MLM Insights: 10 Things Every Serious Distributor Should Understand

Today, I’m going to share some of my best MLM insights.  Bookmark this page and share it with your serious team members.

I’m not going to hold back in this post.  I want to share my top MLM insights every serious network marketing rep should know about.  Keep in mind this post is not for someone who only wants to make a few hundred dollars per month with their business. This is for SERIOUS distributors only, people who want to do network marketing as a career!

I’m going to say some controversial things.  I don’t expect you to agree with me on everything.  This is just based upon my own experience in our industry.  All I ask is that you keep an open mind and simply hear me out.  By all means we can agree to disagree.

Top 10 MLM Insights

Keep in mind everything you read below are things I’ve learned during the past 15 years, via the school of hard knocks.

# 10: Attrition is the # 1 Enemy in Our Industry

It’s taboo to talk about this subject in a public setting, because if your upline told you the truth it would scare the crap out of you.  Attrition is your number one enemy in this industry.

Your yearly attrition will be at least fifty percent of your team and probably much closer to 70 to 80 percent of your team.

People quit the business for many different reasons and it normally has very little to do with you or your company.  Most people quit everything they do.  Even if you have a great system and work closely with the people you personally sponsor, most will still quit.

  • Expect to lose 30% to 50% of all your new reps in 90 days or less
  • Expect to lose 70% to 80% of your team each year

It’s a reality, even though most leaders refuse to talk about it.

We even have one company in our industry who says they have a 95% monthly reorder rate.  If you do that math that still breaks down to a 50% yearly attrition rate.

I understand that all businesses in all industries lose customers.  I don’t think the attrition rate in our industry should even scare you off, but it sure does help to know it upfront, so you can expect it and not be devastated when it happens.

Just look in your back office and verify this.  What percentage of your total team is even ordering each month?  What percentage of your team renews their account each year?  What percentage of your team is actively retailing and recruiting?

Before you freak out, let’s take a moment and put this in perspective:

  1. Think about how many people who start out as a freshman in college actually complete their four years and graduate with a degree…
  2. Think about how many people buy a gym membership and never even go once… Think about how many people actually renew their gym membership year after year…
  3. Think about how many people get divorced… Some statistics say it is as high as fifty percent…
  4. Think about how many traditional businesses start each year, but don’t make it past their first year in business…

Why would network marketing be different from these other examples?

What you need to do know is MOST people quit everything they do.  When people quit your team it typically has nothing to do with network marketing, the company, you, your upline, or the products.  Most people don’t finish what they start.  It’s human nature to quit things.

Here’s the truth.  Even if most of your team members quit, you can still build a HUGE business.  What you’re really looking for is 2-5 leaders who will go on and build it big, with or without you.  In addition, many people who quit building a business stay on as a wholesale customer, so it’s still a win-win for you.

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# 9: You Want Mass Market Products

Hear me out on this one.  I believe it makes sense work with a company that offers mass market products.  You want products that appeal to the masses so you have more potential prospects.  This is much wiser than picking a company with niche products that only appeal to a very small percentage of the population.  Does that make sense?

There is nothing wrong with niche products.  I like niche products.  But, I don’t want to join a business opportunity that limits me to such a small group of people that it’s almost impossible to find qualified prospects.

One of the reasons health and wellness products are so popular in our industry is because they are consumable and appeal to the masses.  Ultimately, you want a product that appeals to the masses, is priced fairly, and is consumed each month, so it needs to be reordered.

# 8: Duplication is a Lie

Everyone in our industry talks about duplication, like it is the norm.  It’s not.  I believe it’s the most abused word in our industry.

Ask any successful rep how many people on their team honestly duplicated what they’ve done and the answer is less than three percent, maybe less than that, regardless of what system they use or what company they are in.

Of all the people you’ve sponsored, how many of them each sponsored 50 to 100 people?  How many of them made it to your rank or higher?  Heck how many even sponsored one person?  Not many.

Here’s what you need to know.

  • Nearly 80% of your team won’t even sponsor one person
  • About 10-20% of your team will do SOMETHING each month to grow their business, on a very part-time basis
  • About 1-3% of your team will catch the vision and treat the business like a real business

That’s it folks.  You can fight these numbers all you want, but that is how it has always worked out for me, regardless of what company I represented.

Here’s what I’ve found.  Whenever you talk to a prospect, talk about the products and the business and let them decide which option is the best fit for them.  Prior to someone being in the business for a while, you never really know what their commitment level is going to be.

Many people will fool you.  The people you think will often be your best people usually end up doing nothing, whereas certain people you thought would only be a customer turn out to be a business builder.

In addition, you only need two to five good leaders who get it to build a six figure income.  The bottom line is that only a very small percentage of your team will duplicate and build a big business. That’s okay though.  Everyone on your team helps create volume.

# 7: There are Many Ways to Build a Business

I’ll be the first to admit that systems are important for new people with no sales, marketing, entrepreneurship or MLM experience.  Systems keep people on track to help them succeed.

That being said, I have learned there are MANY ways to build a successful network marketing business.  Study any 100 top earners in our industry and you will see they all build the business differently from each other.

When you are new you should follow the team’s system.  Don’t try to reinvent the wheel.  That being said, as you develop some basic skills and know what you are doing, there is absolutely nothing wrong with leveraging your own talents and abilities.

Everyone is wired differently.  Some people are outgoing.  Others are shy.  Some folks love home parties.  Others hate it.  Some people can prospect any stranger.  To some people, having to talk to strangers scares them to death.

Figure out what you are good at and leverage your own talents and abilities to build the business in a way that works for you.  That is one of my most important MLM insights.

For example, I build my business by writing.  I chose blogging because I love to write.  It works well for me, but it wouldn’t work for someone who hated sitting behind a computer all day or hated writing.

# 6: You Won’t Build a Big Business Treating It Like a Hobby

You’re never going to build a huge team working part-time.  You’ll never become a six figure or seven figure earner with a minimum wage mindset or work ethic.

All top earners in our industry worked their business more than part time.  Yes, you can build up a great part-time income working part-time, but chances are, you won’t build up a full-time income doing it.

It takes a big commitment to build a successful business of any kind.  Even if you have a day job, if you want to build a huge business, you’ll probably have to work at least 3-4 hours per day on your network marketing business.

My definition of part-time is anything less than 20 hours per week (of money producing activities).  Most successful reps, even if they have a day job, work their network marketing business 30+ hours per week.

Treat it like a business and it will pay you like a business.  Treat it like a hobby and it will be an expensive hobby.

# 5: Success Will Take Longer Than You Expect

Very few people in our industry, or any other endeavor, experience quick success. This business is not the lottery.  Rome wasn’t built in a day, either.

I’ve found that most top earners have been with one company at least five years, and normally ten or more years.  Yes, there are a few exceptions, but it isn’t the norm.

This is not a job where you are trading hours for dollars.  Like any other business, you will work your ass off in the beginning for very little money.  That is how most businesses work.

If you have the idea that you are going to make more money working part-time in your network marketing business (in your first year) than you make working full time, in a career you’ve probably had for a while, you are kidding yourself.

If you’re working your MLM business anything less than 20 hours per week, it’s probably going to take you five or more years to create a full-time income with your network marketing business.  That’s still a great deal.  I just think it’s important to have realistic expectations.

So many people join our industry and expect to get rich quick or get paid for doing nothing.  That’s not how any legitimate business works.

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# 4: You’ll Need to Personally Sponsor MINIMUM 100-200 People

Study the top earners in our industry and the one thing that 90% of them have in common is that they personally sponsored MINIMUM 100-200 people, if not more than that.  Yes, there are a few rare exceptions, but they are rare.

Most people you sponsor will quit in 90 days or less.  The ones who stick around will typically just be wholesale customers and not sponsor more than one or two people.

About 1 in 30 people you sponsor will be serious about the business.  Even if you’ve sponsored hundreds of people, most of your income will come from just one to three of those serious people.

Your success will come down to how long it takes for you to find 2-5 quality people.

# 3: Your Previous Experience will be a Blessing or a Curse

What you did BEFORE you joined network marketing will turn out to be a blessing or a curse in your business.

Network marketing is a profession, just like anything else.  You have to develop a certain set of skills and attitudes to become successful.

If you have no experience is sales, leadership, marketing, recruiting, or entrepreneurship, you will go through a steep learning curve in this industry.  This learning curve will be different for everyone, depending on their previous experience.

I can’ speak for anyone else, but it took me 12 YEARS to really develop my skills in network marketing.  It doesn’t have to take you that long, but it might.

When you see someone join our industry for the first time, and crush it right out the gate, it’s because their previous work and life experience helped prepare them for MLM Success.

On the other hand, if you see someone else struggle with every part of the business, it’s because their previous life and work experience did NOT prepare them for network marketing.  They have already developed the required skills.

The bottom line is that everyone will need to go through some personal growth to become successful in the business.  Some people will just require a lot more growth than others.

# 2: Your Real Product is the Business Opportunity

Most people join our industry to make extra money, not because of the products.

To clarify, YES, the products are important.  Yes, you need retail customers.

But, don’t confuse direct selling and network marketing.  Direct sales is about one person selling a ton of product.  Think of the Avon® lady.

Network marketing, on the other hand, is about a lot of people doing a little bit.

I’ll be the first to admit that you should maintain two to five personal retail customers.   This makes your business legitimate and helps you be profitable.

Once you’ve done that, you need to focus on the business side of things.  I personally believe in leading with the business opportunity and defaulting to the products.

Here’s what I have learned during my career.

If you lead with the products and people aren’t interested, there is a 100% chance they will not join the business.  On the other hand, if you lead with the business, many people who are not interested in the business side of things will still become a customer.

Just retailing products is not what network marketing is about.  Network marketing is about having hundreds, even thousands of people using the products, servicing a couple customers and sponsoring a few distributors.

Lead with the business.  It is the fastest way to grow a business.  Think about it this way for a moment.

Would you rather find 100 customers yourself, or would you rather have 10 distributors who each maintained 10 customers?  I know which example I would pick.

# 1: Building Fast is the Only Way to Go

There is a story about the tortoise and the hare.  The two are in a race.

The tortoise starts out the race nice and slow while the hare gets off to the quick start.  At some point, the hare sees he has a commanding lead in the race, so he takes a break.  While he sleeps, the tortoise just stays nice and steady.  By the time the hare wakes up from his nap, the tortoise crosses the line and wins the race.

The moral of the story is that steady pace wins the race.  Not so in network marketing.

Yes, sponsoring 2-3 people a month consistently, every month, for a few years is better than doing nothing at all.  You can build a big team following that approach, but it is the slow and painful way to build this business.

The best way to build your network marketing is to have a sense of urgency and take all out massive action in a 90-day blitz.  A 90-day blitz is when you concentrate, focus and triple your activities in your business. You do more in 90-days than most people do in a few years.

Ideally, you want to do a few 90-day blitzes back-to-back, where you recruit 20-40 people in 90 days, so you can create rapid momentum and growth in your business.

Success in network marketing comes down to creating and riding momentum.  It is almost impossible to create momentum if you are slow and steady.

Most top leaders in the industry have done minimum one to three 90-day blitzes in their business.  They did all out massive action to create a surge of activity and results.

This created excitement and rapid growth in their team.  Once they finished the 90-day blitz, they could slow down their efforts a bit and just be nice and steady.

The bottom line is you must go “all in” at some point and take all out massive action for a short period of time.  The beauty is you only need to do that for 90-days, one to three times in your network marketing career.

Final Thoughts

That’s it folks.  These are my top 10 MLM insights I believe that every serious MLM Rep should know about.  I would love to hear what you think about these MLM insights.  Do you agree or disagree with what I said?  Leave a comment below to let me know what you think.  As a quick disclaimer, this is just my opinion.  Individual results will vary.

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Chuck Holmes
Network Marketing Professional (21+ years)
Top Recruiter & Top Rep

2 thoughts on “MLM Insights: 10 Things Every Serious Distributor Should Understand”

  1. Hello Chuck , you are absolutely right on this .
    This is a great back up way to do business
    The main conclusion is that you are stable
    on your own feet , being really independent marketer .
    However most people goes the easy way
    just to fail and then abandon the ship
    Marketing needs applied knowledge that costs
    years of effort to just upgrade a level
    it is a constant fight against ignorance & ego .

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