Work at Home Jobs Making Money

The Myth Of The 97% Network Marketing Failure Rate

In recent years people are increasingly looking for an extra source of income. They are prepared to utilize their spare hours at home to pursue their cherished dream of financial freedom. Many of them are attracted towards network marketing for variety of reasons. There are thousands of multi-level affiliate programs which promise significant wealth from the comfort of your home.

People join these marketing programs with a lot of hope and expectation. However they are not adequately prepared for the pitfalls which bring then about their downfall. According to often quoted statistics, the apparent failure rate for new direct sales consultants and network marketers is about 97%. Based on this claim, only 3% of people make sufficient earnings to continue and worse still, many others are not even able to recover their investment.

But where does this figure come from and is there any documented evidence anywhere to prove it? The truth is that no-one really knows where it originated. One theory is that Amway often used this figure in sales presentations to insinuate, if not claim that their independent distributors were more successful than that. Nowadays, it’s a widely used statistic that seems to be generally accepted as being true, but the fact is this reported failure rate for network marketing businesses is totally unsubstantiated. In other words, saying that failure rate in MLM is 97% is both misleading and most likely untrue.

For the most part, statistics on small business failures are based on whether they are still in business after a certain period of time. However, in collating these figures, the reasons for closing a business aren’t considered. While many of the closures may be because of lack of profit, others closed for a variety of other reasons including being sold for a profit. If a network marketer changes to another program for a greater earning potential, they probably wouldn’t consider this change a failure.

Also, the data that’s being analyzed to determine failure rates doesn’t distinguish between different types of businesses. It is very likely that network marketing is included with all small business or at least all home businesses. Another consideration is that many direct sales and
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network marketing companies are private ventures that do not have to disclose financial information. These indefinite factors make it difficult and perhaps impossible to accurately determine success and failure.

One of the main reasons that network marketing failure and success can’t be proven is that ‘failure’ is a loose term. What exactly defines failure? People enter a network marketing program with different goals and expectations. A failure for one marketer may represent moderate success for another. It’s very likely that only 3% become the top earners in any program; however that is no different from any other business, sport or other endeavour. To describe the other 97% as failures is both false and unreasonable.

So, although the statistics quoted can be regarded as a myth, unfortunately there is still failure in network marketing. There are several reasons for this …

Lure of Quick Riches:
This is probably biggest attraction for new home based business and small business owners. However ‘get-rich-quick’ schemes rarely deliver what they promise. They are often responsible for failure among work at home enthusiasts. My advice would be to stay away from such inducements. When considering any program, look beyond the promise of quick gains. Choose reputable organizations with support and the marketing tools you require to succeed.

Lack of Experience:
There are numerous instances where a network marketing program earns some people substantially more than many others. If you look closely you will find that most successful people have been associated with internet marketing for some time. Anyone just starting will require some training and possibly mentoring to succeed in this arena. Accordingly, they should only select MLM programs that provide adequate training and promotional tools. A lack of experience should not be a deterrent; instead it should be viewed as a challenge. Experience is something which is earned and until you actually jump into water you cannot start swimming.

Unrealistic Expectations:
This is closely linked to the empty promise of getting rich quickly. When you join a business opportunity, you should have a long term horizon. It usually takes regular and sustained promotional efforts to produce results. Sometimes it can take a few months for significant results to appear but if you resolve to follow the program training lessons and use the tools correctly then you will reap the rewards. The biggest decision you will have to make in network marketing is not to quit!

Lack of Commitment:
This is one major factor which ultimately decides between success and failure. That factor is YOU – your mindset and motivation level. There is nothing more important! Sadly, many marketers quit before they really get started. They don’t see what they’ve been promised or what they expect and give up. Their investment to get started in MLM was minimal so they aren’t losing much. They aren’t going to go broke so they simply walk away and leave so much potential unfulfilled. Most people who get involved in network marketing don’t stay in the business for long and that is where the apparent 97% failure rate comes in.

There is no substitute for your positive and ongoing commitment. Continuous promotion of your business is a must for success. There are many inexpensive and free promotional options such as writing articles, blogs, forums, classified ads and email marketing. Whatever strategies you choose, the key is to diligently follow them month after month and stay long enough to reap the benefit. Success in your MLM network marketing program is ascertained by these proven methods.

If the reported 97% failure rate has frightened you away from starting your own direct sales or network marketing business, take another look. Of course there are no guarantees and businesses do fail everyday, but the outlook can be very positive. Minimize your risk by choosing carefully, researching thoroughly, set
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out a plan for success and most importantly, persevere to achieve that success. It is well within your grasp – you only have to keep reaching for it.

By: Dave Tomlinson

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