“Network marketing” might sound like 1950s Tupperware parties that gave housewives an opportunity to make some money after World War II. During these parties, the hostess or “consultant” would invite friends and family over to sell Tupperware, quite different from the traditional sales environment.
Though these parties began more than 50 years ago, social media allowed them to make their way from suburban homes to residence halls.
Network marketing — also known as multi-level marketing, direct-sales marketing or referral marketing— is a business model where revenue is gained by not only the amount of products the salesperson sells, but also how many people they recruit to their network. Many companies, like Mary Kay, Arbonne, Aloette, doTerra and Amway, use network marketing to promote their brand.
Industrial technology and packaging freshman Noelle Laird is a consultant for Arbonne and has worked for the company for a month. Arbonne gives their consultants cash bonuses, 15 to 35 percent of retail profit and a life insurance program, among other benefits. Arbonne has a seven-level chain of command, from consultants at the very bottom to national vice presidents at the top. Consultants make an average monthly income between $50 and $200, while national vice presidents can make over $22,000.
Once employees move up from consultants, they make commission off the products they sell as well as the products the employees under them sell. For Laird to move up to district manager, she is growing her network by inviting her friends to host residence hall parties with Arbonne products.
“Arbonne is a business you build for yourself,” Laird said. “[It helps me with] time management. I was spreading myself across three or four different jobs — I work at Blast downtown, I babysit, I tutor. It’s my own business, but I’m working with a bunch of different people. Holding those parties … I’m really just trying to share about the business. If they sign up, then I can build my business off of them, too.”
According to Laird, during these parties, hosts — usually a friend of the consultant — invites friends living in the residence hall to try the company’s products. The host provides snacks and guests play games to win prizes. Prizes include samples of Arbonne’s dietary supplements and fizz sticks, their most popular products. Attendees are also encouraged to try Arbonne’s makeup products. During this time, the consultant and district manager will talk to the guests about their experience with the company to encourage recruiting.
“We’re not putting money into famous people, we’re putting money back into our business,” Laird said. “The product goes straight from the manufacturer to the customer, so there’s all this extra money that they give back to the consultants. No extra money for the in-betweens.”
Similar to Arbonne, Aloette is a skin-care company that uses network marketing. Kristen Jones is the owner of an Aloette franchise, president of Aloette of Central Coast California and worked in network marketing for 13 years. Recently, Jones was invited to speak at a Cal Poly Women in Business Association meeting about her experience as a small business owner. Jones gave away more than $100 of free product vouchers to winners of a raffle and invited the winners to her house to try Aloette’s products. For each friend a raffle winner brought , they got $25 worth of free product. According to Jones, this kind of network marketing is becoming popular because of social media.
“I think that network marketing is becoming more popular because it’s a way for people to make supplemental or full-time income with flexibility,” she said. “Many people these days have a lot going on and with social media and the way we’re able to network with people literally all over the world, more people are drawn to the supplemental income, the flexibility, the lifestyle.”
That’s what network marketing for many companies like Aloette and Arbonne is: a lifestyle. For people like Jones and Laird, it’s sharing products of a company they believe in and are passionate about.
“Really it’s not about me trying to sell the product, it’s me sharing the lifestyle that Arbonne has,” Laird said. “I’m not preaching something I don’t believe in … I used it before I became a consultant. I believe in the product, it’s all botanically based, it’s Swiss heritage. I don’t necessarily see myself as a saleswoman, I don’t get upset if [someone] doesn’t buy my product, I’m just happy that I at least put it in someone’s head that this is a lifestyle.”
For Jones, a mother of three and a yoga teacher, running her Aloette franchise is a way to make additional revenue while being able to spend time with her family.
“The great part of having a business like Aloette or Arbonne is that when you’re busy and you have a family or a full-time career, you still have a reorder business,” she said. “I love the flexibility, I personally wouldn’t be able to sit at a desk from 9 to 5.”
For college students like Laird, working for a network marketing company like Arbonne can be a step forward professionally, too.
“I want to have a comfortable lifestyle and I think having a job like this will give me the opportunity to do that,” Laird said. “I definitely see myself building my business in the next four years and even after that, too. If I can get to one of the top level where I’m making $14,000 [or more] a month, then it could possibly be my full-time job.”
According to the World Federation of Direct Selling Associations, network marketing is a $178 billion industry in the United States. This number is larger than global sales in the video gaming, movie and natural foods industries. Arbonne and Aloette parties might just be replacing the Tupperware party.