The Biggest truth your upline didn’t tell you about Network Marketing
There are a lot of facts about network marketing that the new distributors are usually unaware of. We have covered a few of them in our previous blogs but Multi-level marketing is a big industry and there’s still a lot to disclose.
The untold truth we are going to discuss in this blog is the biggest and the most important one. Even most of the experienced distributors are either not familiar with it or do not want to accept it because of its bitterness. But not accepting a truth doesn’t make it a lie.
Success and failure in any field are predicted on the basis of calculations and ratios. These ratios are hidden from the new distributors in network marketing because they are not very promising, especially this one: More than 90% of the people who join multi-level marketing end up losing more money than they earn in this industry.
Now it might be obvious to you why this is hidden from new and even experienced distributors and why it is the biggest and the most important untold truth about network marketing. Even the top-level distributors who are aware of it either ignore it or do not accept it (at least in front of others). They do not want anyone (especially their downline) to find out about it. The simple reason being that most of them would quit as soon as they came to know about it.
Some of the distributors might not believe this ratio or debate that it only exists for certain types of marketing plans. But if you look closely, you will find that the multi-level marketing model is created in such a way that this ratio will hold true in all types of compensation plans. Around 90% of the people would never earn anything considerable, 8% would be earning average income and only 2% would be able to earn enough to support a luxurious lifestyle.
The following example will make it clear why this ratio will always exist in every multi-level marketing model: Let’s say the founder of an MLM company finds 5 people who are ready to work in his downline and those 5 people bring 5 more people each, and so on and so forth, then after just 15 levels, the total number of required people would be much more than the population of the world currently (i.e. in 2021). So, if everyone has to earn, then there has to be an endless supply of recruits which is obviously not possible.
This is a big loophole where the entire system collapses just after 15 levels. And this is the reason this ratio will always hold true in the MLM model regardless of the marketing plan.
Knowing this is really important for each and every distributor. This prevents them from getting trapped in unrealistic expectations and false hopes. Sharing this and all the other truths about network marketing is the first and the most important responsibility of every upline.
Now after reading till here, some people would start comparing the MLM model to that of a pyramid scheme, but that is not at all reasonable. There are some major differences between both of them which we have discussed in our very first blog.
On the other hand, some of the MLM devotees (no offense to anyone) would compare this ratio to the ratio of success in a startup where 95% of the startups fail in the first 5 years and out of the remaining 5%, 95% fail in the next 5 years. They will claim that MLM is still much better than starting your own business. This seems to be a reasonable debate from outside but there’s a catch here. See, the 5% of startups that achieve success are not dependent on the 95% failing startups for their success. But in network marketing, if 10% of the people achieve success, it is because the other 90% of the people are working hard for them without earning anything themselves.
So, no industry is similar to what it seems from the outside. Every industry has its own advantages and disadvantages and it is totally upon the person to decide which one is the most suitable for him.
What’s the solution?
The current model is a lose-lose-lose model where the company, the top-level leaders, and the other distributors, all will lose in the longer-term. It might seem that the company and the top leaders are winning because they initially are able to earn well and make profits, but since this success is dependent on the 90% of the distributors who are not gaining anything, it is short-lived because ultimately they will quit.
The only way to make the MLM model profitable for everyone is to shift the focus from making distributors to making customers. It should be made sure that the turnover which 90% of the distributors were generating should be generated by creating more and more customers. This way the entire 100% of the distributors would have a share in the profits and it will be a win-win-win model for the long term.
Originally published at http://themlmcult.com.
