Things You Should Know Before Signing on to MLM
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Written by Jimmie Burroughs 
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Multilevel marketing has been around since as early as the 1930s in a primitive form, but was made popular by Amway in the 1950s. Since Amway, millions of MLM companies have sprung up, and most of them went as quickly as they arrived. The vast majority of new MLM companies don’t even make it past the 5 year mark, and most of those that do fail before the ten year mark. With those kinds of odds, why do people still try MLM? For one reason…it appears to be fast easy money! However, nothing could be farther from the truth. It hardly ever is fast, easy money. Here is the real truth about MLM:
The earliest beginnings of MLM
Nutrilite began what would evolve into the earliest form of multi level marketing in the 1930s. In 1945 Mytinger & Casselberry contracted with Nutrilite to become the exclusive American distributor of Nutrilite products. They created the very first documented MLM compensation plan. Here is how it worked: A Nutrilite distributor could buy his supplies at a 35% discount and resale the products for a 35% profit. For example, if distributors bought a product for $13 and then sold it for $20, they cleared $7.00 profit. The simplicity of that original compensation plan has changed; modern MLM compensation plans are so complex that few understand them or even want to.
The early claims of nutrialite as being a cure all, and a remedy for good health got the FDA involved, and consequently new laws banned such claims and restricted what could be said about the healing nature of nutrilite. (The FDA is kept busy even today trying to squelch false claims made by MLM companies.) Nevertheless, through it all Nutrilite continued their march forward.
Amway made MLM popular
High school buddies, Rich DeVos and Jay Van Andel, became Nutrilite distributors right after high school graduation. They became extremely successful, building a sales organization of over 2,000 distributors in a relative short period of time. They feared that Nutrilite Products might collapse, so they formed their own new company and named it the American Way Association; later they renamed their company Amway. They started marketing biodegradable detergent products along with other household cleaning products. Later they diversified and included beauty aids, toiletry, jewelry, furniture, electronic products, and a list of other items. There was a steady increase in gross sales reaching a half million dollars in 1959 and growing to over a billion dollars by the early 1980s.
The Fail rate for MLM distributors
As much as ninety eight percent of those in MLM will eventually fail. Nevertheless, that isn’t too far from the number that fail in a traditional business, which is about ninety five percent. On the other hand, there are some, a small margin, who do exceptionally well and wind up millionaires, and some very quickly. Most of them switch over to selling information products, and make tons of money selling to the ninety eight percent that are destined to fail. I know that I’m painting a very dreary picture of MLM, but I challenge anyone to prove me wrong. In some respects, MLM is a good business model, but it just isn’t for most people, at least those with expectations of making a lot of money as a distributor. What I mean by failing is failing to become wealthy. Some do manage to make a few hundred dollars a month above expenses while others lose thousands of dollars trying to succeed.
Another thing to consider, and the one most distasteful to me is that the two percent who succeed in a big way make their money primarily off the shoulders of the ninety eight percent who eventually fail, but who continue to buy what is usually an overpriced monthly auto ship, hoping that one day they will be on stage with the super stars telling how they did it. The only possible way this can balance out is if the authorship is a needed or wanted product and competitively priced, and those who buy want or need the product. However, that rarely is the case. For example, I paid $38 for and authorship which I liked and wanted. For years now I’ve used the product, but I no longer get it through an overpriced authorship; I get the exact same product but four times as much for $25, and buy it from a regular company on the Internet, not an MLM.
There are a few MLM companies that defy the stereotype
Even though I made some money in MLM, I’m still on the losing end when the total cost is taken into consideration. Those who are successful often counter any negative criticism of the industry with the statement that people doing the criticism were unable to succeed, so they are angry and slam MLM when it was actually their own fault that they couldn’t make it. That may be the case in some instances but not mine. I went into MLM with eyes wide open, thinking that I would beat the odds and eventually become one of the two percent who succeed big, and I believe that eventually I could have, at least to a degree, that is if I had believed in the concept of MLM, which I didn’t.
If you somehow insist that you can beat the tremendous odds, at least select a company with these five qualities: 1. A company that has High integrity; 2. A company that gives its distributors a good chance of succeeding; 3. A company that offers unique products; 4. A company that has products that can’t be bought for a lot less somewhere else; 5. A company that has products that are proven to be effective.
I’ve tried seven different MLM companies, and only one of them measured up. It is the only one I have ever seen that meets the five criteria I mentioned above. It is the only one I’ve ever seen that I think could include a lot more than the two percent that usually are able to succeed. While no one actually needs the product, it is wanted by a lot of people because of what it can do; only one company has the product; it isn’t available anywhere else in the world. It is competitively priced among those products that offer similar results. The product has been tested by an independent testing company and is clinically proven to work. The company makes every effort to help their distributors to succeed. They strive towards honesty and integrity and consequently they are the fastest growing MLM Company in the history of MLM. I’m no longer affiliated with this company because, as I stated above, I no longer believe in the concept of MLM. If you are interested, listen to this testimonial of a person I know who has been in MLM for many years and has made it big in other MLM companies. Listen to what he says about this unique company: www.amazingresults2.com
If you can live with the fact that ninety five to ninety eight percent of those that you recruit into the business will lose money and ultimately fail, it could be that you will beat the odds and be one of the few that succeeds. Personally, it isn’t worth it to me.
About the author: Jimmie Burroughs is a motivational speaker and author who has been involved in teaching Christian Personal Development for more than 30 years. There are hundreds of articles to help you on this website (Website Contents ) in your personal growth. If I can help you personally please send your concerns via Contact me.