A lot of people want to start their own business, but have trouble finding the right opportunity. A lot of people want to be their own boss, but don’t want to venture out to develop there own model or risk their own capital for payroll etc.
I know we all hate the “M” word. It’s okay… I’m going to say it… multi-level marketing… MLM. The term carries so many different biases it’s almost hilarious. What ends the joke so quickly, is when we take a second to look at how effective it really can be. In 2003, Amway reported the global market for multi-level-marketing to be 82 billion dollars large. I was reminded again this past week as I was approached by a number of different friends regarding a new product line and company known as Agel. Before I identify a few gaping fallacies I observed with Agel, let me give a quick background regarding my familiarity with MLM companies.
As special contractor at Morinda Inc, (the mother company of Tahitian Noni International) I saw first hand the effectiveness of rapid market penetration with low overhead provided by network marketing companies. As part of the original team that pioneered the research, development and marketing roll-out strategy for the animal products lines at Tahitian Noni International, I had a unique opportunity to work with the corporate family and distributors alike to introduce the new product line. After a year and a half of release, the product line has already grossed over 12 million dollars and remains today the #2 best selling product behind the Original Tahitian Noni Juice. In addition to some hands on work, I also wrote my honors thesis on Nutraceutical multi-level marketing companies in China: Past obstacles become future opportunity. (It’s over 60 pages with in-depth industry interviews and more.–It should be in the BYU Library by January if anyone is interested.)
I’ll avoid any ethical or philosophical points here, but let me just give my thoughts on the Agel opportunity. If you watch their promotional video it identifies a number of different advantages that their product has; in addition to an incredible comp plan, and strong scientific foundation, (what vitamins don’t have scientific data to back them up), it identifies two other points which I think help to illustrate the weakness of the product and foreshadow its difficulty in sustainability:
No competitors! I can’t believe that Agel dared to say that because it is a liquid vitamin pouch that it has no competitors. That statement carries at least two major fallacies. First, everyone who is in involved in the MLM industry knows that it is, for the most part, a fixed pie demographic. ‘MLMers’ buy from the MLMs, it certainly doesn’t share with the standard retail industry. Every nutraceutical MLM with their own unique product (and they’ve each got one) is a competitor. Secondly, a liquid vitamin is relatively the same as any liquid juice supplement out there. Whether its
Tahitian Noni Juice,
or whatever, the Agel liquid vitamin supplement is certainly a direct competitor with them… I wander if maybe Agel just doesn’t know it yet…
It looks cool! I can’t believe they really included that in their campaign. I can understand maybe using that line if you were selling clothes or trendy accessories–but it really weakens your product for a health supplement. When you think about it, this point really just drives home what I feel is their their biggest obstacle for long-term sustainability: Their demographic.
Their ads are filled with happy, active people ages 18-30. Their lingo is clearly as ‘hip’ as they can be. Their packaging is cool. But their real story and marketing base is weak. I’m concerned that they sell the product like it was more of a fashion fad than a real health supplement. Don’t get me wrong, they do a great a job of hitting their demographic. Just last week I had two people–ages 23 and 22 who approached me to see what I thought about helping them sell their product and pentrate Asia. Even with very limited required involvement, I decided rather adamently not to do it. Of course I have my own ethical/philosphical disputes with their model but really, I just don’t see it as a long term solution for people who are in an age and demographic where they should working to acquire long-term skills and experience for their futures.
In short, I don’t think it has long term sustainability, and unless you’re a cereal MLMer, it’s not a good investment of your time and money.