Is MLM Dead?

I'm doing a little research for an upcoming book. I am curious to know what your feelings are on MLM. Has it's best day come and gone? Or is this economy going to see a surge in MLM biz opp seekers? Why are more people moving towards the short term affiliate stuff?
And do you think that MLM can find creative ways to turn the 97% fail rate around?

I am looking forward to seeing what you all have to say! I love MLM. However I look at it like a good stock portfolio. You must diversify. And you must be able to do deep market research to make sure that you can succeed. And you had better be well funded to make it through the start up.

Is it dying? I don't know. That's why I am making this post.

web20mentor: Is it dying? I don't know. That's why I am making this post.

It's not dying as far as I can tell - methods of marketing may change, but mlm or network marketing an actual product or service is still by far, the quickest way to get a home based business built up to the point that it can create an extra couple grand (or more) a month.

That's my two cent's worth

Danny,

I think MLM in its traditional form is a thing of the past. The old days of Amway are gone and the only companies who are succeeding are the ones who are internet based.

I am affiliated with a direct sales networking company and its similar to MLM in the fact that we recruit new entrepreneurs. The reasons I chose my company over MLM's is the generous commission plan. I do not need depth to start seeing residuals. With most MLM's you need considerable depth to start seeing the same returns. Thats why people like the affiliates, they start seeing some results right away.

Also, most MLM's deal with the same type of lotions, potions and pills they always have dealt with. The product lines lack creative new products, its just the same old idea packaged differently. You can have an awesome business system but you need a quality product to back it up.

But I do think you will continue to see MLM's thrive in spite of their shortcomings when compared to other business models. They usually have lower start up costs than direct sales models so that will always entice entrepreneurs on a shoe string budget. After all Trump and Kiyosaki have just recently given rave reviews of the network marketing business overall. I think that goes a long way.

Danny,

Great questions.

Has the best days come and gone?

In my humble opinion.....No

The old ways of promoting MLM (home meetings, card decks, cold calling etc...) is slowly becoming a thing of the past. We are entering an exciting new era of promoting with technology (video and audio). The best days of MLM are just around the corner.

This new era will bring a HUGE surge of MLM opportunity seekers.

Video will provide groundbreaking means to reach the global community. The generation who already incorporate this new technology such as MySpace and YouTube into their everyday lives will bring MLM into their income earning mix.

Why are more people moving towards the short term affiliate stuff?

Quite simply, it is a sheer numbers game. There are simply more affiliate marketing programs than network marketing companies. It seems that many more organizations are offering partner programs to make money.

These very programs have made a decent attempt to corner the market for business opportunity seekers.

And do you think that MLM can find creative ways to turn the 97% fail rate around?

To be blunt, even with the advent of the new technology to promote an MLM opportunity, I still do not see the fail rate changing that much.

The reason is.....

you will still have that percentage of the population entering an MLM opportunity looking for quick money when only the opposite is true.


- Kevin Tyler Smith

I don't think MLM is dead. In my humble opinion there is no more ethical or efficient way to deliver product to the end consumer than via direct marketing. Empower distributors to not only earn off their own efforts, but off the efforts of distributors they bring in, and you have motivation to both succeed and teach success. As to the Fail rate, i would really like to see how and where the number was derived.

Now, my answer to the failure rate is, how bad one wants it. If the desire to succeed, to grow and develop a business that can and does change people's lives is stronger than the fear of failure, you will succeed. If you have a burning desire to succeed, if it consumes you, drives you to learn all you can and still thirst for more knowledge, keeps you up at night thinking of ways to do a better job, yes, you will succeed.

Wanting/needing to make money is NOT a strong enough reason to succeed. Hard times come, the word NO is heard to often, whatever the obstacle, simply needing money is not enough. You will just go back to whatever quick fix you can find to get some cash in hand. Then when the pressure is off, you may go try another MLM. The problem isn't in MLM, nor is it to be blamed on bad training, bad coaching. If anything it's bad recruiting. If we continue to recruit tire kickers, we will keep getting the same results.

Interesting,

MLM has been thriving for over half a century, and will continue to thrive for another century. MLM is a viable means to move product, and as companies have learned over the years, Avon, Fuller Brush and a dozen of other companies have opened MLM divisions, just as my company has in last couple months.

In my opinion, the best opportunities are the ones where an established company decides to open a new division for MLM, and this model has worked in every case I have ever researched, and for good reason, they have the name recognition, they have a value oriented product people already can verify, so it is only natural to want to increase business via MLM.

I started a traditional business, and I went with affiliate program, similar to MLM and it grew a hundred times faster than if I stayed local or regional like most traditional businesses start out doing. This is why franchising was invented, but with MLM, you don't have the same regulatory requirements as do franchise offers. MLM just makes good business sense, but it is too bad so many use it as a form of pyramid and ponzi which gives industry a bad name.

Bottom line, MLM is not going anywhere, if anything, it will grow even larger as is the case when recessions and foreclosures more than double the interest in MLM. With so many losing their jobs, like in mortgage and banking, like Bear Stearn's, and a dozen more to follow, unemployment drives MLM industry, so I am already seeing it. I just brought on two from mortgage industry, so it is a good sign for all of us who are in MLM industry.

Good luck to all, Mike

I hope it thrives! I just joined one for the first time! Yikes!

AmyKay: I hope it thrives! I just joined one for the first time! Yikes!

Great,

Good for you, FreebieForce is a nice low risk business choice, so congratulations, you will not be disappointed, I have been in since start and am enjoying all the promo items for free and discounts. I get more than the cost of membership every month without problem, and since I have several dozen as members, it more than pays for itself, so good choice for your first in MLM. (g)

Good luck to all, Mike

This is a great thread.....

I was one of the 97%.

Though my work endeavours have always looked after me well, I like many others was drawn to the possibility of a strong residual income. Though I am a hard worker and enjoy my achievements, the possibility of maintaining a strong income without continually burning the candle at both ends appealed to me.

OK - straight into a vitamin & weight loss MLM. Buy all the merchandise for marketing - set up a field credit card payment system, and of course enough product to sink a battleship.

Considering that the lead product with this MLM was a weight loss product, I was doomed to failure with the fact that I struggle to get up to and maintain 70KG (yes - I know, should have said skinny, but have you ever seen a fat greyhound?)

Make your list - speak to everyone in 20 streets around where you live - get heaps of customers and they will all become distributors...... Got one customer and they did not re-purchase.

The other main problem for being part of the 97% club in this one is that my sponsor was an elderly immigrant who knew how to sell and get people excited. When I was in, I was on my own.

OK - a few years later - I felt pressured to get into a company that was re-writing the bible for the benefit of their cult like members at the time. This person who worked for one of my account clients was right into it, and if I said no I would have lost the account.

I listened to the tapes - read the books - went to all the seminars and got right into the motivational part of this company. Though I was systematically losing all my friends as I worked the LIST, they kept telling me that they were not good friends if they did not join me in this incredible money making (and friend losing) business.

Though I was moderately successful and the motivational part of their training was great, I was concerned about the amount of product I had to buy very regularly.

My wife did not support me in this (maybe she saw something that I didn't from the beginning), and when my sponsor started pushing the fact that she should support me in my endeavours for that was the role of a wife (implying that maybe it was time to look around for a replacement as he did), it was time to kick his cat on the way out of his weekly meeting at his home, and drop an "All Mighty Wheelie" on his lawn as I left his house.

By this time I was thinking of changing my name to 97% and never getting into MLM again...........

My regular businesses continued to prosper and my position in life changed to meet with my continuing prosperity (Well ??“ it was better than before). I was even getting a monthly residual income from my clients (thanks MLM).

One day a person knocked on my door and presented me with a product that I really wanted, was good for the environment and saved me money. I tried it and it did what he said it would, and started getting excited about the difference it could make to the world if everyone used it ??“ Guess what? ??“ it was MLM and I was turned on the strength of the person who introduced me to the product ??“ the product itself, and the ethics of the company.

The rest is history ??“ I am now one of the leaders in this MLM and I am making a difference to many peoples lives and saving the world as well. (Not bad when you consider that I really - really - really did not intend going into MLM again) - Oh!, and by the way, my wife is as excited as I am with my company (you have to listen to that feminine intuition guys).

web20mentor: Is it dying? I don't know. That's why I am making this post.

After my short posting - No, I don't think MLM is dying - I think it is evolving into one of the biggest industries in the world. Those people and MLM's that were not prepaired to evolve with it have subsequently dissolved into another dimention (Twighlight Zone Music Inserted Here).

Start looking for the common denominator in most of the MLM's today - it is supporting the distributors, helping them to be successful and an ethical company.

(Felt like writing tonight)

Regards
Paul

I agree this is an awesome thread...I just got through commenting on this in another post.

MLM is not dead, in fact most MLM's now are forced to be more legit and provide more value to their customers and affiliates. The reason being(as some have stated) other's have used MLM's as a way to promise big, steal large, and run away. Besmerching the great name and marketing theory of MLM.

As for new technology? MLM in it's simplest form is a surefire way to get a company up and started. This can be done with pen and paper or huge supercomputers. The main factor in success or failure is honesty.

If you take a look at traditional marketing, lets say a basketball sneaker. And you pay attention to what it is they are "promising you" you'll soon realize that through ads, marketing & sponsorship they are basically saying, "Buy this shoe and you're game will get better".

I think we can all agree that this is not the case, however; people still buy into this mindset, and worse yet they help to perpetuate it.

I'm not sure why traditional marketing(sex, videos, jingles) have never been called out for what they are...subliminal lies(for the most part)

I CAN tell you why MLM's have. And that is because their product is money. So when people don't get the money they were promised they get angry...rightfully so.

So what is the difference between Nike promising better game via shoes and MLM's promising money via opportunities...? In the end they both fall short.

Again my theory is that MONEY is what does it. When your game doesn't get better at least you have something to show for it(shoes)

When you lose money in an MLM all you have to show for it is burnt relationships, and a fat hole in your pocket.

...on a side not WHERE does that 97% failure rate statistic come from?

opendomain: So what is the difference between Nike promising better game via shoes and MLM's promising money via opportunities...? In the end they both fall short.

Doesn't this depend on the Training - Ethics of the company - The versatility and pricing of the product, and most importantly how the business model will be accepted by the general public?

When Google first popped it's little head onto the Internet scene, most people would have said "Just another search engine" - Now look at them. They did it right by doing it right for everyone.

The same applies to MLM.

I was speaking more towards the marketing in this area. Business both online and offline market potential.

Whether it's potential to make money or potential to make you jump higher and run faster it's all potential.

Some companies and products live up to their potential and are actually quit legit. ETHICS does play a huge role in the scope of how the potential is displayed, but in the end marketing currently about playing off of someone's hopes.

If you saw an honest Nike ad it would look something like this:
A guy would stand up, put a nike shoe on and say WOW this is comfortable, not to hard not to soft, fits the foot and is durable.

That would be it.

It's a far cry from:
Open to a scene from the playoffs, show 5 seconds left on the clock with a tie score. Flash to the shoes, then to the players face. Now show him taking off from the free throw line and dunking the ball just as the clock hits zero. The flash to the shoes again and end with, "Got Game?"

What in the world did any of that have to do with the shoe? Nothing, but it plays on the emotion of it all and in a sense it is lying to you subliminally.

You could do the same thing with marketing online.

The difference is when your average Joe goes out and buys shoes he doesn't necessarily believe he's going to be dunking the ball anytime soon, he's ok with that, but the marketing told him (subliminally) that he could. He knows his limits and is grounded in reality.

MLM business is different in that reality seams to fly out the window and people really DO expect to make 1 million dollars in a day and when the same marketing tactic of promising big turns out differently in reality people get upset and all of a sudden MLM is a scam.

MLM's with a unique product and backend support are actually thriving. Network marketing today is no different than internet marketing, affiliate marketing, private label rights, or anything else.

If you get enough traffic to a site, and you have something of value to offer, you will make money. It all starts with traffic and that is where most people fail. They do not get enough eyeballs to their site.

I agree I found this to be the #1 killer of people I try to help.

When asked what are you doing to get traffic to your site most people answer in a couple of ways.
1. Pay for it...this is IMHO not that reliable...though I have had SOME success with a particular program marketing to other business owners.

2. Forum, or article, or blog, or myspace, or etc...
THAT is great I tell them. Now show me 10 examples of this...
Turns out most people trying to utilize these methods are not utilizing them the way they are supposed to be utilitzed.
1-2 articles is not going to cut it i'm affraid.

3. Nothing...people sometimes are just generally lost. I know even within my own group sometimes people just find everything so overwhelming.

Do I start a blog first or write an article. What should I post in forums, where should I post, what should I sign up for, do I have enough key words...etc, etc, etc.

I personally developed a tool for my team to use(see marketing course in sig line) to address many of the reoccuring issues and questions.

It is now and will always be evolving as new things come up, but for now I've found it has already taken much of the guess work out of things for many of my own team.

web20mentor: I am curious to know what your feelings are on MLM. Has it's best day come and gone? Or is this economy going to see a surge in MLM biz opp seekers?

Good questions Danny.

Let me just say this: Although the future of our world economy seems pretty uncertain right now nobody can predict the outcome of the MLM industry with 100% accuracy. There will be many losers and there will be many winners. You can bet on that.

The economic forecast looks pretty gloomy for the next little while. Over here in Canada, according to my mother, we're experiencing the worst recession since 1981. Not sure where she got that information but I trust her.

However, our 5 year-old MLM company is in its concentration phase right now. We haven't yet hit momentum. That being said, it keeps breaking sales volume records each month.

Unless something horrific happens to our global economy, G-d forbid, I am of the opinion that we'll continue to experience a steady growth for many, many more years to come.

If MLM stops it will only be due to some major upheaval, a global shift or something.

And assuming the human race survives, we'll likely all find a way to market and promote our goods and services to the "new world order" as we rebuild.

As our friend and mentor, Tom 'Big Al' Schreiter says, "You can never stop promoting stuff; you can only stop picking up a check for it."

MLM isn't dead or dying. We're now experiencing a surge of seekers.

One more thing: Web 2.0 is helping to expose the unscrupulous scammers. It's a new world guys! Be honest and transparent and you will survive in MLM.

Rob Nyte

Hi Danny,

Great questions, very thought provoking. I have to believe that the main problem anyone in any mlm has encountered is the marketing issue.

So as the shift from old school marketing continues over to internet marketing, the mlm industry will evolve right along with it. Meaning that more and more people will join companies that offer better and more advanced marketing methods. That will lead to more and more coaches with adequate marketing skills to be able to produce a duplicatable system. Therefore, mlm will survive, but only to the extent that the shift from the old ways to the new ways is adapted.

This will take time, but not an inordinate amount of time. It looks like our old friend Mr. Darwin was right on the money with the whole natural selection/survival of the fittest thing.

web20mentor
It is now 3 years later. I can't say that MLMs are dead. They are just a lot more difficult. I think they have been replaced by internet marketing systems which are more efficient.

Because of the financial crisis the public is much more wary. Because of the internet, the public is much more informed. I think there is less and less of potential market that is willing to consider MLM. By and large, it has a reputation as a get rich quick scheme, overpriced products, and hype. There is a shrinking number of people who are willing or can afford to take the risks.

Most MLM replicated sites are not designed for effective internet marketing. They send mixed messages. If you send someone to them to buy a product, most also try to get customers to sign up. It makes it difficult to interest people in the products without pushing the distributorships. This undermines the validity of the product with many companies. Most will not let you do your own internet marketing. I understand their reasons. However, the replicated websites are not effective marketing.

I had a couple of success businesses going in MLM, when the company changed rules or went out of business and I lost my downline. I realized at that point, that an MLM is owning your own business is not the case. You are simply renting a business from the company.

Whether online or offline, MLM will never die. in fact, those who are not in right now and don't care to build a business, are the same people that will be broke in those years to come.

A lot of people think that the MLM industry is getting saturated. You have to laugh at that because this business will never be saturated.

I say this because everyday, new babies are born right? In 18 years many of them will look for a home business. Think about that. They will get into your business.

Those who take advantage of this business today, will be MILLIONAIRES over the next few years.

MLM will never die. It is here to stay. So long as there will be generational changes people will always look int MLM at a certain point. What will probably and is changing now is the perception about it.

Interesting,

Always nice to see this subject given the ever changing economic conditions we are all going through. MLM will never die, but it sure is in constant flux, love or hate, it will survive, but not all will thrive in this industry.

MLM is more difficult than ever as I see it, and for good reason, the recession is hitting everyone, not just those who are involved in MLM industry. What I see is a dual edge sword, yes, it is more difficult, but with more desperate people looking for extra income, it sort of balances itself off.

There will be thousands more looking into MLM over the coming year, so if you are one of them, my best advice is to spend more time researching the industry before you fall for the wrong company or selling the wrong products. What was hot yesterday does not assure you it will be hot tomorrow, so tread slowly through the thousands of choices before deciding based on the usual get rich quick hype of MLM.

Success to all,