Today, I’d like to discuss some of the most common MLM Business problems.
No business is perfect. Every business and business model has its share of pros and cons. While our industry does have some issues, I believe the pros easily outweigh the cons.
The upside of network marketing is limitless. Where else can you start a business for a few hundred dollars, work from anywhere in the world, not need employees, work hard for two to five years, and build up a long-term residual income?
On the flip side of the coin, I’ll be the first to admit that entrepreneurship and network marketing are not for everyone. Most people do not have the skills, work ethic, or mental toughness to build a long-term successful business of any kind. That’s why most people are employees.
If you decide network marketing is something you WANT to do, it’s important to understand these common problems upfront, so you can minimize them as much as possible.
Common MLM Business Problems
# 1: High Attrition
Every business in the real world loses employees AND customers. FACT. If any business stopped recruiting new customers and new employees, it would not be in business long. This includes Walmart®, the NBA®, churches, the government, etc.
One of the biggest MLM Business problems is the attrition. From personal experience, at least 80 to 90 percent of the people who join a MLM Company quit within their first year, and most of those people quit in 90-days or less.
People quit for many different reasons. It normally has nothing to do with the company or industry either. Not everyone is cut out for sales or entrepreneurship. Not everyone can manage their time effectively. Not everyone can manage their emotions or have realistic expectations.
I’d also note that all SALES type jobs have high attrition. This would include realtors, insurance agents, door to door sales, direct sales, etc. Selling is tough. It’s not for everyone.
Despite the high attrition, our industry is still quite lucrative. Even if MOST people quit, you can still build a big team and big residual income.
# 2: Low Cost of Entry
The low cost of entry is a blessing and curse in our industry. It’s a blessing because people with little or no money can start their own business. On the other hand, it’s a curse because most people who join network marketing will not treat their business seriously, because they have such a small amount of money invested.
I tell everyone on my team to act as if you wrote a check for one million dollars to start your business. Treat it like a big business. Be part-time with a full-time attitude.
When someone invests tens of thousands of dollars, even millions of dollars, to start and run their own business, they do EVERYTHING in their ability to make it successful. They make a business plan, work 80 to 100 hours per week, work nights and weekends, learn everything they can about their industry, etc.
This rarely happens in our industry. In fact, we might just be the only industry where someone “starts” a business and then does absolutely NOTHING to grow it.
If you act as if you have millions of dollars invested in your business, there is a high likelihood you will succeed in network marketing! Food for thought!
# 3: The Reputation of Our Industry
Most people you talk with are ignorant about our industry. They don’t know what they don’t know. Network marketing is not taught at schools, in college, or in most homes. To most people, it is a foreign concept. As a result, many people have preconceived notions, even misconceived notions about what our industry is all about.
Combine that with the fact that anyone can write a negative article online or create an anti-MLM website, and most prospects have a difficult time determining the difference between fact and fiction.
Now, don’t get me wrong. Some people in our industry say and do some shady things. These folks hurt EVERYONE in our great industry. We need to do a better job policing ourselves.
This is not exclusive to MLM. It happens in every industry. There are good people and bad people in every industry.
Our real job as network marketing professionals is to educate our prospects. We must say and do the right thing and teach them what network marketing is about.
# 4: Competitively Priced Products
One of the most common MLM Business problems is OVER-PRICED products.
Many companies in our industry mark up the price of their products so much that no one in their right mind would buy it!
Very few prospects will whip out $100 for a bottle of “magic” juice or $75 for a bottle of skin lotion. Some people will, but most won’t.
I tell people that if the products don’t make sense, the business doesn’t make sense. The products don’t have to be unique to the company, although that can help. The products don’t need to be the cheapest either, but they must be competitively priced to what consumers can buy online.
Before joining any MLM Company, ask yourself this question:
Would I buy the products at the suggested retail price if I weren’t promoting the business?
If you can answer yes to that question, you’ve found a good company.
# 5: Mismanaged or Greedy Companies
We have some crazy owners and mismanaged companies in our industry. That’s one of the reasons so many MLM Companies fail. They either have a good thing going and they get greedy and change the deal or they are clueless about how to start, run, and grow a successful business. Of course, there are lots of GOOD owners too.
There are few things that anger people more than building up a big team or working hard for several years to grow your business, only to have the company go belly up and shut down.
Make sure you research the company owners and management team BEFORE you join a MLM Company.
In conclusion, these are the most common MLM Business problems, as I see it.
No industry is perfect. No company is perfect. No business is perfect. No person is perfect. Despite these common MLM Business problems, I still believe network marketing is the best industry out there for the average person to succeed. The pros easily outweigh the cons.
What are your thoughts? Do you agree or disagree with me? Leave a comment below to let me know what you think. I look forward to hearing from you.