Written by Raisinberry
To be honest, the actual title of the USA Today article, dated Oct 10, 2016, said millenials “wanted”. That great 130 year old multi-level marketing giant, Avon, has spun off a private company called the North American Division. This division purports to be the New Avon, looking for fresh meat millenials to reboot their tired business model and image. The CEO, Sheri McCoy, believes separating New Avon from Avon Products is the best path to “unencumbered…profitability and growth” for both businesses. The article says that Cerberus Capital Management, (who took a “roughly 80% stake in the new company”) is one of those capital management firms that buys troubled companies with the hopes of striking it big for it’s investors. Apparently they are of the belief that MLM is a profitable enterprise…and it must be, because this three headed dog wouldn’t be involved otherwise! One of the secrets of MLM is in the profitability of the beginning…and of starting over! Clear the slate, reinvent, retool and reboot to create a “ground floor” opportunity to recruit millenials, in what Barnum would call a “sucker born every minute” proposition. Just get out before the empire collapses once again, eh Fluffy?
So let’s see. How “new” is it. Surely they must have retooled the message and the opportunity so that each recruit has a viable and profitable business, without all the false statements and hype for which Avon, Mary Kay, Herbalife, Amway and hundreds more, are famous. The article says, “If you are a millenial looking for cash to get rid of college debt…or even a Boomer looking to be your own boss..”, this is the bait that is supposed to lure you into “A BOSS LIFE…-the new campaign launching over social media and tv this week. Here’s the pitch ladies! See if you’ve heard this before:
“ …it’s focused on allowing a woman to be able to build their business around the flexibility of her own hours, the freedom to work full time, part time or somewhere in the middle, and to work whereever she wants.” Sounds like no more territories.
- “ a woman who was able to pay off her college loan selling beauty products.”
- “ a mother able to spend quality time with her children working from home”
- “ a husband and wife able to run their Avon based business together.”
And, it’s all about that residual income! Yippee!
Here’s where Mary Kay and New Avon seem to differ. Apparently Avon prefers to give a less exaggerated picture of income, while maintaining a certain level of deception. The representative interviewed for the article (who graduated 2 years ago) says she earned $16,000 a year part time, and her team has grown to 100. Having some trouble seeing that income, before expenses, paying off the typical student loan? I mean, you have to live, first. And remember, she has 100 in her downline! But hey, it is likely more accurate an income claim, even if they allow you to believe that’s her profit. And we all know it isn’t.
Interviewed for the USA Today article was a man named Neil Saunders, CEO of a retail research firm commenting on the Avon split and adding his observations on what is necessary for New Avon’s growth:
“A pitch for more representatives is vital…they need to get those numbers up because that’s the lifeblood of the business.” Commenting on the competition from Sephora and Ulta and others he states, “…they(women) don’t need Avon in the way they once did, so it’s a very difficult business model to make work.”
And that it is. But these MLM styled models do not tell that story to the public. The story they tell is all about potential. Possibility. They target the gullible and unsuspecting, the trusting and searching, the hard working and needy, and create a potential solution to a very real problem. Appealing to the needs of millenials, and depending on their lack of awareness regarding product based pyramids and the true numbers in MLM, recruiters project the future, the big returns, the cash and rewards that involvement in this ground floor, or retooled opportunity are supposed to bring. Very much like that capital investment firm, no doubt, promises.
As recruit after recruit gets sucked in and buys in with their own cash, ordering to meet qualifying benchmarks, active statuses or discount levels, those who know the game ride above the wave, skimming the profits, regardless of what happens to the recruits below. After all, it is VITAL that more representatives come on board, the lifeblood is sales to representatives, not sales to consumers. Since the MLM version of Avon was rebooted by Fluffy, they probably recognize the extremely profitable early returns of a MLM on the rise…as long as the targeted victims sign on…and work the recruiting scheme as planned.
Imagine how bad it would be if millenials actually, oh, I don’t know, were savvy internet users and perhaps, uh, found out, through, knowledgeable sources what a predatory model multi-level marketing really is? How 99% of participants lose money, and how those at the top who are used to bait your belief in the potential, are profiting off YOUR investment in product, not your profitability. That would be very bad. Bad for investors, bad for recruiters, because these schemes only work when the real story is hidden from those who are not familiar, who instead believe in the potential profit story-telling coming from the one who stands to make the most money from them falling for it. At least for a while, ’till the recruiting well dries up.
So what we have is an old dog, dressed up in a new look, using the same old tricks. You would think investment companies would steer clear of financial and product based pyramid schemes, and that a failing division using the MLM model would change the model. But that would be a new trick, and for the top dogs, the old ones worked so well.