How a Bad Economy Affects the MLM Industry

During the past few years, we have experienced a global recession. The stock market has declined, jobs have disappeared and more people are struggling financially. This economic downturn has had both positive and negative effects on our industry. In the paragraphs below, I’m going to discuss both sides of the coin and explain how a bad economy affects the MLM Industry.

Since the economy has declined, many people now realize they need to have a Plan B. Most people have discovered that the days of job security are long gone. Rather than having all their eggs in one basket, some people are catching on to the idea of having multiple streams of income. In addition, many folks are excited about the idea of working from home, in their own business. While not everyone is receptive to the concept of network marketing, many of the folks mentioned above would “take a look at it” if the idea was shared with them properly. This creates plenty of opportunity for the self-motivated distributor.

On the other hand, our struggling economy has also had negative consequences in our industry. Because so many people have lost their jobs, lots of distributors and customers can no longer afford their MLM auto-ship or products. Or, they don’t have money to buy leads or advertise their business. That means that many people will “quit” their MLM business when they experience a financial setback. In addition, many people do not have ANY disposable income to start a MLM business, even when the start up cost is less than $100.

Don’t let this bad news fool you though. There is still plenty of opportunity to build a thriving network marketing business, even in a bad economy. Your job is simply to sift and sort through people, in order to find people who are looking for what you have to offer. Sure, most people won’t be interested, even if they need an extra income stream. But, some folks will gladly seize the opportunity if you share it with them. So, your key to success is to work the numbers and be persistent and consistent.

Remember, many successful companies have been started and built during tough financial times.  Plenty of businesses THRIVE during bad economic times.  It’s also important to remember that OPPORTUNITY is always alive and well.  It’s up to you to act upon that opportunity and do something with it.

Final Thoughts 

In summary, the global recession has affected he network marketing industry in a good and bad way. Many people are out of work and no longer have the disposable income to build their MLM business and order the products. This means that lots of people who are involved with the industry, will quit building their business if they lose their primary income, or are pinched for cash. On the other hand, many people are now looking for a PLAN B or a way to work from home. Your key to success during this bad economy is to sift and sort through your prospects until you find people who are interested in what you have to offer!

What are your thoughts?  How do you think the bad economy has affected the network marketing industry? Leave a comment and let us know.

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4 thoughts on “How a Bad Economy Affects the MLM Industry”

  1. I actually think that the bad economy helps the MLM business as well. Because unlike a couple of decades ago, it is possible for people to work from home. And not only that, but they can work from home successfully, and MLM plays a huge part in that.
    I think it’s in what you sell, and how you sell it, as well how good you are at sponsoring other people.

    1. Kristen,

      I agree with you. We are currently in a crisis with people on lock down in their homes and not able to go to work or school. I believe that having an MLM is very beneficial in times like these because people are able to still make money. Today there are so many MLM companies that could meet many consumers needs. Not all companies (or any that I can think of) are a one stop shop but there is nothing wrong with shopping from a couple.

  2. In many ways I think that a bad economy can be really very good for MLMs. It, of course, depends on the type of MLM.

    The way I see it it is much like gambling. When the economy gets bad, casinos, horse tracks and other gambling establishments seem to get more business. People are searching for another way to make money. If your MLM is “pitched” properly, I believe many people will jump aboard.

    The biggest key with this is the quality of people that join. I believe many may be quitters, but if the leader nurtures them correctly, he can develop good people, but if he just lets them be, I think he will lose the majority.

    I also agree with the fact that auto-ship could also cause problems. It should be set at a very minimal order.

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