The Status of the Network Marketing Industry as of 2016

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 and I love the industry.

Number two, this is just my opinion and we can agree to disagree.

Number three, I spend two to six 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.

First off, our industry is HUGE and it is growing.

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 that 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 may never recover.

Some of those issues include:

# 1 Anti-MLM Websites

I understand and respect freedom of speech, and I am not against negative websites.

However, there is always more than one side to a story.

Our industry has TONS of anti-MLM websites.

That being said, a lot of negative websites have an agenda.

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.

mlm in 2016# 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.

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 items 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.

I would like to see all MLM Products removed from these two sites (doubt that will happen though).

# 3 Increased Competition

Competition is a good thing.

That’s how America was built.

That’s what capitalism is all about.

Back in the day, there were only a few MLM Companies to choose from.

Now there are thousands.

And 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.

# 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.

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My Thoughts

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.

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.

love or hate mlm memeThe 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

# 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.

Pay them, 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.

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 focused on.

# 5 Mandatory Ethics Training

Every new distributor in every company should be required to go through several HOURS of ethics training.

This could be done online.

This would help reduce the hype, income claims and crap our industry deals with.

My Advice for 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.

# 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.

Final Thoughts

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.

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8 thoughts on “The Status of the Network Marketing Industry as of 2016

  1. Mike Forrest

    Great article! I wish more MLMers would take your advice. I see a lot of MLM companies out there who take advantage of their distributors through focusing on the purchasing of training materials vice product. Yes, training materials are important and are a good indicator of who is in the fight with you as opposed to a distributor who only buys product. But the product is where the money should be made, not in selling the training materials.

    1. chuckholmes Post author

      I agree. We should only be paid for movement of products. Companies, and reps, trying to make lots of money off tools from their own team are foolish. I wouldn’t call it unethical, but I would call it stupid.

  2. Jason Ruth

    My best success thus far has been when I have been product focussed opposed to business focused. My story on my companies products is what sells. People are in tune to feelings. How can “X” product make them feel. They are save to the hype and the gimmicks. In my opinion, those don’t work. Lead with the products.

  3. Greg Boudonck

    This is a very good post Chuck. I hope that many leaders in the MLM industry will read and heed a lot of your advice that is in this post.

    I honestly think many of these companies could take some lessons from Avon. While I know Avon has taken some hard hits because of the economy, they do run a program that is customer focused instead of distributor focused. It is creating a customer focus that will keep network marketing going strong.

    I don’t think that negative websites will ever disappear, but websites like yours can help defend the network marketing industry. I also agree that companies need to make a stronger stand against distributors selling on ebay and amazon, but again, that will probably never completely disappear.

    I suggest that distributors share this post with both their up line and down line. If posts such as this one are shared, maybe the changes that need to be made will become reality.

  4. R.G. Westerman

    The economy has changed since the downturn in 2008. More and more people are looking to find economic independence on their own terms, whether it means starting their own business, working freelance, or entering into an MLM company. People are finding a renewed sense of security on their own terms.


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