Today, I want to discuss failure in the MLM Industry.
This is a controversial topic that few people really understand.
It definitely gets taken out of context a lot and gives our industry a bad reputation.
My goal today is just to clarify things so you can see both sides of the story.
I’ve read countless articles and blog posts online that only a small percentage of people who get involved with network marketing actually make a profit, and a very TINY percentage of those people earn a substantial or full-time income!
If you read any company’s “average earning’s statement” you will find that only a very small percentage of distributors make a full time income with the company, about one to three percent of the distributors.
A decent amount of folks earn between $100 and $300 per month, and a small group of people earn $500 to $5000 per month, but MOST people don’t earn anything at all.
Yes, these numbers do vary slightly by company, but the bottom line is that most people in our industry do not make any money with their network marketing business.
As I see it, there are three different groups of people in MLM.
Unfortunately, all three groups are “combined” into one group when companies publish their “average earnings statement.”
First and foremost, are the product users.
Believe it or not, not every joins a network marketing company to make money.
Many folks sign up as distributors just to get the wholesale-retail difference on their personal purchases.
I’d bet close to 75% of my personal team falls into this category.
Are they MLM Failures?
They’re just happy product users.
Saying these folks “failed” in MLM is far fetched to me.
Another group you have is people who get in and do nothing.
Trust me, most people do nothing to build their business.
This is the person who joins with the desire to make money, but doesn’t do the work.
My question to you is “how can you call someone a failure if they quit their business in less than a year and/or never even sponsored a few people?”
You can’t fail something you haven’t started, but you can quit.
Don’t confuse the words quit and fail.
They are two totally different things.
I’d bet 80% of the people who join a company and WANT to make money fall into this category, maybe even more.
The next type of person is someone who gets in, works their business consistently week in and week out (at least 10 hours per week) for two to three years and still fails.
I’ve personally NEVER met anyone who fell into this category, but I’m sure there are some folks out there.
To me, this is the ONLY group of people that should be considered “MLM Failures,” people who actively tried to build their network marketing business week in and week out for several years, but still couldn’t get it to work.
The Most Important Question
People get so wrapped up with the high failure rates in our industry, that they often end up neglecting the most important question.
That question is , WHY do so many people who WANT to make money in network marketing not make any money?
And I think that question is really a million dollar question.
In the paragraphs below, I will do my best to answer that question honestly and objectively.
We will also review what the top earners do to succeed.
What the Top Earners Do to Succeed
When you study the successful people and the unsuccessful people in any industry, you start to notice patterns and trends.
Simply put, successful people do certain things in a certain way, whereas unsuccessful people do things differently (or they don’t do anything at all).
Here are some of the patterns and trends I’ve noticed from top earners in the network marketing industry.
- They find a company with products/services they are passionate about and stick with that company for the long haul, at least five to ten years
- They have a crystal clear vision for their business
- They have lots of personal customers
- They are on auto-ship and use and believe in all of the company’s products
- They have “sold out” to the concept of MLM and their specific company
- They take their business education very seriously: buying books, attending seminars, listening to audio programs, and participating in Mastermind Teams
- They have a successful mentor who serves as their personal coach; in some cases they even pay their mentor
- They set time in their schedule to work their business every day
- They work their business consistently for several years
- They accept 100% responsibility for their own success
- They treat their business like they have ONE MILLION dollars invested in it
Trends of MLM Failures
On the other hand, when you study people who “fail” or “quit” our industry you also noticed trends.
Here are a few examples:
- Jump from company to company every few months or years
- No vision
- They don’t have any customers
- They aren’t on auto-ship and don’t believe in the products
- They haven’t completely “sold out” to the idea
- They don’t invest money in their business education
- They don’t have a mentor
- They don’t work their business consistently for any period of time
- They blame their lack of results on everyone but themselves
- They don’t have any type of game plan
- They think about their business a lot, but they don’t do anything
***** Are there any exceptions to this list?
Of course, there is always an exception to any rule.
But for the most part, these are the major differences I’ve found between the people who make it big in network marketing and the people who fail in network marketing.
Other posts you may enjoy:
- MLM Successes: 35 Must Read Blog Posts
- Why People Hate MLM
- How to Go from Bad to Good to Great
- The Four Hour Work Week by Timothy Ferriss: A Review
- Top 19 MLM Tidbits
Failure Rate in the Real World
Furthermore, I think it’s equally important to compare the failure rates (quit rates) in the MLM industry to other things in life.
You see, you have to put things in context.
You have to compare apples to apples.
I want to show you a few examples of failure (quitting) so you can see things from a complete perspective.
Here are a few facts about failure that you should know about (sources are cited).
- 95% of all blogs fail. According to a recent study 95% of all blogs haven’t been updated in 120 days. In other words, the blogger gave up on their dreams of having a successful and profitable blog (Source).
- Nearly 50% of marriages fail (source). This varies by age, gender, race, and by state.
- 70% of small businesses fail in the first 10 years (source).
- Most people, a large majority of people fail with diet plans. They lose weight temporarily and then gain most of it back fairly quickly (source).
- 67% of gym memberships never even get used (source).
Ask any real estate or insurance broker how many people they have to recruit to find someone who PRODUCES.
Ask them what percentage of their recruits drop out and don’t earn anything at all.
I think you will quickly discover that most realtors never sell one house and most insurance agents never sell one policy!
The truth is, selling is not for everyone.
It is typically a tough profession with a high turnover.
Another truth is that most people fail/quit in everything they do.
Most people QUIT their diets, marriages, savings plans, New Year’s Resolutions, fitness plans, and just about everything else in life.
Why would MLM be any different?
Yet, how many times do you search the Internet and see a blog like this:
- A disgruntled blogger writing why blogging is a scam
- A disgruntled small business owner writing why owning a business is a scam
- A disgruntled person trying to lose weight who writes why dieting is a scam
- A disgruntled person who bought a gym membership writing about why gym memberships are scams
- Etc., Etc., Etc.
In most cases, you will never see a blog, forum post or online article about any of these topics being a scam.
Yet, everyone and there brother will plaster the Internet writing stories about why the network marketing company they worked with is a scam.
It absolutely amazes me and annoys me at the same time.
The Bottom Line
Here’s the bottom line.
You can succeed or fail (quit) in anything you do.
- There are successful network marketers
- There are successful bloggers
- There are successful entrepreneurs
- There are people who are successful at losing weight and keeping it off
- There are people who buy gym memberships and transform their bodies
Rather than spending all your time studying and reading about the failures (and quitters), why not study what the successful people?
Why not find out what the successful people did to become successful and then simply do what they did?
In my opinion, that is the quickest way to become a success yourself.
Yes, you have freedom of speech and can call it whatever you want to.
But before you label our industry a scam, why don’t you call everything you quit a scam?
Once again, it’s also important to differentiate the difference between failure and quitting.
Most people don’t fail at things: they quit things.
And there is a big difference between the two.
If you get started with something, learn from your mistakes and keep pressing forward, you will eventually succeed.
Most people simply don’t have the vision, the discipline, the work ethic and the perseverance it takes to succeed at different things in life, including network marketing.
What are your thoughts on this subject?
What do you think about the failure rate in the MLM Industry?
What do you think about the network marketing industry itself?
Please leave a comment and share your thoughts.
I look forward to hearing from you.