One of the biggest problems with most home based businesses is the fact that they are not sustainable. This is especially true for any MLM or network marketing type of business.
Although I have been one of the fortunate few that have made a lot of money with network marketing the simple fact is they never last. Even if the company lasts, organizations tend to fall apart and after a while the person that is building that kind of business finds it more and more difficult to out recruit attrition. It’s like trying to fill a bucket of water that has a hole in it.
In the book “The Case (for and) Against Multi-Level Marketing” researchers found:
Prospects are typically lured into MLM with exaggerated product and income claims. Rewards are stacked in favor of those at or near the top of the pyramid, who are often the first ones to join. Since approximately 99% of participants lose money, most of them eventually drop out, to be replaced by a continual stream of new recruits, who are likewise destined for loss and disappointment
What Are MLM Success and Drop Out Rates?
- In the first year of operation, a minimum of 50% of representatives drop-out.
- After five years of operation, a minimum of 90% of representatives have left the company.
By year 10, only those at or near the top have not dropped out – making it safe to say at least 95% of representatives have dropped out
Loss rates are extraordinary – averaging 99.7% (or about 99.9% for new recruits) for the MLMs for which I have been able to obtain relevant data. This in itself would not be so bad, except that it is promoted as an “income opportunity” – or even as a “business opportunity” – a misrepresentation in itself.
To contrast these statistics, consider the failure rates for traditional small businesses. The Small Business Administration’s statistics for 2008 found that 44% of small businesses survive at least four years and 31% at least seven year, and 39% of businesses are profitable over the life of the small business. Only 64% of small businesses fail in 10 years.
MLM is almost always unprofitable for participants, except for TOPPs (top-of-the-pyramid promoters) at or near the top of the pyramid – who are usually the first ones to join and who may profit from the purchases of what is often a huge “down line” of recruits churning beneath them. Typically, MLMs have little sustainable customer base and are primarily dependent for revenues from purchases of a network of participants – 99% of whom lose money.
So do you think your business is sustainable? Your MLM is different, right?
Another painful lesson I learned the hard way with network marketing is that you never really “own” your business. That’s right! It is one of the biggest lies of network marketing, that you “own” your business.
The fact is the company owns that business and if they decide someday that they don’t need you or don’t want you any more they can just take it from you, it is called “termination” and they can take your business from you at any point in time.
Sure they may have to come up with some creative way to do it. But you are seriously fooling yourself if you think they can’t or they won’t.
I used to think the same thing until it was done to me and I had a six figure residual income taken from me by a company claiming that I was doing something I wasn’t even doing. If you think that people are not falsely accused of doing things in this world, especially when there is a lot of money involved, you are just as naive as I used to be.
In the long run it didn’t even matter. It led to a legal battle and in battles like that it all comes down to who can hold out the longest or in other words who has the deepest pockets, and when a company has just stolen your primary source of income that makes it even harder to wage a legal battle with them.
This all may sound strange coming from a guy that made a lot of money in network marketing. Well the fact is I have seen “The Good, The Bad and The Ugly” in the network marketing industry. Does that mean I think they are all bad? No.
I do not think they are all bad and I am a “customer” of a few of them still to this day.
But I do not actively build those “opportunities”, I just really like their products and continue to purchase their products as a customer and when it may be a good fit for someone I may even recommend those products to some people.
However as far as building something that I believe in and creating a long term residual income that I can pass on when I leave, I stay away from the hyped up promises of MLM or network marketing opportunities that are not even close to being sustainable.
But what is the average person to do if they have a dream of developing a large residual income with a work at home business? For so many years the most prevalent option was to get involved with a Network Marketing opportunity.
Welcome to the 21st century, while not new it is relatively new to North America, it is actually a ten year old international giant.
So how does this new model differ from MLM or Network Marketing? Just consider the following, does this look a little different than what you’ve seen in the past?
- No Sign Up Fees
- No Business Kits to Purchase
- No Monthly Minimum Purchases
- No Auto-Ship
- No Attrition
- No Website Fees
- No Overpriced Products
- No Added Expenses
No games, No gimmicks, No tricks just continue to do what you already do and get paid for it.
If you would like to learn more simply complete the form HERE and watch your inbox for more details.
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Yours to count on,
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