“If it works, it works” as the old saying goes. That is, unless of course, it doesn’t. Network Marketing
& MLM opportunities look good on paper. We’ve all seen the presentations, whether via an online video presentation or at our kitchen table. We hear impressive terminology like “forced matrix”, “hybrid networking model” and “direct response networking”. We see impressive graphic illustrations and “forced geometric progression” strutures to get prospects salivating over potential for a quick net profit, and a long-term residual income. A distributor gets involved, spends time and money hoping to beat the staggering odds stacked against them. And, unfortunately, as with 99% of all network or multi-level marketers, the distributor fails. They lose money, motivation and inevitably drop out of the program.
This begs the question; “Why do people, knowing full well that statistically they will indeed fail within the first 6 months, even get involved in the first place?” Answer: They bought into the myth, or illusion of MLM and Network Marketing success.
Do we suggest that MLM and Network Marketing business models are a scam? Of course not. There are in fact legitimate opportunities out there that offer new and unique products or services to the market. After all, on paper, the math works out. However, in reality, the vast majority will fail within the first three months, regardless of the product or market appetite.
We will now summarize 5 of the most common myths attributed to MLM & Network Marketing in attempt to explain the massive failure rate that networkers seem destined to endure.
Myth #1: MLM offers a better business opportunity than any other conventional model for amassing a large fortune.
Reality: 99% everyone who invests in MLM ends up losing money. That means that fewer than 1% of all MLM representatives ever earn a profit. With approximately 13.3 MLM and network marketing distributors in the US alone, only 130,000 ever make money. And those “gurus” earning a sustainable income at this business are an even smaller percentage still. The fact is that mathematics inevitably limit every MLM opportunity. The MLM Business model itself allows for only a small number of successful distributors. Continuous growth of an MLM company is in fact usually due to the constant number of new enrollees, most of which drop out by the third month. It takes an army of failures to create just one successful distributor.
Myth #2: MLM is easy. Recruiting Friends and relatives ensures you have Life-Time distributors & customers.
Reality: Capitalizing upon personal relationships like friends and family members to build your organization can hinder and even destroy social standing. Simply put, people don’t like being pressured by friends or relatives to buy products or join a business. Naturally, people tend to avoid them and identify them as a salesman, not a friend. This is jokingly referred to as the “NFL” or “No Friends Left” club in MLM & network marketing circles.
Myth #3: MLM & network marketing can be done successfully in your spare time. A few hours of time invested every week can earn a significant supplemental income and will grow exponentially, making further effort unnecessary.
Reality: Earning an income in MLM & network marketing requires extraordinary time commitment. “A few hours a week” inevitably leads to dominating people’s entire life. In MLM, because everyone with a heart beat is a prospect, every waking moment is a potential time for marketing and recruiting. Talent, dedication and salesmanship all require one key element to hone and enhance: time. This is one of the reasons why so many MLM ‘ers jump from program to program, hoping to catch the next wave. They have spent so much time on the phone and keeping up with changing company guidelines that it has actually become their life.
Myth #4: MLM & network marketing are the best option for owning your own business and achieving financial independence.
Reality: Distributorship in MLM is not “owning a business”. Most MLM contracts have termination of the distributorship clauses in their Terms & Conditions Agreement. This makes it easy, and perfectly legal, to cancel your distributorship at will, commissions can be withheld and down lines can be taken away arbitrarily. MLM distributors are not “business owners”, but joiners in a rigid duplication system over which they have virtually no control and must adhere to.
Myth #5: Network marketing & MLM’s are the most effective after building a large down line, thus leading to long-term residual income.
Reality: Most assume that success with MLM depends on reselling the opportunity to sign up more distributors and building a massive organization. As a matter of fact, long term residual income lies in a loyal customer base, NOT from the organizations efforts. Translation: in the long term, money can be made from the customers using your product, not from that 99% failure rate we discussed earlier. Personal retailing is where the potential for long term income, not building huge down lines destined to collapse. So of course, the question arises, why even put any more money or effort into recruiting distributors, when the real money is on the retail end? If your involved in a MLM, stop recruiting
distrutors and focus solely on long term customer relationships.
Is there an alternative? Is there a business model that can turn a 99% Failure Rate into a 99% Success Rate?