What Are The Top Three PROBLEMS With MLM?

MLM and Network Marketing Have Problems That You Need To Avoid Or Overcome.

The truth is that for MANY people, MLM is the WORST choice for their first attempt at home-based business.

guy frustration Top Three Problems With MLM

MLM Frustration

Because of the ease of entry, many people choose network marketing as their first attempt at a home-based business.

We ALL want the FREEDOM promised by a network marketing business.

Unfortunately, MLM is a “business” and MANY people aren’t cut out to be their own boss!!!

I had over 20 years of sales and business experience before being recruited into an MLM. I liked the CONCEPT: Just find 5, who find 5, and so on. If only it was this easy…

Ann Sieg is the author of The Attraction Marketer’s Manifesto. She writes: “Almost everything you’ve ever been taught about building a network marketing business is pure BS!”

attraction marketers manifesto Top Three Problems With MLM

The Attraction Marketer's Manifesto

PS. You can get your FREE copy of The Attraction Marketer’s Manifesto by clicking on the image at the left or following this link.

Ann Sieg is also the author of The Renegade Network Marketer. Here she writes: “Your average networker is told that they can jump right in, with no prior sales or business experience and make a killing within 6 months!” Wrong again!

So I want to carefully outline the problems that keep most people from making money in network marketing:

1. Network marketing REQUIRES a network. Seems obvious, right. You earn money by leveraging the efforts of dozens, hundreds, or even thousands of others in your “team”, across the country and possibly around the world!

team Top Three Problems With MLM

Network Downline

But, as Ann Sieg referenced, MOST of these people are ALSO inexperienced in business and marketing.

They don’t have much of an investment in your company. If they don’t start making money very quickly, they will leave for the next new “ground floor”, “pre-launch” opportunity. (And there WILL be several new MLM’s launched each and every month!)

The result: with the click of a mouse, many of your potential “leaders” will be gone and take large sections of your downline with them. As a result, many MLM’s face upwards of 75% attrition (that is, turnover of members) EVERY year! You must NEVER stop recruiting just to maintain the SAME income level.

Conclusion: make sure that the MLM you join has a VERY unique product or service!
Make sure it is not just selling a product similar to any of hundreds of other MLM companies or conventional retailers! Make sure that the marketing plan of your MLM is focused on CUSTOMERS – not just recruiting!
Make sure your MLM is a perfect match for your lifestyle and values. You NEED to “become a product of your product!” (Would you be a customer if there was no business opportunity?)

2. The low entry cost also REQUIRES a large “downline” organization. Networkers get paid for only TWO things: selling products and recruiting other distributors.

Most serious business people and professionals will look at the commissions on product sales and can’t understand how they can create a 6-figure income based on $5.00 or $10.00 commissions per sale. For this reason, most people (mistakenly) treat MLM like a hobby or a play thing. Consequently they experience limited success and are lousy testimonials!

At the same time, members of your downline have to be committed to purchasing the products faithfully EVERY month. If they ever get tired of buying the products they will also quit. Again, make sure your network marketing company has some very compelling and exclusive products to maximize retention of customers – retail and wholesale.

Otherwise, when these orders stop your residual income also stops.

Conclusion: make sure your MLM has a OUTSTANDING product or service that you look forward to buying and receiving EVERY month for the foreseeable future! Make sure your product or service is something you will enthusiastically use and recommend to others! If you can be tempted to substitute a generic product from WalMart you are doomed.

If you can’t honestly be excited about your product line, you will be ineffective telling anyone else! You NEED to want to buy the products even if there was no income opportunity attached!

3. As stated, networkers get paid for TWO things: selling products and recruiting other distributors. In truth, networkers get paid MORE per transaction for recruiting others. If they don’t like recruiting or are unsuccessful in marketing the opportunity, their income will stop and they will quit. Therefore, you are REQUIRED to become an effective recruiter AND trainer to build a lasting and productive downline.

Unfortunately, the majority of upline “sponsors” also have no business experience. Both they and their recruits are left to flounder and ultimately fail.

The low entry cost to become a network rep attracts people who have a lower commitment level. They often enter the business without any marketing experience – or a budget for marketing their new business. At the same time, most networking companies provide only basic marketing tools to their reps. Usually EVERYONE in the company uses the same IDENTICAL, replicated website and receives the same limited “training”.

You have to realize that you are then competing for sales and recruits with EVERY other rep in your company. At the same you are competing for sales against every other MLM or retailer selling anything vaguely similar.

Note: most replicated websites have a way to gather the email addresses of inquiries. These emails are accumulated within the COMPANY’s system. This is intentional so that when reps quit the contact information remains the property of the COMPANY, and the residual commissions may roll up to the next active rep – or be absorbed by the COMPANY.

Conclusion: success in MLM is going to REQUIRE that you do something (actually MANY things) differently than all of your uninformed competition! The FIRST thing you will need to do is develop a well-organized marketing plan.

Your marketing plan REQUIRES that you think backwards! How are prospects finding you? How are you communicating with them? What products and services are you offering?

Note this: you will FAIL if you just ask everyone to join “your business”! You can’t ask total strangers to “join you”, that is, TRUST YOU – an inexperienced newbie networker – to help them build their own new business!

MILLIONS of new network marketers try – and fail – to convince friends, family members, and complete strangers to go into business with them.

And virtually ALL of these target “team members” are completely CLUELESS about how network marketing works!

What is required for success in ANY online business has become known as a “marketing funnel”. This funnel gathers contact information of prospects and reps and then produces customers at the other end. These leads and customers become YOUR property. You then must FIRST begin a carefully crafted education process BEFORE you present your business opportunity!

Your list of potential business “partners” forms a list of subscribers which can then be directed to ANY product, service, or primary business (including MLM or affiliate links.)

You need to understand that it is a REALITY that over 90% of the MLM inquiries you generate will NOT join your business opportunity! You NEED multiple sales opportunities to create multiple streams of income.

So – contrary to the advice of ALL network marketing companies – the FIRST step is not making a list of 200 friends, family, and distant acquaintances! The first step is to plug your “leads” into a generic marketing funnel. This allows you to separate the minority who are actually interested in your MLM, and to promote MULTIPLE offers, products, and services to them and everyone else!

This can NOT be overstated. You need to build your own personal brand – You, Inc – and create some personal credibility. (After all, you may also join another opportunity at some point, or become involved in multiple opportunities or affiliate programs! You can NOT afford to lose all the fruits of your marketing efforts if you change companies.)

You are also going to NEED to commit to a serious marketing education. The “training” available from your COMPANY is not enough! PLEASE accept the recommendations found in the Online Marketing Training section of this blog as a start in acquiring the equivalent of a “graduate degree” in online marketing!

This training is not optional. As mentioned, you are truly competing with every other rep in your company (AND THOUSANDS OF OTHER COMPANIES!) for new recruits. You need to learn how to become an effective sponsor of other networkers. Serious potential recruits will not only research the MLM company but also the downlines within the company that they can choose from! Serious business builders don’t join companies, they join LEADERS!

Your success in MLM will largely be dependent on how visible you can become as a marketing expert – outside of your chosen MLM company!

Now that you have been thoroughly educated on the CHALLENGES facing your network marketing business, I have some advice if this is your chosen business model:

First, MAKE SURE you chose an established company. New MLM’s start almost every week! I have been burned before when a start-up fizzled just as fast as it erupted on the biz opp scene.

Second, your success in MLM will REQUIRE that you are a “product of the product”. By that I mean, make sure the product or service is SO GREAT that you would be willing to buy it – month after month – even if you weren’t a distributor/rep. Remember, you are REQUIRED to sign up for an “autoship”, that is, automatic monthly purchase to qualify for commissions. Again – ask yourself HONESTLY – would you use the product or service if not for the income “opportunity”?

Third, is the product or service unique enough and has such a list of compelling benefits that you have an HONEST chance of selling it on a retail basis? By that I mean, can you sell it to your friends or the businesses you patronize? And are the benefits so intriguing that some of these customers will say to themselves, “I should tell others about this!” (In other words, raving fans become reps themselves!)

coffeeberry products500 Top Three Problems With MLM

Exclusive SoZo Coffeeberry Products

There is ONE network marketing/MLM company that Randy endorses only because it matches ALL these criteria: SoZo Life

Check out the link above for more information on this network marketing company that is breaking all the records and has experienced growth month after month!

Again, I invite you to check out some of the other Marketing Training resources available to you on this blog. I offer ONLY the resources I have used successfully to build MY business! (this is after over 30 years of sales and business experience.) As I built my catalog of skills I have forced myself to become knowledgeable in blogging, social media, video marketing, attraction marketing, and more! I recommend you do the same!

See the Marketing Training section and Online Marketing Tools for help in this ongoing process!

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Randy Reek

Randy writes about topics that affect your finances, including Making Money and Saving Money. Randy is especially passionate about entrepreneurship. The Marketing Training section includes EXACTLY what Randy is using NOW to earn a full-time income as an online marketer - and how you can do the same! If you think any of the posts or articles would be interesting to others, please forward to your contacts. Follow Randy also on Twitter and Facebook!

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