In this article we take a quick look at the network marketing industry heavyweight contenders. We review the features, advantages and disadvantages of the top 5 MLM companies based on their popularity. The measure used to determine the most popular is simply Internet search traffic volume. Although popularity may not necessarily be the best reason for any person to join, we thought it would be useful to know a little about these companies that are attracting the most attention in the online world.
The actual popularity of various network marketing companies is calculated by Mark D Worthan’s Best-MLM-Opportunities.com which uses Google search data. His rankings are based on Google Trends, which is a service from Google Labs that allows you to compare the number of searches for various keywords across time. The service can be used to determine the relative number of searches for various MLM companies. Here are the results from current data, along with a short overview of each company:
1. Amway – Amway began when its founders became distributors of Nutrilite vitamins in 1959. Amway is famous for “legitimizing” the network marketing industry in 1979, based on FTC’s ruling that the company did not qualify as a pyramid scheme. This was based on the finding that the Amway compensation system was based on product sales vs. recruiting payments. Amway reported sales of $8.4 billion in 2009. Amway North America was closed in the early 2000’s and most North American distributors became memebers of sister company Quixtar, but still continue to order Amway products. At that time, the average monthly earnings for “active” Independent Business Owners was disclosed to be $115. The main advantage of Amway is is broad name recognition in the industry. Its main disadvantage, as reported by many distributors, is its compensation plan which makes adequate earnings difficult for most IBOs.
2. Herbalife – Herbalife was founded in 1980 and achieved net sales if $2.3 billion in 2009. Over the years Herbalife has faced occasional legal challenges over the safety of its products, none of which has yet been upheld. The company reached settlement with the California Attorney General in 1985 for $850 million when charged with making inflated product claims. The company’s product formulations were changed to eliminate Ma Huang in 2002 when several states enacted laws to ban the use of ephedrine alkaloids. In 2007 a scientific study at the University Hospital of Bern Switzerland and Israeli hospitals found an association between consumption of Herbalife products and hepatitis. These items and other media and legal settlements seem to be the company’s main disadvantages.
3. Mary Kay – Mary Kay started in 1963 as a skin care and cosmetics products company, based initially on a tanner’s formulations. Worldwide revenues were $2.5 billion in 2009. Brand recognition is the main advantage of this company, which obviously appeals more to women than men. A significantly high annual turnover is experienced for both US (68.6%) and Canadian (85%) consultants. Earnings statistics reported for Canada were that of 29,675 consultants, only 1878 grossed more than $100, 276 of the 553 Sales Directors earned more than $17,471 and 15 of the 23 National Directors earned more than $100K, which suggests significant earnings are experienced by only a few top consultants.
4. Pampered Chef – Pampered Chef was founded in 1980, using in-home demonstrations to market cookwares via the party plan business model. Berkshire Hathaway Corporation acquired Pampered Chef in 2002. Earnings figures are unavailable.
5. Monavie – Monavie distributes a juice product made from blended fruit juice with main components of freeze-dried acai powder and puree. Monavie, founded in 2005, was recently ranked eighteenth on Inc. Magazine’s 500/5000 ranking of the fastest growing private companies in the US. Company claims of effectiveness of its key polyphenol antioxidants have been refuted by the FDA, Linus Pauling Institute, and European Food Safety Authority which state that such compounds have little or no value following digestion. A Newsweek article reported only 10% of distributors earned more than $100 per week and the 2008 rentention rate for new recruits was only 30%. Monavie reamains a very viable opportunity for signifant earnings despite these issues and highly popular #9 ranked on MLMInsider.com’s annual report. This may be due to its more up-to-date and potentially lucrative compensation plan and outstanding management, although a recent mlmwatchdog.com video reports a significantloss of interest due to compensation plan changes in the last year.
We don’t necessarily recommend or advise against joining any of these top 5 companies, but merely wanted to look at a few facts about them. The main point to be made here is how few people do any checking on company background, the founders and/or compensation plan before joining. If evaluating home business opportunities, it is advisable to get familiar with the industry, establish some selection criteria and make an informed, unemotional choice. One thing to note is that strong emotions often come into play in the “buying” process of selecting a home business opportunity and after the fact justification of decisions made emotionally is very common.
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Jim C Green