Get Out of the Pessimistic Economic Tailspin
I came across a blog post today by a guy who had seen a recent article on the increasing popularity of direct selling. He was bemoaning the fact that the result would be more invitations to direct selling parties or demonstrations. He’s right that the poor economy will probably encourage many people to explore whether direct selling is for them. There are tons of products out there that are of interest to people – especially with the holidays coming up. But what really caught my attention was his “warning” to people to decline the invitations. What? His logic is as follows: “The hard truth is that we do not need more broke Americans spending what little surplus cash they have on stuff they don’t need,” he says. I hardly think it’s fair to paint the U.S. economy that unfavorably – the majority of Americans are far from broke. In fact, I believe it’s his kind of pessimism that makes an already tentative economic situation worse. He probably has his mattress filled with cash, too. My logic says that in this type of situation you should get out there and do what you can to return our economy to good health – and while that doesn’t mean extravagant, careless spending, it also doesn’t mean hunkering down and becoming a hermit in your own home.
Here are just a few thoughts:
1) Give yourself a “pick-me-up.” If the news of economic woes has you feeling down, you need to look on the bright side. The economy is cyclical – it always has been and always will be. Sitting at home a worrying about it won’t change a thing. If you are invited to a direct selling party or demonstration – go and have fun! It’s an inexpensive night out. If you find something you love, consider it a little gift to yourself. If not, thank the hostess for a wonderful evening, and on the drive home think about how you didn’t spend $25 for dinner, $10 for a movie ticket, and who knows how much for drinks afterwards.
2) Be part of the solution. Most women don’t stop wearing cosmetics when a recession hits, just like most people don’t stop their health and wellness routine. For people who already buy these products, most will keep on buying. Others may even discover new brands because smart companies (direct selling, traditional retail or otherwise) increase their marketing during economic slowdowns. Research shows people are very receptive to marketing when the economy is slow because they are looking for signs that things are getting better. I say, don’t just look for signs – get out there and do something about it! When people start buying again, the economy is going to get better, so forget about putting your money in your mattress and be part of the solution.
3) Do yourself a favor. A thriving economy is built on commerce. Whether a particular company has its products on store shelves, sells through mail order or engages a salesforce of consultants to market its products – the end result is the same – products and services are distributed to those who want them. There is always going to be a market for quality products and services – and direct selling gives people the opportunity to earn supplemental income while having fun at the same time. If you are looking for an additional source of income and are intrigued by the thought of doing something on your own, direct selling may be a good option. But, that doesn’t mean you should take the choice lightly. Be sure to set goals and thoroughly check out any company you are interested in to make sure your expectations are reasonable. Direct selling is, in fact, selling, so don’t expect the commission checks to start rolling in without putting in some work. And be sure to think beyond your immediate family and friends. While they are a great group to start with to get your feet wet, long term success will require you to get out of your comfort zone and market your products on a wider scale.
Pessimism fuels economic woes, and depriving oneself of a little fun now and then only makes the situation seem worse. So America, while the government is busy throwing billions of dollars at the situation, take the easiest step you can and change your own outlook. Get out there and have a little fun. If you happen to pick up a new shade of lipstick or a new centerpiece for the dining room table, all the better. Consider it a dose of medicine for both your psyche and the economy.
Tags: direct selling, DSA, economy, MLM, multilevel, pessimism
November 5th, 2008 at 10:31 am
Amy…
I am so glad that you advised your readers to do the necessary research about any opportunity. Not all people attending a party are asked to join up themselves. I believe I read the blog in question. Pessimism shouldn’t be mistaken for good sense. You are correct that many people do have money, will not lose their jobs and the like. Some are fortunate.
Strangely your analysis of how the economy works is correct; witness the recent stimulus checks passed back to the people to hopefully avoid the present down turn in the economy. Of course people have just come out of a long spending cycle, which runs counter to the good habit most people should develop to save money for these kinds of rainy days.
Spending is encouraged to stimulate the economy, but I believe people are best served when they seek out value in a free market situation where prices will most generally find their correct level. Sadly, people can be convinced that a MLM marketing scheme will provide some big payoff in the future, and in a “reality inverting” scenario, make themselves not a distributor of products, but soul customer in their relation to their business. To succeed in some of these marketing strategies, they must also find other people who will believe in the “buy from yourself” idea that is bandied about by the motivation industry. Not only will they be expected to buy the products, but also the systems of tools and motivation that they are told are the “keys to success” in their consumership. Some are told conflicting ideas like: “tools are optional, but so is success.” Now which message is really being relayed here?
I am glad you tempered your observations and advised your readers to take the time to make a wise decision. To decide to go forth, or even to decline altogether is the wise approach to these supposed opportunities and business offers.
I have a very nice neighbor. If for some reason she would invite me over to enjoy a social gathering and possibly see something she has to sell, I would be inclined to go. If I were confronted by a hard sell for a recruitment into one of these “buy from yourself” affairs, I most likely would politely decline, enjoy what I could about the evening and at least try to remain friendly with my friend. Too often these recruitment inclined people brand people who will not accept their glorious proposals as “broke losers” and basically shun them with a us versus them attitude. I realize there are exceptions, but I am only generalizing here.
As I’ve said before, the price of some mixing bowls or measuring cups (I love to cook) are not that high of a price to pay to enjoy a social occasion. My wife may be more inclined to be the target of such an invite because if there is a real product being offered, many times it is makeup, home interior, or cook ware. I get the benefit of the prize she may bring home as a gift for me. Okay, I buy the thought that the price of dinner, movie and a night out is also another way to stimulate the economy, so why not pay a little extra for some face paint or wall adornment?
In the end, people should be wary, not inclined to quickly jump into any situation without doing plenty of research and sleeping on any business offer. I have a business degree, and I wouldn’t think of jumping into any business offer without sufficient and complete investigation. What one learns might prevent one from being involved in a selling business where you are taught to believe you are the distributor but really are the target customer and consumer. I tap my head with my index finger and ask readers to also do the same thing, it is only wise. Not all these MLM companies are created equal. Distributors basically must pay any over head expenses necessary to operate a recruitment first business model. Many will be encouraged to buy any number of books, tapes and instructional material, and attend “pay to attend” seminars and rallies. All of these present a situation where one’s expense to be in the business may far outweigh any commission check. Use good commons sense—which I feel Amy is urging. There are competing opinions about MLM businesses, be sure to listen to both sides.
Finally, reaching a pin level of success in many of these businesses requires a large outlay of time, money, and potentially socially stigmatizing activities. Many people are not suited for the incredible amount of hoops one must in the end jump through. For the vast amount of distributors in these businesses, long term success is mathematically remote but not entirely impossible. Use common sense, DO ALL OF THE EXTENSIVE background checks on the opportunity. A wise person wouldn’t want to hire a new employee without doing some checking. This should apply to MLM business offers as well.
November 11th, 2008 at 10:27 pm
Great blog Amy. Thank you for sharing the positive side of the economy and a solution for your readers. It is refreshing.
November 17th, 2008 at 7:29 pm
Great points, Amy!
I hope this also helps direct sellers open up and invite, appropriately, others over for a shopping alternative during the holidays and year round too!
I think that online shopping and social networking trends will help consumers to be open to new, better, and more fun ways to make their usual or intended purchases.
November 18th, 2008 at 1:05 pm
Amy I enjoyed reading your blog. I have been a distributor for 9 years with Amway and I agree with you that you should get all the facts about a company before you jump into something that you only have a little information about. I would like to share with you my experience with Amway. I had all the concerns that everyone else has when I first started, but I have a great sponsor who has worked with me over the years and has really helped me to be successful. I have made hundreds of friends and created lasting relationships with numerous people that I would never have met if it had not been for this business. I am on the training system and it has helped me overcome my shyness and helped me to grow personally.
I feel that this training system is no different than my training system that I must continue as a Nuclear Medicine Technologist.What I found out was that success in any business you start up requires you to get busy and work and it also requires training. The books that I have read over the years, I think there have been over 100 of them,have helped me in all areas of my life, and I feel that I am so blessed to have been introduced to this business and to have been sponsored by a couple that are now my best friends.
One thing I found interesting in your comments was that you may not really be a distibutor but rather a soul customer in your business. Well I do buy all the products that I need from my own business such as all my toilet articles, my laundry supplies, my food bars,energy drinks and my wife buys all her make up, jewelry and hair products and I pay about the same thing that you pay when you buy your products, but the difference is at the end of the month Amway sends me a bonus check that has over the past 7 years been well over the money I spent.I think that is a great deal.
I did not mean for this to be this long. I just wanted you to know there are some good MLM businesses. Oh! You are right this business is like a lot of other businesses it is not for everyone, and I have never tried to talk someone into my business. I simply present the program and if they want to do it that is fine and if they don’t that is fine also, I have never called anyone a loser if they did not see what I saw in the business than I still want them to be a friend.Anyway Amy I did enjoy your blog it was well written and thought out.
November 26th, 2008 at 5:22 pm
J.C.,
I debated a long time about approving your post as it toes the line on acceptable under the blog rules based on your focus on one company. However, I ultimately decided to post it because I think the points you make speak to a much larger issue - and that’s the very different experiences people can have not only with direct selling in general, but with specific companies. I know there are people out there who have had less-than-satisfactory experiences with direct selling, and industry critics like to focus on those stories - but there are millions of people every year who have great experiences and those stories aren’t told nearly enough. Similarly, there are certain retail stores that I refuse to shop with because of prior bad experiences. That doesn’t mean there’s necessarily anything wrong with the company, it just didn’t work out for me. I respect the right of other people to shop at those establishments, but just don’t expect me to shop there! (And I’ll admit, I’ve done my fair share on complaining online when I’ve encountered a problem with a company - but I hope my comments have ultimately been constructive and helped any company in question improve their customer service.)
I hope readers of this blog will take away from your article a reinforcement of the fact that everyone has a different perspective, and the free-flow of information from all perspectives will help consumers make educated decisions.
November 27th, 2008 at 6:17 am
Amy…
Although JC claims he has had a good experience and is basically a typical ‘distributor’ in the particular MLM he and his wife are involved in. He is involved in a ‘self consumption’ model which cannot possibly produce commission checks that offset the cost of his purchases which he admits that he and his wife are consumers of. He also says that he purchases all the training materials, so I am left to assume that many of the people he meets in his business are people he is hoping to recruit as a ‘distributor’.
JC fits perfectly into the ‘buy from yourself and teach others to do the same’ (BFYATOTDTS) model; and if he does not retail product, he violates his company’s retail selling rules. Surely you should have recognized this and at least mentioned that is against DSA best practices. He is a perfect example of what makes MLM marketing like this a product based pyramid scheme. The tools serve to promote the deception. Most likely the people that JC recruits also will follow the ‘buy from yourself’ method to achieving the MLM pot of gold at the end of the rainbow, which is generally well guarded by the top of the top of the top of the pyramid kingpin ‘distributors’.
Thank you JC for describing the bad situation that sadly exists amongst some of the DSA companies. The direct selling in your circumstance is not made by you, but buy the company you claim to represent. I am sure they view you as a good customer.
December 7th, 2008 at 11:41 pm
“The hard truth is that we do not need more broke Americans spending what little surplus cash they have on stuff they don’t need,” he says.
Clearly no understanding of how money works, and he writes for CNN? Okay then…well the war got us out of the great depression. Direct selling will get us out of this current slump. Why, spending is what runs economies. Out flow determines inflow. Hoarding cash only increases inflation because the govt. is forced to print more fiat money (not worth its weight in gold might I add…spend now to avoid inflation. Very simple really!
July 11th, 2009 at 8:28 pm
Spend now to avoid inflation? What drugs is this guy (or gal) on? A basic education in economics will tell you that to get the best deals, you certainly want to avoid any middlemen. And direct marketing is a middleman. You can ALWAYS purchase the same items cheaper by simply doing your own homework versus using a third party. If this comment is even listed I’ll be amazed. But let’s see.
July 12th, 2009 at 9:45 am
Bob,
First, the topic here is direct selling - very different than direct marketing (perhaps that’s where you get the misimpression that the direct selling model has more middlemen than retailers, whose products might go through 4 or more middlemen before even reaching the store shelf). Second, consumer spending makes up a huge percentage of GDP (about 70% I believe) so when people aren’t spending, the economy tanks. The only way to reverse that problem is for people to spend again. So, when people hang on to their money because they fear what the economy will do, the problem only gets worse. In some cases, even people who do not have present economic concerns are not spending because they feel they they SHOULD have concerns. Bottom line is spending is the key to economic recovery.