. The first four peo­ple I spoke to all told me the same thing – they’d signed up but their dreams of fi­nan­cial in­de­pen­dence hadn’t worked out. Why? They didn’t have the nec­es­sary time, en­ergy or tem­per­a­ment to move prod­uct and/or re­cruit others. With no re­tail sales and with no “down­line” com­mis­sions, their vi­sion fiz­zled and died.

No­body, how­ever, felt ripped off – ev­ery­one was quick to as­sure me that they shoul­dered all the re­spon­si­bil­ity for their lack of suc­cess. In the same breath in which they chas­tised them­selves for their fail­ure, they ex­horted me to speak to “a lady” who was a rag­ing suc­cess in the busi­ness. “Talk to Vernisha,” sounded the cho­rus. So I did.

Suc­cess­ful net­work mar­keters are all evan­gel­i­cal about their pro­gramme and Vernisha Charles-Joseph is no dif­fer­ent. As we chat­ted over video link, her en­thu­si­asm grabbed me through my lap­top screen. I had to draw the cloak of jour­nal­is­tic scep­ti­cism tightly around me to shield my­self from the in­fec­tious zeal with which she told of her ex­pe­ri­ences. “This is how peo­ple get sucked in,” I thought, as our con­ver­sa­tion de­vel­oped.

A 10-year sales man­age­ment job at a telecom­mu­ni­ca­tions com­pany ended in 2008 and, af­ter a while, the mother of four be­came weary of hav­ing to start at the bot­tom of the peck­ing or­der at ev­ery sub­se­quent place of em­ploy­ment. “I found it be­came very tir­ing, and it be­came al­most worse than mo­not­o­nous . . . you wake up ev­ery morn­ing, go to work, spend eight to ten hours on the job, come back home ex­hausted, and the qual­ity of life was just not what I wanted. I didn’t have time for my kids. My chil­dren are very young, and very tal­ented; it was not en­rich­ing for my fam­ily.”

A friend in­tro­duced her to the con­cept of net­work mar­ket­ing in 2010 and, af­ter al­most 18 months of re­search, she pur­chased her first set of in­ven­tory in June 2011. Even then, her busi­ness sat dor­mant un­til 2012 when she fi­nally de­cided to put some en­ergy into it. The rest, as they say . . .

Even though Vernisha has given up work­ing tra­di­tional jobs, don’t think for a sec­ond she’s spend­ing her days sip­ping cock­tails on a beach some­where. She called me from her of­fice in Cas­tries, where she puts in full-time hours hawk­ing her prod­ucts and in­duct­ing peo­ple into the pro­gramme. She does sales, con­ducts in­for­ma­tional and train­ing we­bi­nars, and helps her down­line re­cruits get es­tab­lished. “I am suc­cess­ful in my busi­ness be­cause I put in the hours and I put in the work - and that’s maybe one of the down­sides: per­sons come in with the mind­set that they’ve bought a glo­ri­fied lot­tery ticket.”

GWT is hot right now, and Vernisha seems to be do­ing well, but not all net­work mar­ket­ing com­pa­nies are cre­ated equal – some peo­ple do suf­fer. Sev­eral of my ac­quain­tances have seen their bud­ding Mary Kay em­pires shrivel and die in the face of in­creased ship­ping prices, cus­toms night­mares, and loss of pub­lic in­ter­est in their prod­ucts in the face of more com­pe­ti­tion from lo­cal beauty sup­ply stores.

Some com­pa­nies are scam­mier than others, struc­tur­ing their com­pen­sa­tion scheme to priv­i­lege re­cruit­ing ac­tiv­ity over ac­tu­ally sell­ing prod­ucts. Some sell low­value prod­ucts at ex­or­bi­tant prices. What’s the sub­stan­tive dif­fer­ence, really, be­tween an il­le­gal pyra­mid scheme where each per­son pays in $50, and a le­gal net­work mar­ket­ing pro­gramme that sells $10 worth of vi­ta­min sup­ple­ments for $60? In each case, you’re pay­ing $50 just for the priv­i­lege of be­ing in the net­work – there’s zero value in that!

It turns out that net­work mar­ket­ing, like all other en­tre­pre­neur­ial ac­tiv­i­ties, is fraught with risk. If you want to be suc­cess­ful, you must care­fully an­a­lyze the risks in­volved and eval­u­ate how suitable the spe­cific pro­gramme is for you and your skillset. I know I will never have the time and the pa­tience needed to pre­side over a small net­work mar­ket­ing em­pire like Vernisha, but I’m glad to see that her ef­forts have re­sulted in sta­ble, prof­itable self-em­ploy­ment for her, and in for­eign ex­change from all over the world trick­ling into her lo­cal bank ac­count – a boost for the na­tion’s bot­tom line!

Like most other en­tre­pre­neur­ial ac­tiv­i­ties, net­work mar­ket­ing is fraught with risk.

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