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Research: 0.4% is Network Marketing Success Rate | Worst Industry

Till now I have written 200+ articles on Network Marketing aka Direct Selling.

From my first MLM post to till now, my perspective towards MLM has completely changed. Reading numbers of MLM blogs, books and analyzing income plans made me a more MLM insightful person.

Maximum people get failed in Network Marketing and few get success in it. Most of us are not aware of Network Marketing Success Rate, which is extremely low.

mlm-success-rate-graph

Even a gambler has more chance to get richer compared to an MLM leader.

DSA (Direct Selling Association) and Most MLM portals promote network marketing without showing proper statistics.

Most companies share their annual turnover. But there is a difference between GDP and GDP per capita. We always consider GDP per capita to judge prosperity, not only GDP.

In our Job Vs MLM post, we saw that the average Herbalife USA direct seller earns 5 times lesser than a least paid job in the USA.

Even reading books like The Business of the 21st Century by Robert Kiyosaki doesn’t make any sense. Personally, I felt Robert Kiyosaki filled his book with bluff content to show MLM a superior opportunity.

Network Marketing Histroy

Network Marketing started in the decade 1920s. California Vitamin Company (Now Nutrilite) and California Perfume Company (Now Avon Products) are pioneers of the MLM Industry.

In the year 1959 Amway (American Way) started and till now Amway is the leading company in this industry.

With the growth of direct selling, simultaneously Ponzi and Pyramid Scheme came in trend and most MLM scams took place.

Network Marketing Success Rate

As I said earlier, the Direct Selling Association (DSA), MLM portals, leaders, blogs and MLM-related Books always favor it.

Statistics are widely used in most businesses. Statistics are vital to understanding growth and prediction. But most MLM favoring authority never use statistics.

Network-Marketing-Success-Rate

The book “The Business of the 21st Century” does not have a single data which makes me believe that MLM is actually the business of the 21st century.

For this post, we will rely on research based on facts and figure to understand the success rate of MLM.

The Case (for and) against Multi-level Marketing

The Case (for and) against Multi-level Marketing is an ebook written by Jon M Taylor (MBA, Ph.D.).

Jon M Taylor joined the network marketing industry around 1994 and he was one of the top 1% earners of that company.

But being after one of the top 1% earners, Jon was losing 1200$ monthly. Jon was investing his own money in a campaign, to recruit new people in the downline.

Jon’s campaign was successful, but he never earned the amount about which he was promised. So he started his research on MLM.

Why Jon M Taylor’s Research?

Many of you wondering, why I am considering Jon M Taylor’s Research?

When Jon was confused about does only his MLM company pay so less? he started his research.

Jon found that the situation was the same in all companies around him. He was shocked and continued his research.

After Investigating 350 MLM Companies for 15 years, he published his ebook over the internet.

Jon-M-Taylor-FTC

Jon M Taylor’s book got an identity when USA agency FTC (Federal Trade Commission) promoted his ebook on their official site.

Jon also challenged the president of 60 most prominent MLM Companies of that time to prove him wrong, but the challenge remains unmet cause most of the presidents never dare to reply Jon.

99.6% of people get failed in Network Marketing

Jon M Taylor proved that 99.6% of people in network marketing lose their money in buying overpriced products.

In the 7th chapter of his eBook, Jon revealed that 99.12% to 99.97% lose their money, on average 99.6% are losers.

The remaining less than 0.4% of successful people in MLM are at the top of the pyramid, i.e. is 4 in 1000.

In those profiting people, either most had joined the company in the initial days or have straight connections with company operators. Therefore the chance of success of an average distributor gets very less near about 0.1%.

Jon compared the success rates of MLM to other professions.

Even illegal money-circulating pyramid schemes have a better success rate than legal products-based MLM called Network Marketing.

Income SourceSuccess Rate
Wage Jobs100%
Legitimate Direct Selling 80%
Small Business39%
Illegal Pyramid Schemes10%
Gambling2.9%
MLM/Network Marketing0.4%

Jon M Taylor has used words like Incentivized Purchases, TOPPs (Top of a Pyramid of Participants), Stockpiling, Top-Weighted schemes, Sympathy buyers to explain the dark reality of Network Marketing.

Personally, I recommend everyone to read Jon M Taylor’s research who directly and indirectly related to MLM. You can download Jon M Taylor Book PDF by clicking on the just below button.



Who gets Success in Network Marketing?

Network Marketing has a very low success rate. Still few people get success in it and become part of the 0.4% success club in every MLM company.

Generally, they are the people who are at the top of the pyramid. Most of them were joined the plan in the initial days of the company.

MLM companies give good earning to only those people, who have large downlines. And peoples who are masters in recruiting new people have more chances to get success.

Recruiting active people in the downline is the principle of success.

0.4% include people like Sonu Sharma. Sonu Sharma is a popular Network Marketer of an Indian MLM company Vestige.

He is a successful network marketer, because of his presenting skills in front of thousands of people and his storytelling.

Just search his name on YouTube, he got millions of followers by motivating people for MLM and sharing fictional stories.

Why Network Marketing?

Books like The Business of the 21st century give many reasons to do MLM.

These books don’t have proper stats, But qualitative points in these books are not false.

A person engaged in MLM learns various things, like

  • Building Communication Skills
  • Leadership Quality
  • People Skills
  • Dreaming Big
  • And other interpersonal skills

Sometimes failing makes a person better.

Even India’s most popular motivational speaker Sandeep Maheshwari is an ex-network marketer.

But at last, it’s all about selecting the right profession. Spending money and precious time in an Industry with such a low success rate and controversies may affect someone’s life adversely.

Why not Network Marketing?

MLM Success Rate driven by Jon M Taylor is enough to say no to MLM.

When any person joins any MLM company, firstly they force their family and friends to join in the downline or to purchase their overpriced products.

The Sympathy Buyers term is used by Jon M Taylor means those family members and friends who buy MLM company products when their loved ones force them.

In most cases, innocent people waste their time and money who never know anything about network marketing.

Everyone is not an entrepreneur who is also willing to become one among the top 0.4% of people in any MLM company.

Moreover, there are lots of new skills and professions available to become a better person in life.

If someone has passion or interest in any field, then following passion is the best option. Because the person may earn less money but will be happy about work.

Conclusion

I hope this post on Network Marketing Success Rate is beneficial for you. Many of you are new to the MLM industry and working with faith to get success, may got hurt.

Maybe you do not like this post, but I recommend everyone to read Jon M Taylor’s book especially chapter 7, to understand what’s wrong with MLM Industry.

Thank You!!

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Hemant Kumawat

Hemant Kumawat

हेमंत कुमावत एक MLM विश्लेषक और ब्लॉगर है, जो निष्पक्ष डायरेक्ट सेलिंग कंपनियों का अवलोकन करते है और TechMistri.com से लोगों को इस इंडस्ट्री के प्रति शिक्षित करते है। आप इनसे फेसबूक पेज, इंस्टाग्राम और टेलीग्राम के माध्यम से संपर्क कर सकते है।

3 thoughts on “Research: 0.4% is Network Marketing Success Rate | Worst Industry”

  1. Vishal Wandale

    There is negativity of network marketing in india right now hence the success rate is low, but I have confidence, network marketing will be the big platform of income in upcoming year.

    Thank you.

  2. SUCCESS RATE IS TOO LOW I KNOW BUT THE DATA IS OF LAST 15 YEARS BUT DATA DONT CONSIDER OF 21 CENTURY MEANS 2020, SUCCESS RATIO YOU ARE TELLING IS 0.04% OKAY, BUT WHAT’S ISTHE ELIGIBILITY CRITERIA OF BEING SUCCESSFUL HERE, YOU ARE TAKING, ONE MORE POINT THAT YOU DISCUSSED HEREIN YOUR WHOLE ARTICLE THAT OVERPRICED PRODUCTS RATE, WHAT IF A COMPANY COMES AND SELL THEIR PRODUCTS AT AFFORDABLE PRICE (GOOD QUALITY AND BELOW MRP OF TRADITIONAL MARKET RATE OR SOMEWHERE NEARBY ) THEN CHANCES IS MORE HIGHER TO GET SUCCESSFUL,SO HERE YOUR WHOLE THEORY 0F THE CHANCES IN NETWORK MARKETING OF BEING SUCCESSFUL IS VERY LOW, GOT FAILED.

    1. I respect your opinion. There is no other good research available to know the actual success rate of MLM, so I have to refer Jon M Taylor.
      Secondly, his research is not failed, he included 350+ MLM companies, and there is no much difference in pricing till nom. The concept of MLM makes products price high, which will not be going to change, yes companies can try to slightly reduce the price or use health/wellness products to generate more profit over each sale. But it won’t affect the success rate much, and today it is impossible to found the success rate because most MLM companies never disclose it, to save their own reputations.

      Thank You!!

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