Company Name: Longaberger
What Is It?
A company with a long history that emphasizes baskets and home products that are now focusing on selling through a direct marketing model.
Unlike many other MLMs, the products from Longaberger do have the advantage of being somewhat novel and interesting. That might be enough to get people buying a few but the high prices are likely to put many customers off. At the same time, the long-term potential for income with this company simply isn’t high, especially as the compensation plan is complicated and appears to be intentionally confusing.
As a company, Longaberger has a long history within the United States, stretching back more than 30 years. Their reputation lies strongly in handcrafted wooden baskets, although they do also sell a range of other lifestyle and home products.
With that type of history and reputation, it might seem surprising that we’re talking about the company on this site. But, Longaberger has been struggling in recent years, partly due to the recent recession, along with changes in what consumers are interested in. In fact, the company now has somewhere around 230 employees, down from more than 8,000 at the height of the company.
Based on these issues, it isn’t too surprising that the company has moved into the direct sales market. This means that the company is now relying on distributors to promote and sell its products, providing them with compensation if they actually do make sales. That system makes a lot of sense for the company but what about for the distributors? Does the reputation of the company make it easier to earn money or much more difficult?
Well… let’s start with the products.
It shouldn’t come as any surprise but most of the products that Longaberger offers through direct sales are baskets of some form or another, along with accessories to go with those baskets. There are also seasonal and themed variations of baskets and of related items.
The other types of products on offer range considerably but they include things like shelves, accents for the home, tableware, and even collectors’ items.
The other main area of products is the ability to create your own customized basket. Well, more specifically you get to choose a basket and then customize it in various ways. So, you can pick accent colors, the writing on the basket, and add on decorative tack covers.
The idea is fairly cool and I can see how customized baskets like this might be used as gifts. At the same time though, the concept is also a bit of a gimmick. For the most part, it seems like most people might try this out once or twice but they probably aren’t going to buy customized baskets on a regular basis. For that matter, the same is true of baskets. You may find some people who are willing to buy baskets regularly but most people won’t stay interested in them for very long.
Now, the novelty factor is somewhat of an advantage, especially as there aren’t that many places that focus on baskets as heavily as Longaberger does. As a distributor, this is something that you could take advantage of, provided that you were able to consistently get new clients.
However, this means that consistent income depends on you finding new customers. Repeat customers are unlikely. How many customized baskets can you order for gifts or for decorating your own home?
The other main thing to consider about the products is their price. Realistically, the baskets are fairly expensive, especially when you consider that most of them are relatively small.
In part, you’re paying for quality and for the unusual nature of the item. Nevertheless, paying around $50 for a single basket seems fairly expensive and most of the company’s baskets fall somewhere around this price or higher. I guess people’s idea of value is different, but the design looks quite plain for what you pay, and I’d rather get a cheap Target basked to hold my stationary than pay $50.
There is an argument that high-quality products are worth paying extra for, as are branded products. But, regardless of whether that is the case or not, most people aren’t going to have the money or the willingness to regularly buy baskets at this price. And, as I said before, baskets are a bit of a novelty, which decreases the amount of repeat business you’ll get.
All in all, the products are interesting enough but you would struggle to make repeat sales. The company itself may also be an issue here, as there are other ways to get these baskets as well, including Amazon and eBay. May times people buy a bunch of products for themselves to boost their rank within a company and get bonuses or incentives, then resell the items at a loss on sites like Amazon to recoup some of their money.
Longaberger does offer some items other than baskets, but not much. The dishes and decorations are not very unique looking, and remind me of a Micheal’s or Joann’s store having a going out of business sale.
If you want to make money from any company, it’s important to consider the opportunity itself, as well as simply the products. As a general rule, MLM opportunities tend to be quite similar to one another but there are some differences too. Those differences can play a key role in how easy or hard it is to be successful with a given company.
As with most MLMs, getting started with the company involves buying a kit, which includes a selection of their products. There are two main kits on offer, one at $89 and another more complex one at $264. The idea is that these products provide a way to show what the company offers, although members are encouraged to buy more products over time as well.
On their site, Longaberger doesn’t offer much more information about exactly what’s involved in being a distributor and this makes it a little difficult to write a Longaberger review. Nevertheless, there is enough information online to offer insight.
The basic level in Longaberger’s system is being a Home Consultant, which simply means that you earn a commission from making sales. In this case, your commission is 25% and you can also earn a discount on some products that you buy yourself. 25% is quite good since some of the companies I promote to pay only 5%!
You do also get a website that you can use to sell the products. Another plus! The company says that this is personalized but realistically, it’s just going to be a duplicate site that might have your name and image on it. I doubt they teach much in terms of search engine optimization and actual online marketing. As such, you don’t have much of a chance of actually ranking the website or getting traffic that way.
One reason I don’t support a lot of network marketing companies is because direct sales are tricky and most people end up trying to make sales to friends and family members. In many cases, people have limited social networks, and majorly struggle to find new people to make sales to. Even online, they are limited to promoting to Facebook friends.
In theory, the idea of recruiting others is supposed to help get around this issue. By recruiting others, you have the potential to earn various bonuses, including a commission from the sales that people you recruit make. As they have different social networks than you, this gives you a much wider potential audience and a greater chance for income. Likewise, the various bonuses mean that you earn more money for the same amount of work.
But, often it doesn’t work like that and you find yourself struggling to make consistent sales and to grow your team.
While Longaberger doesn’t offer many specifics about their plan, it does appear that they use a fairly common technique of ranks. This means that there are various levels within the company, each of which comes with its own bonuses and criteria. For example, these are some of the bonuses associated with the rank Manager:
Those might seem complicated and that complexity is a side effect of the MLM pattern. Often you have to have a specific structure within your team to get various bonuses and different bonuses have their own sets of rules and requirements.
In many cases, members struggle to even understand what they are supposed to do to maximize their income potential, which makes it that much harder to be successful. Overall, you’re dealing with a complex system that requires a lot of planning, management, and legwork on your part.
I don’t like MLMs much but theoretically, it is possible to make a decent income through them, which includes the system that Longaberger offers. Nevertheless, relatively few people are actually successful in this structure and normally they are the ones that join the company when it is new and somewhat novel.
In the case of Longaberger, the company’s history acts as both an advantage and a disadvantage. On the plus side, people have heard of the company and its products, so this may make them more likely to buy. However, the products are also fairly common, rather expensive, and not that unusual. There are also many places that you could buy them. So, this makes it harder for distributors to create a successful business.
MLMs really are an exercise in theory versus reality. On paper, the idea can look like a powerful way to earn money, especially with all of the bonuses. Who doesn’t love the idea of residual income? Yet, it doesn’t tend to work that way when you actually try it.
One reason is that the model involves a lot of team management. After all, you have to rely on your team for much of your income, which means that you have to make sure they perform well. It’s easy to see how this can become a pretty major issue.
To be successful, you have to find a way of making sure your team consistently makes sales and grows over time. Doing this is never going to be easy, especially as many people aren’t dedicated and may not have the time to focus solely on the business. In fact, some of the people you recruit will only be casually interested in the business, so they may not earn you that much money.
In the end, being successful would involve considerable time trying to force people to be effective. But, in many cases, this simply won’t work, as people tend to have their own wants, needs, and responsibilities. Which begs the question, do you really want a business where you have to rely so heavily on team members?
I mentioned earlier that recruitment is supposed to be a way of extending your potential audience pool. However, that’s another example of something that sounds much better on paper than in practice.
I know people who have been in similar companies in the past and one pattern is that those recruited tend to have similar social networks as the person who recruits them. This overlap means that you end up directly competing with the people that you recruit and the same thing happens for anyone they recruit. As such, it can be extremely difficult to make sales and there are also a limited number of people that you can recruit.
Indeed, you’ll quickly find that most people in your social circle have already been approached multiple times and aren’t that interested in buying products or joining the company.
MLM VS Affiliate Marketing
At first glance, companies like Longaberger can seem like a great idea, especially when the company has a decent reputation. Yet, when you start digging into the concept and the compensation plan, it becomes clear that the system isn’t nearly as good as it seems to be.
Perhaps the biggest issue with MLM plans is simply that there is so much involved. Yet, is this really necessary? There are better ways to earn money out there, ones that just let you focus on sales, without the need to build a team or make pitches to friends and family.
The system that I come back to time and time again is one called affiliate marketing.
In essence, affiliate marketing is like the very first part of Longaberger’s plan, where you’re earning a commission from sales. However, you’re not making those sales directly. Instead, you’re using a website to attract and sell to a much larger audience.
Because of the size of your potential audience, affiliate marketing means that you can make money just from sales, without having to worry about recruitment. You also get to pick the products yourself. There is a huge range of affiliate programs out there that are free to join, so your options for products are pretty much endless and will cost you nothing.
Actually, you could even do affiliate marketing for baskets, if you particularly wanted to, but actually, I think it would be more fun to do something like designer handbags!