 |
Five Reasons Why Ninety Percent of Network Marketers Fail
Author: Ouida Vincent  | Posted: 24-02-2008 | Comments: 0 | Views: 11 | Rating: (57)  (?) 
Nine out of 10 people who fill out a network marketing application will fail to build a viable business. Among that number will be people who do not take action and people who build a business yet experience a true business collapse.
The oft-quoted statistic allegedly from the Small Business Administration(SBA) that 9 out of 10 of all businesses fail within 10 years by comparison is not true.
According Brian Headd?s article from Small Business Economics 21:51-61, 2003: Redefining Business Success: Distinguishing between Closure and Failure, 66% of conventional businesses survive 2 years or more, 50% survive four years or more and 40% survive six years or more. Traditional small businesses do far better than the 90% failure rate quoted by people in the network marketing industry.
What is the difference? Is the network marketing model itself faulty? Many familiar sales models use the same business model as network marketing. Real estate sales are a prime example. Many top sales people across the automotive, pharmaceutical, travel and other industries have as their main responsibility to recruit and train sales people and in return are paid commissions based on the performance of their teams. It is not the model.
What is it then? Why do so many people fail in network marketing?
Working with people over the past 5 years and in speaking with other successful network marketers during the same time, I have been able to come up with 5 reasons:
1) The cost of entry is too low: The typical start up costs can range from 0 to $1500 dollars. Imagine the person who decides to open a traditional business and has to invest tens of thousands of dollars to do so. How might that person differ from the person who can put their business start up on a credit card? The person seeking to open a conventional business where the investment is high will develop a business plan. That plan will include a skills assessment, expected expenditures and projected revenues. If the prospective business owner realizes they have a skill deficit that is material to their business success, they will either set to work learning that skill before opening their business or they will provide funding and a plan to acquire that skill while they are in the planning stages and before they open for business. Now imagine the person who can simply put their start up costs on their credit card. For the majority of network marketers there is no planning beyond the initial start up. Most never ask of their sponsors or themselves what they may need to be successful other than the initial start op costs. They never ask what skills they lack. There are on-going business costs in addition to the start up costs and those costs can range from $100 to $500 dollars per month. Many do not make provision for on-going expenses. On-going business expenses tend to be regarded as expenses akin to the cable bill rather than investments in their business. The low start up, then, can be a stumbling block to success in business.
2) Lack of appropriate training: Unfortunately many companies and teams do not offer training beyond corporate events. In order to be successful network marketers must master a simple formula, the Inviting Formula, and they must use that formula 30 to 60 times per month. Without this formula many new and seasoned network marketers will invite the wrong prospects to review their information and find themselves disappointed by the results. The Inviting Formula is simple to learn and implement. Why is there so little training available in network marketing? I believe the reason can be found in the very reasons why people get started in network marketing. Take the wage earner who wants to fire his boss. He never wants anyone to tell him what to do again; he hates his boss and wants to be free. Take the corporate executive and the entrepreneur both of whom are tired of managing people and are looking to build a fleet of independent business owners that they never have to manage. Put both groups of people together in what is fundamentally a people business and what do you get? People who find that they have to do what they were trying to get away from in order to be successful and become free! YIKES!
3) Too many people are looking for the big income score and fail to appreciate the smaller sums of income they earn along the way. Most people get started in network marketing because of the big income claims. They want the six figures. If they don?t get ?em they quit. Here is a statistic that will knock your socks off. Anyone grossing $30,000 per year or more with their respective company is among the top 3% of income earners for their company. Here is another fact. The income earned through network marketing is tax-advantaged income. Income earned through a job is not. Anyone earning an additional $30,000 dollars per year in tax-advantaged income who fails to make significant strides in improving their wealth will never improve their wealth with $100,000 per year. Finally, the road to earning and keeping six figures and beyond is a 5 to 10 year process and there is no way around it. It is a process that requires growth and change in the areas of personal finance, emotional maturity, spiritual maturity, and personal association.
4) Low EQ, failed expectations, too much hype in the industry: Looks like I jumbled 3 different ideas into one point but they are actually all related. There is a lot of hype in the industry. Joe Smith the waiter to went from 0 to six figures in a year. Of course Joe Smith and his company forgot to mention that all of Joe?s family were involved in the industry of network marketing, that all were successful, and that Joe was working as a waiter just to figure out what his options were. That skills are required is just one of the ?inconvenient truths? of network marketing. The hype leads invariably to failed expectations. If people understand at the start that network marketing is really a business that requires a skill set fewer people would get started and more people would be successful. The organizations created would move from vertical sales organizations to consumer-based organizations as more people seek to become product users rather than business owners. Network marketing itself is an industry that attracts too many people who desire instant gratification. Daniel Goldman described the Emotional Quotient or EQ in his book Emotional Intelligence. He found that the greatest determinant of long term success was one?s ability to delay gratification.
5) Money In, Money Out: Many people treat Network Marketing as a Money in, Money out proposition. Imagine a black box. On one side of the box is the word ?IN? in bold letters. On the other side is the word ?OUT? in bold letters. It would be easy to think that just because you put money in, you should get money out. Investments rarely work out that way. See the trouble is that ?black box?. Something goes on in that black box that transforms inputs into outputs and therein lies the rub. As an illustration, I was on the phone with a prospect the other day. He said, ?I have been scammed so many times, what I need is a person who will work with me, show me the ropes, train me?are you that person?? My response was, ?yes, we have a training program that begins with our training manual. We have weekly calls and I will be meeting with you a couple of times per week and giving you assignments each time we meet. You won?t progress unless you do the assignments and attend the training calls?are you that person?? Stone cold silence. He never did answer my question. With my first company, I received motivational materials at a cost of $60 dollars per month but no training. In my second program there was training galore that I didn?t take advantage of. I thought my team?s system would build my business for me. When I realized that it wouldn?t, I had a choice, quit or continue. In order to continue I had to ask myself some questions, among them, What skill or skills do I lack? There are 2 skills required in network marketing A) the skill of inviting which has embedded in it the stills of listening, sorting and sifting and B) The skill of training which requires the skills of boundary setting and the skill of setting expectations. I lacked the skill of inviting. I learned my profession through experimentation, direct observation and practicing. I applied those same strategies to learning the skill of inviting and I went from sporadic checks to consistently earning multiple 4 figures per month.
Rate this Article:
Current: 0 / 5 stars - 0 vote(s).
Article Source: http://www.articlesbase.com/business-articles/five-reasons-why-ninety-percent-of-network-marketers-fail-340584.html
About the Author:Ouida Vincent has been generating leads online for her primary network marketing business and teaching duplicable strategies to her team from her home for over 5 years. To pick up her team's Light House Marketing guide to Network Marketing on the internet, go to http://www.passiveincomesecretsonline.com
|
Submitting articles has become one of the most popular means of generating quality backlinks and targeted traffic to your website. Join us today - It's Free! |
|
Related Articles
Finding the One True Thing in Network Marketing
By: Ouida Vincent | 27/01/2008 | Internet
My mentor said at his retirement breakfast, "if everyone knew what I knew about Network Marketing, everyone would be in it." He has been with one company. Unfortunately, people are encouraged to chase success, and embrace failure, by frequently changing companies. Business success and lifestyle change are virtuallly assured to people who find and understand and embrace the "one true thing in Network Marketing."
As a Newbie, How to Find a Good Mentor in MLM
By: Craig Mattice | 23/06/2008 | Internet
This is an insightful look at the processes a newbie should evaluate and incorporate into their search for a good quality mentor for their business. The article delves into the elements necessary, the ease of locating a mentor, and what a mentor should have to be qualified for a good match. Relax and enjoy this article and learn something new.
When to Leave Your MLM Company. Should You Stay or Should You Go?
By: Craig Mattice | 18/06/2008 | Internet
This article deals with the serious question of whether to stay or leave one's current network marketing or MLM company and goes into the insightful elements that must be considered before making such a decision. Sit back, relax, and enjoy the insight of one who has been there and done that.
MLM - Network Marketing Companies - are They a Scam?
By: Brian Jones | 27/06/2008 | Internet
Do you believe all MLM - Network Marketing companies are a scam? Can you make money? Are 6 figure incomes possible? You decide...
4 Steps to Successfully Communicate in a Home-based Business
By: William Winch | 06/02/2008 | MLM
Proper communication is essential for the success of a home-based business. A simple 4 step process to implement this essential aspect into your method of operation is outlined in detail. The author is a Business Growth Specialist whose mission is helping people expand and explode their home-based businesses without falling into costly traps of wasting time, energy and money.
Are you Committing the Same Mistake Most Network Marketers Make?
By: Wil Chirinos | 28/08/2006 | Home Business
Discover the single change you can make to avoid becoming part of the 90% failure rate in network marketing.
Think Like an Owner and Explode Your Home-based Business
By: William Winch | 31/03/2008 | Home Business
This article explains the importance of thinking like an owner in the network marketing industry, and offers tips on the best ways to use leadership as a way to explode a home-based business. The author is a Business Growth Specialist whose mission is helping people expand and explode their home-based businesses without falling into costly traps of wasting time, energy and money.
How to Overcome Setbacks to Keep your Home-based Business on Track
By: William Winch | 12/02/2008 | Home Business
This article addresses the importance of not putting your home-based business on hold while you attempt to solve everyday and setback problems. Several examples and suggestions are discussed in detail. The author is a Business Growth Specialist whose mission is helping people expand and explode their home-based businesses without falling into costly traps of wasting time, energy and money.
Got a Question? Ask.
Ask the community a question about this article:
Frequently Asked Questions
Personal for girls only
By: skyler | 08-07-2008
Please do not take this as a weird question its just that alot of people bring up this topic with me asking do i shave my private and i dont tell them... but i really dont no and need help are females supose to shave all there private? please help me
Does keeping score make it more exciting?
By: Shari | 04-07-2008
Do you prefer points (like Yahoo!Answers) or no points (like Yedda)?Do you think points (even pointless like Y!) make it more interesting or do you prefer the freedom of the no points system?
Meaning of the runic pentagram
By: curious george | 29-06-2008
What is the meaning of the symbols surrounding the runic pentagram. What is the purpose of the runic pentagram?
Animated halloween movie specials
By: cooks21 | 25-06-2008
I remember every halloween this cartoon movie would come on and i don't know if it was a t.v special or something.But it's about a group of friends trying to help or save this boy(he had freckles)and there's this evil guy with a long nose bringing them into the night sky. and later on they go in this room with a bunch of evil pumpkin people and that's all i can remember.
Author of The Upside Down River
By: Joyce Molinari | 23-06-2008
I need to know the author of the book "The Upside Down River". It is about the river that runs through the Salinas Valley in California. The book is very old and I guess written in the 50's maybe. We bought for my father when came out. We lived or I was born and raised in Salinas. Lived there 69 year's before retiring to Sarasota FL and living with my youngest daughter.Thanks for you help in advance.
I assume that there are two types of organisations ...
By: drabsv | 18-06-2008
I assume that there are two types of organisations according to the relation structure-people:(1) organisations which expect employees to adapt to their rules, roles and conditions of work. If there are not enough candidates, these organisations react by either increasing salaries or by coercing people to work there through various mechansims - manipulating unemployment rate (e.g. outsourcing work to overpopulated Asia, letting immigrants in); mandatory labour service/ military service; etc. In brief: "the individual must fit into the system". An example of a policy of such organisation: "working time is set Monday till Friday, from 8 am till 5 p.m".(2) organisations which create their rules, roles and work habitats with the human in mind, from the very outset; they also maintain feedback loops to change (improve) those rules, roles and conditions for work when necessary. In brief: "the individual must fit to the system and system must fit to the individual".An example of a policy of such organisation: "the working day is 8 hours; standard working time is set Monday till Friday, from 8 am till 5 p.m but you can arrange with our managers a different schedule, convenient to you". If my assumption is correct, any examples of type (2) organisations?
Q&A Powered by: 
Latest Business Articles
The Basics of Creating a Filing System That You Can Benefit From Starting Today
By: Tracey Lawton | 19/07/2008
In my brand-new article, I'm going to share with you 7 easy steps for getting your filing system in place. The summertime is generally a quieter time with a more slower pace of business, so use this time to get one of your core office systems in place.
The 9 Things You Will Want to Include in Your Email Newsletters
By: Katrina Sawa | 19/07/2008
You probably get numerous newsletters across your desk each month. How many of those do you really read? I am sure that you scan certain newsletters for valuable information, while you just toss others. Then, of course, there those like mine (chuckle), which you read every last word of.
How to Establish yourself as an Expert
By: Katrina Sawa | 18/07/2008
Establishing yourself as an Expert in your field is a great way to get added exposure, publicity and credibility for you and your business which will ultimately bring you more sales and more money!!
Women Owning the Workplace: Tips to Guide Female Entrepreneurs
By: Melissa Mashtonio | 18/07/2008
Women are taking the business world by storm, and it doesn't look like they're backing down. According the Womenentrepreneur.com, women-owned firms are the fastest growing in the country. Women are looking beyond the traditional roles and moving ahead to a new role: entrepreneur. This does not necessarily mean women are...
Getting Ahead in the Construction Industry
By: Duncan Freer | 18/07/2008
With new regeneration and Government housing targets, the construction industry is facing the toughest challenges yet. With new projects in commercial and residential developments, growing pressures for sustainable and low impact development and the need for low cost housing, better and faster results are being expected from everyone involved in...
Getting Ahead In The Rail Industry
By: Duncan Freer | 18/07/2008
The rail industry is a greener alternative for travel than any other method at the moment, and as a result is beginning to see an increase in investment and public interest. With the Government and business regulators placing such a huge emphasis on offsetting personal and private carbon emissions it...
Getting Ahead in the Utilities Industry
By: Duncan Freer | 18/07/2008
The Utilities industry is currently facing rapid change and is having to adapt to the many new demands made on it by existing and potential customers. Once dominated by state-run monopolies, the utilities sector of the twenty first century is shifting to respond to emerging competitors who are increasingly savvy...
Recessions Require Leadership From the Core!
By: Axel Meierhoefer | 18/07/2008
When things are going tough, leaders need to step up and deliver more than every. LEading fomr the core is what we need to succeed
More from Ouida Vincent
Cashflow: the Only Sensible Investment Strategy for the Twenty-first Century
By: Ouida Vincent | 18/03/2008 | Finance
Cashflow, the direction of money in someones life is vital to everyone's survival. It is as important as the air we breathe. Despite its importance cashflow is talked about very little in mainstream financial circles. This article examines the reasons why and why cashflow is the only wealth building strategy remaining that makes sense.
The Stock Market: the Second Biggest Financial Scam of the Twentieth Century Part 2 of 2
By: Ouida Vincent | 13/03/2008 | Finance
In part 2 of The Stock Market: The Second Biggest Financial Scam of the Twentieth Century, the author shows us why the stock market can never live up to the promises of Wall Street and the financial pundits and why the average investor would do well to steer clear of it and opt instead for solid financial education.
The Stock Market: the Second Biggest Financial Scam of the Twentieth Century Part 1 of 2
By: Ouida Vincent | 09/03/2008 | Business
Since the 1990s workers seeking a safe haven for their retirement assets have been steered toward the stock market by the popular financial culture with the promise of consistently high returns. But are the long term returns true? The author examines the long term performance of the stock market and tackles the provocative question: Is the stock market a place where the average worker can safely craft a secure retirement.
Home Ownership: the Greatest Financial Scam of the Twentieth Century
By: Ouida Vincent | 04/02/2008 | Finance
Many people followed the financial planners advice and bought a home. Instead of wealth, home ownership has created debt, financial hardship, disappointment for millions of families. The article examines the falicy in the logic that home ownership creates wealth and demonstrates why it never can.
Finding the One True Thing in Network Marketing
By: Ouida Vincent | 27/01/2008 | Internet
My mentor said at his retirement breakfast, "if everyone knew what I knew about Network Marketing, everyone would be in it." He has been with one company. Unfortunately, people are encouraged to chase success, and embrace failure, by frequently changing companies. Business success and lifestyle change are virtuallly assured to people who find and understand and embrace the "one true thing in Network Marketing."
Critical Strategies to Get your Network Marketing Business Online
By: Ouida Vincent | 13/01/2008 | Internet
The Internet has meant a revolution for many business formats, from recreation to books. Can the internet transform the traditional face to face and belly to belly business of Network Marketing? Mike Ray and Ouida Vincent, the authors believe so and their business success online proves it.
Do the Necessary Thing
By: Ouida Vincent | 12/01/2008 | Self Improvement
How do you do the things you need to do against your will to do them? The answer to this question, not surprisingly, is the key to success in all endeavors. Ouida Vincent provides simple strategies for doing the necessary thing.
Five Strategies to Make Tackling
By: Ouida Vincent | 26/12/2007 | Self Improvement
Have you ever heard someone say that the reason they don't have the success they seek is because IT or life is hard. The author agrees that IT is hard, but also contends that change is necessary and offers five success strategies to make success with IT easier.
|
|
Business 
