Can You Really Make Money in an MLM?
However, without a very strong desire to succeed, followed by a strong work ethic, and being open to and committing to new ideas, you will probably never make any money. The statistics bear this out.
Becoming financially independent with an MLM is achievable although it might seem impossible. Jon Taylor discovered in his free online electronic book titled ‘Multi-Level Marketing Unmasked’ that over 97.7% individuals will fail in network marketing, resulting in a great loss of money. Statistically speaking, it is assumed that only 3 people among the 1000 individuals who signed up for a network marketing network will benefit, those three will definitely receive greater measure money compared to what they invested. However, if I plan on growing five successful members in my downline, I have to mobilize about 1,665 new people. I will say that again….the average is that out of over 1,500 recruits, only 5 become successful.
One Chief Executive of a top 5 MLM company says that about 70% of people singing up for an MLM never do anything whatsoever.
This could be a technique any person can try, although it still only benefits 1 out of 333 individuals. If you are to consider why it’s tough for network marketers to earn money, you can refer to the payment schedules of USANA, Amway, Nu Skin and Herbalife. As you might expect, the system for earning money with each, are very similar.
Likewise, each of the MLM embodies separate features and their mode of payment. On the whole, we believe this arrangement as a setup that makes it hard for people to earn good money in network marketing.
For instance; you must be eligible before you can receive payment – A ‘rank’ will be awarded to you once you purchase products. This action generates what we call ‘synthetic demand’ for those commodities you bought. For you to stay ‘eligible’ you must keep purchasing more products. People continue to demand these products in surplus even beyond their consumption rate or above what they can sell to dealers, and this is leading to over congestion of these products.
Members are the ones investing more in this business – The management of these Network marketing recognizes that only a lesser portion of their product are sold to dealers while huge demands are coming from members for consumption or to simply stay ‘eligible’ in the plan. In other words, sales are not influenced by market factors; they are influenced by members just to meet up with the goal. If the company only generate little revenues from retailers, this means that one can only be successful by taking advantage of members registered under their matrix.
It’s a game of spenders and earners – Outside other revenues generated within; those ahead of you in the matrix can only earn money if you pay in money. The news that says the suffering single parent became rich overnight might be real. But most times, they don’t share what went down the line in the business, and that is: every single dollar they earned was generated from people who belong to a lower rank in their MLM matrix order. As members lose money, other members earn in that MLM circle.
This is a system that is prone to negative incentives- Just as we discussed earlier, money is only earned when more members are signed up. The moment you launch in fully into the plan, your referrers gain from your payment. They will always advise you to keep putting in those dimes to remain ‘active’. The actual fact is – you make them richer every time you put in money into the system. They will assure you that you will make a great profit when you climb a higher rank in the MLM, but actually, they need you to keep pumping in more money into the company for them to keep up with more earnings.