Multi-level Marketing: It Can Work, But Buyer-Beware

mlm“When my son was born, I wanted to start a home business, but nothing fit,” says Sharon Holmlund of Thurmont, Maryland. Then she read a magazine article about Shoebox to Showcase, a home-based business in which consultants teach customers to preserve their family photos using photo-safe albums and accessories. She started running her Shoebox to Showcase business part-time in April 1990. This year she hopes to earn $15,000; in five year she expects to be making $50,000 a year, while still working part-time.

Shoebox to Showcase, a program started in 1988 by Creative Memories, a marketer of archival-quality photo albums, is a low-cost way to start your own home business. (Creative Memories is a division of Webway, Inc., which has produced photo albums since the 1930s.) It’s particularly attractive to parents at home with young children because the program allows you to market and manage a business at your own pace. According to Creative Memories vice-president Susan Iida-Pederson, 98 percent of Shoebox to Showcase consultants are women, of whom 85 percent work part-time.

“The market is anyone who has been put in charge of organizing family photo albums but doesn’t know what to do,” says Holmlund.

Shoebox to Showcase is similar in structure to other successful multilevel, direct-sales companies like Mary Kay Cosmetics of Dallas, Texas. There are three levels in the organization. The first is consultant. Holmlund began as a consultant by purchasing the standard $95 introductory Shoebox to Showcase package. This includes a demonstration album and sales materials that show how to create a photo album to use at presentations. Holmlund also bought a number of discounted albums to sell. (Album purchases are useful for presentations, but not required; customers can order from catalogs.) Using personal contacts and others suggested by Creative Memories staff, she held several Shoebox to Showcase classes and presentations. Holmlund became an “active” consultant when she registered $300 in sales.

As a consultant, Holmlund generates income from two sources–the sale of albums and supplies, and customer workshops on photo preservation and album making. She receives a 30 percent commission on all album sales; through varying monthly incentives, she can receive as much as 40 percent. For each class, Holmlund receives a nominal fee from each student.

Consultants become unit managers when they recruit six new consultants to the company. Holmlund found most of her recruits through workshops. Working 15 to 20 hours a week, Holmlund became a unit manager in about nine months.

There are more ways for unit managers to generate income. From consultants whom Holmlund recruits (first-line consultants), she receives 6 percent of all merchandise they purchase from the parent company. From consultants recruited by her consultants (second-line consultants) she receives 4 percent of sales. Holmlund can also generate income from classes for new consultants on sales strategies and photo-album techniques.

A unit manager becomes a director when four of his or her consultants become unit managers. No one has yet reached this level in the organization of Creative Memories.

As an individual progresses in the organization, the sources of income change. For example, when Holmlund was a consultant, nearly all of her income came from sales. This year, as a unit manager, she projects that 40 percent of her income will come through sales and 60 percent from benefits earned from her consultants. In four to five years, Holmlund foresees 10 percent of her income coming through sales and 90 percent from work with and sales by recruits. “It’s the classic sales-to-management approach,” she says.


Holmlund runs the business from her home office, using a Macintosh Classic and an Apple Personal LaserWriter printer. With FileMaker Pro software, she tracks clients and consultants and produces ongoing business-generating mailings (about 50 letters per month) to historical societies, women’s groups, and local and national periodicals. With Microsoft Word, she produces a monthly newsletter, From Sharon’s Shoebox, for her 40 to 50 consultants, and fliers for crafts fairs and shopping-mall promotions. (See this month’s cover story on newsletter production.) Monthly mailing costs run about $50; monthly copying costs are $35. She has also set up an 800-number ([800] 484-1091, ext. 5049) for orders and queries; the monthly cost varies, depending on business volume.

“Support from the company is very strong,” says Holmlund. Creative Memories provides catalogs, press kits, and promotional materials. The company sponsors several regional mini conventions throughout the year and an annual national convention.

“Shoebox to Showcase is a business you can begin on a shoestring and stay with for the long haul,” says Holmlund. In 1988, when the company was just starting, Creative Memories/Shoebox to Showcase had eight consultants and no unit managers; today it has 800 consultants and 30 unit managers across the country. “There’s so much room for growth,” says Holmlund. “And I’m glad I’ve found something that lets me balance my business and my family.”

Posted in Money by BigPaul at August 22nd, 2015.
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