by Serena Tan

Created on: December 28, 2006   Last Updated: March 09, 2007

Network marketers. Direct selling. MLM. What comes to mind when you hear these phrases? Aggressive, pushy salespeople? A family member or friend you want to avoid because he can't stop talking about his new business and all the wonderful products his family loves?

The network marketing industry has given thousands of individuals a chance to experience what it is like to work for themselves without the high costs traditionally associated with regular brick-and-mortar businesses.

At the same time, it is not without its detractors. Top of the list is an oft-quoted statistic that 95% of network marketers fail and only 5% succeed. Type in "95% failure rate network marketers" in Google and you'll see what I mean. This statistic is often attributed to the US Small Business Administration. However, when I last checked the SBA website's FAQs, what it said was: "Two-thirds of new employer establishments survive at least two years, and 44 percent survive at least four years, according to a recent study. These results were similar for different industries."

So is this 95% figure a myth to convince you that the odds are stacked against the network marketing newbie from the start?
And if there is some basis for the claim that an overwhelming majority fail at network marketing, what are the possible causes?
More importantly, what does this mean for you if you are considering an opportunity with a network marketing company?

Judging from the testimonials of those who have been disillusioned by the industry, there are several possible reasons why an individual may fail:

He's with the wrong company. He's not wild about the products. When people ask him what's great about the products, he can't quite explain it. The compensation plan is not working for him. The monthly quota is not sustainable in his present financial situation and is draining his resources. He finds himself saddled with products he cannot finish consuming or cannot sell. He is not getting the upline support he needs.
The company's Heavy Hitters practise the old-school philosophy of Recruit-Recruit-Recruit, i.e. marketing by numbers. And he just happens to hate selling and prospecting and cold calling. His network is limited. Soon he runs out of leads. No leads means no customers, and no customers means no downlines.
It's all about the money, and only about the money. He thinks network marketing is his quick ticket to a life of leisure in a beach house in the Caribbean, with minimal effort on his part.
He doesn't treat

• 1
• 2
• 3
• 4
• Next Page >>