Ten Truths About Network Marketing

Today, I want to share ten truths about network marketing, as I see it.

As quick preface, I must state that building a large and profitable network marketing business is not easy and it’s not for everyone.  It’s not easy to succeed and it can be a very frustrating business at times.

That being said, I still think it’s a great deal for SOME folks.  If you’re willing to work hard, to stay persistent and work with the same company for five to ten years or longer, you can do very well in our industry.

But, it’s not some get rich quick scheme or easy way to make money.  Like any business, it takes time, money, TONS of hard work, and a little bit of luck.

Now that we have that out of the way, here are ten truths about network marketing that few people ever talk about.

1. It Takes Time – Rome wasn’t built in a day.  Most people will work their ENTIRE life in a job and end up broke, but they never question that business model.  Most people who start a traditional business expect to go several years BEFORE they make their first dollar profit, yet they build the business anyway.  What’s weird about MLM is that people get involved and if they aren’t making big bucks within the first month or two, they quit and say they were scammed!  I really don’t get that.  Working hard, being persistent and having some patience is a must to succeed in MLM.  You must be willing to work part-time for five to ten years before you can expect to earn a large full-time income.

2. Rejection Causes Many People to Quit – I don’t know anyone who likes rejection.  I don’t like to be rejected and I’m sure you don’t either.  Most people hear NO two or three times in this industry and then they mentally quit.  They might stick around longer, but they don’t do much other than order products every once in a while.  You have to learn how to deal with rejection if you want to succeed in network marketing.  You can’t take it personal and you have to realize that people aren’t attacking you personally: they’re just not interested in your business opportunity or products.

3. You Are in the Sales Business – Every entrepreneur in ANY business is in the sales business.  This does not mean you have to be a high pressure, used car salesman.  But you do need to accept that your real job is sales and marketing.  This doesn’t mean pressuring, chasing, bugging or convincing people either, but it does mean knowing how to generate leads, how to show a presentation, how to close a prospect and how to follow up. Even if you have a great product or opportunity, you have to know how to sell it to others.

4. High Attrition and Turnover – Network marketing has an extremely high turnover.  Don’t fret though: every sales industry has a high turnover.  Ask any real estate broker or insurance broker or retail manager what their turnover rate is annually, and I’d bet it’s close to 80 or 90 percent of their sales force, which is similar to network marketing.

Yes, a lot of people on your team will quit and there is little you can do about that.  But a few key people WON’T quit and those are the ones that will produce most of your income anyway. To put things in perspective, all businesses have a high turnover.  Drive through your town and look at the businesses.  How many are shut down?  How many are new?  I can promise you that in five years from now, most of the businesses in your town that are in business today won’t be around!

5. It’s Easy to Quit – Here’s something very few people talk about.  Since MLM is so inexpensive to join (less than $300 in most cases) it’s really easy to quit.  If people plopped down $500k to get involved with MLM, they would be less likely to quit.  In fact, they would do anything and everything to make their business successful.  But since most folks have less than $300 invested there is little to lose. I like that our industry is so affordable to get started, but it is a double edge sword.

6. It’s Not the Only Way to Earn Residual Income – What attracted me to this industry initially was the opportunity to earn residual income.  I truly believe EVERYONE should build residual income streams, on top of their nine to five job.  What I’ve since learned is that there are many ways to earn residual income.  You can have book royalties, intellectual property, rental income, insurance premiums, information products and more.  Even if you decide MLM is not for you, I highly suggest you find a business model that offers some type of residual income.

7. Dealing with People Stinks – Network marketing is the ultimate people business.  One of the reasons you can earn so much money in our industry is you have to learn to deal with different types of people.  This is also one of the biggest reasons for failure.  Let’s face it; dealing with people is hard to do.  People will lie to you.  People will deceive you.  People will quit.  People will make you angry.  It’s takes dynamic people skills to succeed in MLM.  On the flip side of the coin, EVERY business has to deal with people and customers and most entrepreneurs deal with similar people challenges.  If you don’t like people this business is not for you.

8. Most Network Marketers Fail – It’s true, most network marketers fail.  I don’t deny that.  Most people who join the industry lose money and quit.  What’s funny is that people don’t put this in context.  The truth is most people fail at EVERYTHING they do.  Most marriages fail.  Most people die broke.  Most diets fail.  Most people eat too much.  Most realtors fail.  Most sales people fail.  Most businesses fail.  Most people who buy a gym membership never even go to the gym once.  Also, it’s important to realize the difference between failing and quitting.  If you didn’t work your business consistently for several years, you didn’t fail, you QUIT!

ten truths about mlm9. You Can Make A Lot of Money, But You Probably Won’t – Some people earn millions of dollars a year with their MLM Company.  A select few make that much a month.  Many earn $500 to $5k per month.  And many others earn nothing at all.  The amount of money you will make will be determined by your ability to sell the products and build a team.  This is a production based pay system.  Produce well and you will make a lot of money.  Produce nothing and you will make nothing.  This is not like a job where you get paid to show and get paid regardless of your performance.  This is a commission based performance, just like most other business ventures.

10. Most People You Talk To Won’t Want to Join – When I first got started in MLM I thought everyone would want what I had to offer.  Who wouldn’t want a better life, more time and more money?  I learned quickly that most folks just aren’t interested in your business opportunity or products.  And that’s fine.  You don’t need everyone.  Maybe one in every 10 people you talk to will be interested in either becoming a customer or a distributor.  And that’s a good enough ratio that if you work the numbers you can do very well. The truth is every business has a TARGET MARKET.  Not matter what type of business you own, not everyone will be interested.

Final Thoughts

There you have it folks.  These are the ten truths about owning a network marketing business as I see it.  I love our industry, but I also realize it is far from perfect.  Any business that involves people can’t be perfect.  I would love if you left a comment below to tell me what you think.  What is your favorite truth that I mentioned above?  Which one did I forget to add to my list?  I look forward to hearing from you.

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Chuck Holmes
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6 thoughts on “Ten Truths About Network Marketing”

  1. I think you hit on a good subject with point number seven. If you are not a people person, this may not be the avenue for you. Talk about the ultimate test in patience! People’s attitudes and actions alone are enough to drive you crazy, let alone all of the little flaws and mistakes they can make along the way that can complicate things. You have to learn to be respectful and polite in spite of how the person opposite you is responding. It is tough, but it can also be very rewarding.

    1. Dealing with people can be very difficult. That’s why you can make so much money in this industry. You have to deal with a lot of people. You have an adult day care center going on at times. It can be annoying, but the payoff can be well worth it. You also get to meet lots of great people.

  2. Yes, this is a blunt post, but it is the truth. MLM businesses provide the only true merit based pay. It is NOT a job. You are in sales, and you must work long and hard hours to even have a chance at succeeding. Sometimes even then you might not. But like any other long term investment, the greater the risk, the greater the chance of reward.

  3. I must say Chuck, this is what attracted me to your blog and your writings; you are brutally honest. This is nice to see for a change, because so many in network marketing leave honesty in the closet. I believe the MLM industry will gain more respect and become a more viable income source if there are more like you.

    If people realize that network marketing is just like any business, they can succeed. It doesn’t just fall in your lap over night. The business takes hard work and persistence.

    Thank you for this honest and needed post. Have a great day.

    1. Thanks Greg. I try to be honest. The truth is, most businesses are hard work. Nothing is easy. What drives me crazy is when people use hype to get people in our industry or they lie to them or give them false expectations.

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