Multi-Level Marketing Expands During Recession

by lisa ~ May 11, 2009

Growing up in Upstate New York in the 1970s, I had many friends whose parents who tried to sell Amway. In today’s economically challenging conditions, these multi-level marketing (MLM) operations - also known as matrix, network, or franchise marketing - seem to be multiplying. I realized that MLMs were enjoying a renaissance when my cleaning lady tried to sell me Nutrilife nutritional supplements.

The MLM model is now being used by a range of businesses from Amway, which calls itself Quixtar these days, to online shopping portal Market America. It has even infiltrated Manhattan’s upper crust, which is promoting Xoçai (pronounced show-SIGH), a brand of “healthy chocolate.”

According to The New York Times, the Xoçai “business operates on a familiar model: New distributors buy in at various levels and receive cases of chocolate products - bars, nuggets, cookies, drinks - at home every month. These distributors recruit newer distributors, earning a percentage of their sales. The promotional materials promise larger and larger monthly checks for those who greatly expand the tree.”

To understand why MLMs have a bad name, read any of the numerous reports available from reliable news organizations including USA Today and CNBC.

How reviled are MLMs? Some pink slip parties even bar representatives of dozens of known ones.

To read the complete article, “A Chocolate, With Amway Undertones, Networks Its Way Into New York,” click here:

http://news.idg.no/cw/art.cfm?id=171E46BA-1A64-67EA-E4D7D0D031790CF7

Lisa Tibbitts  is a New York-based corporate communications professional with an MBA in marketing. Follow her on Twitter: http://twitter.com/FinancialPR.