Network marketing failure rate is very high. And this is not limited to certain countries or cities.
Mlm business distributors (or affiliates) are losing money big time worldwide.
In fact, most people who become distributors for mlm companies quit
within 4 to 6 months of joining their preferred mlm company because of
losses from their independent distributor business.
This means that if you signup with a network marketing company today, you're likely to quit the business (and go in search of another HOT opportunity) in six months or less.
Wait. Why is mlm failure rate so high?
There are four key reasons:
1. The majority of people have absolutely no idea how to run a business and make it profitable
2. Most mlm companies require distributors to purchase the company's products or services monthly (called autoship) to qualify for commissions
3. Most mlm companies have over-priced products / services and
4. Most people who join network marketing companies as distributors have unrealistic income expectations from the business
Let's take a moment to explain how each of the factors above increases the network marketing failure rate and what you can do to increase your chance at success.
As mentioned above, most people have never run a business of their own and have no idea how to start and run a business.
The majority of people are actually trained in school to get good grades so they can get good jobs with national and multinational companies. There is often little or no training on how to earn money outside of the paid job environment.
What do you expect will happen with this category of mentally unprepared new recruits?
Sure, most are likely to fail starting from month 1.
MLM autoship is defined as the minimum product or service purchase required of mlm company distributors or affiliates to achieve ACTIVE MEMBER status and, hence, qualify to earn commission on purchases by their downlines.
For example, if the minimum autoship amount is =N=20,000 per month (about $100 USD), this automatically increases the business expenses of the new distributor by =N=20,000 every month.
What happens if the distributor is unable to sell off his personal purchase to end users or customers?
Well, he still has to purchase another =N=20,000 worth of product the following month to qualify for commission.
Most average people will be out of cash to sustain the purchases after 4 to 6 months of no sales (or little sales) and continued autoship purchase month after month.
A third factor that contributes to high network marketing failure rate is over-priced mlm products and services.
How this pushes the average mlm business distributor towards business failure is pretty obvious.
If the mlm company you promote has over-priced products, you will have serious trouble retailing the products. And if you can't retail the products, you will likely consume them or give them away to friends and relatives.
When you give products away as samples, consume all of them or pile them up in your house because of poor sales, you automatically increase the operating cost of your business.
When your business operating expenses go up and your commission from the company is too small to cover all your expenses, you will end up with losses and eventually give up on the business.
Millions of people all over the world join network marketing companies with the hope that they will become multi-millionaires in 6 to 12 months.
Unfortunately, the tough truth hit them when they find they are spending more than they are earning even after 6 to 8 months of working hard in their mlm company.
The raw truth is this . . . network marketing is not an easy route to wealth. MLM business is not a get-rich-quick business.
In fact, most people will still not make enough money from the business to cover all of their expenses even if they stick with their preferred mlm company for 24 months (or two full years).
Simple reason . . . most network marketing distributors (or affiliates) do not do due diligence and choose the best home base business opportunity when they are looking for a business opportunity to promote.
Analysis of the income disclosure statements of many mlm companies show that MLM failure rate is high . . . very high.
In simple words . . . there is no guarantee that you will make any money from networking marketing.
The fact that networking marketing failure rate is high should tell you that you're taking a big risk when you decide to join an mlm company as a distributor, affiliate or brand partner.
Should you turn round and run because of the high mlm failure rate?
That is up to you to decide.
The stakes are high in network marketing and the odds are against the average person.
However, be informed that high failure rate in business is not peculiar to network marketing business alone. Traders and small business people in various professions also face the risk of failure when they start out solo like the average network marketer.
Do due diligence before joining any mlm company. Ask the right questions. And be sure to join the best mlm business opportunity available out there.