Network Businesses Gaining Popularity, Acceptance Multilevel Marketers Still Have To Fight The Perception That They Are Similar To Pyramid Schemes

Multilevel marketing businesses in Spokane and North Idaho are increasing in number and acceptance, as successful participants help polish a tarnished image.

The premise of all multilevel marketing businesses is simple: create a network by selling the product or service to others, who in turn become representatives and sell to yet more people.

In the network of most multilevel marketing plans, the person who recruits others to join the business gets a percentage of that person’s sales and/or a bonus for bringing the new person into the network.

This concept, for years associated primarily with Amway and tarnished by the occasional illegal pyramid scheme, is moving into the mainstream.

Based from the home or office, network businesses encompass all kinds of products from telephone service to vitamins to cosmetics to specialized products.

Take Excel Telecommunications Inc., a long-distance carrier service that continues to win converts in North Idaho.

Dallas-based Excel provides discount long-distance service and hassle-free switching from whatever long-distance carrier a person now uses.

Regional training directors like Dan Mattison recruit and train others to sell Excel service. The more reps he recruits and the more people he “sponsors” or recruits and trains, the more commission he gets from the long distance bills of those who switch to Excel.

“It boils down to this: we’re saving money for people on something they use every day, and the company’s paying us to do it,” said Mattison, a Hayden Lake resident who also owns an Arby’s restaurant. “I’m spending more time with this because I enjoy it so much.”

Mattison also gets bonuses for signing what Excel calls management representatives, or those who persuade people to switch their service to Excel. About 200 Excel reps work in Coeur d’Alene alone, Mattison said.

The company continues to expand into Spokane, said Roberta Kinley, who introduced the concept to most of the regional trainers in the area. Kinley has been earning income from network marketing businesses for 11 years.

“It’s a can’t-miss opportunity,” she said. “It’s growing faster than you can imagine.”

More and more of the networking concepts are popping up in our area and others, said Scott Bozman, an associate professor of marketing at Gonzaga University.

As more multilevel businesses enter the area, people begin to accept that they are ways to possibly make legitimate income, Bozman said.

“I suspect that people are starting to look at them more carefully in the sense that there are some that have more potential,” he said. “If you have 500 customers and are selling them $100 a week, you can make a decent living.”

But Multilevel marketers still have to fight opposition from traditional storefront businesses and the perception that they are similar to pyramid schemes.

Several pyramid scams drifted through Coeur d’Alene last year, costing some residents thousands of dollars.

To evaluate a networking business idea, Bozman suggests a hard examination of the product.

“Is it something that people want, and can you sell it to them for less than they would get it in traditional places? The product needs to have competitive advantages.”

Mutlilevel operations often face strong opposition when they enter a new industry.

Take Jetaway/NuConcepts, a California-based network travel service creating interest in Spokane, for example.

Outraged travel agents have launched a public relations blitz against the service, which provides access to discount travel and other perks accorded travel agents for a one-time fee of $475.

The company has fought legal battles with the International Airlines Travel Agents Network and the American Society of Travel Agents over use of the group’s acronyms on NuConcepts ID cards. Neither acronym appears now.

While travel agents find much to dislike in the program, they seemed most concerned that it will cheapen their image.

Jeff Soukup of Spokane’s Cruises of the Seas manages nearly 40 NuConcepts travel agents in Spokane. If you’re a NuConcepts independent agent, you get a portion of the commission for travel you book, including your own travel.

The company has 10,000 independent agents in the country and continues to grow at a phenomenal pace, Kinley said.

“The reason we’re getting huge discounts on air fares and accommodations is that people in the tourism industry want to talk to us,” she said.

As to those who say multilevel marketing has a cheap image, Kinley points to a $6 million home now under construction in Post Falls. The home belongs to an executive with Amway, one of the first network marketing businesses.

“And it took him 30 years to make that kind of money,” Kinley said. “With what Excel offers today, you can make that kind of money in just five to seven years. But it takes an awful lot of hard work.”

, DataTimes