Multi-Level Marketing - Is it worth it?

I am not a fan of large multi-level marketing companies… I am definitely not against people making money or people starting businesses, but these companies are sort of out of control. Not long ago my friend Monica and I were out enjoying happy hour on a Friday night when the lady sitting at the table close by interrupted us. She just had to tell us how fun we looked. (We are fun!) But then she proceeded to tell us she really wanted us to come to her Mary Kay event, that we definitely didn’t have to buy anything just show up. Ok, lets be real… Don’t lie… You don’t want me to just come hang out, you want me to hang out and then realize how great Mary Kay is and buy a ton of stuff. For me I just don’t spend money on that type of stuff… Walmart or Target makeup for this girl works just great.

I get invited to parties of all types – health products, makeup, bags, kitchen supplies, jewelry…. I have been invited to 3 parties this week alone. How do I say yes to one friend and no to another?  I am an equal opportunity friend but I live on a budget as many of my friends do.

To me it just doesn’t seem worth it to both the consultant and the host.  To be a consultant you have to buy all the product to showcase, it doesn’t really seem that profitable to me when this is considered. It would be like if I worked at a sporting goods store, I would spend my entire check on Under Armour gear and Asic running shoes rather than pay my bills. But at the same time I wouldn’t need my friends to buy Asics and Under Armour to help support my habit so it would actually be better than being a consultant for a multi-level marketing company.

To host a party you have to clean your house, beg/invite all your friends to come, purchase food and drinks… All for a discount on a couple of products, maybe get a couple of products free. After factoring food and drink costs it is usually cheaper to just buy the products at full price than invite your friends into your house.

Most of the items you can buy at these parties are available at Target (or some sort of similar product) for much cheaper, or you can get on Etsy and find something original and handmade for less.  (Target doesn’t charge the $5-$15 shipping these parties do).

Seriously check out Etsy – The jewelry on this site is fantastic and is handmade all across the United States. This stuff is fun and you will most likely be the only one that has it out of any group of friends you go out with! And you are supporting a small business. Or…. Maybe you could sell Etsy stuff… (see below)

With large companies everyone gets a cut, making the product completely overpriced. The seller gets a cut, the person who recruited the seller, the recruiter who recruited the recruiter…. The company itself also needs to make a profit. When something is sold at retail the wholesaler and the retailer make a profit. So… its much easier to make more money and at the same time  maybe offer a product for cheaper.

If you still want to have home parties or sell a product BE ORIGINAL– There are plenty of small companies that would love to work with you. It might take more research but definitely worth it. A) Your friends will be so much more excited to see new stuff and B) You will probably make more money.  Average commissions from a large MLM company are generally 20-30% max. If you work directly with a wholesaler you can profit 50% and sometimes more.

You can also start websites with your favorite products, I hate technology and could even figure it out. Many companies will work to drop ship items you want to showcase. Check out thepinkstore.com.  This store is an ecommerce website that sells products for other companies. This could be done for virtually anything. My sister sells our headbands on various websites such as eBay and my mom does all the shipping. My sister never physically sees our headbands in Phoenix and they are shipped from Nebraska. While this is a family arrangement, it could easily be worked out with any business such as what thepinkstore.com does. Pixi Chix out of Lincoln is always looking for people to host parties/be reps for their products. They would work with virtually anyone that would be excited to sell their unique and cute clothing. It is completely different from any home parties I have been invited to. Again, there are several sellers on Etsy that would probably sell products to you. 

So…. Although I love getting together with groups of girls for a night of fun, I would rather just buy the bottles of wine and have everyone leave their money at home. And, I think if you are considering selling for someone, take the time and find an original product. It might be more work upfront but you will make more money and your friends will be much more excited to see what you are selling than being invited to the same jewelry, bag, kitchen party... :)

My Mom is the BEST

So I am pretty thankful for everyone and everything in my life – but just wanted to give a shout out to one of the most talented and awesome people ever – My Mom…

If you have met my mom you know she is pretty great, but seriously I wouldn’t be where I am today without her. My mom has always supported all my crazy ideas, even if she initially thinks they are ridiculous…  (which she has no problem telling me)

But in all seriousness, my mom is the reason I am an entrepreneur.  When we were growing up my mom used to make stuff for craft shows and did well enough that she could stay at home with us. We would help her and would work at the shows with her. She was patient enough to help me find things that I could make and sell so that I could have my own money as well. That gave me my first chances at seeing how to run a successful business.

When I was in 8^th grade my mom decided to go on QVC with these stuffed bears she made. Such a crazy process having over 600 bears made from start to finish in your own house. Strings and body parts everywhere! It was absolutely amazing to see all our friends and family help out in the process and although hard work definitely a cool process to be a part of. The bears sold out in like 4 minutes which is pretty amazing and really shows how legit my mom is. She got offers to sell again on QVC but the profit margin wasn’t there to make it worth it once material prices went up. Still, to sell out on QVC is so cool.

As I decided to start my business my mom jumped right on board to help out in making stuff for me to sell, and along with my dad works nearly every weekend at tournaments or races. My mom herself has made over 20,000 headbands in the first year. Yes, you are reading that right – 20,000!!! Who needs China when you have Janet!  She also just set up my new website for me. With absolutely no classes or training she did it all including the photos which turned out awesome! (If you haven’t built a website or tried taking clothing pictures it sucks, and I hate doing it.)  ***Check out her awesomeness at BADSportz.com ****

So… Without my mom BAD Sportz wouldn’t be possible… I love her and am so thankful I got the coolest mom ever! 

Teaching... Learning... Sounds Complicated...

Today I got an email telling me I needed to order the textbook I will be using this spring to teach Marketing Promotions. This really got me thinking about my academic career and a few basic issues I have with myself teaching (although I am super excited to teach)… A) I can’t use a textbook because then I would have to read it, and I rarely read as a student. B) I skipped more classes than I attended. When I did attend I was late or sat in the back searching for the end of the internet or playing Farmville. C) I think grades are kind of a joke and often times a poor indication of talent. D) When I actually had to give an hour presentation for a seminar I talked for a short 8 minutes before turning my presentation into a group discussion, and E) the idea of creating a syllabus and having something so structured sounds craaazy….  My life and business operates on the day to day…

For longer than I can remember I thought a lot of things school related didn’t make sense and required too much effort for the payoff. (And yet I made it through 3 degrees somehow). When I was in elementary school I would write one letter very neatly and then decide I could do it once and there was no point to take the time to keep writing during handwriting class… If I could add something I just didn’t see the point in continuing to finish the math homework, so I would just stare off into space and not do my homework for weeks at a time. Unfortunately my parents would find out about this behavior and I would be locked in the house until I caught up, spending entire weekends doing mindless work. In high school I thought things seemed boring and not worth the effort so I would cheat on subjects I didn’t like. I talked my little sister into writing a paper for me once (ok maybe twice). In college I found ways to do the minimum effort, sign up for the easiest professors, and lived on the theory that Cs were degrees. In law school I never saw the point in going to class when I could learn something on my own. It was like getting teeth pulled having to listen to some of those professors, BORING. I will say I actually enjoyed several of my MBA classes and did attend most of the time, although a few of those were a snooze. So how do I as a professor make things better for my students?

Everyone laughs at me when I say I am going to have students market BAD Sportz and the Totally RAD 80s Run as part of class projects this spring, throwing my students into my real world marketing issues, but wouldn’t some sort of real world experience be better than reading a textbook or taking tests?  You can do case study after case study but isn’t it more beneficial to see the impact your efforts make on a real life business, positive or negative? 

How can I hold my students to standards of attending class when I never wanted to attend? Who am I to say they learn best by listening to me talk? I remember when I told everyone I wasn’t taking the BAR review course because it was $2,000 and that I would just study on my own. Everyone told me I would fail… Turns out I passed while I read the book from the pool, and those brainwashed students that didn’t think they could do it on their own were out $2,000 to listen to some guy talk through the TV. So how do I incorporate teaching styles and standards to fit more students and have them do their best work when I am a prime example that not everyone learns the same way.

And who am I to grade someone, especially in marketing which is so subjective? What might sound really stupid to one person could be a million dollar idea to another.  Grades are a hard thing. I was never really into the whole details thing, so naturally I only studied enough to get an average grade in income tax. Crazy enough the week after we got our grades a friend who scored one of the highest grades in our class had me doing her taxes because she couldn’t figure them out. She probably got more job offers too… When I was in high school we had to choose companies to play a stock market game. Everyone else in my accounting class came with these long stories of why they picked their companies based on all this research. I showed up and named my companies. When asked why I simply said I asked my dad in the morning while I ate my breakfast. Figured he always read the stocks section and invested so he would know. Some teachers would think I wasn’t prepared and would reward those idiots for their supposed detailed research vs. what could be seen as laziness on my part. Turns out my stocks did the best, being the only stocks in my class to win money. 

I am highly critical of the education system in general but only because I want people to do great work and have a chance to succeed. I think several classes and professors are very set in their ways, as well as focus on students messing up or not being prepared in one area and taking away points, instead of promoting ways to earn points by using students strengths. Even listening to my teacher friends they talk more about the kids that struggle, instead of focusing on positives so many times. Maybe I will just give several unique and different opportunities to earn points and whoever earns them gets an A. Is it so bad to give an entire class of students A grades by uncovering each of their talents instead of throwing them all into a room and rewarding the nerd that reads the textbook word for word? And, without these students I don’t even have a job teaching. So, how do I structure my class so they can get the most benefit for the money they are paying (or will be paying back each month for the next ten years of their lives)?

Making decisions... Finding direction

One of the biggest challenges I face with my business is knowing where to concentrate my efforts and how to grow BAD Sportz. As I watched the latest Shark Tank episode this guy was selling paint for animals but was only selling in stores and had no web presence. The fact that he hadn’t even thought to sell online pretty much cost him any sort of deal. Basically the Sharks told him he might not be the guy to be running his company because of his lack of good judgment… It really got me thinking; do I know what I am doing? Is there something I am missing? I feel like every day I am super busy and could do several things to grow one way or another. How do I even know the right way to grow?? Am I missing something obvious like this guy?

Part of the problem lies in the fact that I have no business plan. I mean I have an idea of what I would like to accomplish but no real path to follow. As described by my sister the plan is as follows - I throw spaghetti at a wall and see what sticks.  I think this provides for ultimate flexibility in being able to pursue whatever might come my way and have always been spontaneous so this fits pretty well, however sometimes it is nice to have some sort of consistency or plan. So what exactly should the plan be though? That is pretty much the question I ask myself daily but just sort of bounce between ideas…

There seems like a huge opportunity with road races, and the Totally RAD 80s Run definitely has the potential to be a huge event in several cities with the right marketing in place. Omaha was great for a first year event, but then I basically ran out of time in Des Moines to do any sort of marketing because of other volleyball events and it wasn’t that awesome. If the races can draw 3,000 runners there is potential to make over $50,000 per race.  But drawing up and executing a marketing plan to make this happen is much harder than it looks! It is doable as seen by other races, however challenging nonetheless. Anyone with ideas who wants to join forces to make this happen should definitely contact me!!

BAD Sportz apparel sells great at tournaments or camps and that itself keeps me busy. I basically live out of my car though with almost 90,000 miles in two years. Not sure all that driving is what I want to do forever or if my car time is the best way I could be spending my time. I get calls from parents needing birthday gifts or Christmas presents often. Although several of them come shop out of my basement would a retail space make sense? We do have the website up and running but it really hasn’t been promoted and we haven’t spent any money on advertising. Should I put more effort into promoting the website and selling online with sites like Amazon? I set up an Etsy account last week.. . Should I be selling more there? I get several requests for uniforms and personalized apparel and have built a solid network of teams. Would it be worth it to get my own screen printing equipment and grow that direction? It would be possible to wholesale to stores if we could bring our prices down but then that would be a whole other channel to manage and grow?? Maybe I should just buy everything from China?   

Seriously, how does a business decide where to focus? Do you really need a plan? Am I missing something completely obvious? For now I might just keep throwing spaghetti J. 

Start Your Own Business, it's fun!

I get a lot of questions about how I started my business or comments about how people wish they could start their own business. I really believe anyone that wants to start a business can.  Several people think they lack funding to start a business. When I look at every business I started it has been with virtually no money.  Sometimes people also say they don’t have any creative ideas on what to start. My best advice is to copy another idea or business. Most of the best businesses aren’t original ideas; they are improvements on ideas others had.

Here are a few of the crazy businesses I have started, maybe they will inspire a new business–

When I was in 3rd grade, I started selling earrings that I made out of old necklaces I found at our house or at garage sales.  They were pretty hideous but I was pretty good at selling them. I figured out that everyone has 50 cents to buy a pair of earrings, and since my parents bought the supplies I was making pure profit. (makes me laugh now, my parents were great business partners!)  I did pretty well and it was really exciting to be able to buy sweet stuff (whatever it was a 3rd grader thought was cool). My parents allowed me to spend money I made on whatever I wanted and it was pretty much awesome.

In high school I started cleaning houses and offices with my mom. This continued through college. Definitely not the most glamorous job (ok it completely sucked at times), but I made good money doing it and it helped pay my tuition. People are always looking for cleaning people. These sort of businesses are great! You can do as many or as few houses as you want, quit at any time, and earn extra money!  I also had a boss that scooped dog poop at nights.

While I was in college my sister and I realized textbooks that weren’t necessarily being used the next semester at our school were still being used at other schools and that we could sell them on eBay. We spent finals week two different semesters grabbing books basically out of the trash that other students thought were worthless. We even drove to another town to get books from that college. Within a couple of weeks we made enough money to pay for summer tuition and expenses.  My favorite story from this is one day when I went to work out, saw a book on the top of a trashcan, dug it out and listed it online at the computer at the rec center, and when I was done working out it had already sold for $40.  It was like money was just being dropped from the sky. Not every college kid would dig through a trashcan but hey a dirty $40 is still $40.

After college I took sort of a break from being an entrepreneur and went to work for corporate America. While working I was never really satisfied. I felt like everything I did was paying someone else too much for my efforts. So, I thought maybe law school was the answer. After passing the bar exam, God blessed me with a year of struggling to find a job which landed me living in the basement of a family friend. Long story short I came up with another idea to start a business.  I decided to start selling apparel and headbands at youth sports tournaments across the Midwest. I had seen this work in another part of the country and at larger tournaments. So, I copied the model and started my own business, BAD Sportz. (You can check out our stuff at BADSportz.com.) Without being able to get a bank loan because of all my student debt and no job I had to be creative. I was able to work with people to buy items on consignment until I was fully able to have my own line printed. I spent days and nights emailing and calling people trying to get into their tournaments.  My mom, the most creative person I know, was a huge help in coming up with items to sell and offering opinions and ideas.  My parents and friends jumped on board and have been amazing with helping make this business a success.  With just a $2,000 loan from my parents and the amazing support and encouragement of my parents and friends the business sold over $250,000 in the first year. We were also able to raise over $30,000 to youth sports teams all over the Midwest.

This past year I started the Totally RAD 80s Run and Omaha’s Great Pumpkin Run. Several people ask how I was able to just start a 5k. It is actually pretty simple. I watched what other races were popular, what they are doing well, what they can improve on, and what might be missing that I could fill a need for. I had researched this idea for quite some time when I was down in Phoenix and knew I had found a great idea based on runner reaction to a similar race that takes place along the west coast. I decided to bring a similar race to the Midwest. I had paid attention to what other races had done well and knew I really needed to market this race right. With the help of Facebook marketing and a Living Social deal I was able to get close to 1,400 runners registered for my first event. This was done with no money out of pocket.  I planned out what expenses I might have based on what I had found online with my venue, shirts, timing, insurance etc., and then based the price of registration on this. Registrations paid for marketing and everything else I needed to buy along the way.

What I have learned from these businesses is that it is rewarding to work for yourself, and completely possible for anyone willing to put in the work to start their own business venture. It doesn’t have to be a full time gig, but it can definitely turn into that. You don’t need a ton of money to start, just a passion about what you do. Pay attention to what others are doing, keep your eyes open for opportunity, and bring your own creative twist to an old idea