The Home Zone

On The Level

"Our goal in selling Watkins goes along with our values: spending time with our family and doing the things that are important to us," says Steve Bretzke. "That's what we try to get across to [prospects]." Bretzke has been able to do just that since 1990, when he and his wife, Ginny, both 36, became associates of multilevel marketing (MLM) company Watkins Inc.

"We were planning to have a family, and we wanted the flexibility of having at least one of us at home [with the kids]," explains Ginny.

When they discovered Winona, Minnesota-based Watkins, they were intrigued. "The diversity of the product line is one of the things that [appealed] to us," says Ginny. Watkins sells a wide variety of household, personal-care, health and nutrition products, as well as specialty foods.

MLM opportunities differ from other business opportunities in that selling products isn't your only focus. You also recruit new salespeople into the system, building a chain of recruits and receiving a percentage of their sales. "[Ultimately], you can get to a point where your residual income doesn't depend on [your own sales]," says Ginny. That point came for the Lee's Summit, Missouri, entrepreneurs roughly two years after they started--sales hit nearly $250,000, and they had about 500 recruits. At the time, the pair used the then-new venue of online bulletin boards to advertise their business. After a year, Steve quit his job, and in 1996, Ginny did, too.

The benefits of this opportunity go beyond a comfortable income and lifestyle; for the Bretzkes, it's all about freedom. "[Our business] has taken on a life of its own, and we couldn't stop it now if we wanted to," says Steve. "The money is great, but I'd work for half this amount just to be home with our three daughters and not have to go [to an office] every morning."

Before you purchase an MLM opportunity, consider the following:

  • Since your success depends on the product, look for a high-quality product or service for which there is a real demand in the marketplace.
  • Look carefully at the upfront investment to see whether it's reasonable.
  • Contact state authorities to ensure the business is legitimate or see if complaints have been filed. Check out the company's business records; they should be on file with the state and county in which it operates.
  • Investigate what the business proposition involves and how long the company has existed.
  • Make sure the company has evidence to back up any earnings claims.
  • Check for a buyback policy. Legitimate companies will buy back unsold inventory and sales kits from you if you want to leave the program within a reasonable time.
  • Pyramid schemes, which require participants to make an investment or buy something in return for the right to recruit others into the system, are illegal. Legitimate MLM companies must be genuine retail organizations that sell a product or service to customers.

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This article was originally published in the September 1999 print edition of Entrepreneur with the headline: The Home Zone.

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