I have never been a fan of Multi Level Marketing companies – MLMs – so when Sara first started expressing interest in joining Beautycounter, I was very hesitant. I’ve learned a lot and want to share with others who may have the same reservations that I did.
(Sneak peek – I am very happy she joined. So happy, in fact, that my first blog post ever is about Beautycounter…didn’t see that coming…at least everyone will know how much I love my wife!)
I think there are 3 main reasons MLM’s have turned me off in the past:
1. Having friends try to sell me something didn’t feel right – If I don’t let them pitch me, or if I do/don’t buy anything, how does it impact our friendship?
2. I have always assumed that MLMs take advantage the joiner/seller, and that is how they survive – high initial buy in, buying/carrying your own inventory, annual fees, or some other dubious detail that would take advantage of the seller.
3. I didn’t like the level component of it – where you make money based on the sales of the people “below” you in the “pyramid” – why should you profit off another person’s work?
So with those in mind, we talked about it, she did a lot of reading and research, and we talked some more. We don’t make any big decisions quickly! I was still a little hesitant, but she felt very strongly about the mission of the company, her ability to make an impact, and to start her own business – so we gave it a try.
After a really great year and a half, here is how Beautycounter stacks up to the points above:
**as a small note – I believe my thoughts below can only really be applied directly to Beautycounter and not necessarily all MLMs. As a whole, they are probably better than I originally thought, but each company is unique and should be thought of that way – just as there are bad “traditional” companies, there are bad MLMs**
Buying/Selling to Friends
For some reason, I have always been a little suspicious about friends trying to sell things to me in a direct sales manner. (This might just be my personal hangup so apologies if it doesn’t apply to you) I think a lot of it is because of a distrust of the business model and my belief that if they make a pitch, I need to buy something. I feel good about the business model (see below) and have found a good place with the sales side after seeing it in practice.
I’m sure not everyone is this way, but Sara is very conscious not to push her product/message on people. She puts it into the world in a way that if people want to know or learn more, she is very accessible and follows up. It seems that works better than being pushy, anyway.
For some reason, the fact that she would be selling a physical product made me pause. But then I thought, how is this different than her selling/advertising for her (hypothetical) new yoga studio, jewelry store, restaurant, or a book she had written?
As I peeled the onion a little more, I am not sure why I was more “comfortable” being sold something from a company I had no connection with vs. a friend. At least with a friend, I have a better sense of where that money is going and I know I am supporting their small business. Why should I feel better about buying something from someone I don’t know?
Buy in, fees, general exploitation?
The initial fee to become a Beautycounter consultant is $98, of which $75 is product. Free would have been better, but this is pretty good.
Strictly speaking, Sara did not need to buy any additional product to start her Beautycounter business. However, starting without products would have been hard for a lot of reasons, the primary one being that she wouldn’t have had tangible knowledge of the product which is key in sales.
BC offers (but doesn’t require) highly discounted kits only when someone joins, which set off some alarms for me. It felt like artificial scarcity and a “classic” move. After seeing how recruitment has unfolded for different members of her team, I now understand why BC restricts it this way – it legitimately seems to be a good deal for the new consultant, and they would lose money if they kept it open all of the time. There were different size/price kits, and Sara was able to choose which one to invest in.
We were both keeping an eye on money in/money out, and Sara made the investment in a large kit back in 3 months. I felt pretty psyched when I realized she was truly starting her own small business and in 3 months, she was cash positive! I know many small business owners who cannot say the same.
The whole pay and incentive structure is extremely well thought out and generous. I have been amazed to see how it has adapted and guided Sara as she has grown her business. There have been carrots at all the right times, and motivating factors to pull her towards the next level.
The company itself has a great mission, product, and ethical operation. I didn’t know what a B-corp was and if you don’t, it is worth looking up.
On the Level
All businesses are structured such that managers make more money than entry level associates. They are more productive due to experience, and have more responsibilities. This isn’t generally questioned in a traditional business, but it is in an MLM.
I questioned this structure at first, but then realized that it happens in most traditional companies too, just behind the scenes, hidden from the everyday employee.
What I have observed is that Sara puts a lot of time and energy into coaching and teaching the new members of her team at all levels. (This includes teaching people how to manage) She is in contact with them all of the time answering questions, giving advice, and figuring out how to bring out the best in people so they can grow their own business. Philosophically, I am okay with her getting paid for that in the same way as a typical manager. In fact, I like the transparency and that she is getting paid for the extra work to train and mentor someone – this isn’t the case in many businesses.
Tying back into the incentive structure, it should be noted that Sara only benefits from consultants 3 levels down. I like this because in my mind, it more closely aligns the number of people she benefits from to the number she directly influences. That seems fair which was the focus of my original hesitancy to begin with.
So…that was longer than I thought and it looks like I know a lot more about the company then I would have guessed. Thanks for sticking with me if you got to this point and hopefully it is helpful to someone trying to figure out how to think about all of this.