ARTICLE

Why People Fail in MLM

by Art Meakin

The subject of why people fail in MLM has been fascinating to me my entire 26 year career.

I've come to the conclusion that there are three major reasons for this failure, but ONLY ONE is valid:

It is quite clear that only one out of three hundred companies make it to their tenth year in business. Most fail or go out of business before their second year in business. So, this is one reason why people fail in MLM. But, there are two problems with this being a valid reason.

(a) if you believe as I do that everything happens for a reason and that I create my own destiny and reality, then joining a company that fails or goes out of business is just part of my path to success; and (b) many people succeed despite the failure of the company they joined... usually because they have figured out what it takes to be successful no matter what the situation.

Typically only about three to five percent of the people who are involved in MLM receive a decent part-time to full-time income. The rest make no money at all or lose money. Typically, it is said, this is because it is so easy and inexpensive to join most companies, and the people joining get involved with get-rich-quick illusions and expectations. However, the three to five percent who do become successful in MLM joined at the same cost and usually have the same expectations as those who fail... so this really isn't a valid reason either.

Most of the people who get involved and join an MLM company do not have any business experience, they are employee minded, and their work ethic is the same as the one they have at their real job which is to do as little as possible... but do enough not to get fired. Becoming an independent representative for an MLM company is in reality starting a business and all that goes with being in business, it takes a lot of hard dedicated work, and a person must be willing to invest time, money, and risk their reputation and ego. For instance, let's say to get started properly in an MLM company it cost about $600 up front and $300 to $700 per month in overhead and advertising expenses. An experienced business person, or someone educated with a Bachelor or Masters in Business Administration, would not think twice about those costs. It's called the cost of doing business. My experience has shown that I need to spend 30% of my short term monthly income goal in advertising costs otherwise I will not create that income. So, if I have a $1,500 per month short-term income goal then I need to spend about $450 per month on advertising plus my product purchase and other overhead costs each month. Most companies spend about 30% of their gross revenues on advertising. MLM companies take their advertising budget and pay their independent representatives when a product is sold. Therefore, who do you think pays for or performs the advertising?? The independent representative of course.

Unfortunately, only about three to five percent of the people who get involved in MLM take their business seriously and budget funds towards advertising and overhead expenses. Some of you may ask where you'd get the extra money each month to pay for your business expenses until your income reached your short term goal? I started a paper route and used that money. It took nine months before I reached my first income goal and could quit the paper route. If you're serious about being successful in business you will figure out a way to meet your monthly business, overhead, and advertising expenses. So, what is the most valid reason people fail at MLM?

Because they do not treat their business like a business and that's the truth.

So what's the sure way to succeed in MLM? Treat your MLM venture as a REAL BUSINESS.

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