Why People Fail in MLM
by Art Meakin
The subject of why people fail in MLM has been fascinating to me
my entire 26 year career.
I've come to the conclusion that there are three major reasons
for this failure, but ONLY ONE is valid:
It is quite clear that only one out of three hundred companies
make it to their tenth year in business. Most fail or go out of
business before their second year in business. So, this is one
reason why people fail in MLM. But, there are two problems with
this being a valid reason.
(a) if you believe as I do that everything happens for a reason
and that I create my own destiny and reality, then joining a
company that fails or goes out of business is just part of my
path to success; and
(b) many people succeed despite the failure of the company they
joined... usually because they have figured out what it takes to
be successful no matter what the situation.
Typically only about three to five percent of the people who are
involved in MLM receive a decent part-time to full-time income.
The rest make no money at all or lose money. Typically, it is
said, this is because it is so easy and inexpensive to join most
companies, and the people joining get involved with
get-rich-quick illusions and expectations. However, the three to
five percent who do become successful in MLM joined at the same
cost and usually have the same expectations as those who fail...
so this really isn't a valid reason either.
Most of the people who get involved and join an MLM company do
not have any business experience, they are employee minded, and
their work ethic is the same as the one they have at their real
job which is to do as little as possible... but do enough not to
get fired. Becoming an independent representative for an MLM
company is in reality starting a business and all that goes with
being in business, it takes a lot of hard dedicated work, and a
person must be willing to invest time, money, and risk their
reputation and ego. For instance, let's say to get started
properly in an MLM company it cost about $600 up front and $300
to $700 per month in overhead and advertising expenses. An
experienced business person, or someone educated with a Bachelor
or Masters in Business Administration, would not think twice
about those costs. It's called the cost of doing business. My
experience has shown that I need to spend 30% of my short term
monthly income goal in advertising costs otherwise I will not
create that income. So, if I have a $1,500 per month short-term
income goal then I need to spend about $450 per month on
advertising plus my product purchase and other overhead costs
each month. Most companies spend about 30% of their gross
revenues on advertising. MLM companies take their advertising
budget and pay their independent representatives when a product
is sold. Therefore, who do you think pays for or performs the
advertising?? The independent representative of course.
Unfortunately, only about three to five percent of the people who
get involved in MLM take their business seriously and budget
funds towards advertising and overhead expenses. Some of you may
ask where you'd get the extra money each month to pay for your
business expenses until your income reached your short term goal?
I started a paper route and used that money. It took nine months
before I reached my first income goal and could quit the paper
route. If you're serious about being successful in business you
will figure out a way to meet your monthly business, overhead,
and advertising expenses. So, what is the most valid reason
people fail at MLM?
Because they do not treat their business like a business and
that's the truth.
So what's the sure way to succeed in MLM?
Treat your MLM venture as a REAL BUSINESS.
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