The Network Has Disconnected

Ah, the lessons I learned in network marketing during the 90s. I got sucked in, as many people do, by a seemingly successful person I knew who wanted me to join him in a "business opportunity". I went and looked at it, and boom -- they had me.

The opportunity presentation is designed specifically to answer all your concerns in one fell swoop. It is masterfully designed by people who really know how to hit the hot points. They are very careful to NOT lie to you. Instead, they simply tell you only the truths that you need to hear, leaving out the ones that might send you packing.

To be clear, people who are professional network marketers are experts at this stuff. They know how to push your buttons, and a good, professional presentation is designed to give you only TWO options: 1) you will become a rep of the company; 2) you will NOT become a rep, but you WILL become a customer of the person who brought you there, to help them out.

I spent several years on the fringes of the industry with not much success. But just to be clear, I was NOT very good at it. They will NEVER admit this to you, but to be at all successful at this business, you really do need to have sales skills and a thick skin. You also need to be a slick talker, someone who is comfortable getting in front of the room and giving that aforementioned presentation professionally. I had none of those skills. Still don't.

After a while, you begin to notice that the people in the front of the room would sell their souls to be successful in the business. In fact, most of them probably have sold their souls. There is no other way to succeed, because you MUST recruit a lot of people, people who you KNOW are probably going to fail miserably. And you have to take their money knowing they are most likely gonna lose it. That takes one hard-hearted motherfucker, believe me.

What they don't tell you are some simple facts of life, and these come from a study done by a PhD. who wrote a book on the subject, a guy who went in with NO agenda other than to find out the truth (not an easy thing to do in an industry that hides its numbers better than the CIA). To wit,

• The loss rate for all MLMs ranged from 99.05% to 99.99%, with an average of 99.71% of participants losing money in an MLM. On average, one in 545 are likely to have profited after subtracting expenses and 997 out of 1,000 individuals involved with an MLM lose money (not including time invested).

• What kind of expenses are required to launch an effective recruitment campaign for a recruitment-focused MLM (a company that places compensation and incentive on recruiting a "down-line")? A minimum of $25,000 in total expenses (including incentives, products, phone, Internet, give-aways, computer supplies, advertising, travel etc.). To come up with this figure, he joined a recruitment-focused company and worked full-time on the business for a year. Obviously this figure will differ based off a number of factors including personal commitment and the company's requirements.

• Because of the dismal MLM failure rates and other criteria, it is interesting to note that MLM businesses don’t even qualify for SBA loans or other small business funding and assistance programs.

• In the first year of operation, a minimum of 50% of representatives drop-out.

• After five years of operation, a minimum of 90% of representatives have left the company.

• By year 10, only those at or near the top have not dropped out – making it safe to say at least 95% of representatives have dropped out.

• To contrast these statistics, consider the failure rates for traditional small businesses. The Small Business Administration’s statistics for 2008 found that 44% of small businesses survive at least four years and 31% at least seven year, and 39% of businesses are profitable over the life of the small business. Only 64% of small businesses fail in 10 years

I learned a lot of good, positive-thinking types of lessons during my involvement in MLM, things that I still use today. But the sad fact is that MLM is THE WORST place to implement such lessons for one simple reason: it is a horrible business opportunity that has a HUGE chance of failure and a minuscule chance of success. Even worse, if you DO happen to succeed at the business, and if you had morals in the first place, you are likely to find that end of the rainbow will find you to be a person who can do things that you never dreamed you'd be able to do, nor would have wanted to do, back in the day. 

I did meet a lot of great people in the business, people who had good hearts and who only wanted the best for themselves and their downlines. They are all out of the business now, perhaps wiser for the experience, certainly poorer in the pocketbook (for the most part). Even the BEST people I knew in the business, the ones who worked the hardest and longest and most effectively, never managed to make a full-time income in MLM. Why? Because it is virtually impossible. That's the simple, painful truth.

You CAN, however, make a LOT of money in MLM. If that sounds contradictory, here is HOW you can do that: start a network marketing company. 

You are sure to find many, many desperate souls eager to be a part of something that offers camaraderie, recognition, and a sense of "team". And as you'll be at the top of the food chain, you'll make a profit off everything they do, as they (each and every one of them) eventually fall by the wayside as they find they are making virtually nothing for all the hours of good, honest effort they put into their businesses.

Hope you can have a nice night's sleep.