I Left Network Marketing

Why I Left Network Marketing: A quick explanation…

Comment: It’s possible you arrived at this blog post because you were redirected from one of my old network marketing websites. I apologize if the information you might have been searching for is no longer available.

I attempted to create wealth for myself, my family and friends with a couple of direct sales businesses. I persevered for over a decade. I enrolled thousands of hopeful people; unfortunately, only a couple of those people earned a significant income. My goal was to help, but the attrition stats were undeniable. I started to feel like I was picking pockets rather than doing good. The big question is, did I fail thousands of distributors, or, did network marketing’s business-model for distributors let all of us down?

I recently decided to sever my ties to the network marketing profession. Thank you to all the wonderful people, I’ve met along the way. I wish you health, happiness and enormous success in your future endeavours.

Network Marketing – Think Hard Before Joining

Network marketing has been around for over fifty years, so its track record is very well established. Millions and millions of people, worldwide, have enrolled; unfortunately, the vast majority ended up losing their money. Significantly, and contrary to myth, only a minuscule fraction of one percent of network marketing professionals have actually earned serious incomes.

Here’s a typical example: ‘Big Money’ stories enticed people, by the hundreds of thousands, to discover an exotic, super-fruit, juice company. Titillated by stories that the company’s top income earners were paid millions of dollars every year, financially desperate people felt they had new hope; some actually dreamed about earning as much as $100,000 per month. What happened to their dreams?

Not too long ago, that company’s, government mandated, income disclosure statement revealed that:

  • fewer than one percent qualified for commissions
  • of the one percent who qualified for commissions, only ten percent earned more than $100 a week

99% never earned any money. 0.9% earned less than $100 per week. 0.1% earned more than $100 weekly.

You might be thinking, “One out of every one thousand people earning $100, or more, per week doesn’t sound too bad.” Unfortunately, your thought process may not have factored in the distributor’s business related expenses. How much did the distributor spend for their required monthly product order? What were her/his marketing expenses (examples: product samples, magazines, brochures, DVDs, postage, newspaper ads, websites, pay-per-click ads and leads)? It’s, usually, surprisingly difficult to get a network marketing business into profit.

Q: What makes you think it will be different for you?

Here’s a quote I saved* (warning, it’s depressing for network marketers):

Roland Whitsell, a former business professor who spent 40 years researching and teaching the pitfalls of multilevel marketing: "You’d be hard-pressed to find anyone making over $1.50 an hour, the primary product is opportunity. The strongest, most powerful motivational force today is false hope."

*Note: My apologies to the original author, I neglected to record the attribution when I saved his/her quote.

Something New

Network Marketing Heads Up cover

I’ve published a downloadable eBook in ePub format. The title is ‘Network Marketing Heads Up.’

Network Marketing Heads Up download icon

>> Visit NetworkMarketingHeadsUp.com

Comments

  1. Dare Ojo-Bello says:

    Dr. Charles,
    I am sorry for what you went true but very happy that you have the conscience to open up your experience to those you had wanted to help with these opportunities.

    I have only been in networking for 4 months. Its my first experience and like you, I was doing it to help people.

    You mentioned that “of the one percent that qualified for commissions, only ten percent earned more than $100 a week”. In the network marketing business that I am involved in, we have better success stories than what you have reported. I have seen my upline who is twice as hard working, reaching $2,000 per month in the first 4 month of joining the business. I will put my average earnings for the 4 months to about $300. I am giving real figures here.

    But let me also mention that my low monthly earnings is due to my downlines who came in and thought they will make money quickly without ever doing anything. I spend a lot of time reading, marketing online, speaking to prospects, looking for marketing leads, attending online webinars, interacting at social network sites like facebook, getting every knowledge that I can to help me understand the entire industry, my primary business and how to close a sale. Needless to say, this is not a part time job. I am enrolled in an MBA program with the University of Liverpool and sometimes I struggle to meet the deadlines to submit assignments because I am immersed in my network marketing business.

    To make good income, I am not just training myself, I also lead and mentor teams and trying very hard to let my downlines understand that they need to be able to fill my roles, also helping their downlines. Attrition rate is very high in this industry. In my first month, I attracted the highest number of downlines but I also lost most of these immediately following that first month. Now, I don’t enrol anyone without ensuring the person also enrols their first downlines within the first month so that they can earn income. Experience has shown that if they don’t earn money in the first month, they are likely to walk away. I am in for long term and the prospect of making $40,000, $80,000 and even $100,000 per month in the next 10-12 months is very realistic if only I can find people like me who are passionate and willing to work for the business.

    Let me close by saying that this statements above are based on the particular business that I am into now and I have no plans to get into another network marketing business anytime soon. If after enrolling, a business says I should spend $60 every month (for autoship) and then work hard to earn $500 every month, I don’t think its a bad deal. But interestingly, what you earn is only limited by how far you are willing to work. For example, if I enrol say 10 downlines (in September, I enrolled 18), I will get paid $75×18 ($1,350). If I enrol, 2 people, I will still earn enough to cover my autoship. I consider myself not working hard enough if after I put all the efforts above, I am unable to enrol 5 people at least in a month. This thing works for me and its working for a lot of people if only they understand this business requires full and long term commitment. You can do your independent assessment of my business at http://www.skinnybodygroup.com

    Thanks
    Dare Ojo-Bello

  2. I missed the website field above although I included it in the body of my mail

    Rgds
    Dare

  3. Thanks for writing Dare. Congratulations for your early success in your company.

    Every network marketing company has success stories, both big and small, it’s a large part of how they grow their distributor base. Individual success stories are interesting and occasionally inspirational. That said, corporate income disclosure statements can be very informative, they reveal what’s transpired for the majority of distributors. Accurate statements help to sort out fact and fiction, they reduce the promotion of false hope. Example: “Only 1% qualified for commissions” rather than “If you knew for sure that it was possible to earn $100,000 per month and retire in 2-3 years would you want to learn more?”

    If you’re considering joining a network marketing company, my recommendation is to ask to see that company’s income disclosure statement before you join. Unsurprisingly, both distributors and companies are often reluctant to make their statement available.

    BTW, it’s Dr. Frank, not Dr. Charles. 🙂

  4. That is very sad news. I have been purchasing products from a network marketing company for several years and have recently decided to dive into the business opportunity after watching my upline sponsor increase her full-time income while working part-time and save her husband’s income after he lost his job two years ago. When I saw what this business opportunity did for her, I couldn’t stand to sit on the sidelines any longer. While the success rates are relatively low industry wide, I imagine the effort rates are also comparable. Training seems to be a shortcoming of this industry as there is no silver bullet for getting people to simply duplicate a sales plan. Also, there is no boss, so getting people to “show up” is another cause for limited success, in my opinion. Fear of rejection is the big one that keeps people from approaching others, too.

    If I were you, I wouldn’t feel like I were picking the pockets of my downline, if they were spending their money on useful high quality products that only replaced items they might have purchased elsewhere such as with my business. My company might be different as they manufacture skin care, wellness and cosmetic products people are already buying. With my company no one needs to purchase inventory or buy in to reach certain levels. But, of course, each company is different.

    In my opinion, I think you were right in your original beliefs about Network Marketing, but it could be possible that you just weren’t with the right companies or promoting the right products for your own personality or set of beliefs. While the stats are undeniable, I cannot help but to wonder how they compare to other sales jobs where one is let go after not hitting quotas for a couple of months. In this industry, you never get fired for not making money, you simply quit. And many do before they ever see success but that doesn’t mean they never would. Additionally, if more people stuck with it, maybe we would see those statistics change. Best of luck to you!

  5. Thanks for writing Steph, I appreciate your thoughtful comments. I hope you enjoy huge success in your Arbonne business.

  6. I have a same feeling like you guys before. When I heard of Network Marketing or Muti Level Marketing, my first signal is that it is a scam. However, I am a open mind person. Although I think I am right but I wish to find out how scam are they. I also like to learn some of their system. I meet them in a Tim Horton. What they are saying is Rich Dad Poor Dad concept, I already heard that so many time. I stopped them and ask them their compension plan. Then I am surprise, I have seen some of the muti level marketing say they need to introduce 3 or 4 people first and the commission is muti level. However, they plan is very very easy. They only want you to introduce two people and their commission is 100% from the bottom to the top. At that same time you can put the commission back to the sponsor, which i think is very good. Another things I really like is even though you are at the bottom, it does not mean you will make less money than the top one. Therefore, I think their company is very fair company.

    Their concept is just changing your shopping habit. Turn spending on consumer goods or service into Income. what you just do is buy it from your own online shopping mall. Like health product, skin care, person care, finance, cosmetics, cleaning product, home and Garden and web design…etc. those product we need everyday. Also you can buy their 3000 partner store like best buy, sears, gap, bebe, banana republic, forever 21, travelocity, starbucks…etc.

  7. 🙂 Ah, “The Mall Without Walls” good luck with your Market America business Leo.