MLM-Truth
Why The Home Based Business Success Rate Is Not What It Should Be.
This site is dedicated to those reviewing Home Based Money Making with a emphasis on residual income. Direct sales/Multi level marketing is a great option for a Home Based Business. Here we will break down why with even considerable effort, the majority fail. We believe that the MLM industry should be profitable for more than just the top 3%. The need for alternative income is greater than ever. The rising cost of living coupled with falling wages has all but erased the notion of living a comfortable middle class lifestyle via your job.
If you are honest with yourself, you have to admit that the squeeze is on! (and has been for years) In the past 30yrs 85% of all new wealth in America has gone to the top 1% of the population.
The gradual increase in basic living cost, has created a large number of working poor or struggling families. Your w2 says you are middle class, but you are still living from check to check! Everything looks good on the outside, but you know the truth.
The question is, can a home based business remove you from this treadmill lifestyle; where there is never enough time. Our kids are in need of more time and attention. Our health is in need of more time and attention! Our relationships are in need of more time and attention; but we spend of all of our time chasing money!
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Well, in my 25-years of trying to find the right Home Based Business, I have participated in many ventures. Sometimes succeeding, but in too many cases struggling, even after putting in substantial effort. This site will reveal for you why only a few will make any real money in traditional MLM/direct sales opportunities.
Is Direct Sales/Multi Level Marketing The Answer?
For decades the Direct Sales/Multi-level Marketing industry has touted itself has the business that everyone can do. Well i am here to tell from experience that it is mostly a lie. I know, that is strong language; but when 97% percent of those starting a Direct Sales/MLM home based business fail, and the retention rates or number of people that stay in business is only 9-15% consistantly; you have to admit that we are being sold on a pipe dream for the most part.
When you see these presentations you are given all of the best case scenarios. You’ve heard it all before; You start by bringing in 12 prospect, all of them recruit 3-new businesses and so on and so forth. Now, there is nothing untrue about the numbers that you hear, except that they don’t account for human nature. The number of people with the mind set, time and money to perservere is hard to predict.
What is the answer? you have to be capable of recruiting large numbers of people so that even after the 15% retention rate mentioned earlier occurs, you still have your 12 plus 3 and so on. So, who can do that?! We are right back to the top 1-to 3%. Yep, even this industry mirrors corporate America. The top wins and the rest continue to dream.
The Truth is: In Reality Most Fail Badly
Believe it or not, I am not against Direct Sales or MLM as a home based money making option; I just want those who visit this site to get the probable truth of what they are in for when they start a traditional Multi level Marketing busness.
I understand the attraction to residual income. Most Americans will participate in the 40-40 plan. Work 40 years and try to retire on 40% less income! That is if your employer still has a pension plan.
Residual income is the answer;but the way that almost all MLM companies compensation plans are designed, only the top 3% will make any real money. The rest will come to the conventions and clap for the same few going across the stage with large incomes in tow.
But even for these people, traditional MLM holds some undesirable traits. Think about this from the big shots point of view. He or she has the circle of influence to put large numbers of people in place and build large organizations that produce huge profits; but earlier we mentioned a little thing called retention; with a average retention rate of 15% to be generous, these people have to continuously rebuild there businesses. So they really never enjoy true residual income.
You no doubt have heard the stories of major multi level marketing leaders migrating there teams over to new companies over and over again. They are doing what they have to do to stay ahead of the dreaded Direct Sales/Multi Level Marketing cycle.
What Is The Typical MLM Home Based Business Cycle:
Distributors sign up with excitement and glee!; they purchase there products and sponsor a average of 1-to-4 new business. they religiously use the companies products, they contact all of their warm list (friends, family co-worker ect.) only to find that they have already been through the pain of the cycle; so they reject what they are offering sometimes without even seeing it. Over time the pain of rejection and the notion of approaching strangers on a daily basis kills their enthusiasm.
They try to hang on, but after watching the top leaders lifestyes month after month while making little to nothing for their efforts, they finally stop buying the product and quit the business.
The big-time leader are all aware of this cycle. The only effect on them is that they have to continually use there star business builder status to rebuild or move to another venture.
I am not completely sure of this, but I have been around quite a few so called heavy hitters, and I have never heard any of them acknowledge the retention problem or how to solve it. The obvious answer would be to create a compensation plan that paid more evenly. Of course the equity of the compensation plan is not designed by distributors.
I believe that MLM plans should compensate heavy hitter in a big way, however; I also believe that something has to be done to stablize these businesses once they are built.
The Average MLM/Direct Sales People Are Important Also
It is obvious that the small guys that sponsor 1-to-4 distributors are supporting the whole business by consistently purchasing there products month after month. Yes, just staying in and purchasing your quota of product should be rewarded at least enough to keep the small guy in the business.
Maybe all he or she makes is a few hundred dollars per month. If the product is costing them less than what they are making, there is a strong possibility that they stay in; thereby stabilizing the businesses of the heavy hitters! It sounds awfully simple, but I have only seen one MLM comp plan that is designed to do just that.
It Is Called A “Incentivized Referral Plan”
This is as liberal a wealth idea as I have ever seen. The plan taughts concepts such as “the swinging gate” or cooperative economics”, I could’nt believe it when I saw it. This is the best answer I have seen so far for solving some of the worst problems with the Direct Sales/Multi Level Marketing industry.
