MLM Horror Stories: What You Should Know

In today’s post, we are going to discuss MLM horror stories.

Although our industry has lots of success stories, it has even more horror stories.

If you do a quick internet search for MLM Horror Stories, you will find THOUSANDS of stories and articles written by people who claim that their experience in network marketing ruined their life, forced them into bankruptcy, strained their relationships, made them lose their job, or led to a divorce.

Some of the most common Horror Stories include:

  • Bankruptcy and/or Financial Ruin– There are tons of MLM Horror Stories online about people who supposedly lost their homes to foreclosure, racked up credit card debt, got behind on bills and eventually had to file for bankruptcy because of their failure (and poor decisions) with their MLM business.
  • Failed Marriages– Many people claim that MLM ruined their relationship with their spouse. Their spouse had a different view about the business and it ended up causing tension in the marriage. Or, they spent so much time away from their spouse and kids while they were building their business.
  • Destroyed Friendships– Countless people claim that network marketing ruined their relationships with their friends and family. As a result, they became part of the No Friends Left Club.
  • Heart Attacks and Stress– Many people report anxiety and stress (even some heart attacks) because of their disappointment and failure in network marketing.

First off, if you have ever experienced any of these things, and you think it was a result of your participation in network marketing, I’m sorry you feel that way.  I am sorry you had a bad experience.  These things should never happen to anyone in our industry.

I’ll be the first to admit that if you build your network marketing business the wrong way, these things COULD happen to you, or anyone else.

You could also argue the same holds true for any other business model. Countless entrepreneurs have gone bankrupt, got divorced, lost friendships and lost their health BECAUSE of their business.

It is by no means exclusive to network marketing, nor does it have to happen to any network marketer.

The real question you should be asking yourself right now is this:

“What is the real cause of these MLM horror stories?”

You should also ask yourself “is the cause of these horror stories the network marketing industry itself, or the people involved, or the way the person is building their business?”

Think about that for a moment.

Everyone is quick to blame their problem on someone or something else.  It’s the American way.

Few people actually man up or woman up and take responsibility for their own failure, poor performance, bad decisions, or mistakes. After all, it’s easier to blame others.

On the flip side of the coin, I also realize there are circumstances that are outside of one person’s control.

Personally, I believe most of these MLM horror stories could be avoided, if people had realistic expectations, worked smart, and kept things in perspective.

If people followed the advice I am about to share in this article, they could turn their MLM Horror Story into a MLM Success Story (or at least avoid having a horror story).

I’m going to share several simple ideas to help prevent you from failing in MLM. Even if you don’t agree with me on each tip, I hope you will at least hear me out.

My real goal is to help you help you have fun, make money and achieve your goals.

# 1 Not Everyone is Cut Out to Work for Themselves

There, I said it.  Not everyone should be a distributor. Everyone’s situation is different.  Everyone is different.  Not everyone is cut out to be an entrepreneur (or network marketer), and there is nothing wrong with that.  

Some people are not suited for the time commitment and hard work it takes to build a successful business of any kind. Others do not have the skill-set, mind-set, work ethic or hustle.

What I would tell these folks is to consider being a customer or wholesale distributor, but don’t try to build a business of any kind.  Instead, focus on your day job. Stay an employee.

Before you start any type of business, ask yourself the following questions:

  • Can I manage my own time effectively?
  • Would I enjoy being my own boss?
  • Do I have to the discipline to consistently work a part-time business for several years?
  • Am I coachable?
  • Would I be willing to work my business for a couple years, without earning any money at all, until my business gets established and running smoothly?
  • Am I willing to give up most of my leisure time for a few years to build a part-time business?
  • Can I handle the constant rejection, temporary failure and disappointment?
  • Can I handle the fear and stress of the unknown of not having a steady paycheck?

Only you can answer these questions, but I hope you will ask yourself each question before you start any type of business.

If more people thought about this BEFORE they started a business, there would definitely be less MLM Horror Stories.

# 2 Get Your Priorities in Order

First and foremost, your family and friends, your health, your personal finances and your spiritual life are more important than your MLM business (or any other business).

Read that again one more time so it sinks in.

Don’t let your MLM business take over your life. It is not your life. It is only a part of your life.

It does not define who you are as a person.  Instead, it’s simply how you make money.

The day your business (any kind of business, even a job) becomes more important than your spouse, your kids, your finances, your health, your spiritual well-being, and your happiness, is the day you are doomed for failure.

I’m not saying your MLM business shouldn’t be a top priority. It should be ONE of your top priorities, but only after these other things I mentioned.

Here’s what else you need to know.

NEVER, EVER pressure your friends or family to do business with you.  Never guilt trip them either.  By all means, notify them about what you are doing, but never pressure them to get involved.

Don’t put a strain on your relationships just because people don’t support your business.

Never value the business more than the relationship.

And never make the relationship dependent upon their involvement in the business.

If people want to work with you, or be a customer, GREAT.  If not, GREAT.

Remember, your friends and family will be your friends and family until the day you die.  There is no point ruining those relationships for any amount of money!

Also, while you are building your network marketing business, make sure you still:

  • Exercise, eat right and stay in shape
  • Work hard for your employer
  • Spend lots of quality time with your spouse and kids
  • Maintain your spiritual health

The bottom line is that you need to keep things in perspective and get your priorities right.

# 3 Treat Your MLM Business like a Real Business

Most people in our industry treat their network marketing business like a hobby, but they expect it to pay them like a job.  

I understand most people have day jobs and other responsibilities, and that’s fine, but you need to ACT as if you had a million dollars invested in your business, if you want to succeed.

At a minimum, you should do the following things:

Remember, you get out what you put in.

You wouldn’t start your own restaurant, only have it open 30 minutes a week, and expect to make money.  Nor, would you start a restaurant and shut it down (quit) in 30 to 90 days.

Yet, that’s what most people in our industry do.  I believe you can build a big and profitable network marketing business working just an hour a day IF you focus on the right activities AND do it consistently for five to ten years.

Here’s what I suggest.

If you’re going to do it, then do it!

If you’re going to dink around with it and test the waters, just be a customer, and focus on your job instead!

You won’t make a six figure income with a $2 work ethic!

# 4 Have Realistic Expectations

As I mentioned earlier, network marketing is not a job.  You do not get paid by the hour like you do from your employer.  Just like any other business, you get paid to perform.  It is merit based pay.

Most people are never taught what realistic expectations are before they get involved in our great industry.  I’ll do that for you today, so you know what to expect.  These expectations are based off someone working their business part-time, 20 hours per week.

If you work your business less than 20 hours per week, it will take you longer to succeed (in most cases).  If you put in more work, you can shorten the timeline (in most cases).

Assuming you are working 20 hours per week, here is what to expect:

  • 0-6 months to get profitable
  • 6-12 months to make $200 to $500 per month
  • 12-24 months to make $500 to $2,000 per month
  • 24-36 months to make $3,000 to $5,000 per month
  • 5+ years to make $10,000 per month

Obviously, this is just my opinion.  I can’t guarantee these results, but I do think they are realistic for most people. Individual results will vary.

Most people who join the industry are in a bad financial situation and they need money today.  When they don’t make much money with their business right out the gate, they get frustrated and quit.

I’ve said it before and I will say it again.

  1. If it took you years to mess up your finances, and it will probably take you years to fix it
  2. Network marketing is not designed to provide a significant immediate income
  3. If you are broke, get a job and do this on the side
  4. If you have a job, keep it until your MLM income is at least three times your salary and you have three years of living expenses saved up in the bank
  5. Do NOT go full time in your MLM Business from day one!

Also, network marketing provides a residual income, also known as a passive income, whereas your day job is linear income.  There is a big difference between these two types of income.

It takes several YEARS to build up a solid residual income.

You need to have some patience while you’re doing it.  This is not a get rich quick scheme, unless your definition of quick is five to ten years.

You have to work your ass off for several or more YEARS to make it big.

Don’t let that scare you off though.  Considering you are doing it part-time, even if it took you ten years to make an extra $5k per month in residual income, I think it would still be worth it.

Whatever you do, realize this is a long term project and is not designed to provide for your immediate financial needs.

# 5 Money Management

The most common MLM Horror Stories involve money.  Examples might include:

  • Distributors spending thousands or tens of thousands of dollars on inventory
  • Distributors getting stuck with a big tax bill
  • Distributors not making any money

These are the three most common money issues in our industry I can think of.

Once again, these things can happen in ANY business, not just network marketing.

It doesn’t have to be that way.

The real beauty of network marketing is that it is inexpensive, has a low barrier of entry, and very low ongoing monthly expenses compared to traditional businesses.

If you think $100 a month for auto-ship is expensive, then owning a business is probably not for you.  

If you do the business right, you won’t have money issues.

If you do the business wrong, you will.

It is YOUR responsibility to do it right!

As an entrepreneur, you have a responsibility to be smart with your money!  At a minimum, this means:

  • Keeping your inventory to a bare bones minimum
  • Not buying products just to buy products
  • Having a separate business checking account
  • Saving money for taxes
  • Keeping an updated monthly profit and loss statement
  • Making financial projections
  • Looking for ways to increase revenue and reduce expenses
  • Never spending money just to spend money
  • Closely evaluating each dollar that comes into the business and each dollar that goes out of the business

Most people coming into our industry have never owned a business before of any kind, nor have they even had one hour of instruction about money management.

Most people, inside and outside of network marketing, suck at handling their money.

As a business owner, you have to get a grip on your finances.  Most businesses have ups and downs.  There are periods of feast and famine. Cash-flow can vary significantly from month to month.

As a network marketer, you must be proactive with your business cash-flow, profits and expenses!  This is non-negotiable.

Each month, update your profit and loss statement and look for areas to improve.

Final Thoughts

In conclusion, there are lots of MLM Horror Stories on the internet. You can do a search for “MLM Horror Stories” and find thousands of search results.

Although lots of people fail in our industry, many people succeed too. The same holds true in any industry.

The secret to success in network marketing is to follow the steps outlined above. There is plenty of room at the top for you!

No network marketing company is flooded or saturated with successful distributors.

After reading this article, if you have a MLM Horror Story to share with others, you can enter it below. I’ve tried to make this website as “positive” as possible, but I also realize that people need a venue to vent and share their failures and frustrations, too.

If you have a good MLM horror story, just leave a comment below. Just make sure that you don’t slander the company or a specific person. If approved, your MLM Horror Story will be available for the rest of our online community to read and comment on. Thank you.

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11 thoughts on “MLM Horror Stories: What You Should Know

  1. R.G. Westerman

    While I understand the leadership of any MLM wants to recruit people who will devote full time to the company, what is your opinion on how to handle those who seek to work part time for just some extra income? Perhaps they are in school and are hoping the flexibility is a good fit for their schedule? Maybe they have a desire to increase involvement at a later time. Do you recommend investing time in such a prospect?

    Reply
    1. chuckholmes Post author

      Being part time is how everyone should start out. Keep your day job and do the business part time. Most people have no desire to do it full time. Maybe 1-2% of our industry is full time. The beauty is “part time.”

      Reply
  2. alex

    i separated with my husband of 10 years, we fell on financial hardship and he tried one of the popular mlm companies out there, don’t want to give free advertising. Our issue was point number 1 on the list. He didn’t keep things in perspective. the business consumed every waking second of his day. even at the dinner table he would be on the phone. Little by little we spent less and less time together or doing things with the family, we have 3 kids. They would even complain that daddy was always busy on his phone or out on presentations. There came a point where we just stopped talking and doing things together as a family. What bothers me the most is how he justified it all by saying he was doing it for us and that we should just support him. One day i just decided i had enough and finally sat him down to talk. He listened and asked if he could leave because he had a presentation to attend with potential recruits. The next day he left to his parents, before he left he told me that i should have been more supportive of him and that once he makes it rich, i would regret ending the marriage, that was 5 years ago, he is still living with his parents and behind on child support. My experience with MLM isn’t a good one, that’s why i can’t stand them. It helped ruin my marriage and forever changed my children’s life.

    Reply
  3. Diamond Grant

    Off the bat I would not have associated failed marriages with MLM, but it does seem to make sense. In a marriage you are a team and if one team member is on a different page than the other team member it can certainly be a source of tension and friction that can cause a rift. If one person is more invested in the business than the other there can be resentment on both ends. Or if the business isn’t progressing quickly enough for one person that can be another major source of problems. It is important the communication be open and frequent so that everyone is aligned in an effort to try to reduce those issues.

    Reply
  4. Faye

    I believe that your most valuable tip here is “Don’t expect instant success.” MLM is not something to do because you can’t do anything else. It is not something to do so that you can have instant money. It is a long term process: building your business from essentially nothing. It will require more time and money investment than you realize when you are just starting out. It will take time to realize a profit. Best advice to brand new MLM business owners: don’t quit your day job just yet!

    Reply
    1. chuckholmes Post author

      I agree. If you are hard up for money, get a job or part time job to keep the monkey off your back. If you start a business, it will probably take you 1-2 years to start making money.

      Reply
  5. Greg Boudonck

    These horror stories are just as true with traditional business as with MLM businesses. I have heard of stockbrokers leaping from 16 story buildings. Stockbroking is not an MLM. Stress, hardship, and badluck can happen in traditional business just as much as an MLM. All of what you have listed is just as true with some traditional businesses. We do need to keep are work in perspective, whether it is an MLM or a Traditional business. Great post!

    Reply
    1. chuckholmes Post author

      Most businesses that do defunct or bankrupt put the owners is SERIOUS debt, normally in the mid to high six figure mark. Failing in MLM is MINIMAL compared to failing in any other type of business, financially speaking. Yet, few people every talk about that.

      Reply
      1. Greg Boudonck

        Exactly Chuck! It seems that when there is some kind of negative, it spreads like a wildfire in a dry forest; when there is a positive, people seldom talk about it. I believe that many humans thrive on looking at the negatives.

        The first comment here…Alex I believe, I feel bad that a situation such as that happened, but the same things happen with gamblers, alcoholics, and many others. It wasn’t the MLMs fault, it was bad decisions on the part of several people. I don’t mean to be harsh, but marriage counseling would have been a good step early on before it carried to the point it did.

        Again I say, it isn’t the fault of the MLM that things happen….It is the person in the mirror.

        Reply
        1. chuckholmes Post author

          Good points, Greg. At the end of the day we must all accept responsibility for our own lives. There are lots of factors that can influence us. It’s out ability to keep things in perspective and keep things in balance that matter most.

          Reply

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