Not all MLM companies are created equal. Many see an initial burst of success followed by a gradual tapering off of profits, causing them to collapse and go out of business. MLM companies that succeed have sound business models, both for those who run the company and for those who sell product and recruit new sales agents. There are many sites devoted to MLM rankings, creating lists of companies likely to provide a return on investment to sales agents interested in the industry.
Even while the popular culture’s view of MLMs is shifting, FitzPatrick doesn’t think we’re yet at a tipping point where consumers reject them en masse. Trump’s election may help explain why. After the election, FitzPatrick says he sent out a newsletter to the many victims of pyramid schemes who’ve come to him for help, explaining the connections with Trump.
I’d like to point out a few things: statistically something like 96% of businesses fail within the first 5-10 years, which is a much more impactful loss, both financially and time wise, than the few hundred dollars one puts into whatever product they’re using in MLM. So realistically the success rate as a “self employed business owner” with MLM is probably a bit better than it is with launching a traditional business, or at least consistent with it. It takes discipline and tenacity that many people don’t have- that’s why they chose to remain employees in the first place.
These nonsalaried workers may be stay-at-home parents, college students or part-time workers hoping to make money by selling products such as vitamins and makeup to their friends and family. But experts note that just selling products is typically not enough to make a profit, and workers are encouraged to recruit a "downline," a team of underlings from whose sales they also earn a commission, creating a pyramid-shaped compensation structure.
Well they were hot…this company was caught in the act and had some shade thrown their way after they were found to have been over-inflating their health products for consumer purchase. But really though? What company do you know that doesn’t do this in the MLM health industry? It seems like a common practice, even if its “just a bit,” so they are able to pay out commissions made. Some perspective for the shade…their fiber product was 900% more costly than “leading alternatives” and their Trioten protein blend was 600% more pricey as well when comparing their products to companies such as Herbalife and Shaklee.
Although Jeff's global business includes Distributors in more than 25 countries and thousands of qualifiers, his mission remains to support and encourage those around him. Jeff does this through recruiting, coaching, and mentoring on a daily basis. He has never been more passionate or excited about the business because he TRULY believes the best is yet to come.
MLMs are also criticized for being unable to fulfill their promises for the majority of participants due to basic conflicts with Western cultural norms. There are even claims that the success rate for breaking even or even making money are far worse than other types of businesses: "The vast majority of MLMs are recruiting MLMs, in which participants must recruit aggressively to profit. Based on available data from the companies themselves, the loss rate for recruiting MLMs is approximately 99.9%; i.e., 99.9% of participants lose money after subtracting all expenses, including purchases from the company." In part, this is because encouraging recruits to further "recruit people to compete with [them]" leads to "market saturation." It has also been claimed "(b)y its very nature, MLM is completely devoid of any scientific foundations."
Owner Two develops a business that also sells $100 USD worth of goods each month. Like Owner One, Owner Two receives a bonus for his sales volume on top of any retail profit he has made. By sponsoring Owner Two, Owner One who has generated $100 USD of sales, is also credited for the $100 USD produced by Owner Two. Therefore Owner One’s total business sales volume is considered to be $200 USD.
On the other hand, many people have gotten into Network Marketing and have made a fortune from it. People such as John Haremza, who signed up as a sales rep for a small water filter company, and is now worth millions. Alternatively, Sebastian Greenwood, who made an investment in Onecoin, and put in the hard work and time necessary. He is now considered an ambassador of the company, having made his fortune there, and spends much of his time helping others grow successful.
This “outlier” experience helped him to develop and grow both his own brands and increase the value of his brand partners as he was quickly becoming an influential professional skateboarder. By leveraging his influence and designing new concepts and ideas, he helped turn a rising footwear and apparel brand into a $500 million international company. He used that same expertise to build skate brands later in his career launching the world's first true professional skateboarding league Street League Skateboarding and a first of its kind skateboarding channel, ETN.
Unfortunately, many pyramid schemes attempt to present themselves as legitimate MLM businesses and, often, it can take many years for the FTC to finally step in and close down these fraudulent companies… so BEWARE! Do your due diligence and avoid any opportunity that emphasizes recruiting members and getting paid, rather earning commissions for the sale of products and services.
Pyramid schemes come in all forms. A really simple example are those chain letter things where you’d get a letter with seven names and addresses. You were supposed to send $1 to the names on the list. After you did that you were supposed to add your own name to the bottom of the list and send the letter off to at least 7 people. Supposedly you could make tens of thousands of dollars in just a few weeks doing this.
They may have professional athletes like Drew Brees promoting their products, but that doesn’t mean you should believe all of AdvoCare’s claims. This MLM company sells shakes, supplements, and pills. In order to succeed with AdvoCare, as with others, you need to recruit more people to sell the same products. Constantly hitting up your family and friends to buy stuff from you can cause some tense relationships.
Hi! I just saw your post today! Are you still open to discovering and examing an MLM COMPANY which is dedicated to allowing you to unleash your maximum potential? Voted best in the Industry with # 1 compensation plan and highest quality clinical studied and certified standard products in health and wellness! If so, let me know and I promise to supply you with all the information you need to help you make the best choice for your future.
In March I joined an MLM company and I’m lost… my first reaction to network marketing was I’m not a sales person, to which I was told it’s not about sales but about building relationships. The other thing that makes me crazy is I see a lot of folks who appear so fake with their bubbly “everything is coming up roses and bubble gum” that I cringe. I’m honest to a fault and happy but not giddy. I feel like I have writers block in that I’m not sure what direction to take to get my business going, the struggle is real right now… Any thoughts or suggestions I can take away.
However, there are some things we do know. First, consultants need to make $100 in sales every six months. That’s a very reasonable requirement. But, it may just apply to being a member. You’ll probably need more sales to earn from your team. Second, Steeped Tea does encourage online marketing, like through social media sites. That’s always good and you may even be able to sell online.
This podcast is brought to you by Go Pro Recruiting Mastery - the #1 generic training event for the Network Marketing Profession. Join us December 4-6 at the MGM Grand Garden Arena in Las Vegas, Nevada. You will hear from top thought leaders including Magic Johnson, John Maxwell and dozens of Million-Dollar Earners. It's an extraordinary event that you and your team can't afford to miss.