Have you ever heard of some of the statistics quoted about MLM?
They claim that 97% of all distributors who get involved in MLM fail.
Is this really true? If it is true, does this mean that MLM or Network marketing is a poorly designed business model?
Network Marketing Business Failure Rate – What is the Source?
First off, if someone says that 97% of all distributors fail, you should ask them where they got that statistic from.
Nine times out of ten they will tell you that they heard it from someone else. If you were able to contact the person that told them, they would likely tell you the same thing.
The statistic has been thrown around so much in the industry that most people simply accept it as fact.
The fact of the matter is we really don’t know what the true failure rate is for MLM.
To my knowledge there has never been a comprehensive study on the subject. There is no company that has taken the time out to survey distributors involved in network marketing and figure out what the failure rate truly is.
However, for arguments sake, let’s say 97% of the distributors in MLM really do fail.
What Constitutes Failure in MLM?
Let’s say “failure” means not making any money from the business.
Are “Wholesale Buyer Distributors” Factored In?
There are a large number of distributors in MLM companies who really didn’t join the company to make money. They joined the company as a distributor to save on their product cost.
Therefore if the distributor didn’t join the company to make money to begin with, is it fair to classify that person as a failure?
Absolutely not! Their purpose for signing up was to get the wholesale discount. They got the wholesale discount. That means they accomplished what they set out to accomplish and they were a success.Your network marketing business more than its products.
If you factor out all of the distributors who are distributors simply to get wholesale pricing on products, that will dramatically decrease the failure rate.
Did Distributors Who Failed Get Proper Training?
How many of those distributors experiencing failure in their MLM actually plugged into the training offered by their network marketing company?
I don’t know about you, but I know many of the distributors that I have recruited in the past never plugged into a single company training.
Is it fair to say the industry has a failure rate of 97% when a number of the people included in that rate didn’t take advantage of the training offered?
What Kind of Action was Performed by MLM Business Failures?
The final question I would ask is how many of those people who “failed” in network marketing today actually went out and took action and attempted to build the business?
Did they approach people and attempt to prospect them for the business?
Many distributors who get started in network marketing never approach a single person about their MLM business opportunity.
It is unreasonable to include people who never try to build the business in a failure number that is supposed to be reflective on the network marketing industry as a whole.
Look at the Failure Rates of Other Industries .
Similar failure rates are quoted for industries like real estate agents, insurance sales and stock brokers.
Keep in mind these are all industries where you have to get licensed and trained just to be qualified to sell the product.
If people in these industries still have a high failure rate, it clearly shows that there is nothing inherently wrong with the network marketing business model which causes high failure as well.
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