How Network Marketing (Almost) Ruined My Life
The year was 2005. I was 22 years old. Fresh out of a mostly unsuccessful college campaign. Poor grades, relative to my peers. No meaningful internship experience. No job lined up. No real skills and nothing of value to offer anyone. All I had was the typical expectant attitude that is (in my opinion) unfairly attributed to most Millennials by preceding generations. I wanted everything yet had done nothing to earn it.
When I realized that my GPA wasn’t high enough to land the cushy Wall Street gig, reality set in. I applied everywhere I could when, finally, an insurance company had mercy on me and offered me $34,000 a year to push papers, press buttons, and execute repeatable processes that were designed by smart people with real skills.
The salary, thankfully, was just enough to cover my student loan payments. While at work, I spent most of my time trying to calculate how much money I would be making in the future, based on the average 2% salary increases my job offered. It was depressing. I realized that, even having my entire life confined to one room in my mother’s house, it would take me close to 25 years to pay off my student loans. The situation I found myself in was exactly what I created for myself, based directly on my own effort (or lack thereof) during college.
Fast forward one year. I was a stellar employee who put in long hours and pumped out a workload in line with my top peers. For my incredible efforts, I was awarded a 2.3% raise instead of the typical 2%. They REALLY valued me.
One beautiful spring afternoon, one of my cousins made an unexpected appearance at my house. He said “I have this amazing business opportunity to share with you. You can make a sh*t ton of money, and yes, it’s legal. I could tell you more about it now, but it will be even better if I show you. Come to my house next Wednesday at 7:30pm sharp.” Red flag. Whenever someone says “I can tell you about it now, but come to this meeting and see for yourself”, turn your body 180 degrees and RUN as fast as you can. Run like Forest Gump. Run like the wind.
I arrived at 7:25pm, dressed in my finest $50 suit. Along with my cousin, was a well-dressed gentleman in a $1,000 suit whose flashy bright red Infiniti G35 coupe was parked just outside. There was one thing I knew for certain. The MSRP on his car was more than my annual salary. Because he dressed well and drove a nice car, I naturally asked him what he did for a living, and he was more than happy to share that information with me, during the meeting, of course.
In a very engaging presentation, this smooth-talking gentleman went on to explain how he was a part of an amazing company that was expanding in the area, and that he was looking to grow his team. His company’s flagship product was Video E-Mail. I thought, what a novel idea! That will catch on! How cool would it be to be able to record your message (in 4 minutes or less) and not have to type anything?
There were even custom banners that you could place around your video to advertise products or direct people to your business website OR custom site so that they could join your team and help you to build an empire. These people thought of everything.
“All you have to do is recruit three people, and each of them recruits three people, and each of them recruits three people, and before you know it, you’ll have an army under you and you’ll be making $10,000 a month without having to do anything. All you have to do is pay $1000 for set up fees and $299 per month to “own your own business”. The hardest part is getting those first three people, and with a product this fantastic, that won’t be hard at all. By the way, it’s totally not a pyramid scheme….”
“When you get three people, have them duplicate your efforts by each getting three people, and so on and so forth. Before you know it, you’ll have an organization that is constantly duplicating itself, and you’ll get 2% of all of the volume that flows up.”
I don’t know about you guys, but 2% of a lot adds up to… well… a lot. You can clearly see that my business and financial logic was top notch.
“Just personally enroll three people to place in each of your legs so that you qualify for the compensation plan, then find one sales superstar who will go out and just kill it.”
No brainer. Where do I sign up?
I never thought to ask the presenter how much he made with the company, because asking people how much they make is personal information, right? I never asked to see a check, and I just assumed that if he could afford a $1,000 suit and drive a fancy red car, then the company must be paying him well.
I asked my cousin how much he made in his limited time with the company, and he said, “well, it doesn’t matter what I make. What you will make will depend on the effort you put in.” In a way, he was absolutely right. What I did not know at the time was that not all effort is rewarded equally in the world of Network Marketing.
I approached family and friends, and they all said “No”. Of course, I thought how could they not see the potential in this? Why was my ability to see the future so much better than everyone else’s?
As if that wasn’t delusional enough, another Red Flag was in who I approached for my “business”. My mother (who signed up for a short while just to appease me), my girlfriend (who dumped me over this nonsense), my brother (who flat out said “No”), and other relatives and friends who simply started to avoid me. One thing about these pie in the sky Network Marketing companies is that when you join one, it becomes all you talk about, and people get sick of that. They also get sick of you.
I think the biggest regret that I have from the whole experience is that I drove so many people away. Many people who I considered good friends have not talked to me in over 10 years because I treated them like “prospects” instead of like human beings.
Now, how does someone who makes $34,000 a year with over $120,000 in student loan debt finance $299 per month? You guessed it. A good ‘ole credit card. During the brainwashing process in which the compensation plan was explained, I had full expectation that I would be able to repeatedly cover that $299 monthly fee in no time.
What I soon found out was that each month, the money kept on going out, but none ever came back in. Now I had student loan debt AND credit card debt. I was a mess.
I had no sales skills, and quite frankly, even the best salespeople can only sustain that marketing structure for so long, before the bottom falls out. And when that happens, you can either A) put more pressure on your ‘downline’ to recruit, B) double down your efforts and feverishly find more suckers to fill in the gaps, or C) give up and find another company to get in ‘on the ground floor’.
I do not mean to ‘hate’ on Network Marketing, but in my personal experience, nothing good ever came out of it. Besides some harsh lessons learned, the only real tangible thing I gained from Network Marketing was debt.
Like a true ‘B-‘ student, I actually joined a couple of different Network Marketing companies after this one, because it takes me a few painful licks in order to adequately learn my lessons. Each company dangled the carrot of ‘financial freedom’ in front of me while offering several reasons why it would be superior to any Network Marketing company I may have tried before. But once you’ve tried one, you’ve tried them all. Trust me. I know from experience.
Some people (claim to) make millions of dollars in Network Marketing. They’ll tell you that the reason why most people fail in Network Marketing is simply because they give up. It’s one of those lines that keeps you in the game. It’s sinister.
When I was a part of those companies, I would vehemently defend why they were not pyramid schemes. Here are some of my favorites:
“Corporate America has a pyramid structure, except there is only one CEO. Here, everyone gets to be the CEO.”
“In a pyramid scheme, there are no real products. We have real products and services.”
“You can make waaaay more than the person who brought you in.”
Let’s be honest with ourselves. This is a business model that revolves around exponential recruitment. Theoretically, if EVERYONE decided to join, then at some point, there would be people who would have no one to recruit. They would have to wait for more babies to be born (and brainwashed). Am I making any sense here?
So yes, network marketing almost ruined my life. It left me broke, friendless, reminded me that I had no skills, and made me aware of how easy it is to get people who are in relatively desperate circumstances to give up even more of their money at the promise of riches.
Honestly, getting out and never looking back, provided me the first real sense of ‘Freedom’ that I had felt in years.