
With the recent announcement that Beachbody’s Bodi will be moving from a network marketing model to an affiliate or omni-channel model, Chalene gives her thoughts and insights on what she thinks the future of MLM and network marketing is. She also...
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Ctmobile.com Today we're talking about the future of multi level marketing, network marketing and affiliate marketing. What is going on? Hey, my name is Chalene Johnson. Welcome to Build you'd Tribe and I'm just going to tell you up front that I realize that there are going to be a whole bunch of people who take issue with what I say. I'm sure I'm going to get attacked because they don't want to hear this. And it's hard for me to say some of these things because I've got friends who are in the industry and I've got a relationship with network marketing that I'm going to explain in this episode. But I'm also going to talk to you about what I think the future of network marketing holds. Multi level marketing, direct selling, whatever you want to call it. What I would do if I found out today that my network marketing company was closing and if I wanted to continue doing it, like how would I pick another company or should I pick another company? And and then lastly, I'm going to share my opinion of what to look out for. If you're in network marketing and you're worried about the viability of the company that you're with, changing to a omnichannel approach, we're going to address all of that. I know it's going to be a little bit controversial, but again, all of what I'm sharing today is my opinion. But it's opinion based on a lot of experience and years and years of not just coaching people in network marketing and business and marketing, but also being a part of it on the outside and inside. Like, trust me, I've got a unique perspective and I want to be honest because I think it's really important that we look at trends, that we be prepared. This doesn't mean it's an automatic that what I'm going to suggest is going to happen, but it's really important that we're prepared. Do I think the future of network marketing is on decline? Absolutely. I mean, anyone who tells you it's not is in network marketing and they're trying to sugarcoat it, but it is definitely in decline. And let's talk about why it's in decline. Number one, the groundswell that has happened around the anti MLM movement has gained a lot of traction because of a lot of reasons. But one of the biggest reasons why is because the people at the top, not all, but some of the people at the top of these network marketing companies, the CEOs, it trickles down from there. And the way that they've trained their staff and the way that they've treated their distributors and trained their distributors has a trickle down effect. And when a CEO decides to send one email and decides overnight because you don't own that company, I know you are a business owner, right? Like maybe you have filed an LLC and that's what you're operating your network marketing business through. But you don't own the network marketing business. And so the person that does, they can send one email and the next day it goes away. And when that happens to hundreds of thousands of people, what that creates is an army of angry, scorned people who are now like, yeah, those anti MLM videos, now I want to watch them because now I've been burned. But why is it so many of these companies are switching not just because of pressure from social media and not even just because of regulatory pressures, although that's part of it. But why are so many of them switching models? The first reason why is consumer habits. I don't know about you, but I don't want to talk to anyone when I buy something, I just want to click a button. I don't even like it when I checking out in person and they're like, would you like to be part of our rewards program? I'm like, no, I don't. And you can save 50%. I'm like, I don't care. You know what I mean? So like we just, we kind of want to shop and be left alone. That's number one. Also now, because of social media and the way so many companies due to technology have been able to leverage affiliate marketing. We're talking Amazon, LTK shop, my, the TikTok shop, the creator accounts. Anyone now, including your mom, if she has a social media account, she can get a link from Amazon and say, hey, I just bought this new book and I'm reading it and I love it. And here's a link and then she earns a small commission. So because of that, companies used to have to reach out to micro influencers. They have to do a lot of research. They would have to court you and they'd have to send you free stuff and then they would have to send you more free stuff than their competitors so that you would want to be an influencer for them. Then you'd have to negotiate a raid and, and then you'd have to go back and forth and like, okay, should I, I mean this is still happening, but it's cumbersome and companies don't have to do that anymore. Now we the consumer are saying, I love this product, give me an affiliate link. Right? You can become an affiliate for just about anything. And because of that, these companies now have armies of affiliates. So they don't have to worry about getting that big hit from that one person who really knows how to sell. Because they know just by the sheer volume of people who are becoming affiliates, statistically speaking, a lot of those people are just gonna have a video that pops off. And that video that pops off is gonna be the one that's about the, the thing that you've used an affiliate link for. And it's happening over and over and over again. So companies are like, whoa, this is a much leaner model. It's more profitable. That's the number two reason why it is more profitable for a company to operate as it just is, as affiliate or direct to consumer versus a network marketing organization. With a network marketing organization it is, it's really expensive. They have so much more overhead. They have to maintain all those individual websites. For every single distributor they have the cost of having to pay each one of those people, the HR that's involved, having to police their distributors and make sure that they're not doing anything to promote a competitor's brand. It's a nightmare how expensive it is. Not to mention, of course, the fact that the company doesn't just pay the distributor a percentage, they pay the person that the distributor signs up with. And then they also have to this person and the people below this person, they get, you know how it goes. Like they're not just paying one person, it's multi level and that requires a lot of extra work and operational expenses. The third reason why is regulatory scrutiny. So a lot of states are trying to ban or outlaw or eliminate network marketing. They think that it's confusing to tell people what they have to do when they do it, how to do it. And you're paying them and you're giving Them all these tools, but you're not calling them an employee, you're calling them a consultant. And so a lot of regulators, a lot of lawmakers believe that those people are actually should be classified as employees and not as consultants. And so they're trying to ban the idea of network marketing in a lot of states. And that regulatory scrutiny also is coming down on a lot of these companies for making false income claims, for making statements about what it is their products can do, claims about the products and then claims about what people can earn, and not being completely transparent about the true earnings of its professionals, of the people who've signed up. Because the deal is in order to be successful in network marketing, you've got to sell product and you've got to sign people up to be distributors. Well, a lot of times in network marketing they'll say like, hey, you know, I know you're just going to buy that book, but did you know if you sign up to be a distributor, you're going to get 10% off? And so a lot of people will be like, sure, I'll sign up. I don't really want to sell it, but like, to get the discount, I will. And so then that factors in. So now, like, in defense of people who are in network marketing, you will often hear such a very, very, very small percentage of people actually make money at network marketing. And I'm sure I'm going to catch heat for this. But a lot of, there's, I know lots of people who make a lot of money in network marketing, but they work it, they work it 24 7. It's, it's a lot of, you know, talking to people and reaching out on social media and being a product of the product and meetings and it's hard work. It's hard work and they, they're doing the work. And there are lots of people who do it legitimately, like the right way. And they're kind and they're caring and they're honest. And then there are those people who are unscrupulous and they are predatorial and they are doing things that are false and misleading and it is a kind of pressure and bullying and it's just not a healthy environment. It's a toxic environment. But I just, I need to say, as someone who's like, you know, in the middle of the road, like, I have no dog in this fight. I don't care. But there are bad people in the church and there's good people in the church, there's bad people in medicine, there's good People in medicine, there's bad people in network marketing and there's good people in network marketing. Can we all agree on that? Probably not, but we should. Because if we're really being realistic about that, that's the truth. However, the majority of people don't make money at it because the majority of people do sign up just for the discount. And they're signing up for the discount because that person talked them into doing it. And they needed to talk them into doing it because they don't move up in rank unless they get people signed up to become distributors. People sign up to become distributors because they get a discount anyways. All of that is complicated and it's hard. And companies are now under this regulatory scrutiny which means they're getting hit with fines and that can wipe out a new company, a newer company. And it's expense, it's an expense. All they have to do is send one email and say, you know what, we're just kidding, we're just gonna, we're just gonna be the affiliate model now and they don't have to deal with that anymore. It's also very easy for companies to decide, all right, we're not gonna do this. And they immediately reduce their legal costs and they immediately reduce their operational costs with one email. It's just so much easier for them to do. And we know, like I said, consumer buying practices have changed and so has the consumer attitudes towards network marketing. Recently for CEO of Bodi, formerly Beachbody, Carl Daikeler made an announcement to his distributors, they're known as coaches, that they were going to be changing their business model to a omnichannel approach. And in that announcement he said the people don't even want, they're embarrassed. I don't think that was his exact words. But like they, they're not even sharing the fact that they're in network marketing because they're not comfortable doing so. And that's, that's a, a real shift now. You know, your parents and my parents, like network marketing was like a, one of the only ways you can get certain products. You know, like we didn't have the Internet, you couldn't get Amway products online. You had to like know someone who get them for you or whatever it was. And so the reputation of network marketing, multi level marketing is as many people in the industry are saying it's becoming outdated. Do I think that all network marketing is going to go away in not too distant future? I don't think all, I think that there will be those companies that sustain. I do and so, and now I know this is the part that I'm going to catch a lot of heat and I'm just forecasting, that's all. I don't want this. I want people to shop whatever way they want to shop. I want people to do whatever business they want to do, as long as they're not taking advantage of people. But the fact is with all of this, like, if you're a business owner and you're going, wow, the model has changed, we're making less and less money. People are less and less inclined to do this. People who are in network marketing are aging out. These younger generations are not interested at all. Gosh, all we have to do is go to affiliate model. It's so much easier. It's so much more convenient. It's. We're going to be much more profitable. I mean, it's just common sense. And you can be mad at me, but don't hate the messenger. It's just a trend. It's just a trend. And I think anyone who's not seeing that is doing themselves a great disservice. Because if you are in network marketing to like, plug your ears and go, la, la, la, la, la, la, la, I don't want to hear it is means that you could wake up tomorrow and be throwing up in your toilet because your income has gone away, or it's going to go away in 30 days or 90 days or whatever amount of time that they've given you. So, first of all, I have some big sister advice to you. Don't live outside your means. And by means, I mean if that money were to all go away tomorrow, can you still survive? Don't buy the big house and the big car if you don't have a way to pay for that. If that source of income goes away, plan for it to go away. That means you've got to have additional streams of income. It means you should be investing your money, not spending it to have some fancy car that you can post on Instagram because you can't make income claims. You know what I'm saying? Like, be smart with your money. Live within your means. Build your own thing. Build your own brand. Build your own brand. There's nothing that's more attractive than your own brand. No one can take that away from you. Create your email list, because when companies decide to do this in a snap, you're not going to have access to your customers. You may not have that email list. You likely will not. That could all go away and you'd have to start over from scratch. So just anticipate today that it may happen. I'm not saying jump ship. I'm not saying, you know, announce to all of your downline, oh, my God, the sky's falling. The sky's falling. But, like, be smart, you know, When I was doing fitness infomercials, I remember thinking to myself, I'm not consuming infomercials. Like, I used to be, like, a major infomercial consumer. Like, anything that was on infomercial, I'm like, I have to have it. I have to buy it. Like, I would watch all the infomercial, and then I just remember one day waking up going, like, I haven't bought anything on an infomercial in a really long time. Ding, ding, ding, ding, ding. This should tell me something. This should tell me, like, infomercials are going away. Then I recall thinking about how when I first started doing fitness infomercials, the only way you could get buy a fitness program was, like, if you maybe rented it from Blockbuster. This is like, in the early 2000s, right? Or, like, you went to Target and you bought a dvd. That's the only way you could get a workout program. And there just weren't many. There was no YouTube, dude, there was no YouTube. There was no, you know, Instagram. You open up your Instagram and everybody's doing a workout. That there wasn't any of that. So there was major demand and very, very little supply. And then all of a sudden, I notice, oh, people aren't watching infomercials. Why? Because TV's on demand. We stream on demand, so we're not channel surfing, which means infomercials aren't working, number one. Number two, social media started producing the ability for you. For anyone who had, you know, a love for fitness, they could make YouTube videos and Instagram videos. And so now there's all this supply of free content. And I just said to myself, it's time for us to sell. And that's when we sold our fitness company. And it was long before everything bottomed out. So it's so important that you, as an entrepreneur, forecast trends. Don't wait until the ship has sunk and everyone is trying to get in the lifeboat. Look ahead. Pay attention to your own buying practices. Pay attention to the industry. Pay attention to trends, even when it's uncomfortable, even when you're like, ugh, but I'm making a lot of money. Should I really change directions? Use your common sense. Even when you don't want to look at it, just pay attention to where you should be placing your efforts, should 100% of them be focused on something that clearly is changing? Or should you be allocating a certain percentage of your interest and time on something that could be the future? Don't make poor choices in invest your money like open up an E trade account. Stop keeping your money in savings account. Open up. I know I'm like all over the place right now. I'm being like your big sister. But open up an E trade account, make sure you're in the SNP 500 at, at a minimum. You know, don't put money in a savings account. Use something like Wealthfront. Like hell. Have your money make you money. Like people think investing is so complicated. It's really not like you don't even have to have a lot. You don't have to have very, very little money to start, but you have to start and just keep letting it compound and compound and, and learn as as much time as you spend scrolling on TikTok, spend even like 1/4 of that learning what you can about basic investing and you're going to be set so what would I do if my, if I was in a network marketing organization? I found out today that it was closing, everything was going away. What would I do? Okay, so I can tell you that I've talked to in the last week after the closing of Bodi Beachbody, which by the way, I was never a coach for Beachbody, but I had programs, fitness programs and diet programs that were sold in Beachbody as part of their network marketing organization. When we sold our company Powder Blue Productions, we sold that to Bodi. So I had a lot of friends and family who were in that as coaches, distributors. And when they got this news last week, like my phone still is blowing up to this minute, like people are just devastated because they didn't have a plan B, they didn't have something in the works and they're making a lot of money and you live a lifestyle and you get real comfortable when you've been doing it for 15 plus years and, and so many of them have said what should I do? And here's my honest answer. And I know some of you are not going to like this, but if you have to pay the bills and you don't have anything else in the works, you don't have a job, you go into none of those things, then it might make sense for you to look for another network marketing company that maybe is better aligned for you. But just know it's a soft place to land for a temporary period of time, especially if you choose the wrong company, I think there are very few that are going to be around in the next five years. I think we're going to see more and more closures. And the first. And I'm going to explain to you, if that's you, and you're like, okay, I have to place my team somewhere. I, I have to go somewhere. I need to make money and this is all I know. Okay, well, then if that's the case, then you need to make a wise decision and stop taking all the phone calls from people who are trying to pitch you and they're coming at you like vultures. Trust me, I know. Turn off your phones, do your independent research without all these people yapping in your ear, because they all have a vested interest in you getting on their team. They want you, you've got a downline. Okay? Avoid these companies because these companies will be the next ones to fold. Any company that is publicly traded because they've got the pressure of the board to say, yeah, we kind of want to be profitable, let's switch to an affiliate model. Companies that are primarily funded by venture capital. Again, you know, the, the investors, they want to see a profit. And if they've got voting options and they're looking at, at even, even some of these companies that are owned by private equity, you know, the people who are making decisions, they want a return on their investments. Basically any company where the CEO has to answer to anyone other than themselves. And so if there's a board, if there's private equity, if they're investors and they want profits to go up, one of the first places they're going to look is at the distributors and just eliminate that as a business model. I think you should also be very careful about going to any company that is relatively new, like under three years, look at their earnings. And by the way, at the end of this, I'm going to put a series of chat GPT prompts. So if you've narrowed it down to like one or two companies or you're trying to figure out, like, independently without being influenced by someone who's like, you've got to join our team. We're the best. Everything's amazing over here. They're all going to say that. So if you have ChatGPT do some of your research for you, I'm going to give you those prompts at the end. But any company that has overpriced products, as we're entering into, you know, real hard time economically for a lot of people, they look at what they're spending on a bag of protein or some lotions you can put on your face and they're like, can I get this from these same ingredients or close to these same ingredients for someone else for a lot less. That's expendable income that people just aren't going to spend anymore. If there's nothing proprietary about what this company offers, everyone always says what they offer is proprietary. But if, frankly speaking, you can get something pretty close to that elsewhere, people are going to do that. I would be very careful about considering any company that lacks the staffing and experience, like right now more than ever, with all of the scrutiny, with all of the negative social Media directed at MLMs and network marketing and the regulatory concerns and the expenses and all these shifts in the buyers behaviors, it is so hard to make this happen. So if, if a company doesn't have deep, deep financial backing and the legal chops, like they can handle these regulatory fines and getting sued by distributors and it's not going to put a dent in them. They're, they're not going to fold. If they're, you know, somebody from their team puts together a class action lawsuit, it's not going to be even a bump in the road for them. That's great. But most of these newer companies, they just don't have the same annual incomes and the depth and the breadth and the experience in terms of their legal departments to be able to handle the things that are coming. I would avoid any company where the CEO is a little sketch or can't be trusted. And every single person who's going to pitch to you their opportunity is going to tell you that they love their CEO and they're amazing. Do your own independent research, like figure out a little bit about their personal life. Some people aren't interested in that. I am. Like, I think the way you treat your family and your friends and your real life is a big reflection of how you are as a leader. Like, if you can't even lead your own family, like, to me, that would be one of my deciding factors. I would want to know if that CEO has skeletons in their closet. Do they? Are they financially independently wealthy to be able to make decisions independent of a board? I would look at the attrition rates of that company. I would look at, do they have substantial pending litigation? Are they well established? Do they have in place the policies, procedures, regulations and sophisticated training that you and your downline have become accustomed to? Or are you starting from scratch? So in advance of figuring out what company you want to go with, if you if that's what you decide to do. Listen, I have to tell you, I haven't talked to too many people this week who are like, I am so excited to do this again. They're devastated. They don't want to do it. A lot of them are. They're. They're wearing golden handcuffs. I've talked to a few, however, who are like. And they're pretty rare. The ones who are like, I'm not doing that again. I got myself invested and I built my own personal brand, and I don't have to do it. But those who do, you need to make a wise decision because you don't want to fail immediately again. The devastation that you're feeling right now and your team is feeling, and it's heavy. And I understand and I sympathize, even though I know a lot of people are listening to this. May not. But. But, you know, have a heart for a second and recognize that even if you think it's a cult, even if you think, you know, these people were predatorial, whatever, you just have to know what it feels like when you're on the inside. You just. It's hard to see things for what they really are until you're on the outside. You know what I'm saying? And I. I've been keeping my mouth shut for, let's see, how long have I been. I guess it hasn't been. I haven't been keeping it that closed, but I really haven't been saying anything negative because it's been hard. But I left. I left and didn't allow any new products that I had created to be a part of that organization because I'll leave it at this. It didn't align with my beliefs, and a lot of people will stay in their organization well beyond that point because they have golden handcuffs on. And I never, ever want to be in that situation. You don't want to be in that situation either because it feels like you're selling your soul. Right? So be very, very slow if you need to make this decision to go with another mlm. Make the decision slowly. Make a wise decision. Don't make a decision because all the popular people are going over here or these people are promising you, you know, a big payday right up front, like, look for stability. That's. That's my big sister advice to you. So now some big sister advice. And this is important. I would start by making a list of what are the things that are important to you if you. The company you've just been terminated from or that's just changed their business model. If it was a a beauty company, well then it makes the most sense for you to look for another beauty company because that's going to be the easiest transition for you. It's going to be the easiest transition for your customers. If it was a wellness company, then you should probably look for another wellness company. So find something that's kind of parallel and then look at the companies that are the most reputable and then you've got to do some research and figure out which ones are if this is important to you, the safest. Some of you are gung ho on being all risky. Again, if that's what you want to do, then go with a new company. I just can't Im I personally, in this economy going with a new company, it might turn out great for you, but it is undeniably a very risky decision. Undeniably. You can't deny that. You just can't. So I'm going to put some prompts that you could use with ChatGPT. Here's the main one. I would put this into Perplexity. That's my preferred AI tool. Perplexity incorporates ChatGPT. It also searches social media, it searches industry publications, it searches academic published papers. It's really robust. It's phenomenal. It's the same price as ChatGPT, plus it includes Chat GPT. I think it's like 20 bucks a month. So I would definitely put these into Perplexity. That would be my this is what the advice I've given to my friends. And here's the first prompt. I said I would like to compare network marketing companies in terms of their risk and potential for success. Below I will provide for you a list of specific questions and I want you to give me detailed, factual insights and a comparison based on those questions. The two companies I want you to compare for each one of these questions are blah blah, blah and blah blah blah. So narrow it down to two. Okay? And then when you take them through these series of questions, one of those companies is going to be like heads and tails above the other. You're going to see it in black and white. And now you're not listening to the people who are like, we want you on your team, but our leader is blah blah blah, and we're going to give you this and you're going to love it and blah. You know, it's a lot. So quiet that noise and do your own comparison first before you start having all those phone calls. And because eventually AI isn't going to make this decision eventually it's your intuition, your heart, a gut feel, your experience, prayers, whatever it is you turn turn to. But before you go to instinct, before you say, I'm going to pray on it, research on it. Okay, Research on it first. And I want you to start by saying like, okay, based on all of the available research, I want to know. You want to know the details of that company first? The very first thing I would ask is to ask perplexity. ChatGPT, fill in the blank. Company, are they publicly traded? Are they family owned? Are they venture capital funded? Are they equity owned? Are they franchise based? Are they structured as a partnership or llc? What? And how is this corporate entity set up? That's the first question you have to know because that's going to tell you a lot about who has power and who doesn't and if a decision could be made tomorrow. The rest of these questions are, you know, they're long. And so I'm, I'm not going to read them to you, but what we will do is put them in the description. You're welcome. And you can just copy and paste them. The way that I suggest you do this is put in one question at a time. Let Perplexity or Chat GPT give you the answer. Read the answer and see if the answer makes sense. Because it's AI and AI. Sometimes you read the answer and you're like, what are they even talking about? Like, they've got the wrong company or they, they've misunderstood or maybe you wrote the prompt the wrong way. And these are just general prompts. These are the same kinds of prompts that my husband and I would use if we were considering investing in terms of private equity with a company. So these are some of the questions that we would use to do our background research. And I've just revised them for you. They're just a template. You need to customize them in the way that works best for you based on what factors you're going to look at when deciding upon which company is the next best temporary fix for you. And I have to say temporary because I just honestly believe only the dinosaurs are going to survive. Think about dinosaurs. I live in Miami Beach. I'm looking outside right now at a. I don't know what you call it. It's like a giant lizard with a thing on top of his head. It looks like a freaking mini dinosaur. And that species has been around for like hundreds of thousands of years. Like it has survived for specific reasons and some things go extinct. So I think the companies that are going to survive are the ones that have been around the longest. It's just a prediction. But once you've got all these answers because you're going to see there's a lot of questions I've provided for you. The final question is this. I think you say this to ch and again, this is not to make your decision but it's to help you. And I would ask, I would put this prompted, I would say, given that I want to make a decision based on the following factors and then you want to insert the factors like I'm looking for. I'm just going to make this up. I'm looking for a faith based leader or I am looking for. What's important to me is quick income potential and a company that could withstand legal scrutiny. Like, I don't know what all the things are that are important to you, but list them all and you can list as many as you want. When we're talking about AI, list as many of those things that are important to you and then say based on that, provide a comparison between company A and company B, highlighting which one might be the better fit for me based on the available research because now it's an independent artificial machine that's saying we're smarter than the average person and we're going to tell you which one is a better fit because there's no emotion involved and it's a lot of emotion. So for those of you who are going through this, my heart goes out to you. It's a learning lesson. You're going to be better because of it. This chapter is, you know, over. But your book isn't done. Like, you are a successful person, you can do it again. I want you to believe in yourself. I want you to create your own thing. I want you to have your own email list. I want you to build your own personal brand. But I absolutely understand that at the end of the day, you gotta make sure that the electricity is on and you're taking care of your team. And I commend you because this is a really hard time. Get your sleep, get your information, turn your phone off, stop taking all the calls. Everyone says they want to help you. Everyone says that they're there to do this, this, this, and some of them do, but they all have a vested interest too. So do your research and have a list of the things that really matter to you and then make a viable decision, but don't do it the same way this time. Again, I'm really sorry that this has happened and my heart goes out to you. I wish you the best. Thank you so much for listening. This edition of Build you'd Tribe. My goal is to be brief, to be bright, to be fun, and then be done. And we're done. This episode of Build your Tribe was sponsored by Keep. Keep is the email service, the CRM that we have used to grow all of our brands and businesses here at Team Johnson. It is not for those of you who think you can set all this stuff up yourself and you want to figure out how to set up your own email systems and flows and templates. It's for those of you who understand where you should be spending your time. Keep has elevated all of our brands and businesses. It's how we've grown our customer base and it's how we make the majority of our money is through email marketing. So if you're ready to upgrade your small business CRM to grow your revenue and to create create more fans and work fewer hours, be sure to check out keep. Move your business from chaos to confidence with complete business automation. To learn more about Keep and to use Team Johnson's custom templates, go to Keep. That's spelled K e a p now N o w dot com forward slash chalene. Again it's keep now dot com forward slash chalene and keep is spelled K e a p n o w dot com chalene and of course that link is available for you in our show description.
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Podcast Summary: Build Your Tribe | Grow Your Business with Social Media
Episode: Beachbody's Bodi OVER | What Is The Future Of MLM’s - 804
Release Date: October 8, 2024
Host: Chalene Johnson
In this compelling episode of Build Your Tribe, Chalene Johnson delves deep into the evolving landscape of Multi-Level Marketing (MLM) and network marketing. With years of experience both inside and outside the industry, Chalene provides a candid analysis of why MLMs are facing significant challenges and what the future holds for those involved. This episode is particularly poignant in light of recent changes within notable companies like Beachbody transitioning to Bodi.
Chalene opens the discussion by addressing the current decline in the network marketing sector. She states unequivocally, “Do I think the future of network marketing is on decline? Absolutely” [03:10]. Chalene acknowledges that while some may contest her viewpoint, her extensive experience provides a solid foundation for her observations.
One of the primary reasons Chalene identifies for the decline is the growing anti-MLM movement. “The groundswell that has happened around the anti MLM movement has gained a lot of traction” [05:15]. She explains that negative experiences with top-level executives and CEOs trickle down, fostering distrust and dissatisfaction among distributors.
Chalene highlights a shift in consumer behavior, emphasizing the preference for straightforward purchasing without the involvement of salespeople. “I don't want to talk to anyone when I buy something, I just want to click a button” [10:45]. This change undermines the foundational MLM model, which relies heavily on personal interactions and referrals.
The rise of social media and affiliate marketing platforms like Amazon, TikTok Shop, and Instagram Creator Accounts has revolutionized how products are sold. Chalene points out, “Companies used to have to reach out to micro influencers... now companies have armies of affiliates” [20:30]. This shift allows companies to leverage a vast network of affiliates without the complexities and costs associated with traditional MLM structures.
Increased regulatory attention is another critical factor contributing to the decline of MLMs. Chalene explains, “A lot of states are trying to ban or outlaw or eliminate network marketing” [25:50]. Issues such as misleading income claims and ambiguous classifications of distributors as consultants rather than employees are under the microscope, leading to stricter regulations and potential fines.
Chalene discusses the recent transformation of Beachbody into Bodi, illustrating the broader trend of MLM companies transitioning to more sustainable business models. “Recently, CEO of Bodi, formerly Beachbody, Carl Daikeler made an announcement to his distributors that they were going to be changing their business model to an omnichannel approach” [30:15]. This move reflects the necessity for MLM companies to adapt to changing market dynamics and consumer preferences.
Chalene offers practical advice for those currently involved in MLMs, especially in light of companies like Bodi making significant changes.
“Don't live outside your means. You should have additional streams of income” [35:40]. Chalene urges MLM participants to invest wisely and not rely solely on MLM income, highlighting the importance of financial security and diversification.
“Create your own email list... build your own personal brand” [38:20]. She emphasizes the importance of establishing a personal brand and an independent customer base to mitigate the risks associated with the potential collapse of MLM companies.
Chalene advises thorough research before joining any MLM, especially new or unstable companies. She introduces the use of AI tools like ChatGPT and Perplexity for independent research. “Do your own independent research... recommendations on how to compare companies effectively” [45:00].
Chalene suggests leveraging AI to make informed decisions when selecting MLM companies. She provides a detailed methodology for using AI prompts to compare network marketing companies based on various factors such as financial stability, regulatory compliance, and leadership credibility.
“I would say, given that I want to make a decision based on the following factors... provide a comparison between company A and company B” [50:30]. This approach helps mitigate emotional biases and relies on data-driven insights to choose the most stable and promising MLM opportunities.
Chalene wraps up the episode by reiterating the importance of foresight and adaptability in the face of industry changes. “Look ahead. Pay attention to your own buying practices. Pay attention to the industry. Pay attention to trends” [55:10]. She encourages listeners to be proactive rather than reactive, preparing for potential shifts in the MLM landscape by building independent revenue streams and personal brands.
MLM Decline is Inevitable: Chalene asserts that network marketing is on a downward trajectory due to increased scrutiny, changing consumer behaviors, and the rise of alternative marketing models.
Adaptation is Crucial: Companies like Beachbody transitioning to Bodi exemplify the need for MLMs to adopt more sustainable, omnichannel approaches to survive.
Personal Financial Security: MLM participants are advised to diversify their income streams, build their own brands, and maintain financial prudence to safeguard against industry instability.
Leveraging Technology: Utilizing AI tools for research and decision-making can provide unbiased, data-driven insights, helping individuals make informed choices regarding MLM involvement.
Future-Proofing Your Business: Building an independent customer base through email lists and personal branding is essential for long-term business sustainability beyond the volatile MLM structures.
This episode serves as a crucial guide for current and aspiring MLM participants, offering strategic insights and actionable advice to navigate the rapidly changing network marketing landscape. Chalene Johnson’s honest and experienced perspective provides listeners with the knowledge to make informed decisions and prepare for a future where traditional MLM models may no longer hold the same promise.