I’ve written several articles about the success rate in network marketing. It’s abysmal. I’ve been in kind of a running debate with several people. They will admit that not many people find real success in network marketing, but they are still gung ho on it as a business model. The believe that you have just as good of a chance to find success in network marketing as you do in anything else. That’s where I draw the line.
I just talked to someone, this morning, who told me that most real estate agents never make any money, that most people who join a gym, never go there to exercise, most insurance salespeople never make any money and 9 out of 10 businesses fail in their first 5 years.
I’ve been a real estate agent and I’ve been an insurance agent. I made some money in each, but I never really found the success that I wanted. I’ve had plenty of time to talk to my fellow agents, in both industries. This is what they had to say about how many people find success.
You’ve probably heard of the 80-20 rule. The agents that I talked to said that the 80-20 rule holds up in both the insurance business and the real estate business. That means that 20% of the agents make 80% of the money. Can we deduce that 20% of agents are finding success in their chosen industries? Let’s say, for the sake of argument that it is only half of those that are truly successful. That’s still 10%.
Even if you believe that 9 out of 10 business fail in their first 5 years, and I’m not convinced that the failure rate is that high, that still leaves 10% of businesses as being at least in business, if not successful. Even if only half of those that are still business are truly successful, that leaves 5%.
If 5% of network marketers reached the top level of network marketing companies then it would be equal to any other kind of business. The unfortunate thing about network marketing is that that 98% of us make no money at all. On average, about .016% of “active” distributors will reach the top level of their companies compensation plan.
Am I saying that we need to have a 5% success rate in network marketing? No, not really. I’d love it to be that high, but I’d settle for 1.0% That would be 1 out of every 100 distributors that are “active” would reach the top levels.
I won’t mention names, but there is a very successful network marketer who says that we, as network marketers, “have a better way.” Do we really, “have a better way?” We do, if you look at it in the abstract. For those who know what to do and reach the top levels, then sure it is a much better way. Who wouldn’t want to have thousands of distributors working under you? Who wouldn’t want the kind of money that those thousands of distributors would make for you?
Then there is a woman out there who says she doesn’t like to call it a “failure rate.” She wants to call it a “quitting rate.” It’s a cute idea. It’s like sugar coating the bad news. She does have a point. Most people who “fail” at network marketing do so having never done any real work in the business. They end up quitting the business.
I think that people don’t do anything in their businesses because they are not taught what to do.
Did you notice that nearly every network marketing company has you do the same thing when you get started? You fill out a memory jogger and then you go out bug and beg your friends to join you or buy a product. A new distributor, to their credit, does exactly what they are told to do and they talk to all of their friends, relatives, neighbors and co-workers. That’s as far as they get. They find out that their warm market isn’t as warm as they thought. They get beat up pretty good and they quit.
I’m not here to denigrate the industry. I’m a big believer in network marketing. I’ve been in the business, off and on, for 30 years. I’ve reached the top level of one of the companies I was working with. I know it can be done, but I’m looking for a little honesty or a dose of reality.
We can’t fix the problem if we don’t acknowledge that there is a problem!
Running any kind of business is difficult. Why do you think that 90% of people opt for a job with a steady paycheck?
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