It has been said by many that the Network Marketing Industry,  also known as MLM, has a failure rate of 95 to 97%. I think that is a very large number, and it would be interesting to understand what  the cause is for such failure. I’m certain that there would be many opinions one could find in reviews and blogs from many marketers and non-marketers alike on this subject. I am just one person that has been involved in the industry on and off since 1972, and I would like to present my feelings on the subject in this post.

I think it is important to understand just a little of what network marketing is in order to realize why success and failure occur. In reality it is a form of sales, but somewhat different than what takes place in a store or mall. The word networking describes it to a degree. Networking is: “The exchange of information or services among individuals or groups, or institutions.” In other words ideas and services and products are exchanged or sold through people and groups of people working or networking together. A companies products or services are sold by large groups of people sharing, by word of mouth, using many different marketing approaches. Whereas, in a store or a large shopping mall, a buyer shops products or services from off a shelf or from a salesperson hired by an employer  to sell his products or services.

A network marketer usually works out of his/her home, and is an independent business person,  and the products he or she sells are shipped to the home for that person to have on hand to sell either retail, or to people that are introduced to the company, wholesale, by the marketer. In today’s marketing it is not necessary to have a huge inventory of products…the company handles that for their associates and ships the products directly to the associate or his/her customers.

The marketer’s goal is to build a large group of people to work with who in turn do the very same thing, or to duplicate his/her efforts. This is the networking effect, that can grow to a very large business for those that work hard to promote his/her companies products or services. Some marketers can earn large sums of money equivalent to CEO’s, doctors and other professionals, and even more!

One of the main reasons for failure in the industry is that many people have a fear of selling, and therefore a fear of failing, and would not want to do that for a living. They do not want to try and talk another person into buying a product or service from them! However, many people join MLM’s because of the possibility of making  a lot of money working from home, but then fear takes over and they fail to be motivated enough to learn the mindset necessary to become successful, and they do not stick with it!

What we do not take into account is the fact that we are all salespersons to the extent that we have to sell ourselves in many facets of life. For example, we have to sell our experience, our talents,and our abilities  to a future employer, or a future mate! It is true that some people have a real knack for selling themselves and their ideas…it comes natural to them! This is a mindset, and it can be developed and improved upon with practice and patience.

It would be obvious to the reader that since the industry first got it’s start back in the forty’s, that there have been numerous changes that could contribute to the success or failure of people in the industry! Certainly television, and all the advancements in that media have opened up many companies and therefore opportunities to market products and ideas to vast audiences. Likewise radio has played a big part in the growth of the industry! Without a doubt, the Internet has added a dimension to sales and marketing that has exploded every business in the world…including the MLM industry!

Another reason for failure in network marketing is the lack of training! A lot of the time an associate or distributor is brought into an MLM company and helped for a time by the sponsor, but then is left to grow the business on his/her own. People are told to make a list of family, friends, and to talk with everyone they meet about the new business. When the new person runs out of people to present the business to, they don’t know what to do next. If they don’t receive additional help and training from those above them, they quit! Many in network marketing do not know how to obtain leads, or prospects, that turn into customers or associates!

There is a learning curve to most everything we do in life. That is true of MLM, or network marketing as well!  The internet provides an abundance of information marketers can acquire to help them learn to be successful operating their home businesses. The internet also provides an arena to the whole world to market products and services to people, and to share new home business opportunities with! A new marketer as well as those that are from the old school, can use the internet to grow their businesses through all the media provided on the internet, such as Facebook, YouTube, and  Twitter, to mention just a few.

In conclusion, it is my personal opinion that the reasons for failure in network marketing or MLM are the  following:

1.  Fear of failure, and fear of talking or sharing with others, your business opportunity or product.

2.  Sponsors that do not help new associates under them to succeed.

3.  Lack of understanding, or not learning what’s required to market your product or company.

4.  Lack of leads or prospects to market to.

5.  Not motivated

6.  Do not learn to be persuasive

7.  And the final and maybe most important!  Not marketing to or promoting to your TARGET MARKET…other network marketers !!

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