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.
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.
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.
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’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 Source||Success Rate|
|Legitimate Direct Selling||80%|
|Illegal Pyramid Schemes||10%|
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.
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.
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.