The State & Future of Multilevel Marketing

The State & Future of Network/Affiliate Marketing.

Multilevel Marketing is a legitimate and legal way to make money. However, the truth is that not many are successful in it, as the latest MLM statistics make abundantly clear.

The thing is:

People quickly drop out because they’re either not making enough money or are spending too much on business expenses. So, they are unable to turn a profit. 

You might be wondering:   “What does multilevel marketing mean?”

Here’s the scoop:

Multilevel Marketing works by selling products through a vast network of sales agents. They can earn a commission every time they make a sale or recruit someone new into the business. Agents earn a percentage of the product’s value, with the rest going to those further up the chain. 

Now:

This is this exact reason that many confuse MLM with pyramid schemes. But MLM is different from pyramid schemes, as it does offer a genuine way to make money and is 100% legal.

So, if you’re curious about multilevel marketing and whether it could work for you, continue reading. You’ll be able to find out some of the benefits and pitfalls you could experience along the way, as well as in-depth MLM industry facts. 

According to research at the FTC, a whopping 99% of recruited sellers lose money in an MLM venture. That means just 1% actually turn a profit. That is generally just those at the very top of a recruitment structure. Because recruiters earn from their own sales and the sales of everyone they recruit, and their recruits, and so one, those at the top can earn a profit. But with 99% of people losing money, it’s hard to see why anyone would join this type of company.

What happens in a business model where everyone loses money? Everyone quits. Well, not quite everyone. But close to it. The same FTC report from Jon Taylor explains that 95% of MLM participants quit within ten years. While it makes sense that people would want to move on from some businesses after a period of time, the rate at which people flee MLMs are a testament to the 1% profitability rate above. According to another study, at least half of participants quit within one year.

While this study is a bit dated, the result is shocking. In 1980, the top 1% of distributors in Amway in Wisconsin brought in a gross profit of $12,500. However, after taking out operating expenses these 200 distributors lost an average of $900 per year.

So, the question that must be asked is, "if I am looking for a way to make extra money on the side, why would I consider an MLM/Affiliate marketing company?" YOU WOULDN'T....UNTIL NOW!

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