In today’s post, I want to write what I consider to be the status of the MLM Industry as of 2016.
You should know three things upfront. Number one, I am a rep in the industry, and I love the industry. Number two, this is just my opinion and we can agree to disagree. Number three, I spend two to four hours a day building my network marketing business, writing about the industry, interviewing people in our industry, and studying the industry.
Therefore, I feel qualified (and obligated) to write this article.
Our industry is HUGE and it is growing year after year, especially internationally. While the industry might not be gaining in popularity in the USA, it is gaining in popularity worldwide. People are hungry to work for themselves, create financial independence, and reclaim their lives.
Here are some 2014 stats from the Direct Selling Association, just to put things in perspective.
- Over 18.2 million people in the U.S. are involved in direct selling
- Those 18.2 million people retailed over $34.5 BILLION worth of products, which was a 5.5% increase from the previous year
- 74.4% of those people were women and 25.6% were men
- 71.5% of those sales were through person to person, 22.4% were through the party plan, and 6.1% were through other means
- In order, the largest categories of products sold include (1) wellness, (2) services, (3) home and family care, (4) personal care, (5) clothing and accessories, and (6) leisure/educational
*** These stats are from the Direct Selling Association
While our industry is huge, and has steady growth, we are dealing with some SIGNIFICANT issues on the internet right now. I believe these issues will continue to hurt our industry UNTIL they are fixed (if that is even possible). I believe that if things continue at this rate, eventually our industry will go away.
Obviously, not everyone will agree with me on this. That’s okay. All I ask is that you keep an open mind and hear me out. Some of the major issues include:
# 1 Anti-MLM Websites
I understand and respect freedom of speech, and I am not against negative websites. Even though I enjoy focusing on the positive in things, I understand many people enjoy focusing on the negative side of things. To each their own.
However, there is always more than one side to a story. There is always a story behind the story: your side, my side, and the truth.
Our industry has TONS of anti-MLM websites online. Type in any company’s name along with the word scam, and you will find hundreds, maybe even thousands of pages of negative stuff.
On the flip side of the coin, this is not exclusive to our industry. Many industies have haters, although ours has more haters than most.
That being said, a lot of anti-MLM websites have an agenda, and it’s not just to reveal facts. In many cases, they bash our industry in order to sell a product or service. Or, someone writes a negative review about one company to promote their own company.
Most websites are simply someone’s opinion, not facts. These websites hurt the industry because the prospect does not know the difference between fact and opinion. They see something negative online and just believe it is true, without verifying the information.
I believe all of these websites should be required to give some type of disclaimer, but I don’t see that happening any time soon.
# 2 eBay and Amazon
First off, I love these two websites.
I shop on both websites every week and buy a majority of my household items on these sites.
I am also an eBay seller and Amazon seller. To clarify, I do not sell my MLM Company’s products on either of these sites. I sell books, antiques and vintage items.
The problem with these two websites (for network marketing) is that many current and former distributors sell their inventory online.
You can go to either website, type in the name of any MLM Company, and find hundreds of the company’s products for sale. Typically, you can buy the products at a CHEAPER price on these websites than you can as a distributor.
This makes it VERY difficult for distributors to find customers and sponsor new people into the business. After all, why would a prospect buy a product from you if they can get the same exact product on Amazon or eBay at a cheaper price than you can buy it for yourself?
I would like to see all MLM Products removed from these two sites, although I doubt that will ever happen. Back in the day, MLM Reps have exclusive distribution rights on their company’s proudcts. Now, we all have to compete with the big corporate companies. It makes life more challenging for us.
# 3 Increased Competition
Competition is a good thing. That’s how America was built. That’s what capitalism and free enterprise are all about.
Back in the day, there were only a few MLM Companies to choose from. Now there are thousands.
Every time a company closes its doors, it seems like five new companies open up! Sadly, most of these new companies don’t survive.
With so many companies competing for the same pool of people, it’s difficult to sponsor people and even harder to keep them in the business.
Most people are simply chasing the next shiny object. I can’t speak for you, but I get at least 10-20 emails per day promoting new business opportunities.
I can’t tell you how many people I’ve sponsored who switched to a new MLM Company in less than 30 days after teaming up with me. These shiny objects, combined with the “instant gratification” mentality of most Americans has created a revolving door in our industry.
# 4 Recruiting Other Network Marketers
I don’t have any stats to support this claim, but I believe it to be true. I don’t see a lot of new people joining the industry. Instead, it seems like recruiters are simply recruiting other network marketers into their business.
As a result, many reps join new companies every few months. These folks have a hard time committing to one company and typically think the company itself is the solution to all of their problems. They are the MLM Junkies and they plague our industry.
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We are quite perhaps the ONLY industry in the world that is loved and hated by so many people. People are either passionate about MLM or passionate about hating it. It’s almost like some religions.
To be honest with you, all industries have people who fail and people who succeed. What most industries don’t have is a large amount of people who fail, and then go online and create websites saying that industry is a scam.
The Future As I See It
I believe our industry can be great again. However, it’s going to take some drastic changes.
Listed below, I will share some of my insights on what I think needs to be done to police our industry and improve its reputation in the years to come.
My Advice for MLM Companies
I believe there are some basic things network marketing companies could do a better job at to improve the reputation of the industry. This includes:
# 1 Stop Nickel and Diming Your Distributors
Get rid of the sign up, website, renewal and membership fees. You don’t need to nickel and dime your distributors to death. If you’re selling business tools and promotional materials, sell them at cost, so your distributors can get what they need at a fair price.
Pay your distributors, and pay them well, for moving your products and services. And GIVE them the resources they need to make that happen.
# 2 Treat Us Like Independent Contractors, Not Employees
Realize that reps are INDEPENDENT BUSINESS OWNERS and get rid of your cross-recruiting and non-compete rules. In addition, loosen up your internet marketing policies.
The internet is here to stay. We are not in the stone age or 1980s anymore. Don’t suppress your distributors and keep them from building online. Realize that you need us more than we need you!
# 3 Stop Frontloading
Get rid of the $500, $750, $1000 and $2000 sign up packages. No one should have to spend that much money to get started with a MLM Company. It shouldn’t even be an option. These packages are how people lose money and get stuck with a bunch of stuff they can’t sell or use.
# 4 Be Proactive
Be diligent about terminating distributors who sell products on eBay and Amazon. Be diligent about terminating distributors who make income claims, do unethical things, and ruin the reputation of your company. If you only did one thing on this list, this would be what I would focus on.
# 5 Mandatory Ethics Training
Every new distributor in every company should be required to go through several HOURS of ethics training BEFORE they are allowed to recruit other distributors or retail products. This training could be done online as part of the sign-up process. This would help reduce the hype, income claims and crap our industry deals with.
My Advice for MLM Distributors
# 1 Be Product Focused
Get more customers. Get lots of customers. Lead with the products, not the business. Show every rep on your team how to acquire at least five to ten customers before they try and recruit their first distributor. If the products don’t make sense, neither will the business.
# 2 Focus on the Little Money
Teach people how to get their products for free and how to make $200 to $1000 per month, rather than focusing on the big money. This will be more appealing to more people. Besides, someone won’t make $20k a month until they’ve made their first $100 in a month.
One of the reasons our industry gets a bad name is because people only talk about the big money, yet very few people make big money.
# 3 Develop Multiple Streams of Income
Only having one income source is risky, whether that income stream is a job or MLM Company. Diversify yourself. Pick ONE network marketing company, but do other things as well, such as sell leads, sell training products, sell affiliate products, offer coaching, etc. Build a You, Inc. business.
# 4 Be an Ambassador to the Industry
Stop bashing other companies and other reps. Realize that everything you do and don’t do affects everyone in your company and everyone else in the industry.
Be a true professional at all times. Get rid of the hype, pressure and drama. Treat everyone you talk to as well as you would treat your own mother or daughter.
# 5 Give People Realistic Expectations
Don’t tell people it will be easy. Don’t talk about getting rich quick. Let people know it will be the hardest thing they ever do, but it will be worth it, if they can get it built.
Let people know that it typically takes a couple years just to make a profit in a business. Let people know there will be struggles, setbacks and disappointments.
You might lose some people initially by telling them the truth, but I’d rather lose someone because of it, then have someone join the business, get disgruntled, quit, and then set up a negative website about our industry.
In review, this is the status of the MLM Industry is 2016 as I see it. Our industry is great, but yes, we have problems just like any other industry. What we really need to do is police ourselves internally and make a few minor changes for the better.
I believe both companies and distributors have a responsibility to do this. What do you think? Leave a comment below to share your thoughts. I look forward to hearing from you.