MULTI LEVEL MARKETING-1

01How to not lose a friend over multi-level marketing

"Hey hun! How are you? We're so overdue for a wine (or five!). Let's make it happen. By the way, I've got an exciting business opportunity that you might want to hear about!"

Does this message and my overuse of exclamation marks look familiar?

If you know anyone in multi-level marketing (MLM) businesses, also known as direct selling, it probably will.

Rodan and Fields, Mary Kay, Isagenix, Tupperware and Doterra are just a few brands you might have seen pop up in your social media feed.

Their members often rely on existing relationships for sales and recruitment. That can be frustrating when you just want to bitch about life over coffee — not be pitched the "opportunity of a lifetime".

"I have seen quite a few examples and testimonies from people who say differing opinions on MLM have ended friendships and even marriages," says Maire O Sullivan, lecturer in marketing at the Cork Institute of Technology, who has studied MLMs through a feminist lens.

"Many people become frustrated with friends attempting to 'commodify' their emotional connection."

MLMs are often fuelled by promises of "get rich quick" and the flexibility to "be your own boss". The reality is making money from direct sales is largely a pipedream (fewer than 1 per cent of members will make a profit) and it's a business model that targets women in financially and emotionally vulnerable states.

Understandably you might be concerned for your friend, and equally not interested in supporting their MLM scheme.

So where does that leave your friendship?

Do you have an experience with MLMs you want to share? Let’s chat: life@abc.net.au

How MLMs can impact friendships

Melissa*, a Brisbane professional in her 30s, hasn't seen one of her bridesmaids in years for several reasons, including MLMs.

"It got to the stage where it felt like every time I saw her there was a new 'business opportunity' I was expected to support — Tupperware, essential oils, lingerie, nutrition supplements," she says.

"And there was a slightly guilt-trippy, passive-aggressive tone if I wasn't on board and prepared to spend money or host a party."

Are 'toxic' friendships worth saving?

Do you have a pal who puts your needs last? You could be in a toxic friendship, but these relationships can be improved.

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Jess*, who studies full time in Brisbane, was fed up with her friend hassling her to join an MLM scheme — and especially when she hit up her contacts list on social media.

"She added my sisters on Facebook who she's never met. I felt that was overstepping the mark," the 35-year-old says.

Lucy*, a 25-year-old stay at home mum living in the US, says while she wants to support her friend's MLM venture, the "harassment is relentless".

"I have a very, very strict budget and I can't buy this crap all the time.

"I hate MLMs so much. The guilting, the relentless posting … and the girls from school in my DMs like, 'Hey babe, how are you?' I don't respond anymore because I already know what they want."

(*Our case studies asked to be anonymous for fear of damaging the friendships further.)

Red flags in MLM schemes

If you're pitched an MLM, this guide from industry and experts covers what you need to know.

Read moreYou don't have to be 'that guy'

But things don't have to go sour with your MLM friend.

If you decide the friendship is worth hanging around for, Relationships Australia NSW CEO Elisabeth Shaw says understanding their choice will help keep it intact.

"Try putting yourself in your friend's shoes as to why this is appealing to them — even if you don't believe in it.

"There are often good reasons, and if you stay focused on those, then you can stay respectful."

For example, it's not only money that appeals to MLM recruits. It's a sense of community and purpose.

Your friend doesn't need you to tell them that it probably won't work out. Most MLM salespeople quit at one point or another.

"If it's not going to work out, that will just happen in time. You as a friend don't have to be the one to announce that … you can just be supportive and respectful and let it play out," Ms Shaw says.

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Ways to be supportive without contributing to MLMs

Once upon a time, Dr O Sullivan went to Mary Kay and Avon parties, but with what she knows about MLMs now, she refuses to support them in any way.

"My concern in supporting a friend involved in these enterprises … is that only a small portion of the sale price goes to your friend — most goes to a business which can be involved in highly unethical practices," she says.

"Even if your friend is making great money, I could not bring myself to support a venture that costs 99 per cent of people involved money."

But not all is lost — there are ways to be supportive without contributing financially.

"One of the cleverest ways I have heard of for helping people is to provide them with business resources; in particular, pre-formatted spreadsheets to track profit and loss," Dr O Sullivan says.

"This shows those who may not be business-savvy the cost of their sales and the value they are placing on their own time. It can help to break the spell for those who are putting in a large investment for little pay-off."

Arguing about politics and staying friends

Is there a way to navigate these potentially explosive discussions without damaging relationships?

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Ms Shaw recommends setting boundaries with your friend.

"If you are asked to host something or be involved in some way, feel like you can be clear that you do feel supportive, but you aren't in a position to help in that way.

"Maybe say you are happy to come and be a cheer squad, but you're not in a position to buy anything [for example]."

And being supportive doesn't mean the relationship has to become a one-way street, explains Catherine Sanders, a clinical psychologist with the Australian Association of Family Therapy.

"It's about reciprocity. All relationships depend on that equal balance of give and take.

"If a friend is taking more — like wanting you to 'like' their posts and come to their parties — but has no time or energy for you and what matters to you, that's really difficult … but something you need to talk about."

Expressing concern about the MLM model

If you think your friend is at risk, financially or otherwise, express that in a sensitive and respectful way, Ms Sanders says.

"You sit them down and say 'I respect the fact you've taken this on and are hoping it will resolve some financial issues or whatever. However I've heard about a number of people who have got caught up and lose money and I'm really worried for you'."

Ms Shaw says it's not wise to condemn their choice. Making your friend feel ashamed will only drive them away.

Dr O Sullivan says the risk of sharing your thoughts on MLMs is your friend might shut you out — as is the nature with some of the schemes.

"In some MLMs, participants are encouraged to cut out anyone who expresses doubt as this negativity will prevent them from achieving their full potential."

02

Your Blueprint to Marketing in China in 2020 (Chinese New Year Special)

China’s substantial population, its thriving economy, and unique cultural norms make it an exciting region for marketers around the globe. In our Chinese New Year special, we discuss:

Why marketing to China is now a key priority

Five tips to help you outline a marketing strategy for China

Important trends and metrics to remember for 2020  

As the world’s second-largest economy in terms of GDP, China is now a key market region for brands. However, marketing in China can seem difficult, due to regulatory complexities and unique cultural norms. For example, commonly used social media marketing platforms, such as Facebook or YouTube, cannot be accessed in China. Also, the influencer marketing community in China is organized differently, with niche segments and norms.

On the occasion of Chinese New Year 2020 (January 25), we take a closer look at marketing strategies for Chinese consumers and bring you useful tips and insights.

Learn More: 10 Best Social Media Marketing Books to Read in 2020

Why Marketing to China Is a Key Priority for Businesses

Several factors have made China a popular region for businesses going global. To begin with, it has a large number of high net worth individuals (HNWI) – between 2016 and 2019, the number of Chinese adults in this bracket increased by 80.8 million. Further, China boasts exceptionally high mobile penetration making it ideal for mobile marketing strategies. With approximately 1.2 billion subscribers, China now has the largest mobile audience globally.

Here are a few important metrics from McKinsey’s China digital consumer trends 2019 report that surveyed 4,300 digital consumers across the country. They precisely indicate why brands need a well-defined strategy for this region:

Online retail in China was expected to reach $1.5 trillion by the end of 2019, making it larger than the next 10 markets combined  

Traditional e-commerce witnessed a slight decline between 2017 and 2018, while the number of shopping malls saw 11% YoY growth. In other words, omnichannel is now a key buzzword for marketing in China.  

63% of apparel buyers use their mobile phones for research while standing in a physical store.  

In 2019, 43% of buyers used digital channels to purchase traditionally offline products such as home decor, packaged goods, personal care, etc. – 2.5 times more than in 2017.  

Social media and content consumption account for two-thirds of the total time spent online, making it critical for brands to have a social marketing strategy in China.  

These metrics reveal an interesting picture. Unlike other market regions, the Chinese consumer is truly omnichannel, and the lines between digital and offline are increasingly blurred. In 2020, brands need a robust, reliable brick-and-mortar presence, bolstered by a well-articulated digital marketing strategy, to win in the Chinese market.

Let’s look at five tips to make this happen.

Learn More: Can Better Online Visibility Disrupt Offline Retail?

5 Tips to Remember When Marketing in China

Despite its localization complexities, large brands do not shy away from investing in marketing to China. In 2018, The Wall Street Journal reported how Chinese shoppers played a significant role in maintaining Gucci’s global revenue levels. And last year, PepsiCo made a major investment in one of China’s largest natural food companies, buying 26% of its shares for $131 million.

For marketers looking to take advantage of China’s promising consumer base, here are five useful tips:

1. Use a dedicated platform for influencer marketing in China  

Influencer marketing in China is different from the standard approaches in other market regions. It has a highly organized influencer community, with specialized influencer agencies, consultancy groups, and incubators to hone social media talent.

And, there are various levels of influencers, like key opinion leaders (KOLs) who are recognized for the validity of their opinions, in a specific domain. There are Wanghongs or influencers who gain popularity for their online appearance. This is in addition to traditional celebrities who also have a large social media following and influence.

In 2020, marketers can use a dedicated platform like Parklu or Robin8 to navigate the influencer community and find the best online advocates for their brands and marketing needs.

2. Live-stream short videos as part of your social marketing strategy in China  

Last year’s edition of the Internet Trends report by Mary Meeker highlighted the critical role played by short-form videos in China. Chinese consumers spent a total of 600 million hours per day watching short-form videos in April of 2019. Popular apps for video consumption included Douyin (or Tik Tok), Kuaishou, and Haokan.

While there are other social media platforms for long-form video consumption like Youku and iQiyi, short-form is the trend to follow in 2020. You can work with KOLs, Wanghongs, and other types of influencers to create short videos of your product. These can be live-streamed through social media at regular intervals to garner a loyal audience.

3. Leverage WeChat for B2B marketing in China  

B2B marketing in China involves several foundational steps, like hosting B2B websites on a Chinese server and optimizing website content as per Baidu’s SEO norms. The content should also be available in Chinese so that it can be accurately indexed. B2B marketers also need a special license called the ICP Beian License to host their websites in Mainland China; this also entails a local offline entity.

To streamline B2B marketing in China, we recommend leveraging WeChat for customer communication rather than website updates or emailers. Email marketing in China isn’t a good area of investment for B2B brands as the number of email users in China is surprisingly low.

WeChat is a messaging app with integrated services for networking, online shopping, and payments, where users can view posts published by accounts they have subscribed to. Leverage WeChat to send newsletters, new product updates, service recommendations, and other marketing messages.

4. Take advantage of Chinese shopping festivals for affiliate marketing  

The first thing to remember here is that websites that work with the affiliate platforms outside of China cannot be promoted in the country. Once you have an alternative website domain in place, one with China-supported payment methods, such as Alipay or WeChat pay, you can get started with your affiliate marketing strategy. The operations are pretty simple – you partner with an affiliate network under the CPS Union.

To make your affiliate marketing strategy a success in China, take advantage of localized shopping festivals in the region. Keep an eye on Double Eleven (Single’s Day in China, celebrated on November 11) – it was popularized by Alibaba in 2009, making it the Chinese equivalent of Cyber Monday. There’s also 618, a mid-year shopping festival that usually falls in June.

Events like these are perfect occasions to share promotional content and hold private sales through your affiliate marketing networks.

5. Replace multi-level marketing in China with direct sales  

There are no two ways around it: multi-level marketing in China should be strictly avoided. Pyramid-like sales structures that employ an undefined number of resellers (on the lines of Amway) were banned in China in 2005. And as the Chinese economy has grown, publicly-traded multi-level marketing companies, including Herbalife, Nuskin, and Usana, have dipped in valuation.

You can replace multi-level marketing with a stronger direct sales strategy, explicitly focused on brick-and-mortar locations that are complemented by online content. This will allow Chinese consumers to confidently buy products from your brand while utilizing digital assets for additional research.

Remember, direct sales channels require a business license, as well as training courses for all resellers.

Learn More: Navigating Growth at Home and Overseas - 3 Tips for Mobile Marketers

In 2020, Digital Marketing in China Will Take Off – Are Brands Ready?

The future of digital marketing in China looks optimistic, to say the least. A 2019 survey of 240 marketers in China revealed that 79% of professionals were looking to increase their digital marketing spends. Social marketing spends in China was expected to grow by 21% on average, with special attention on KOLs, short-form videos, live streams, and official WeChat accounts.

The writing is on the wall – businesses eager to scale fast must make deeper inroads into the Chinese marketplace in 2020. This includes a careful blend of digital marketing and offline activity and compliance with the country’s regulations. Keeping these five tips in mind, you can articulate an effective strategy for marketing to Chinese buyers, gain from its large (and fast-growing) segment of affluent consumers, and build a robust brand in the region.

Happy selling, and have a great Chinese New Year!

Do you have a recommendation for marketers who want to enter the complex Chinese market? Tell us on LinkedIn, Facebook, or Twitter.

03

Unilevel Vs. Binary MLM Plan

Multilevel marketing is a booming industry and a majority of the companies that have stake use Unilevel or Binary MLM plans to run their business. One of the prime reasons for this is the financial freedom and massive growth rate offered by these two popular MLM Plans.

Instead of a traditional distribution channel, MLM companies sell their products directly to the customers. As a happy customer and later distributors, Binary and Unilevel Compensation plans allow you to earn a commission depending on the sales you generate in a more systematic way. When your customers become distributors, you can earn additional team commissions on that, as well.

What Exactly is a Compensation Plan for Multilevel Marketing Business?

You might have heard from different MLM companies how they offer the best compensation plan or the highest payouts to their team. So, what exactly is a compensation plan? A compensation plan is the structure of the MLM company and how it compensates its customers. It usually consists of different sets of rules that determine how and when the team members can earn commission, bonuses, overrides, and other compensations. One of the reasons why MLM business is gaining popularity is because of its lucrative compensation plans. The MLM compensation plans followed by MLM companies differ significantly. When you choose an MLM company to represent, the compensation plan is an important factor to consider because it is the plan that will lead to your business success.

Unilevel Vs. Binary Compensation Plan

The two common types of compensation plans in the MLM business are Binary MLM Plan and Unilevel MLM Plan. Both of these plans are the widely used methods of compensation in the MLM industry and have unique properties. Both of these have their own set of advantages, disadvantages, strengths, and weaknesses. But it is up to the company to select which would be best for their business and the customers.

Binary MLM Plan

Structure Binary MLM compensation plan involves two legs the left leg (Power Leg) and the right leg (Profit Leg). Depending on the position of the new team member, the new member can be on either leg. Every team member would be responsible for hiring more team members to their downline and place them on each of the legs. If a member recruits more than two members, they will put the person on the power leg. Everyone on that upline will share any profits made by that member.

Compensation In Binary MLM plans, the compensation usually varies between 8%-10% of the total business volume done on the weaker leg. Thus, it is essential to maintain a good balance between the two legs.

Advantages of Binary Plan The benefits of Binary MLM plan are

Higher returns as your compensation will depend on the success of your upline.

There is no limit to the amount of compensation you can get.

It is a team-based system where all team members need to work together for the downline to grow.

The upline offers greater support to build the other leg, and thus the expansion is quite fast.

Disadvantages of Binary Plan Some of the major disadvantages are

You can only make profits from the downline on one of the legs and not all of them.

The downline structure may take some time to understand.

If one of the legs is not as strong or active as the other leg, it can result in monetary and time losses.

Unilevel Plan

Structure In a unilevel MLM plan, there is only one line of distribution. It means that every new recruit will be on your forehead. There is no limit to the number of recruits, and the commission will be based on the level depth. Every member can recruit as many members in their downline. This kind of plan allows for a stronger and unlimited network of members.

Compensation In Unilevel MLM plans, the compensation is calculated anywhere from 3 to 10% of the total business volume of a specified level (usually from 5 to 8 levels).

Advantages of Unilevel Plan The benefits of the implementing Unilevel compensation plan includes

It is easy to implement as the structure is easy to understand.

If there are good leaders in the downline, the compensation can be quite high.

You can enjoy faster bonuses and higher residual income.

Disadvantages of Unilevel Plan The disadvantages of Unilevel MLM plan are

Such a plan does not pay up to unlimited levels. There are certain limitations.

You cannot increase the volume of your downline expects for the first level. If you do not have strong leadership in the downline, your compensation might greatly be affected.

The rapid growth of the downline is not possible.

No spillover or checkmatch possible.

When you compare Binary and Unilevel MLM plans, you will notice that both have their own sets of advantages and disadvantages. One plan is not better than the other in general. Different companies choose one based on their business policies, the products, and services they are selling, their targets, and others. You need to pick the MLM company you want to represent based on what you feel will suit your needs and the effort that you can put into your MLM business. Thus, make sure to study the compensation plan clearly, so you know how each plan works and what you stand to gain.

Checkout what MB30 Dynasty Says About Binary Vs. Unilevel MLM Plan

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