Don’t Blame Yourself for Failures in Network Marketing

Building a home business using network marketing has become increasingly popular.  However, statistics are showing that over 90% of them have failed. 

While there is not a single reason that can be targeted for this failure rate, it is commonly found that the business models that compose network marketing are undoubtedly weak.  Consequently, from the beginning there are a number of challenges that you will inevitably face.   

To point out the reasons behind network marketing failures, it’s important to see what the industry is made up of.  You’re probably familiar with how it works; from the training to three-way calls to hyped up company events, it all seems very promising.  Nonetheless, in the end, nothing proved itself beyond a failure.  From that point on, you get down on yourself while wondering what you did wrong.  Yet, it all comes down to the fact that you only failed because the network marketing company has not invested in your initial commitment to them.  They have failed to support you because their business model lacks integrity.

Another element to think about is the companies that house multi-million dollar home offices.  Many times there are pictures on the company’s website.  Do you ever wonder how these are funded?  It all goes back to the compensation plan.  In network marketing, there is no additional form of revenue other than the compensation plan.  It is a staggering thought that you will not benefit from the money used, because of how the plan is designed.

Furthermore, there are still unfortunate insights to be revealed.  Have you ever thought about all the things that go into supporting a massive home office?  Think about what it needs:  cleaning staff, grounds attendants, electric and water bills…etc.  What about workman’s compensation, employee benefits like vacation or sick leave and 401k plans?  You’re probably getting the picture…these things will only be funded by the compensation plan! 

Sadly, you and all the other representatives will never step foot in your network marketing company’s home office building, but the building and maintenance costs come out of your pockets.  And think about the future expenses.  Do you guess that they will be greater or less than what’s being used right now?  Clearly, the expenses will expand because of the business model that is in place.

Something else to consider is the location of your company’s warehouse.  Have you thought about where it’s located?  It is typical that most cities have certain areas called warehouse districts, which usually mean that the cost and rent are low.  Therefore, one would think that it would be a pretty good idea to put company stock in these areas.  Yet, it does not always look like this.  Some warehouses are located right next to their home offices.  Besides providing a remarkable outward appearance, it honestly is a complete misuse of funds.

Hopefully, your eyes have been opened to the reasons multi-level marketing can set you up for failure, due to the foundational model of the company.  Because the overhead costs are so large, there is barely anything left to compensate you as well as the other distributors.  However, not all network-marketing companies are backed by models that don’t support the distributors.  Reliable business models do exist within reputable companies.  It’s just a matter of researching what’s out there.