MLM's Web Problems Hit Home

Lots of businesses have had a tough time adapting to the web. Auto dealers have had a tough time. So have banks, and newspapers, and TV stations. But you probably know this.

What you may not know is that some of the toughest problems adapting to the web are in your spam mail folder. Multi-Level Marketing (MLM) is being killed by the web.

Before we all went online, MLM was how you built a sales force. I worked in an MLM operation in college, selling knives, flatware, and plates. I paid $200 for my sample case, but I earned that back in commissions. If I recruited other salesmen, I got a cut of their commissions, in exchange for training and supervising them. I learned some important lessons, the most important one being I’m no salesman.

The best-known MLM organization, Amway, spent years in the rumor stage before launching its web site, called Quixtar, in the last week. The plan is to sell direct without membership fees, but to give distributors discounts, and to let distributors set up their own stores through the site. If you think this is going to work, you must have been (allegedly) at a lot of George W. Bush’s (alleged) parties in the early 70s.

Tupperware is another new site from an MLM veteran. When you cut through the design, you find they’re selling a limited number of items, recruiting salespeople online, and hoping those salespeople can make it on the “up-sales” – products Tupperware isn’t selling online. Many Tupperware people are already crying foul. Like Amway, the Orlando, Florida-based Tupperware stopped its salespeople from trying the web before they moved themselves.

None of this worries me especially. I keep samples of the Jehovah Witness’s “Watchtower” handy in case someone tries to tell me the “good news” about Amway. I’m not in Tupperware’s target market, and my lovely wife hates to cook.

But this failure to find a new MLM business model is going to hit our family very soon, because we do belong to a very successful MLM organization that is about to be ripped-apart by the web.

That organization is the Girl Scouts.

You won’t find anything on what makes the Girl Scouts famous on the group’s web site, but we learned all about it last spring, our daughter’s first year in scouting. Yes, I’m talking about Girl Scout Cookies.

Girl Scout Cookies aren’t exactly an MLM opportunity, because the line salesmen get ripped-off big time. For selling about 90 boxes at $2.50 each (over $200 in cash flow), our little girl got herself a cloth patch. The troop got a healthy chunk, and the national council did well, too.

That’s OK, because Girl Scout Cookies are insanely easy to sell. All Robin did was take her order pad around the block. And when the cookies arrived (we had to front her the cash), we found ourselves with a new form of currency. Cookie lovers came out of the woodwork – those who’d ordered them grabbed for their wallets like we had lottery tickets. For one week, I thought, I could have made a fortune on eBay – what am I bid for Thin Mints?

The point is that a Fort Worth, Texas mommy discovered last spring that by putting up a web site for her daughter’s selling, her kid made out like Jeff Bezos. This is a discovery thousands of parents are going to make in the next few months. Since the point of the cookies is to support the local troops, what happens to the Girl Scouts then? On this question, I haven’t got a Clue.

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