Five Reasons You Will Fail in Network Marketing

Today, I want to share five reasons your network marketing business will probably fail. Our industry does have a high failure/quit rate.  I don’t know the exact statistics, but I know that 90% or more of the people in our industry QUIT.

People make a huge deal out of this failure rate, but what they don’t realize is most businesses fail. Drive around any town or city in America and look at how many businesses are closed. Look at the buildings and ask how many of the businesses there today were there five years ago.  And in another five years from now, most of the current businesses will fail and close down.

More importantly, most of these businesses had HUGE sums of money invested in their business AND they worked around the clock to run their business.

Businesses fail for a variety of reasons.   Common reasons might include bad location, stupid owners, lack of funding, increased competition, etc.  Yet, when it comes to network marketing, most people fail for different reasons.  My goal today is to educate you on these reasons so it doesn’t happen to you.

# 1 Wrong Mindset – There is a HUGE difference between an employee and entrepreneur. Unfortunately, most new network marketers think like employees!  They have never owned a business before, so they don’t know how to think like an entrepreneur.  They are accustomed to trading hours for dollars.

In the traditional business world, people will invest $10k to $1 million to start a business and they don’t expect to make a profit for three to five YEARS. However, in network marketing, people will quit within 60 to 90 days if they aren’t making $10k per month.  I don’t get that.

If you want to be successful in network marketing, one of the best things you can do is work on your MINDSET.  Get around other successful entrepreneurs both inside and outside of network marketing and learn how they think.  Please realize that you have to be mentally tough to survive in business.  You have to develop a whole new set of skills.  You might even figure out that you weren’t meant to be a business owner.  And that’s perfectly fine.

# 2 No Business or Marketing Plan – All businesses, including network marketers need a written business and marketing plan.  These two documents cover your strategic and tactical goals, your budget, your marketing strategy, your unique selling proposition and your action plan.  Interview 100 network marketers and you will quickly discover that 99 of them DO NOT have a WRITTEN business or marketing plan.

It’s as if they are leaving their success to chance or luck!  Take the time and develop a written plan. The documents should be one page each.  They should be simple, doable and to the point.  You can refer to these documents daily to know what you need to do and see if you are on track.

I learned in the Army that failing to plan is planning to fail!  Make sure you map out your goals, know what you want and have a plan to get there.

# 3 Not Building Relationships – Success in network marketing boils down to building strong RELATIONSHIPS.  If people know you, like you and trust you, there’s a good chance they WON’T quit.  When you study the top earners who have had huge downlines for 30, 40 or even 50 years, you will discover that they are MASTER relationship builders.  Their team is their friends!

They invest time and money and energy in their people.  They build friendships first, and then everything else falls into place.  Are you building friendships or are you just looking for the quick buck?

# 4 Not Being Consistent – This is probably the # 1 reason people fail in network marketing. You can’t work your business one day a week or one day a month and expect huge success. You have to consistently show the plan, prospect and follow up every single day.  Even if you are building your business part-time like most people do, you have to do money producing activities day in and day out for a period of a few YEARS.

When I meet someone who is struggling in our great industry, the first thing I do is look at their calendar.  In 99 out of 100 cases, their calendar is EMPTY and they have done nothing to build their business.  If you want to succeed, you must be consistent for three to five years with the same company!

# 5 Wrong Focus – Most people think about their network marketing business ALL of the time.  However, thinking about your business will accomplish nothing.  Everyone I know is busy, but few people are PRODUCTIVE with their business.

All of your focus should be geared around money producing activities, which include prospecting, showing the plan, following up, getting customers and training your team. Surfing YouTube, cleaning out your office, looking through the catalog, exploring your company website and all those other non-money producing activities are not important. You have to be focused!  You have to work smart!

Things to Consider

Notice that I didn’t say anything about the company, the training or upline support.

TONS of people blame their failure on these things.  They say they failed because their upline doesn’t help, or they haven’t been trained, or their company sucks.  The truth is, as long as you are blaming someone ELSE for YOUR failure, you will never succeed at anything. You have to man up or woman up and accept responsibility for your own business.

People succeed and people fail in every company.  I know people personally sponsored by MILLION DOLLAR EARNERS, yet they still fail!  In fact, I see it all the time.  And I’ve met people with no upline support who become top earners.

There is really no excuse to fail.  You already know what you need to do to succeed in network marketing (talk to people every day).  The only real question is “will you do it?”

If you want to succeed in network marketing, join a good company, make a five year commitment to stick it out, and do something EVERY DAY to build your business.  Do that and you will succeed in network marketing.  Don’t do it and you will quit/fail.

What are your thoughts?  What are the reasons you think people fail in network marketing? Leave a comment below to share your thoughts.

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7 thoughts on “Five Reasons You Will Fail in Network Marketing

  1. Diamond Grant

    I think that a lack of healthy business relationships does contribute to failure in Network Marketing. It is pretty much impossible to do anything completely on your own. You have to have a team of people you can rely on to help you get where you want to go or else you will be stuck. This means creating an environment of trust and respect so people can believe in you and what you are trying to do. It also means helping people to become their best selves while they support you so they feel valued and again are motivated to stay onboard.

    Reply
  2. Faye

    I agree with the points about cash flow, as they are very good ones. I also see how many businesses fail because of the lack of attention to relationships. It is easy to dive into the work, putting in long hours (as you should), but then neglecting essential relationships. What good does it do you to have all of your other ducks in a row if you have neglected to reach out to potential customers and recruits? Be generous with your time and attention too.

    Reply
  3. Richard Brokenshire

    Hi Chuck,Although, your 5 reasons are valid, I do think that most of them are over rated. I started my traditional business, 29 years ago, with a whooping 5.00. For the most part, I had no idea what I was doing. Somehow, I managed to stay in business all these years.I wrote an ebook that had 30-40 different reasons why people fail or quit MLM. I never distributed it because I came to realize that there is only one real reason why people quit/fail at MLM. The one reason? They aren’t making any money from their business.It would be difficult to find a reason to quit if you were making money running your business. I think that the number one thing that a sponsor can do to help the new recruits, is to figure out a way to get them into profit as fast as possible. This puts a stop to the revolving door that most network marketers experience.The constant recruiting and training of new people, only to see them quit in their first 60 days. Quitting the treadmill of the day job is just the beginning of the treadmill in your business!

    Reply
    1. chuckholmes Post author

      I agree that people quit because they aren’t making money. But, I also think that “not making money” is nothing more than a symptom of the five things listed above.

      Truth is, nearly 90% of all businesses fail (not just MLM). All businesses fail because the person is not making a good profit. And usually they are not making a profit for one of the reasons listed above.

      Thanks for the comment, Richard.

      Reply
  4. Patricia Loofbourrow

    The biggest reason I’ve seen for failure is poor money management. People spending too much before they have made any money, people spending the money their customers gave them to buy their products (which in my view is fraud), blowing their profits instead of re-investing them into the business, and so on.It kind of relates to #1 but I feel this is why people “go broke” doing MLM, which shouldn’t really happen.

    Reply
    1. chuckholmes Post author

      You have to watch your cash flow in ANY business. It’s not just about how much you make. It’s how you manage it, controlling when it comes in, goes out, etc. Unfortunately, poor money management is just as common in business as it is in the real world.

      Reply

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