Updated on 08.06.09

The Danger of Selling to Your Friends and Family

Trent Hamm

As I alluded to on Twitter a while back, a friend of mine started selling Amway recently. She sent me a long sales pitch via email, outlining the great products she was selling.

I flatly said “no” and deleted the email.

I didn’t even hesitate. Why? Over the years, many of my friends have pitched various direct sales products to me, my wife, and other family members. I’ve seen a lot of them – Amway, Mary Kay, Princess House, Pampered Chef, Tupperware, the list goes on and on.

I’m not criticizing the quality of the products they sell in any way – that’s an entirely separate issue, one that varies from product to product. What I do question is the true cost of the sale.

Here’s the scoop: if you’re looking to make money by having products pitched to and sold to your friends, you run the risk of damaging those friendships.

Quite often, you put the friends in the uncomfortable position of feeling obligated to buy an item that they don’t want in order to please you. You’re directly exchanging the value of your friendship for the small commission you get for your sale.

A close friend won’t mind too much. They’re likely to understand completely what you’re doing and will support you no matter what you choose.

But is this really something you want to ask of the people you care about the most? Do you want your best friend to feel obligated to buy something from you?

On the other hand, your more distant connections will likely not appreciate it nearly as much. The “cost” you’re asking from them – buying a product they don’t want at an exorbitant price – is often enough to seriously damage the relatively weak connection you have.

What about other people, ones you don’t have a connection with at all? Sure, they’re great guilt-free sales targets, but they’re very difficult sales targets. Unless you’re a professional salesperson, well-trained in convincing people to buy, you’ll not see much success with that avenue.

Here’s the honest truth. I’ve run the numbers on many different programs and listened to the amount of time people have invested in these programs. Almost always, unless they’ve got exceptional sales skills, their earnings for the time invested are significantly below minimum wage. Sometimes, when they’ve paid to participate, they’re actually at a net loss. For that money, they’ve had to essentially call in a favor from many of their friends as well.

In short, there’s a lot more value in working a minimum wage job than there is selling to your friends. You’re not alienating friends and you’re likely earning more per hour than you are from selling the products.

What if you’re asked to buy? My solution is simple. Unless it’s a really close friend who clearly needs the help, I’ll just say “no” to their invitation to buy their products or attend their “product party.” If it is a really close friend, I’ll have a talk with them about it. Why are they selling this product? How much can they actually make? What will they have to give up to make that amount? I’ll run through the numbers with them so they can see how much they’ll realistically earn in exchange for these negative trades on their friendships and relationships.

Many people want “easy entrepreneurship,” and when they see the numbers provided by programs like these, it’s easy to see a big profit. What they don’t see is how it taps out friendships and how it eats enough time that the profit per hour of effort is really pretty tiny.

Successful entrepreneurship is never easy and it doesn’t need to rely on the giving nature of your friends to succeed. It’s a much harder road, but it’s a sustainable road, one that your friends and family will be happy to see you succeed on.

Good luck.

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  1. George says:

    Usually the big money is not in selling the products, but in recruiting other people to sell the products.

  2. Brittany says:

    You leave out the possibility that people ENJOY this type of selling significantly more than a minimum wage job, and done right, can bring a lot more value to one’s life than flipping burgers at McDonalds. For example, my mother (who also works a full-time job) got into demonstrating/selling stamping supplies (for card-making, scrapbooking, etc.) a few years ago, and she just loves it to death. I agree that she usually puts so much work into in that she could make more money per-hour with a second “real” job, not only would that be difficult to fit in with my 3 younger siblings still to keep up with and her other job, but she also would not get the same satisfaction from filing papers or waiting tables as she does from getting to be creative/crafty and run her own business. Also, it has become not only her main hobby, but also a base of her social life (stamping parties tend to be like quilting bees). (Now, while she did invite her friends in the beginning (and some those friends have become regular customers) and did try to talk a few into hosting house parties, I do think she does a good job of not pressuring them to buy anything. I could see how if she was constantly badgering them to buy, this could be damaging–both to her friendships AND her business.)

    Also, even if someone is in it just to make money and not for the social/creative aspects like my mother, you contradict about everything I’ve seen on your website about doing work you love versus work you find unsatisfying with that statement about “there’s a lot more value in working a minimum wage job than there is selling to your friends.” If you only need an extra $50 bucks a month to build your emergency fund and you’re making that running your own mini-business that you enjoy running, how is there less “value” in that then making a little more an hour doing unsatisfying work for someone else?

    I agree you have to branch out from beyond your friend group, that pressuring friends to buy, and that asking people more than once to buy from you unless they show a lot of genuine interest can alienate friends. But I think your criticism, while a little valid, is missing some major points and contradicts some of the values you often espouse.

  3. Owen says:

    Thanks Trent. I am currently attempting to complete a rather long manuscript of the two years that I spent in network marketing. While the experience was invaluable, they were two terrible years where I had to look through the hundreds of phone numbers that I had, calling to arrange appointments with “friends”, and working till unearthly hours as a mark of my dedication. I froze myself out of the things I really wanted to do, but made myself believe that once I made the money I would have the time to enjoy myself once more.

    But what you said is absolutely right – the ties you have with your friends cannot be substituted. For people who want to join direct sales/network marketing/multi-level marketing (whatever it’s called), please think twice.

  4. Michael R. says:

    Brittany, I think you’re missing what he was saying about the income. Minimum wage is not even a living wage, and if you’re making less than minimum, you’re making no where near a living wage.

    If you don’t need the money, then sure do it for fun. But if you’re trying to make a living, you’re pretty much, with a few exceptions, getting involved in one of the lowest paying jobs there is.

  5. anne says:

    i feel the same way. but i usually go anyway!

    most of the time i don’t buy much- just something to give as a gift to someone else. i can’t remember if it was called lia sophia, but i bought a few necklaces for my daughters, and one for their grandmother. but i did feel like i was wasting $. and it’s all made in china, which i have a big problem w/.

    i did like the pampered chef- the things i bought are holding up very well, even though some of them were pricey. like i bought a two burner skillet, plus a square one w/ a handle that are both holding up a million times better than the price caphalon (did i spell tht right?) frying pan i have which was in the same price range.

    at the pampered chef party i spent over $300, but it’s been a few years, and we use all of the stuff that i bought, and i don’t feel like it was money badly spent. and i was happy to support my friend- i really was.

    my favorite was the body shop- i like the company’s ethics, and the products are great. i went to a party, then a few weeks later i hosted a party, but never pursued doing the home sales thing.

    years ago i did amway- what an awful experience. and i gave mary kay a try after that. another bad experience.

    if i were going to do it again, i’d do the body shop, if it’s still a program. but i don’t think i’m cut out for it. but i’ll go to another one of their parties very happily- i buy that stuff anyway, and it’s a good company.

  6. kim says:

    I enjoy going to the type of party Brittany describes above. An active party where I make something or pay for instruction as a group (a local artist does “learn to paint” home parties where everyone pays $40 to attend, then goes home with a nice piece of framed art that looks pretty darn good). I’m all for a stamp party or a scrap booking party. I have a blast making the page and I usually buy a little something. I figure that I’m paying for instruction or the use of the materials with my purchase and the experience with friends is wonderful. I hate being invited to “demonstration” parties. I don’t want to sit and look at cookware or makeup. I don’t want to be an audience to a live version of the home shopping network. I don’t want the expectation of a purchase. I don’t want to sell it and I don’t want to host it. I resent being obligated by relatives who sell and ask me to help them “fill in a show” or “round out an order”. If I want to buy something, I know where to find my rep. Target doesn’t stalk me so neither should amway or Home and Garden Party or Pampered Chef. It does damage relationships, I would imagine that people are too polite to make it known, but I do avoid the people I know are going to hound me about their shows.

  7. NMPatricia says:

    Amen to the damage to relationships. After I said no thank you to my closest friend (she was actually hustling on behalf of her son), I didn’t hear from her again basically. I somehow felt I had insulted her by not going along with what she wanted and then she had little time for me. Maybe I read WAY too much into it, but that is sure how it felt. And I felt really uncomfortable being put in the spot to say no.

  8. Trent, I am so glad you wrote this article! Over the last few years, these greedy “work from home” corporations have literally exploited millions of personal relationships all over the country.

    Every month one of our friends is drawn into the illusion that they are doing everyone a HUGE favor by promoting products that we would otherwise never buy, or could by cheaper (and of the same quality) from a local merchant or over the internet.

    Seriously, the business model of these companies is directly based on GUILT and the EXPLOITATION of a friend’s “not wanting to dissapoint” the seller.

    I’ll admit that in rare exceptions (ie Skin-So-Soft as a bug repellent)when these products actually do serve a purpose, but 99% of the clothes, kitchen products, adult novelties, make-up, etc.) can be purchased more wisely a different way.

    I know CABI (the women’s clothing line) gives people who host the “party” a 50% discount on 1 item for every few hundred dollars in sales is turned during the event.

    When they are charging $80 for a blouse that cost them $2.00 to make and ship from some third world county, they are still making a killing off the very person that is “renting” them retail space.

    In theory, this may be one of the greatest business models ever concieved! Morally, it is probably one of the WORST!

    Sorry to all of you people with big dreams of “working from home”, but as Trent mentioned, these are just dreams!

    The chances of you driving off into the sunset in your Pink Cadillac without exploiting some of your closed personal relationships is neglible (at best).

  9. Noadi says:

    I’m at a level of success with my business that I’m happy with right now for something I started a year ago. However one of my rules is that I never try to sell to my friends or family. It’s just rude, if they want to take a look at my work and buy something that’s great but I won’t pitch to them. The few extra sales I could get from them isn’t worth the cost of making them feel obligated to buy from me.

    I’ve had a few people ask if I do home parties and the answer is always no. Having been to home parties for Mary Kay and the like I really don’t like the pressure to buy involved. My online store or a craft show people feel okay walking away.

    It’s possible to work from home. I do it and it’s great, but I got lucky. I have a talent that I can use to produce products in my home and with the power of the internet sell from home as well. However easy it is not, it’s a ton of work. While I can make my own hours and get up at noon from the time I get up until I go to bed at 3-4am, I’m working.

  10. Brittany says:

    I agree that there is a wrong way to start selling products, but I think these overt criticisms are ignoring the fact that there is also occasionally a RIGHT way. However, my major problem in the article came from the statement about “value.” In response to Michael R., no where in his entire post did Trent allude that this was in relation to people trying to live solely off the income from selling.

    Claiming that it’s almost impossible to support yourself on this “job” completely misses the point that basically no one starts selling these kinds of things in order to make a living. It’s not the kind of job. Every single person I know who does or got into this kind of selling does it to make a little money on the side. I know one person who has been able to make a successful business out of it, but most people want a little extra income to help make ends meet. If they can find something that they can do themselves that enjoy more than mindless labor for someone else, why is that less valuable even if it pays a little less? I was trying to point out when it comes to the “value” of running your own mini-business versus the “value” of minimum wage labor, leaving out the personal value one gains from each of those activities leaves out a MAJOR consideration, especially in light of Trent’s normal statements about the value of an activity being more than just the bottom line.

    As someone who has lived (quite comfortably, if frugally, Michael, but that’s besides the point) on or just barely above minimum wage for several years, until I started bartending and getting tips, the highest-paying job I had was as a casher at Staples, $1.50 over minimum wage. It was also the most miserable, soul-draining, life-sapping job I’ve ever had, and I worked exactly my scheduled hours hated almost every minute of it. Contrast that to my summer as a camp counselor, making a decent weekly salary but close to $2.25/hour if you divided it by the number of hours I was actually working, or my current Americorps position, where I make a decent salary but again less than minimum wage with you calculate out those 50-60 hour weeks sometimes. These are some of the most personally satisfying jobs I’ve ever had, and I wouldn’t trade them for $150/hour over minimum wage. If someone finds running their own mini-business more personally satisfying than minimum wage labor (and are doing it the “right” way in regards to personal relationships), I continue to fail see how there would possibly be more value in minimum wage labor. If someone could explain to me how Trent’s claim about value in this article doesn’t fly in the face of everything else he has advocated on this site (again, assuming a “right” way of dealing with this in regards to friends and family, which I think is possible), I would appreciate it.

  11. Arthi says:

    Well said Trent.

    My parents have bought stuff they rarely used before throwing away, from such friends.

    The friend would be someone we are unwilling to lose by saying no.

    I support your idea of saying no. The person making the sales pitch should not have put our friendship on the line, in the first place, would be more responsible than me if the friendship is strained.

  12. This is soooooo relevant. I’ve been approached by family and friends in sales postions (almost always new to the field) and it’s very uncomfortable. I’ve been in sales much of my career as well, and found it can work really well once you’re established and family and friends come to you. Even then you have to be careful that you apprise them of the pitfalls of what can happen.

    Much of the problem is that in many sales organizations and programs new sales people are encouraged to sell to family and friends in order to get started. The problem for a lot of would be sales people is that once they’ve sold to all of their family and friends, their sales career is over.

    As Trent said, selling to a cold audience is a completely different game, and if you can’t sell to strangers, you can’t sell.

  13. kristine says:


    I read somewhere, probably in Miss Manners, or Etiquettehell.com, a good barometer for these kinds of things.

    If you have had me to your home socially, then I will entertain the notion of attending a sales party, given my disposable income situation, feeling of largesse, or desire to become better friends with that person or someone else in attendance. (A rarity, in this context.)

    If you have never had me to your home as a friend, than I would never entertain being invited to your home purely as a customer with a faux social pretext. I would consider the request vulgar, and it would probably abort all future attempts to deepen the friendship.

    Besides, it reeks of desperation, and taking advantage.

    Bravo, Trent for exposing the numbers as well. I long suspected such. I wold be more embarrassed to hawk to friends than to be seen behind the counter at Walmart.

  14. Derek Cormier says:

    I completely concur. There was an article about MLM’s not too long ago that stated one of the dangers of getting involved with these types of business ventures is the undue pressure and awkwardness you place on family and friends. If I chose not to buy the product, then it is viewed as a direct insult to the person selling the product; it is even worse if asked to “join up” to also sell products because it is the greatest opportunity in the history of mankind.

    If I say no to that, I am viewed as an outsider and an idiot; most MLM’s encourage this type of thinking.

  15. Jo says:

    We recently lost a dear friendship. He is a real estate agent who pushed spending money that we were not comfortable spending. It got to the point where we couldn’t talk to him without him criticizing how we were selling our current home, or pushing us to take risks, and criticizing us when we were being conservative with our money. I wish we had used another realtor and kept our friendship.

  16. Tammy says:

    I have several family members who are into MLM. Each one of them tells me that there is “no pressure” when they ask me to buy something or host a party, but I still feel pressured anyway. I feel guilty for constantly saying no, so I usually end up buying something that I don’t really need. The worst is when they try to pressure me to having a party because then I will be doing the same things to my friends that my family members are doing to me.

  17. Kathleen says:

    It’s important to consider the historical context for some companies such as Avon and Tupperware. These firms were founded at a time when women working outside the home was an alien concept and they provided a means for women (their target demographic for both customers and salespeople) to control their own hours and productivity while still fulfilling their traditional roles as wives and mothers.

    In an economy where jobs of all kinds are difficult to obtain, it seems short-sighted to flatly condemn any avenue of earning. Those proverbial minimum wage jobs may not provide the flexibility a person needs and in fact might not exist at all.

    Having said that, I agree that balancing relationships with sales pitches is important and both the salesperson and the potential customer have to be respectful of each other’s boundaries.

  18. friend says:

    And if you buy once, you will likely be asked to buy again. It’s not just one product one time.

  19. anne says:

    i just found that the body shop at home doesn’t exist in the us anymore.

    isn’t that crazy? the only one i would really be excited about going to or having another party at my house for is the only one i can’t have.

    oh well.

    and kristine #12- you’re so right- this is perfect-

    “If you have had me to your home socially, then I will entertain the notion of attending a sales party, given my disposable income situation, feeling of largesse, or desire to become better friends with that person or someone else in attendance. (A rarity, in this context.)

    If you have never had me to your home as a friend, than I would never entertain being invited to your home purely as a customer with a faux social pretext. I would consider the request vulgar, and it would probably abort all future attempts to deepen the friendship.”

    excellent point- it really is. i think if they wouldn’t invite me to their or their kid’s wedding, then they shouldn’t invite me to their sales party.

  20. Marty C. says:

    Thank you for writing this article. A couple of family members that are having a rough time have been co-opted into these schemes. It may seem like a legit business to them, but to the folks who feel pressured to buy overpriced merchandise to help the person out, it’s like forking over cash to a middleman so a brother/sister/nephew doesn’t have to ask for money directly.

    I’ll help family directly but not when a marketer gets in the equation and takes the majority of the money.

  21. Amateur says:

    This reminds me of a friend whose relative was doing some MLM crap for financial services because that relative thought it was the path to financial freedom as the pitches would say it. My friend was not into it and did not appreciate being constantly asked during family gatherings about the service, as his relative kept pressing for more leads.

    The relative I think burned more than a year on the training seminars, team meetings, and all that other faux business building crap and finally gave up when she realized it was not pulling in real money. All I can think is what a waste of dry cleaning to get ready for those events. For the financial services pyramid schemes, I get the impression they target really impressionable and stubbornly self obsessed people to join that rally, to make them think they can shortcut all the arduous work to become wealthy and “independent.”

    I also have a relative somewhat doing something similar in a less pressing manner for some side money. I haven’t participated because I just don’t want to process my product orders through a third party site when I want to purchase from a first party retailer – I’m not comfortable passing all that info.

    The above comment is right, if you can’t sell to strangers, you can’t sell period. Your family and friends circle may grow but after you’ve exhausted them you’ll need to target new friends’ social circles making you that person who only talks to people to sell them stuff and everyone will avoid like a plague.

  22. Damester says:

    This is a tough one, because the problem can pop up from the most unlikely sources.

    Over the years, I’ve known people who were trying to supplement their income with various types of party (sex toys, cooking items, spices, etc.) gatherings at their home (They had children and this is what worked for them.)

    When I was legitimately interested in a product, I went and if I saw something I could use, I bought it.

    These women were all struggeling and none of the stuff was marked up in price. In fact, some were lower given the quality.

    Then, a retired friend, who used to work on Wall Street and made very good money. A frugal person by nature, but who may have lost a significant portion of their post-retirement income due to the stuff happening in the market these past few years, decided to sign up for one of these energy alternative companies.

    This low-key woman pitched me like crazy based not only on the product for me, but for my ability to sell to others–something I really did not want to do. I was polite but firm, and she kept sending me emails with information.

    I repeatedly told her: I do not have enough friends to sell to who might take advantage of this–whereupon she suggested I sell to the neighbors in my building, something she should have already known I would never do. I politely shut her down on that but she has been cool to me since then.

    She legitimately believes in the product/service and in the opportunity, but she just, despite her intelligence, does not get that this is something I don’t want to do, even though I, too, need money.

    I’m not someone who would ever try to sell to strangers either, which is where, I think you do have to go…even though all of these type of things never emphasize this.

    Perhaps my lack of desire comes from almost 12 years of Catholic school where every year was filled with having to sell stuff for the school. Hated doing it, and when older, hated being pressured to buy by neighbors and friends on behalf of their kids. Talk about emotional blackmail, because that is exactly what this is!

  23. Great article.
    It’s amazing how many people who rarely have 2 words to say suddenly want to show their products or an amazing once in a lifetime opportunity.

  24. Abby says:

    I don’t know. My kids’ babysitter – a lovely woman, with grown kids of her own – recently hosted a party selling ceramics. I didn’t go (no sitter!), but I did buy a few things. Our sitter never, ever lets us tip, routinely insists on not counting the 15 minutes early she arrives, says yes even on short notice and takes an undeniable interest and joy in our kids. Buying a few things (that we could afford and use) seemed like a nice way to pay back someone who really wouldn’t accept any other form of compensation.

    Of course, it would’ve been less awkward to say no to her, too – so maybe that’s why I happily said yes. And, of course, she doesn’t think it is a business – so odds are it will be months, if not years, before we’re asked again.

    I actually find it more awkward to deal with a friend who has opened a bricks’n’mortar store that isn’t doing well. I don’t have much interest in buying what she sells (new books), but because her store is in the neighborhood, I feel obligated. I mean – I walk right by, and she’s a friend. Maybe that’s wimpy of me, but there it is.

  25. Brenda says:

    I sold both Mary Kay and Amway. They are both reliable companies which provide high quality products. Many of my Mary Kay clients approached me before I had a chance to contact them.
    People clean things and they wear make-up. What’s so horrible about getting to try these products before you buy them or not? Since I quit selling Mary Kay I miss getting the little sample packets so I can test the color of the foundation to see if it’s really right for me. I have five bottles of drugstore brand foundations, and I can’t return them like you can return your Mary Kay products.
    I really doubt that your good friends care for your analysis of their business venture. If you aren’t willing to try their product, just say so. Not everyone who tried it bought Mary Kay from me, but we always had a great time experimenting with different things and spending time together.
    You may consider my comments negative, but your response to your friends is negative as well. People who start up home businesses are counseled on how to overcome those types of reactions from their friends. I found that my best friends were not my best customers—my best customers were the people who used the product because of it’s quality, and then they became my friends, too.

  26. Paul says:

    I wonder if you would still be earning less selling products than working a minimum wage job after you factor in taxes?

  27. Someone once told me never to do business with friends or family. I can’t begin to tell you the number of stories I heard where money was the driving cause of a problem between two people. The separation of family/friends and business are words to live by.

  28. Gwen says:

    I buy Mary Kay products, but I usually switch Mary Kay distributors every time. I am so sick of the incessant phone calls “checking up” on me and then sending me catalogs! Trent really hit the nail on the head by saying high-pressure direct selling tactics damage relationships, even the most informal of relationships.

  29. Sara says:

    Ugh, I totally agree about these MLM companies. And I’m glad you wrote this, because I think people who are trying to get out of debt may be vulnerable to trying these things in hopes of extra money. I’ve read some horror stories about Amway; it seems to be one of the worst ones out there.

    I have never gone to these product parties and I never will. There are people at work who put up fliers in the ladies’ room advertising their Lia Sophia or Tupperware parties, send e-mails to everyone they know at the company, and even ask male coworkers to take catalogs home to their wives. I think it’s in really poor taste to do this stuff at your real job!

  30. The real money in MLM is being the first to start one, and collecting the upfront entry fees.

    There’s not much of a “career” for anyone coming in after that.

  31. Fred says:

    I would add to the list unsolicited emails from coworkers to contribute to their charitable cause.

    How can you decline without being a cad? Especially when you really did give at the office. A small donation might feel worse than no donation.

    What bothers me the most is when they don’t have the courtesy to at least give me a heads-up the request is coming.

  32. Rosa says:

    MLM sales are like any other kind of sales – a good product practically sells itself. A mediocre product takes some talent (and a talented salesperson is following legitimate leads, not pushing to their friends and family). A crappy product takes some sort of hook – and a salesperson who’s bought into it hook, line, and sinker.

    That’s what makes the MLM acquaintances so annoying – they’re pushing not just product but belief, and the less founded the belief the more pushing it takes for them to hold onto it.

    (My mom sold Amway products for a while when I was a kid. She never made much money at it, but the stuff people actually wanted, mostly cleaning products, people were calling her back to buy years later, when she was working at her profession again.)

  33. Jessica says:

    I don’t mind fliers or brochures, but I really hate the invitation to a “party”. I especially find it awkward when the “hostess” is a coworker, more so than a friend. At least I enjoy spending time with a friend! I reject 99% of invites…yuck.

  34. Gena says:

    Anne (#4), I think you’re thinking of “Silpada,” the silver jewelry “empire.” Someone I knew years and years ago and haven’t seen (or heard from) since is now big into selling this stuff and is crazy with trying to recruit people. She’s on Facebook essentially pimping it to everyone we ever went to grade school or high school with. It makes her happy, and more power to her for that, but jeez! How many times does a person have to say “thanks but no thanks” before the message is received? I hate this kind of stuff and all of its ilk–Amway, Landmark Forum, Pampered Chef, etc.

  35. Terry Lange says:

    Good article. My wife gets “pitched” by different ladies in our church who are hawking either Pampered Chef, or some other network marketing gimmick. I always tell her to not to buy anything. What gets me is that these people are not necessarily concerned about their relationship/friendship, it seems like they are more interested in making a quick buck rather than preserving & maintaining the relationship/friendship.

  36. Todd says:

    Thank you for writing this Trent! A college friend I hadn’t heard from for years recently called me to say “hi,” and to tell me he’d just gotten a job with Verizon. It was great to hear from him. Then he started telling me how great Verizon service was and asked me how much I was paying for my current plan. The sales pitch went on for ten minutes and he became more and more insistent. I told him I was happy with my current plan and hung up. I am so hurt by this.

    If he’d called me and simply asked for money I would feel less used than I did after realizing he was using me for a commission.

  37. Todd says:

    While we’re at it, could we include school fundraisers as well. These companies are even worse than the home party companies. The send cute little children out among the neighbors, relatives, and parents’ co-workers and friends. No one wants to tell a kid that they don’t want to support the kid’s school or club or band. Sometimes the parents also seem to expect that you will buy.

    Again, if someone just came around and said, “My band is raising money for a trip. Would you contribute $10 to it?” I’d be more likely to say yes, than if I get to “buy” a $10 candle or popcorn tin or trinket, knowing that only $5 or less will actually go to the organization and the rest will go to some sleazy company.

    Let’s keep our social activities free of commercial activity. Soon we’ll all be hosting parties “sponsored by General Motors” where we have to go out and test drive one of the cars out front. Isn’t it better to feel like our friends invite us to dinner because they actually like spending time with us?

  38. jan says:

    Excellent post. I know lots of people who think they are making money at these schemes but the bottom line is they are really not. When I was younger I did Amway and was a great salesman (never sold to friends and family) but walked away when I saw through it. It was a con and I didn’t need it.

  39. kristine says:

    #28, Todd,

    You are so right! When fundraisers rear their ugly head at my child’s school, I write a donation check in lieu of the embarrassment of asking family members to buy overpriced garbage they do not need, so my child’s school gets a small portion of it. I know the school will 100 percent this way.

    I do not buy girl scout cookies for the same reason. The local troop makes diddly from it. Better to write a donation check, if you have a loved one or neighbor’s child in a troop.

  40. Susanne says:

    I think it depends on the product and how many people you know are doing the same thing. I was recently invited to a Pampered Chef party and went because 1) I wanted to meet new people and 2) I was genuinely looking for some quality bakeware. However, if multiple friends were selling these products, I wouldn’t buy them just to be nice.

  41. anne says:

    kristine and todd (28 & 30) i like school fundraisers- i do!

    years ago a friend of mine told me the wrapping paper was good, and she was right- it really is.

    and i like magazines, but i feel guilty splurging on them, so i wait for the fundraisers, and then i buy the magazines. and i buy a few extras to give as gifts- i can give the certificate, then they can choose the subscription.

    if it’s a close friend’s kid, and there’s nothing i want in their catalog, then i give a small check and don’t buy anything.

    years ago i used to sell girl scout cookies door to door, before they started discouraging it. i was so very shy, and the neighborhood was full of girl scouts, and i almost didn’t go to one house because i saw one of my friends walking back up the driveway. but she told me to go there- they wouldn’t buy from her because they were waiting for me to come.

    i’ll always remember that. and i always buy girl scout cookies. and popcorn and first aid kits form boy scouts. and my xmas wreath from the kids at church. i can’t help it.

  42. spaces says:

    Personally, I don’t really care what someone makes. If they make $2 an hour and are happy, more power to them. Money is not the key to happiness.


    It’s just trashy to try to sell to your friends.

    And I think it’s bordering on trashy to sell your kids’ fundraising crap to your colleagues. If the schools need money for equipment, textbooks, etc., then let’s meet up formally and figure out where some savings could be had, or where taxes should be raised. That’s much more honest and no middling company profits from the schools’ funding woes.

    If its for extracirricular stuff, then that’s not appropriate for taxpayers, fine, use fundraisers. I still prefer the more direct route — car washes, rummage sales — because those don’t have that middle man company, profiting off the kids efforts.

  43. I have been getting my feet wet recently selling on Amazon, and have not even thought of asking a family member to buy anything.

    However, I have sold quite a few things to co-workers, but only because I have been able to save them a good deal of money, so it has turned out to improve our relationship quite a bit.

    I am with you 100% though on this. In the past, when asked to attend these “product parties” it makes me want to avoid my friend/family member, whoever, until he/she gets the point to leave me alone.

    And the damage can easily become worse if they don’t get the point.

  44. deRuiter says:

    Great Post Trent! There are certain ways of selling which pretty much guarantee the buyer won’t get good value for his/her money: buying from multi level marketers, buying from QVC, buying from people who ring your doorbell peddling things, cold callers on the phone peddling funeral plots, bibles, vinyl siding, gold futures, penny stocks, buying ANYTHING through TV infomercials. On the other hand, with careful shopping, you will get an excellent bang for your buck at yard sales, estate sales, flea markets, thrift shops, wholesale warehouses and big box stores like Costco, BJs, Walmart, Sam’s Club. When approached to buy some overpriced junk you don’t need or want, “Just say no.” It’s easier to decline today, get a pained look on your face (mentally picture yourself in gastric distress!) and say, “In this economy, I CAN’T.” AND THEN STOP SPEAKING. Don’t continue to babble on about why you’ve said no. Be polite, firm, refuse kindly but quickly. If you love selling, get a real job peddling cosmetics at the mall, cars at a dealership, or set up a booth at a flea market. People who buy from you at these locations really want your stuff, they seek you out to do business. Anytime someone button holes you at a party, in the street, at a friend’s home, and tries to sell you something, YOU DON’T NEED IT, YOU DON’T WANT IT, AND IT WILL WASTE YOUR MONEY.

  45. Jane says:

    A few years ago I had a woman at church call me and tell me that she wanted to “treat” me and give me a makeover in my home (courtesy of Mary Kay, of course). I told her I never wear makeup and that I wouldn’t buy anything. But she still insisted, which really made me uncomfortable. Then she pulled out the big guns – “My husband is in seminary and this is how we can support our family (including three kids).” I still didn’t accept it (because really, I don’t wear makeup EVER), but I thought this was really manipulative. Basically she was saying “buy from me, so my family can eat….”

    I dread any sort of invitation.

  46. Lenore says:

    Let’s call these MLM companies what they really are: CULTS. Websites dedicated to exposing dangerous cults almost always list Amway. They also name some religious groups, even offshoots of major faiths.

    I am just as offended by co-workers or acquaintances asking me to attend their church as I am by the quasi-social salespitch of an Avon representative. The bold “NO SOLICITORS” sign on my front door has served me well very. It keeps most door-to-door sellers away, even Mormons and Jehovah’s Witnesses.

    It’s awkward to say no to people who genuinely believe in what they’re promoting, but it’s worse to be stuck with unwanted merchandise or social obligations. Luckily excuses based on lack of money, time or space are hard to disprove and generally accepted. I wish more workplaces would include a “no soliciting” clause in employee handbooks.

  47. missy says:

    It doesn’t matter if is MLM or not. In my small business, not MLM, I have had several friends sign up for my service and then decide they can’t pay for it. They have come to me with promises of payment in 2 months, 3 months, ect. Bottom line-none ever paid me. The friendship was lost in the end due to the fact they were untruthful, ashamed or whatever. My advice-say no! If the friendship is lost, it probably was going to be anyway.

  48. peight says:

    I could not agree more on this subject! I remember back about two decades ago, when my family was living in upstate New Hampshire we had a neighbor who was a car dealer at the local dealership. My parents were very good friends with these neighbors for more than 7 years and when my father was looking to purchase a new truck he eagerly went to this local dealership and started working through our neighbor. Soon after, my father found that he could easily purchase the same vehicle for far less just by going over the border into Maine. Our neighbor was so outraged by this that he and my father never spoke again. We continued to live there for more than ten years.

    It is sad, but true, that in many cases, when someone who is your friend, becomes your salesperson – often times if you do not cut the deal with them, whether or not it is right for you, they usually don’t take it as business-as-usual. It is taken personally.

    I try my hardest to never deal with friends in this capacity.

  49. I truly dislike being invited to a friend’s home for a “party” whose purpose is to pitch some product. A couple of my friends have these events every now and then; I’ve learned always to have an excuse not to go.

    Usually the women who are selling things are not friends of the hostess. They’re just some saleslady who has glommed onto her one way or another. I find it extremely offensive to be told that if I don’t buy this or that piece of junk, the hostess won’t get the “prize” she was offered in exchange for subjecting her friends to an hours-long sales pitch.

    BTW: about the “no solicitors” sign on the door… One hawker told me that people who use these do so because they have a hard time saying “no” to people who come to the door, and so those signs tell the sales people that this is a good place to pitch the merchandise. It’s better, he said, simply not to answer the door to strangers. Which is good advice, anyway.

  50. Jane says:

    @Funny About Money
    We have several friends who have a “no solicitors” sign on their door, and they claim success. Once in a while, they will still get someone who knocks anyway, but overall the number of door to door salesman is down.

    Our solution is that we have a broken doorbell. I figure most people I want to talk to either know it’s broken and knock, or I am expecting them anyway and leave the door open for them. You’d be surprised at the number of solicitors that don’t knock, even after they press the doorbell and don’t actually hear a bell.

    I totally agree with everyone about school fundraisers. My son is still a baby, but I hope to just write a check every time there’s a fundraiser rather than subject him (or my husband and I as it usually turns out) and our friends to unwanted merchandise. Having said that, I happily order Girl Scout Cookies, because well, I just love the cookies.

  51. shalom says:

    Amen on the school fundraisers! I have a very well paid coworker whose 2 kids go to a local private school. Twice every year this coworker brings around fundraiser sale booklets (cookie dough, knick-knacks, gift wrap, fruit) for this school. I have to tell you, this ticks me off. I see these fundraisers as essentially subsidizing the tuition she pays to send her kids to a private school instead of our (terrific) public schools. I do not contribute to those fundraisers.

    For our own child, we do like Kristine (#30) above and cut a check, rather than sell to friends and coworkers.

    I don’t think all fundraisers are evil, though. The local high school band performs & competes nationally a number of times a year, and they go through serious money. We participate happily in 2 fundraisers — they sell Florida citrus each winter at a fair price; and they sell a discount card good at local businesses. The discount card is so good that it “pays for itself” within a couple of months, and it’s good all year.

  52. shalom says:

    Amen on the school fundraisers! I have a very well paid coworker whose 2 kids go to a local private school. Twice every year this coworker brings around fundraiser sale booklets (cookie dough, knick-knacks, gift wrap, fruit) for this school. I have to tell you, this ticks me off. I see these fundraisers as essentially subsidizing the tuition she pays to send her kids to a private school instead of our (terrific) public schools. I do not contribute to those fundraisers.

    For our own child, we do like Kristine (#30) above and cut a check, rather than sell to friends and coworkers.

    I don’t think all fundraisers are evil, though. The local high school band performs & competes nationally a number of times a year, and they go through serious money. We participate happily in 2 fundraisers — they sell Florida citrus each winter at a fair price; and they sell a discount card good at local businesses. The discount card is so good that it “pays for itself” within a couple of months, and it’s good all year.

  53. You know, if we really care about our friends and family who get caught up in these sales schemes, we really could help them by not buying what they’re selling, which will speed their exit out of the MLM, and hopefully into something that actually works.

    Not to be ugly here, but I’ve prepared tax returns for more MLM people than I can count, and the real nature of the programs are pretty obvious when you see the numbers. Of course I realize too that Trent isn’t just writing about people who sell through MLM, but this is where a lot are concentrated.

  54. A Dawn says:

    I think successful entrepreneurship begins with the help of those who are really is close to us. Families and friends became our first customers on the fact that they know why we got in that situation in the first place. It think that we’re not obliging them but asking for their support and i think they feel the same way about it. they can decline or refuse to buy without damaging our relationship with them because we know and will understand whatever reason they might come up. and i think it’s better to go in business (even small ones) than working in a minimum wage job. if you got the guts to do it why not don’t be afraid to gamble to put up a small business

  55. NYC reader says:

    So-called “multilevel marketing” (MLM) programs are a form of Ponzi scheme. There’s money for the first person in, who gets paid for the additional “levels” of suckers under them who buy a load of supplies to get started, and they get a cut of the lower levels’ commissions after that. The lower levels get stuck.

    Stay away. SCAM.

    I also resent parents who sell the overpriced crap for their kids’ schools, church, youth groups, etc. As several others have noted, the sponsoring organization gets a pittance of the purchase price. If the kids are supposed to learn about dealing with people and selling, they’re not getting this life experience when the parents sell the items. And lastly, it’s an imposition on and exploitation of the relationships.

    Many years ago I was a supervisor with about 15-20 employees under me. Most of my staff sold this stuff for their kids and churches. (Unfortunately there were no rules against soliciting on company property.) I couldn’t buy Girl Scout cookies from one and not another, or fundraising crap from one employee and not the other.

    My solution was to buy between $5 and $10 worth of edible stuff from each employee who solicited. The edible items went next to the coffee pot for all to enjoy. I usually bought doughnuts or bagels for the staff at least once a week anyway, so this was within my budget.

  56. Kathy says:

    Thank you for this post.

    I have been invited to countless of these types of parties and have been hit up to buy overpriced items for a school fundraisers. I almost always say no. It doesn’t matter if the person says there is no pressure to buy something. There is ALWAYS pressure to buy something! Most of the time, I can’t justify spending what they want for things like Pampered Chef or Lia Sophia or even the school fundraiser wrapping paper because I can get it for less at the store.

    Now some might come in here and argue about the quality of Pampered Chef products, and I am not going to dispute the quality, but I can go to a kitchen store and buy the same thing or equivalent and I don’t have to go to a party or feel pressured to buy it in the store.

    My employer has just changed their policy on solicitation on company grounds. It’s no longer allowed and for that, I am thankful.

  57. Sharon says:

    Re: Tupperware. I don’t agree with lumping this in with the “useless junk” category. When we married 31 years ago, we got a nice set. I’m still using all of them, and when something dies, it is replaced free. Pampered Chef stuff is good quality, too.

    My brother-in-law decided to sell some crap from a company with a lot of pseudo-science about what a great nutritional product it is. We did some research, spoke with the folks making it and called their bluff. Then we repeatedly suggested to BIL that he sell an alternative product that is legit. But no, this other crap was from a Good Christian. I don’t know how much money he lost on it.

    I used to sell Girl Scout cookies, too, but when they went over $3 a box, I just started giving every troop money instead. They did much better that way.

  58. Randy says:

    Several years ago a neighbor who was new to insurance asked if he could do a practice interview with me. I reluctantly agreed. He did the interview during regular business hours (I work from home) and interrupted my day. He acted honestly offended when I refused to answer some basic financial questions that I considered personal. “How,” he asked, “can I estimate your insurance needs without the information?” I told him I had plenty of insurance and didn’t ask him to do the interview. He exited the insurance sales racket a few months later.

    Re: the sales parties – I’ve always wanted to go to one of those naughty negligee parties, but my wife won’t let me go.

    Re: schools, etc fund raisers – if a kid comes door-to-door, I’m going to buy something. Usually the cheapest thing on the list as the prices are way overboard. If it’s a cute girl under 10, I’ll buy twice as much — I’m just a sucker. The little girl next door always came to my house frist for girl scout cookies. Unfortunately, she’s outgrown them now.

  59. Jen says:

    I hate when ANYONE tries to sell me anything, even the cute kids selling for a school fundraiser. I would always buy something from the kids though, until two years ago. I placed an order for a box of chocolates to give as a gift. I wrote a check for payment then and there, then waited… and waited… and waited. The neighborhood girl never delivered the chocolates to me, even though the check was processed by my bank.

    She did me a favor actually, because now I will never buy a product I don’t need, even from a child. I ignore all knocks on my door unless I’m expecting someone, or can tell who it is by a car parked out front. As someone mentioned above, it’s safer that way.

  60. Kevin says:

    @A Dawn (#42)

    Thanks for copying-and-pasting the marketing propaganda directly from the Amway training material, but the truth is that in a REAL business, your friends and family AREN’T your “first customers.” Your first customers are people who actively seek you out and actually want your product.

    And you aren’t asking for their “support” – you’re asking for their money. Let’s call a spade a spade.

    It actually makes me angry, the way these MLM scams brainwash their victims, convincing them that they’re actually entrepreneurs, starting a business, or other such nonsense. You’re not involved in a “small business,” you’re just a salesman for a multi-million dollar enterprise that existed long before you ever heard of it. The 5% at the top exploit the other 95% by filling their head with ridiculous notions of “passive income.”

    You didn’t start a small business – you didn’t start squat! You paid a membership fee for a DVD and some brochures, and now you’re working for below minimum wage, exploiting your relationships with friends and family (and doing permanent damage, I might add). You can’t deduct any of your expenses, you don’t have insurance, a license, or any permits, you don’t collect sales tax – YOU’RE NOT A REAL BUSINESS! You’re just a horribly underpaid sales drone!

    Stop harassing your friends and family. All MLMs are scams. The only reason anyone would ever buy anything from you is because they feel bad for you, or are too embarassed to say “no.” Taking advantage of those feelings is NOT ethical. It’s opportunistic.

    If you join an MLM scam, you will lose friends.

  61. kristine says:

    Oh- I realize I do participate in one kind of fundraiser: the cupcakes at school events! (I both make them, and buy them) Not only do the kids appreciate it, but a buck for the occasional super-sweet tasty treat homemade cupcake is always worth it!

    And I will go to a fundraising car wash, as it means the kids want something enough to physically labor for it. I like the work-ethic.

  62. Melina D. says:

    Wow – you’ve clearly hit a nerve, Trent, with this post, just judging by the number and vehemence of the replies. Reading them, I realize how insidious this type of thing has become – we’re all so used to it, we no longer see it clearly. “Oh, another Tupperware party. Guess I have to go.” “Oh, sure, I’ll buy your Avon products. I know you need the money.” “Do you really think I could support myself selling Shaklee? Hmm – maybe I’ll try it.”

    The comment that resonated the most with me:

    “If you have never had me to your home as a friend, than I would never entertain being invited to your home purely as a customer with a faux social pretext. I would consider the request vulgar, and it would probably abort all future attempts to deepen the friendship.” (kristine)

    This brings back some bad memories of being invited to the homes of people who had NEVER asked me over before (despite being invited to my home socially more than once) and how offended I was to be invited simply to fill out the numbers at some kind of sales party. And yet I went!! Possibly feeling guilty at assuming their motives were mercenary. Looking back, I’m sure they were.

    Various times, when really desperate for work, I have considered this type of work. Your post, Trent, is very beneficial – hopefully, it will help shine a bright light on the pluses and minuses of this kind of venture, and help people make good decisions.

  63. Nate says:

    My wife tried being a Mary Kay consultant for a year and wound up losing money in the long run (not to mention the huge amounts of time) because she wasn’t able to sell a lot of things from her “starter kit”. Her friend was the one who talked her into doing it, but come to find out she also hasn’t made much money doing Mary Kay (and is 10k in debt all on credit cards used to pay for new Mary Kay inventory). To get out of debt she just became a full time consultant hoping she could make more if she put more time into it. Good luck…

    These MLM schemes tempt you with the idea of easy money, but unless you sell all of your inventory you wind up with a bunch of stuff you don’t need sitting in your basement and a negative balance in your checking account. Not to mention the fun of trying to do taxes at the end of the year as your own business.

  64. Jaden says:

    I agree with you a little, but I also think it depends on the person selling it when it comes to whether or not it will damage your relationships. It’s all in whether or not you push for orders and become a SALESperson.

    I sell AVON, but many people I know don’t even know it- because I try my hardest not to push. I have given brochures to friends and family (especially if I know they have purchased AVON in the past, or that they like the products), but I have never asked anyone to host a party, and I don’t ask people if/ when they are going to place an order. For me, it’s worth it, because I enjoy having the little side business, I buy AVON for myself and my husband, and I feel like I am truly sharing a good deal with my friends when they ask me about it. I feel like me being a rep leaves it open for people to order, but it doesn’t have to be uncomfortable. I have actually had a few people search me out, saying they have been looking for a rep in the area for a while and are relieved they found me! When the product is truly good quality at a good price and you aren’t just looking to make a buck off it, it can be a good experience :)

  65. Melina D. says:

    To be fair, Jaden, I have to agree with you about Avon. I have actually called friends who sell it and asked for their latest book, so I could order specific products and look for good deals. Perhaps I shouldn’t have lumped Avon in with the others when recounting my bad experiences, because, to be honest, I can’t say I’ve had a bad experience with Avon. There must be a reason…not sure what.

    On the other hand, the friends of mine who have sold it have all admitted to me that in the end, they made minimal money from selling it, and most eventually gave it up, the exception being a neighbour I once had who approached it in a very determined, business-like fashion, regularly canvassing the neighbourhood, and always managing to upsell me when she visited. I always ended up buying stuff I didn’t plan to buy, but never minded in the end, since it was so good. She was a brilliant saleswoman, but I suspect that very few of us could do what she did.

  66. Jaden says:

    I agree, Melina! I bought AVON for a while before I decided to sell it… but I really don’t make much on it at all. I am not by any stretch that amazing saleswoman- I don’t feel right pushing products on people, and would HATE to feel like I guilted someone into buying. I just enjoy having the little business, and I like that I am able to score the things I would buy for myself and my hubby anyway for a little bit less because I sell it :)

    I personally think it’s the fact that the prices are competitive with stores (especially if you hit a sale- they have some GREAT sales!) but the quality, at least of the products I’ve used, is better. I don’t feel the need to be pushy or host parties, because I think the products sell themselves. Most people that try them end up liking them- and if they don’t, AVON has a no-hassle returns policy, which I find reassures people they won’t be wasting their money- if they don’t like it, they get their money back. I don’t know how long I’ll continue doing it, but for now, it’s something I enjoy.

  67. Kate in Canada says:

    Jaden and Melina:

    I also sell Avon, and I have NEVER EVER:
    – knocked on doors
    – talked people’s ears off about it
    – pressured anyone to buy anything

    I put out brochures and flyers. If anyone is interested, all my contact info is right there for them; there’s no need for me to be pushy about it.

    Avon has been around for over 120 years, and a company doesn’t last that long if they don’t have good quality merchandise, good value for the prices, and good customer service! I got into it because I wanted a little extra money, I use & really like some of the products, and because of their corporate and environmental policies.

  68. Nevermind how much or little your friend is making trying to sell you knives or parfumerie or whatever they’re pushing–what about the damage to your friendship should something go wrong? This is something I think very few people consider when they start selling to friends and family on behalf of a pyramid scheme. When my friends come to me now with these types of things, I try to help them find a real job and I recommend you do the same.

  69. Robin says:

    Ugh, I will forever have a bad taste in my mouth about MLM.

    My husband “worked” (ha!) for Cutco while we were engaged. I hated it the whole time, but he was determined it was a good thing. He did make some money off of it… he is very charismatic. In the process, he sold his family (and my family to a point) knives they couldn’t afford. He ended up managing a “branch” in Arkansas for the summer. He called me in the middle of the summer with no money, no food, no way to get out of the town. One bus ticket later, that was the end of that. He was left with some bad debt that I think is all paid off now. And did his “mentor” help him during the crisis? No, of course not, he dropped him like a hot potato as soon as it became clear he wasn’t going to make money for him.

    I still use the knives, because they are good knives. But they are so not worth the price we paid for them, emotionally, relationally, and financially.

  70. Jackie Ulmer says:

    This is an interesting article and I feel compelled to play a little “devil’s advocate!”

    As a successful direct sales business owner for almost 16 years, I don’t “pitch” to my family and friends. Instead, I simply notify them, just as I would if I opened an ice cream store in town.

    Pitching is quite different than notifying. Chasing and bugging is also different. I simply notify. I don’t ask anyone to buy or join, that is up to them.

    Honestly, in most cases, I would much prefer to buy from and support my friends and family, all things being equal.

    Our friends recently opened a wine shop. We joined their wine club, refer people there and buy wine there regularly.

    Some other friends have a local restaurant. I would much rather support them than the national chain up the street.

    I personally promote a high quality line of products that are priced competitively, meaning they aren’t a rip off like some direct sales companies. We go head to head with the number one competitor, who is not direct sales.

    My friends are all my customer and they pass on referrals. They have not joined me in business and that is fine. I value my friendships above all, and would never want them to feel obligated.

    But, it’s bad business not to at least notify. Be a professional in your approach and you’ll be fine, assuming your product line is quality and priced right.

    EXPECT Success!

    Jackie Ulmer

  71. J says:

    Just like anything else, there are scams out there and there are legit companies. As indicated above, Avon has been around a while, and Pampered Chef is owned by Berkshire Hathaway. I will concur that Amway/Quixtar is much more scammy than anything else, they definitely have the hard sell and I personally won’t have anything to do with it. But that’s my view from sitting through a number of their sales conventions in high school when I’d work the A/V equipment (for minimum wage!)

    Quite honestly, I find the attitude displayed here a little discouraging. Legit people who are trying to make money and dabble in entrepreneurship should be EN-couraged, not DIS-couraged. If you don’t want to host a party or buy a product, politely decline the offer. Lots of people need to make ends meet somehow, yet don’t have the ability to work some minimum wage job because they can’t afford daycare or they want to try out being their own boss and having some flexibility in their schedule. There are reasons besides money people want to do something.

    I also find it somehow confusing that Trent will promote his blog and livelihood through social networking “Follow me on Twitter!”, “Be a fan of me on Facebook”, “Become a friend of the Simple Dollar!”, yet when someone tries to sell lipstick or a cheese grater, it’s somehow wrong.

    Also, in the dollar per hour category, I bet the beginning of the Simple Dollar had similar poor returns on “investment”, and Lord knows the Internet is littered with blogger and websites that never made it — just the same way there are people who didn’t make it with home jewelery sales or Tupperware. But there are people who are willing to work their tails off to try this stuff out and they can do well for themselves.

  72. Donna says:

    When approached by family to purchase something (including fundraisers for kids) I will ask them what the commission they make on the product is and pay them directly the money, rather than spend far more to get something I don’t need or want.

  73. Avon is an interesting exception to the MLM game, even though it most certainly is a part of it.

    It’s an example of a product that largely sells itself, all you need to do is get the word out, and people will come to you. Beyond that the extent of the selling is in the gentle persuasion category.

    The problem with most MLMs, and most sales situations, is that the products and services themselves are suspect. They need to be explained to a customer by a convincing sales person, otherwise they would never buy.

    That really sets up the pushy, obnoxious sales person, because he/she is in a position of needing to create a market for the product that wouldn’t exist otherwise. That requires a certain moxy, which most people don’t have and that’s why most people have to sell to family and friends, and their sales careers are short lived.

    It’s really kind of sad for the sales people. We all need to earn money, and those often bogus products can make a person look bad while trying to earn a living. Hopefully they don’t go back after having been burned once. It is a common scheme.

  74. Chris Cruz says:

    One of my good college friends is a culprit for selling to friends. He has pushed away many friends including myself because he constantly pushes sales or asks for too many favors. He first would constantly ask us to do those online referal programs so he can get a free ipod. He got hooked after the ipod then went after a computer. Now he’s into a financial MLM scheme and pushing it on everyone he knows. I went to the hoo raw meeting because he is a good friend but turned him down because it was simply a scam if you just Google the name. Now most of our friends do not want to hang out with him because we know he will push a sale on us.

  75. Amy says:

    This reminds me of two things:
    1. Our HOA wanting to put a No Soliciting sign at the neighborhood entrance but the homeowners voted not to since that meant they couldn’t send their kids around with school fundraiser crap.

    2. Napoleon Dynamite and Uncle Rico driving over the Tupperware while demonstrating how robust it is!

  76. Maya says:

    MLMs are usually a bad way to try to make money (even as a part-time gig).

    But I also believe that all situations (even bad ones) happen for a reason.

    I also sold Cutco knives. I did this right after I graduated from college, as I worked part-time at a bank and continued looking for a “real job” in journalism.

    I did a “demo” for one of my bank co-workers at her house. She politely listened to my entire demo and then suggested that I apply for a job opening that she heard about at her local newspaper. (This was years before the decline of print media.)

    I took her advice and was hired as a reporter for that newspaper.

    So even though I didn’t make a lot of money directly from selling Cutco, I do appreciate the fact that it indirectly led me to my first real job.

    And I agree with Trent’s point that if you have a close friend whose a part of an MLM program/scheme, it’s a great idea to help them find a job where their skills will be put to better use.

  77. Trent, you are a smart person! I was an automobile salesman for 25 years before I retired, and I was always wary when selling to family, because I knew that if they ever got “buyer’s remorse”, they would say I pressured them into buying, or they felt obligated to buy from me. The only thing you should do to protect yourself is be sure to make at least a fair profit on the family sales, because you’re going to live with them for a long, long, time!
    Thanks for all your good posts! John DeFlumeri Jr

  78. Finance Nerd says:

    My wife sold Tupperware for a short time — mainly because she wanted to buy a bunch and get a discount. But she was very uncomfortable with how much her “upline” pushed her to find new recruits, have parties, etc. and got out of it in after a few months.

    She is a SAHM and had been making a nice income before that, so she was not swayed by the comments about how much she could earn by doing this. If she wanted a nice income, she would have gone back to work, because to make that kind of money in MLM you basically have to work full time anyway.

  79. deRuiter says:

    Buttonholing your friends to buy overpriced, made in China junk is tacky. I won’t even sell my used vehicles to friends if they beg me. I sell them to strangers, so when the truck which is 15 years old and has faithfully, without a problem, gone 165,000 miles for me, has a radiator hose go bad for the new owner six months after the purchase of the truck, I don’t have to listen to the moans. Folks, if you all “just say no” continuously, this type of annoying, overpriced marketing, will cease. Smile, and say, “No thank you.” don’t think about it, don’t make exceptions, don’t waffle, don’t contribute to our negative balance of trade with China by paying more than an item is worth. If you need cooking gear, most of it is available, including Pampered Chef, at yard and estate sales, flea markets, Craigslist, freecycle, and by asking friends if they have any cooking equipment they don’t want. This is articularly true of expensive gadgets like bread machines, mixers, ice cream makers. it’s out there free, or cheap, without further damage to the environment or your wallet. Spoken by a person with two top of the line standing mixers, one for $20. (10 year old and still going strong!) and one for free.

  80. Jessica says:

    Network marketing can be a lucrative business. It’s definitely not for everyone. I agree with you, harassing friends and family members to buy a product can be very annoying.

  81. beth says:

    I enjoy reading SimpleDollar and this concept seems to be a real concern to people. I guess I didn’t think that people would buy out of obligation like is expressed in so many comments. I wonder if one year later, it is any more of a concern. My biggest concern is it is a good deal, a quality product and do I need it before I would be motivated by obligation to buy from a friend. A real quality product or service for a price I can afford and want, I would rather buy from a friend. I like the parties because it is a social, fun time. If there is pressure, that’s not fun to me or anybody else.
    If it’s “easy it’s sleezy” so anybody that claims making lots of money for little work is suspect, and you should avoid that stuff. But if someone wants to sell me a security system and I can afford it and it’s a good price, I would be disturbed if my friend didn’t offer it to me and then my home is broken into and someone is hurt because I didn’t have the product/ service. As far as cleaning, gadgets, makeup, vitamins, etc, there’s less profit for the investment and it isn’t something I would want to pay some markup or to sell myself.
    I am licensed for insurance, and can help families get a roadmap to financial freedom, so i feel really good about it and the industry is highly regulated, so I know it is high quality products and services.

  82. Rose says:

    Geez, so much negativity, I feel like I have to balance it out. . .
    No matter what you do in life, everyone has to sell/market themselves at some point. Why so angry about people asking you a question? Just give a polite no and move on with your life if asked about something that does not interest you.
    Remember at some point you too will be selling yourself, your story.

    I enjoy supporting businesses of people I know when they are selling a great quality product, wether it is direct marketing or a store-front business. I prefer to keep my dollars local too.

    I’ve worked (part-time)in direct sales now for close to ten years. There are people out there who DO love our products, search them out, thank me for introducing them to it, etc! The level of customer service is much higher in direct sales with an established rep than at a box store.

    I DO agree that not all companies/reps are the same! I too have had some high pressure/bad experiences with other people in direct sales. But I’ve also had some bad experiences with Craigslist, used items that were not worth their $2, and generic items!

  83. Lee says:

    Thank you Rose. I’ve been in sales for 30 years, but never in direct sales. I know a lot of people that have been involved with various companies, from Shaklee (I’ve been buying from my rep for 20 years), Arbonne, Monavie, Silpada, etc. Most don’t make a lot of money, but they do have pretty fulfilled lives doing what they want. On the other hand, I worked with a woman who sold Arbonne, and she was making more money with it than from her full time job (and was well paid there!).

    Some of the people that posted earlier seem to have such a chip on their shoulders…I’m surprised that they would even walk into a store, let alone talk to a sales person.

    Come off it people, you can say “no” and be done with it. Otherwise, you’re holding a grudge. Get off it.

    There’s a lot of passion in their remarks. Kevin, in particular, seems to have something going on, as he makes some categorical remarks. He also says that direct sales people cannot deduct expenses. This is incorrect. If you run a business from your house and are an independent representative, you can certainly deduct your legitimate business expenses. But don’t take my word for it, ask your accountant.



  84. Jenny says:

    Is it possible to have a link to repost this on Facebook? I have a few ‘friends’ who keep asking me to buy stuff or host parties and it’s annoying. I’m hoping your post would be a wake-up call.

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