+ Reply to Thread
Page 1 of 19 123456789101112131415 ... LastLast
Results 1 to 16 of 301

  1. #1

    Why are failure rates so high in MLM ?

    I’m starting this thread to discuss and analyze why failure rates are so high in MLM. To try to keep the discussion on point and avoid redundancy with other threads, I will make the following assumptions:

    • The individuals we will be discussing are MLMrs who are motivated in starting a business.

    • They are not part of a consumer only demographic.

    • They have been in MLM from 0-3 years.

    • Their failure was NOT based on the pyramid structure or from upline exploitation.

    • The product they are selling is viable.

    If we factor out the consumer only member and the fraud assumption, the question becomes are MLM figures disproportionate to any other entrepreneurial venture?

    Labor statistics state that 90 percent of all small businesses fail within the first 5 years. The average life expectancy for a small business is 7 years. Experts will tell you that your success rate will improve if you have adequate capital to survive the initial start-up curve. They will also say that enthusiasm, attitude, focus and a clear business plan separate the successful owner from failure.

    Many years ago a friend of mine got me to an Amway meeting and sold me on a $100 start-up kit. She got me amped on the idea that I could make allot of money selling the opportunity as the product sold itself. Now did I feel used by this friend ? Yes. Was I resentful ? Yes. Did I feel later that the products were inferior and unsellable. NO.Actually I liked the product and felt like I could see why it would sell itself. The reality was I was a lousy salesman. Sales to me was not an enjoyable task. I was introverted and did not take rejection very well. I also knew that it would take a commitment that I was unwilling to make. I got out before I even got started. After all it was only 100 bucks.

    I think we can take into account that the small investment is an incentive to get people to try an MLM venture. The fact that it can be part time and supplement one’s regular income is attractive as well. The reality is it takes the same entrepreneurial talents to successfully cultivate and grow an MLM business as it would any other business. I believe the easy entry contributes to the failure rate in MLM as there are probably a number of people who are not skillful enough to manage a business. They would never have started a conventional one.

    I think the MLM model is not necessarily exploitive, but it does bring in a disproportionate number of participants that probably should never have gotten into it. Like myself.

  2. #2
    Join Date
    Oct 2012
    Posts
    789

    Re: Why are failure rates so high in MLM ?

    "[...] But one thing that did not compute with me was why I should fail. I reviewed from my months of notetaking why some people succeed and some fail at NWM:
    NWM distributors fail when they don't invest the time and effort necessary to succeed. Reality: Except for Sundays, I had given about 10 to 12 hours a day for a year.
    People fail because they are working with a weak company and/or product line. Reality: My careful research told me WealthPlus was one of the very best in the entire NWM field.
    Unwillingness to invest money in products and services offered by the company - to be a "product of the products" - can severely limit progress. Reality: I had invested many thousands of dollars, not only for myself, but for my family, friends, neighbours, and downline - and (had helped) would have given away nutritionals to almost any person walking the street who looked malnourished.
    Some people lack contacts - family, friends, and associates they can invite to join their NWM program: Reality: I had introduced WealthPlus to over 700 people.
    Some fail due to lack of sales ability or the willingness to asswer themselves when opportunities come along. Reality: No one who knows me would accuse me of being cowardly in efforts to persuade people. And plenty of awards at home testify to my salesmanship abilities."


    So to sum up, false promises and being told you will gain success even though you won't. Doing it "the right way" seems to not always work.

    Also some of these reasons:

    1. Targeting every man on the street, edcutation or not. Hobo or business man.
    2. Being told "you can make a lot of money" plus the fact that many will rejoice when they get a $5 check. For them, it might feel like winning the lottery. They don't care how much is it, it's something. So their vision might get blurry and expenses and other aspects important to the business might be not be comprehended.
    3. It seems like it turns out to be harder then most expect. So many quit after a month, but many also quit after several years, and first then they realize "I'm not cut out to be a business man". It shouldn't take that long to figure out. Seems like the MLM-companies have a tendency to keep their distributors in the game just a little bit longer than they might have wanted to themselves.

      Interesting topic by the way.
    If its too good to be true, it probably is.

  3. #3
    Join Date
    Jul 2008
    Posts
    21,906

    Re: Why are failure rates so high in MLM ?

    Some reasons for failure:
    1. Very inexpensive and easy to get involved, therefore easy not to do anything.

    2. Most people are not taught, or dont seek out, the skills needed to be successful.

    3. Because of above, they dont know what to do, therefore are fearful of doing anything, so they freeze and do nothing.

    4. They are lied to by overexuberant distributors saying they just have to join and get rich.

    5. Anything that relies on a high level of self motivation will have a high failure rate, its human nature to give things up.

    I believe number 2 is the most common reason.

  4. #4
    James R's Avatar
    James R is offline I'm no crook...my upline told me to do it! User Rank
    Join Date
    May 2005
    Posts
    4,651

    Re: Why are failure rates so high in MLM ?

    Quote Originally Posted by ChrisDoyle View Post
    Some reasons for failure:
    1. Very inexpensive and easy to get involved, therefore easy not to do anything.
    Are you suggesting more expensive start up kits to prove you are serious? Maybe a higher mandatory autoship requirement as well?

    The $1000 Vitamark start up box you used to peddle wasn't enough?

    If you would have had a $3000 box to offer new recruits, Vitamark would still be in business today?
    Excited about Nopalea Cactus Juice? Learn how to make your own for FREE!
    Don't be another "$50 a bottle" sucker....best of all you know exaclty what's in it. Click HERE.


    Here's a good one....
    "That's why I changed my 'story'".
    Where else can you find this nonsense besides here?

  5. #5
    James R's Avatar
    James R is offline I'm no crook...my upline told me to do it! User Rank
    Join Date
    May 2005
    Posts
    4,651

    Re: Why are failure rates so high in MLM ?

    Why don't we just cut to the chase and ask the expert.

    Heiney.....any thoughts?
    Excited about Nopalea Cactus Juice? Learn how to make your own for FREE!
    Don't be another "$50 a bottle" sucker....best of all you know exaclty what's in it. Click HERE.


    Here's a good one....
    "That's why I changed my 'story'".
    Where else can you find this nonsense besides here?

  6. #6
    Join Date
    Jul 2008
    Posts
    21,906

    Re: Why are failure rates so high in MLM ?

    Quote Originally Posted by James R View Post
    Are you suggesting more expensive start up kits to prove you are serious? Maybe a higher mandatory autoship requirement as well?

    The $1000 Vitamark start up box you used to peddle wasn't enough?

    If you would have had a $3000 box to offer new recruits, Vitamark would still be in business today?
    At least try to be an ''online expert scambuster'' and think before you post, you're showing your ''trade'' up to be idiots.
    :cwm2:

    Edit to add: it didnt take long for one of the ''scambusters'' to come along and take the thread off track did it? Slap and dash post again and if there are any more, I shall be reporting you for slap and dash posting. Be warned.

  7. #7
    Join Date
    Feb 2005
    Posts
    3,715

    Re: Why are failure rates so high in MLM ?

    Quote Originally Posted by ChrisDoyle View Post
    Some reasons for failure:
    1. Very inexpensive and easy to get involved, therefore easy not to do anything.

    2. Most people are not taught, or dont seek out, the skills needed to be successful.

    3. Because of above, they dont know what to do, therefore are fearful of doing anything, so they freeze and do nothing.

    4. They are lied to by overexuberant distributors saying they just have to join and get rich.

    5. Anything that relies on a high level of self motivation will have a high failure rate, its human nature to give things up.

    I believe number 2 is the most common reason.


    1. What is inexpensive?
    There are MLMs that can be started for $10 and there are ones that can be started for thousands....
    Does the failure rate follow the expense?

    2. Where should they learn the skills needed to be successful?

  8. #8
    Join Date
    Jul 2008
    Posts
    21,906

    Re: Why are failure rates so high in MLM ?

    Quote Originally Posted by bibleman View Post
    1. What is inexpensive?
    There are MLMs that can be started for $10 and there are ones that can be started for thousands....
    Does the failure rate follow the expense?
    I dont know any that can be started for 1000s apart from buying optional product packs and they are optional and will be subject to a refund.

    2. Where should they learn the skills needed to be successful?
    Preferably someone upline who is enjoying the success you want, or a recognised teacher, Tom Schreiter and Mark Januszewski are 2 I would recommend (they are very similar as one learned from the other)

  9. #9
    Join Date
    Feb 2005
    Posts
    3,715

    Re: Why are failure rates so high in MLM ?

    Quote Originally Posted by ChrisDoyle View Post
    I dont know any that can be started for 1000s apart from buying optional product packs and they are optional and will be subject to a refund.



    Preferably someone upline who is enjoying the success you want, or a recognised teacher, Tom Schreiter and Mark Januszewski are 2 I would recommend (they are very similar as one learned from the other)

    Let's go with that then.
    Does a persons who buy the higher optional product pack have a higher success rate than the ones who don't?

    Pertaining to seeking out a learned person to learn from, what does that say for the standard company information and training materials most MLMs offer, and most leaders point to as the system to follow?

  10. #10
    Join Date
    Jul 2008
    Posts
    21,906

    Re: Why are failure rates so high in MLM ?

    Quote Originally Posted by bibleman View Post
    Let's go with that then.
    Does a persons who buy the higher optional product pack have a higher success rate than the ones who don't?
    I dont know, I've never bought nor sold big product packs. It could, but as they are open to a refund, people can easily get their money back.

    Pertaining to seeking out a learned person to learn from, what does that say for the standard company information and training materials most MLMs offer, and most leaders point to as the system to follow?
    The companies aren't there for training purposes, they are there for product supplies, ordering, stocking, research and development and other mundane activities that would take time away from distributors doing the main thing, which is being responsible for product sales. The training should be started by the leaders and passed on down. Unfortunately many of the leaders get it wrong, designing training systems that are good for their characters but not for the masses.

  11. #11
    Join Date
    Feb 2005
    Posts
    3,715

    Re: Why are failure rates so high in MLM ?

    Quote Originally Posted by ChrisDoyle View Post
    I dont know, I've never bought nor sold big product packs. It could, but as they are open to a refund, people can easily get their money back.



    The companies aren't there for training purposes, they are there for product supplies, ordering, stocking, research and development and other mundane activities that would take time away from distributors doing the main thing, which is being responsible for product sales. The training should be started by the leaders and passed on down. Unfortunately many of the leaders get it wrong, designing training systems that are good for their characters but not for the masses.

    The money back deal most MLMs seem to use may or may not be helpful, since the person who joins may hold out longer than the 30 day, 60 day, 90 day time frame for a refund, deciding to work it hard.

    I suppose you are right about the training stuff...usually one of the master distributors puts that stuff together...though not always.

  12. #12

    Re: Why are failure rates so high in MLM ?

    Quote Originally Posted by Zapticon View Post
    "[...] But one thing that did not compute with me was why I should fail. I reviewed from my months of notetaking why some people succeed and some fail at NWM:
    NWM distributors fail when they don't invest the time and effort necessary to succeed. Reality: Except for Sundays, I had given about 10 to 12 hours a day for a year.
    People fail because they are working with a weak company and/or product line. Reality: My careful research told me WealthPlus was one of the very best in the entire NWM field.
    Unwillingness to invest money in products and services offered by the company - to be a "product of the products" - can severely limit progress. Reality: I had invested many thousands of dollars, not only for myself, but for my family, friends, neighbours, and downline - and (had helped) would have given away nutritionals to almost any person walking the street who looked malnourished.
    Some people lack contacts - family, friends, and associates they can invite to join their NWM program: Reality: I had introduced WealthPlus to over 700 people.
    Some fail due to lack of sales ability or the willingness to asswer themselves when opportunities come along. Reality: No one who knows me would accuse me of being cowardly in efforts to persuade people. And plenty of awards at home testify to my salesmanship abilities."


    So to sum up, false promises and being told you will gain success even though you won't. Doing it "the right way" seems to not always work.

    Also some of these reasons:
    1. Targeting every man on the street, edcutation or not. Hobo or business man.
    2. Being told "you can make a lot of money" plus the fact that many will rejoice when they get a $5 check. For them, it might feel like winning the lottery. They don't care how much is it, it's something. So their vision might get blurry and expenses and other aspects important to the business might be not be comprehended.
    3. It seems like it turns out to be harder then most expect. So many quit after a month, but many also quit after several years, and first then they realize "I'm not cut out to be a business man". It shouldn't take that long to figure out. Seems like the MLM-companies have a tendency to keep their distributors in the game just a little bit longer than they might have wanted to themselves.

      Interesting topic by the way.
    Small business failures are littered with people who put in the time. It absolutely does not guarantee success.

    As far as Taylor's sales abilities go I don't think he adequately addressed his skill level. To measure a salesman's level of accomplishment. He should have better quantified the 700 contacts.

    1) How many did he contact to sell the product ?

    2) What were his retail sales numbers ? The fact that he verified that it was a strong product and he stockpiled that product. If he were a good salesman he should have been able to move it and would be reflective of that skill.

    3) How many did he contact to sell the opportunity ? How many joined him ? How many were interested in the opportunity ? Were they warm or cold contacts ?

    4) What was his close rate on each of the above ?

    Another personal example I will share.

    For about 5 months I worked at home depot as an outside sales representative selling contractor type services. It was a strictly commission basis. I spent a week in orientation learning the sales techniques required for closing sales. There were ten steps in the process. Much of it was about overcoming objections and turning a no into a yes.

    We typically were given leads and cultivated our own by working the floor at the local store. We then made appointments with those leads. On average an outside salesman made from 3 to 5 appointments per day averaging about 60 leads a month.

    During those 5 months the most successful month I did about $30 K in sales by closing 3 of those leads.

    Conversely there was a salesman who was consistently doing $150 K a month and averaged about a 25% close rate.

    There were a number of reasons for the disparity that he willingly shared with me.

    He pre-qualified his leads by determining the tire kickers from the warm prospects. He had clear goals he established for himself each month. He took his time making his sales presentations and would not take no for an answer. He lived in an area that was going through revitalization.

    We both made about the same amount of presentations. The quality of those leads, the market demand, the techniques and tenacity were the determining factors between success and failure.

    Taylor's "sales awards" don't mean anything to me. He never articulated the quality of those 700 contacts or his sales strategy.

    That's why it is so important to quantify success or failure with skill level. The fact that he put in the hours do not guarantee him success without TRUE commitment and skill.

  13. #13
    Join Date
    Jul 2005
    Location
    Northern, California
    Posts
    16,985

    Re: Why are failure rates so high in MLM ?

    Quote Originally Posted by Zapticon View Post
    "[...] But one thing that did not compute with me was why I should fail. I reviewed from my months of notetaking why some people succeed and some fail at NWM:
    NWM distributors fail when they don't invest the time and effort necessary to succeed. Reality: Except for Sundays, I had given about 10 to 12 hours a day for a year.
    People fail because they are working with a weak company and/or product line. Reality: My careful research told me WealthPlus was one of the very best in the entire NWM field.
    Unwillingness to invest money in products and services offered by the company - to be a "product of the products" - can severely limit progress. Reality: I had invested many thousands of dollars, not only for myself, but for my family, friends, neighbours, and downline - and (had helped) would have given away nutritionals to almost any person walking the street who looked malnourished.
    Some people lack contacts - family, friends, and associates they can invite to join their NWM program: Reality: I had introduced WealthPlus to over 700 people.
    Some fail due to lack of sales ability or the willingness to asswer themselves when opportunities come along. Reality: No one who knows me would accuse me of being cowardly in efforts to persuade people. And plenty of awards at home testify to my salesmanship abilities."


    So to sum up, false promises and being told you will gain success even though you won't. Doing it "the right way" seems to not always work.

    Also some of these reasons:

    1. Targeting every man on the street, edcutation or not. Hobo or business man.
    2. Being told "you can make a lot of money" plus the fact that many will rejoice when they get a $5 check. For them, it might feel like winning the lottery. They don't care how much is it, it's something. So their vision might get blurry and expenses and other aspects important to the business might be not be comprehended.
    3. It seems like it turns out to be harder then most expect. So many quit after a month, but many also quit after several years, and first then they realize "I'm not cut out to be a business man". It shouldn't take that long to figure out. Seems like the MLM-companies have a tendency to keep their distributors in the game just a little bit longer than they might have wanted to themselves.

      Interesting topic by the way.
    Is that your rant or JT's? If it's JT's why didn't you say so?

    What a load of biased crap! ...take your blinders off...

    Any idea what JT did for those 10-12 hours a day? Did you see his notes tracking his activity?
    Any idea if he consulted with his upline to refine his approach? HOW was he approaching people?

    Could it be that he was just a LOUSY INSURANCE & FINANCIAL SERVICES SALESMAN?!:judges:

    What ever happened with WealthPlus?

    Did you even look at the company he was trying to promote? (I did!)...What's the 'problem', with WP...why did JT fail? What happened to all of his due diligence he bragged about? Doesn't he even know what to look for in a company for himself?

    Obviously not...

    Also, I thought JT was in Nuskin when he fell flat on his face in Direct Sales, not...WealthPlus!??

    One more thing, I just got off the phone with the assistant to the head of WP...it seems they don't hire independant reps for WP at all! It's Alexandria Co.ck baby, it's hers alone!...What gives? (gee, do you think Mrs beep was razzed about her name when growing up?):

    ANY ideas, or do you just continue to leave your blinders on with regards to JT's misinformation and BS?

    Ignorance is bliss I guess...
    As long as it is acceptable for a person to beLIEve that he knows how god wants everyone on Earth to live, we will continue to murder one another on account of our myths. ~ Sam Harris, 'The End Of Faith'
    ~~~~~
    Christianity demands the crucifixion of the intellect.
    ~ Susan Kierkegaard

  14. #14
    Join Date
    Feb 2005
    Posts
    3,715

    Re: Why are failure rates so high in MLM ?

    Quote Originally Posted by noagenda View Post
    1) How many did he contact to sell the product ?

    2) What were his retail sales numbers ? The fact that he verified that it was a strong product and he stockpiled that product. If he were a good salesman he should have been able to move it and would be reflective of that skill.

    3) How many did he contact to sell the opportunity ? How many joined him ? How many were interested in the opportunity ? Were they warm or cold contacts ?

    4) What was his close rate on each of the above ?

    That's why it is so important to quantify success or failure with skill level. The fact that he put in the hours do not guarantee him success without TRUE commitment and skill.


    These are all very good questions. The answer doesn't have to be fancy. It could be as simple as a piece of paper with 100 boxes - X for NO's and a Y for Yes's.
    Fill up the 100 boxes (per day in the life of a door to door salesman) and find the average - 10% or higher Y's for a go-getter.

    I'd like to see quantifying and qualifying of his statements, too.

  15. #15
    Join Date
    Jul 2008
    Posts
    21,906

    Re: Why are failure rates so high in MLM ?

    Quote Originally Posted by noagenda View Post
    The fact that he put in the hours do not guarantee him success without TRUE commitment and skill.
    Thats it. Thats the key.

  16. #16
    Join Date
    Aug 2011
    Location
    Earth
    Posts
    20,845

    Re: Why are failure rates so high in MLM ?

    Quote Originally Posted by ChrisDoyle View Post
    S
    2. Most people are not taught, or dont seek out, the skills needed to be successful.
    So what are these vital skills?

Similar Threads

  1. Extremely High Interest Rates and longer loan payoffs
    By bibleman in forum Used Car Scams
    Replies: 2
    Last Post: 12-22-2013, 04:44 AM
  2. Failure Rates and Math is hard
    By tomInAustin in forum MLM Scams
    Replies: 57
    Last Post: 05-06-2013, 11:50 AM
  3. Failure Rates and likelyhood of success
    By tomInAustin in forum MLM Scams
    Replies: 35
    Last Post: 05-03-2013, 05:46 PM
  4. Replies: 2
    Last Post: 04-01-2013, 03:52 PM
  5. Keep tax rates low, keep tax revenues high
    By Grim17 in forum Political Scams
    Replies: 23
    Last Post: 11-29-2006, 06:37 PM

Tags for this Thread

Bookmarks

Bookmarks

Posting Permissions

  • You may post new threads
  • You may post replies
  • You may not post attachments
  • You may edit your posts
  •