The Good, the Bad, and the Ugly of Network Marketing

In this article, I want to share the good, the bad and the ugly about network marketing. These are my personal thoughts about the industry, based upon my thirteen years experience in the industry. You may agree or disagree with what I have to say and that is perfectly okay. Listed below, we’ll briefly cover each area.

The Good Things About Network Marketing

# 1 What I love about the network marketing industry is that you can start your own business for less than $500 (in most cases). That is a great alternative for someone who can’t afford to start a traditional business.

# 2 You can leverage yourself and build a sales organization that spans the globe. You can build a team with hundreds, even thousands of people, without having ANY employees.  You get paid a small percentage from each person on your team.

# 3 You aren’t stuck in a fixed location.  Unlike most businesses, you don’t have a territory and you aren’t limited to any one geographical location.  As long as you have your phone and an internet connection, you can work from anywhere in the world, even on the beach.

# 4 You can earn passive income, also known as residual income.  Most traditional business owners simply own their job!  The day they stop working they stop getting paid.  They have no leverage and in many cases they are a slave to their own business.  Heck, many traditional business owners can’t even take a day off.

# 5 You can have some great tax advantages. Just like a traditional business owner, you get the same tax advantages, so you can legally write off a portion of your lifestyle and keep your taxes to a minimum.

# 6 You can associate with other positive, like minded entrepreneurs.  One of the things I love most about the industry is the people.  It’s fun to spend time with other people who have big hopes and dreams.  It’s fun to hang around others who encourage you and uplift you.

# 7 You can develop a set of skills that will help you build and run a successful business (in any industry). I think of network marketing as the best business school you can attend.  You’ll learn a lot about sales, marketing, leadership, entrepreneurship, business finances, taxes, operations and much more!

# 8 You will become a better person due to your personal development. Another great thing about our industry is the person you become in the process.  You will develop your potential, learn new skills, improve your attitude, and learn confidence and discipline.

# 9 One of the best things about the industry is that you can start part-time.  Unlike most regular businesses, you can keep your day job to cover your bills and build your network marketing business part-time, just by working 10-20 hours per week.  Over a period of a few years you can potentially earn enough to replace your job income!

# 10 The final thing I love about our industry is that you can become financially independent. Once your passive income is enough to cover your monthly living expenses (whatever amount that might be) you are financially independent to do as you choose!  We are one of the few industries I know of that lets you earn residual income.

The Bad Things About Network Marketing

# 1 Our industry has a horrible reputation with the general public because our industry is really misunderstood.  Most people outside of our industry do not understand our industry.  Most people IN our industry do not understand it.  Many people have preconceived notions and have never done any conclusive research to educate themselves about the industry.

# 2 Most people never learn the right way to build their MLM Business. Most people who join our industry have never done sales, marketing or leadership before.  Even worse, they often join a sponsor who doesn’t know what they are doing.  It’s like the blind leading the blind! Succeeding in this industry takes a unique set of skills, which will take you time to develop, probably several years.

# 3 It’s the hardest thing you will ever do.  Contrary to what some people might tell you, our industry is not easy.  It’s simple, but very difficult.  That being said, the potential reward are worth it (as I see it).  Where else can you work hard for a few years and build up an asset that pays you for many years to come?

# 4 You have to deal with people.  This is definitely a people business.  While it’s fun to work with some people, it can be a pain to work with others.  You’ll have to master your people skills and learn how to deal with mean, arrogant and ignorant people.  You’ll have to deal with people lying to you and not doing what they say they are going to do.

# 5 The pay is commission based.  Most people are accustomed to trading hours for dollars. They work 40 hours in a week and get paid for those 40 hours.  Businesses do not work that way.  In this industry you only get paid on your results.  For most people that is hard to stomach.  I personally like commission based and merit based pay, but most people do not!

The Ugly About Network Marketing

# 1 We have a good amount of snake oil salesman and bad people. Most people in our industry are good people.  However, like any industry, we also have our share of crooks, liars and cheats. I think most people try to do the right thing, but some folks in our industry are misinformed or out to make a quick buck, regardless of the cost!

# 2 The failure rate is quite high. The failure rate in all businesses is close to 80 to 90 percent. The failure rate in our industry is quite high.  I personally haven’t met many folks who worked hard for a few years and failed, but I’ve met a lot of people who tried it for 90 days and quit. Like I mentioned earlier, the business is hard to do.  But so is building a profitable business of any kind.

# 3 Many people ruin their relationships with their friends and family. You’ll hear lots of stories of the No Friends Left Club.  These are folks who ruined their relationships with their friends and family because of HOW they approached them about the business.  It doesn’t have to be this way, but most new distributors are not taught how to properly contact and invite people.

# 4 We tend to attract low quality people. Our industry tends to attract a lot of folks with a lottery mentality, people who are unemployed and broke, who are looking for a financial miracle.  I personally have nothing wrong with these folks, but they are the last type of folks who would start a traditional business.  They join our industry because it’s the only type of business they can afford to start.  We also tend to attract people who are looking for easy money. Once again, not everyone in the industry is in this category, but a lot of reps are.

Final Analysis

When I look at all these statements, I personally think the pros greatly outweigh the cons. In fact, for the average person, I am 100% convinced that network marketing is a good way to (1) reduce their tax burden, (2) to generate an extra $500 to $1000 per month and (3) develop new skills they can use in other business ventures. But no, it’s not for everyone. The weak usually weed themselves out pretty quickly.

So if at some point you decide network marketing isn’t for you, that is perfectly okay. But if you’re one of those people who has a strong desire to succeed in network marketing, a willingness to work hard, and a commitment to keep on keeping on, I’d like to say welcome home!

chuck holmes


Chuck Holmes
Network Marketing Professional (since 2002)
Author, Blogger, & Entrepreneur

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4 thoughts on “The Good, the Bad, and the Ugly of Network Marketing”

  1. It’s nice to hear someone dishing some hard facts on the MLM industry. So many MLM people try to gloss over the hard parts of multi-level entrepreneurship. I believe that tendency is part of why the failure rate is so high, and is also a contributing factor to the bad press. It’s not fair to anyone to ignore the downside[s]!

    1. The truth is no business is easy or “perfect.” Everything has good things and bad things about it. When you try to hype people up and get them excited, that excitement will come down and they will fizzle out.

  2. I am happy this article addressed the good, bad and ugly aspects of the network marketing business. It is good for people who are interested in starting a business within this industry to weigh the pros and cons before choosing to invest their time, money and effort into this potential profitable business venture. Excellent advice article.

  3. This was a fantastic piece that spanned the entire scope of network marketing. I’ve been at it for the last few years, and I can completely validate everything you’ve said. But hey, nothing worth achieving is easy!

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