Most people in the MLM industry think they are not good enough to achieve success in MLM, therefor they are struggling.
People join MLMs to get rich quickly and easily, as it is promoted in such a way, but the reality is far different.
Jon M Taylor (MBA, Ph.D.), an American businessman did research for 15 years on 350 network marketing companies and found that 99.6% of people lose money in MLM business.
The success rate in MLM is just 0.4%, even a person indulged in a fraudulent pyramid scheme has more chance to get success compared to a genuine MLM.
This post is an answer to the question, Why do 99% of people fail in the network marketing business?
So let’s get started
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Why 99% of People Fail in Network Marketing?
Initially, when I got to know, that 0.4% is MLM’s success rate, then it was quite shocking to me. MLM is always promoted in a way to achieve all money, personality and success easily, which is not true.
You can read Taylor’s complete research, The Case (for and) against Multi-level Marketing. This research is published as an eBook and also shared by the American government agency FTC (Federal Trade Commission).
Jon M. Taylor compared the success rate of other businesses with MLM.
|Income Source||Success Rate|
|Legitimate Direct Selling||80%|
|Illegal Pyramid Schemes||10%|
He also challenged MLM companies’ owners to prove him wrong, but no one did so.
Even when I reviewed various MLM companies and checked their income disclosure statements, the finding was almost the same.
The top 1% of people earn more than 90% of the profit and other people lose their money in buying overpriced MLM products. Figures vary according to the compensation plan followed by MLM companies, but the conclusion is constant.
What is Wrong with 99% Distributors?
Actually, MLM is like a tough competitive exam where only 1% of distributors will get success and the other 99% have to go through the loss of money and time.
If only the top 1% of people make profits, then what is exactly wrong with the other 99%?
Lack of skills, hard work, failed in networking and marketing, are some possible reasons for failure for some individuals, but what when 99% are failing?
Actually, the answer is in the success of the top 1% of distributors.
Who Actually Gets Success in MLM?
Distributors who get success in MLM belong to the following 2 categories, which can overlap.
1. Distributors who joined and took positions in the MLM tree at the beginning of the company and remained top of the pyramid. Here, the success of such distributors highly depends on the growth of the company.
2. The second category of the distributor who knows public speaking and can deliver motivational speeches on stage. These distributors are called Leaders, Top promoters and faces of MLM companies.
These leaders show the luxury lifestyle and how easily they achieved it by just joining MLM. Often they use deceptive tactics and lies for mass-level recruitment and lure maximum people to join them.
Ordinary MLM distributors who individually sell products, earn very less commission, while leaders who sell dreams on stage make remarkable income from network marketing.
Even MLM companies provide extra bonuses to such leaders and eventually they become one among the top 1%.
On other hand, every ordinary MLM distributor dream to become that shining MLM Leader.
To Be Concluded
MLM itself permits only a fraction of people to get succeeded who are actually top of the pyramid. There is only space for 1% hence almost 99% of people have to fail in MLM.
Even 4-5 years of struggle is meaningless if someone is not able to do mass-level recruitment in MLM.
Public speaking and stage performance are key to get instant success in the MLM.
Many times ordinary distributors are trapped in MLM Scams such as the Pyramid and Ponzi schemes. Nowadays Forex-MLM and Crypto-MLM have also become very common to fool people. Hence, be careful and take every step after thinking twice.