In the past 20 years, more people have become millionaires using Network Marketing or MLM than from any other occupation or profession. Despite the success stories, MLM has had more than its fair share of problems and failures. With the explosion of internet based opportunities, many so called MLM opportunities are really cleverly disguised, illegal pyramid schemes that are here today and gone tomorrow.
Many people have tried their luck with legitimate MLM programs and have lost money or failed to make enough money to make it worth their while, to continue their efforts. Here are the facts that so many Network Marketers and MLM promoters fail to acknowledge or tell you.
GROWTH BY GEOMETRIC PROGRESSION
One of the most exciting aspects of network marketing is how you can potentially gain a large network from sponsoring a few people personally, with them in turn doing the same thing, with the pattern repeating. I.E.; If you sponsored just 2 VIPs, and they each sponsored just 2, who each sponsored just 2, etc., then this is what it would look like:
2 X 2 = 4 X 2 = 8 X 2 = 16 X 2 = 32 X 2 = 64 X 2= 128 X 2 = 256 X 2 = 512 X 2 = 1024 1024 X 2 = 2048 X 2 = 4096If it took 30 days for this pattern to duplicate (each VIP sponsoring 2 others in their first 30 days), then you will have gained a huge membership network with over 8,000 VIPs in just one year. It is this potential of geometric growth that gets people excited about Network Marketing. Just think, if you were making $2.00 per VIP, then in one year you would be making $16,000 per month! Sounds great, doesn't it ? It also sounds too good to be true. The problem is............
It is too good to be true!
Typically, 60% to 80% of the people who join, sponsor less than 2 members each, in their first 30 days. Therefore, the geometric progression shown above, never really occurs in this manner.
The other factor that is that most of the people that join QUIT and the majority of them do so within a few months after joining. Consequently, annual drop out rates can be as high as 80%. According to the book, "Promises to Keep", about 50% of the distributors of the biggest MLM company in the world, drop out each year.
Why does this happen and why do people quit?
1. Most people never really get started because they don't know what to do. There is no real support or a step-by-step training provided or a good system to follow. As a result, they don't make any money because they are unable to sponsor enough people to become profitable.
2. In order to fulfill the promise of "getting rich", MLM products or services are marked up so that "heavy hitters" can earn large override commissions. The result for the average participant? It is difficult, if not impossible to have any retail customers to earn commissions from.
3. Because MLM products and services cost too much, the participants aren't really saving any money either.
4. It's too much of a hassle being involved, for the little money that they may be making.
5. Any of the above, combined with the fact that they are actually losing money each month because of money spent on product quotas, marketing materials, motivational tapes, rallies, seminars and long distance functions requiring travel, meal, lodging and ticket costs, makes it so they eventually lose hope that they can ever make money as a result developing a big network.
Just a tip for you when you decide on a MLM biz...
TeasasTips
Oh and before you go, check out my review of this season's first 2 episodes of Heroes...my favorite show!!
Why 'Heroes' Keeps Me Enthralled
Heroes is my favorite escapism television show. Maybe it's because as a kid, I always wanted to have superhuman powers. Either to run very fast or to become invisible.
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