Network Marketing: Why People Fail

There are three major reasons why the majority of people fail with network marketing, a.k.a., multilevel marketing (MLM). These are:

  • Lack of Sales Experience
  • Saturation of Products
  • High fees make it difficult to break even month over month

Lack of Sales Experience

The business model of network marketing requires each member to recruit in order to make any money. But most people who get recruited are have little to no sales experience. Recruitment under those circumstances becomes a difficult proposition.

But getting lots of people into the program is actually the only chance one has of being successful in MLM, assuming that success is even possible. If you have never tried to recruit friends and family take it from me, you will alienate them. Your family has no choice but to remain your family. The same is not true of your friends.

Saturation of Products

In order for an MLM program to stay within legal guidelines, it has to sell something other than the program itself. Failure to do so makes the program a Ponzi scheme ​which is illegal. Many of these programs will add products to the membership and will make them available to members. This typically is in exchange of a monthly fee.

What you have to realize is that every product has a saturation point. There are only so many products that members can buy or need. The experienced members will encourage newer members to try and sell those products to others. But even if you were good at sales (again many are not), there are only so many people that you will find that will be willing to buy from you.

As an example, I tried out Amway back in the 1980s. At that time, Amway's main products were soap products. Their soap products were so good (they were highly concentrated). The products that you bought lasted for several months. So what was I going to buy the next month?

They also had a catalog of third party products but they were so heavily marked up, you never had any chance of selling those products to anyone.

High Fees Make it Difficult​ To Break Even

​Suppose the monthly membership for a particular program is $100 per month, which is not unheard of. How long do you think people will stick with a program if they cannot sell at least that much worth of product? If you are lucky people will stay for 2 to 3 months.

In reality, several will bail after the first month. Since recruiting is the primary method of earning money, you can't make the kind of money that these programs require without actually recruiting people. Simply recruiting them is not enough either. These people have to be good sales people themselves and be able to recruit many people in order for them to stick with the program. The people that they recruit need to do the same.

It is true that early adopters of network marketing programs do make a lot of money. But when the networks grow and the products get saturated, that rate of earnings for newcomers slows down to very little if any.​

The High Failure Rate

It's widely believed that the failure rate for MLM is around 96-97%. This means that after recruiting 100 people you can expect that 3 or 4 people may stick around. You'll need to keep doing this over and over. Maybe you can find that first 100 people. But what about the second and third? A further problem is that even if those 3 or 4 (per 100) people are good at recruiting, there's no guarantee the people they recruit are going to be any good at it.​

Are There Better Alternatives?

The affiliate marketing model is a much better way to easily get a business up and running without having to buy products month over month and all without having to recruit people.​ While there are some affiliate programs that give you the option to recruit people, it is usually a much easy sell, all things being equal.

If you want nothing to do with recruiting, there are thousands of affiliate programs that are product or service based and in most cases, they don't require you to speak directly with anyone. You set up the affiliate links on your website and drive traffic to that site. When people buy from that coded link, the vendor pays you a commission.

A further advantage is that this all can be done without any monthly fees. In fact, any affiliate program that charges you to participate should be met with a high level of skepticism.​

Is There More To Affiliate Marketing?​

Admittedly, there is more to affiliate marketing than throwing up some links on a website and having visitors click and buy via your affiliate links. In fact, the business has changed drastically in recent years and training on the subject has been slow to reflect those changes. This is why I want to give you a free report, "Affiliate 3.0 Unlocked" which covers many of these new changes.
Simply leave a valid email and we will get that free report to you right away!

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Jim
 

Hi, my name is Jim. I am here to help you learn how to create your own online business. Never before has it been as easy as it is to do so. I will give you access to the necessary training to make it all happen. Just follow the training and perform the tasks as the come up and at the end of the training you will have a fully working framework with which to start earning money from your online business.

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