Network Marketing: Why the High Failure Rate?

by Steven Dobson · 1 comment

The Network Marketing Business Model has been around for decades and has been credited for creating more millionaires than any other industry. Given the history of this industry, you would think that the success rate of people coming into the Network Marketing Industry would be very high, but the opposite is what you will find. There are many reasons why the plans or the lack of a plan of so many people have failed them when it comes to network marketing.

There is thousands of Network Marketing Companies and all of them have some form of a training plan to train their new distributors, and you would think that with the proper training, more people would succeed in this industry. All training plans are not equal just like all trainers are not equal and this helps contribute to the high failure rate that this industry experiences.

I can only speak from my experience, but I have heard other network marketers tell similar stories. When I first got into this industry I was told by my sponsor to go home and make a list of family, friends, coworkers, and anyone that I had a relationship with. I was told that this was my warm market. Well, for me, I had moved around quite a lot so I had very few family members in the local area and only a hand full of friends that I could not market to because of my situation. I could not sell anything to anyone that I worked with that was junior in grade to me (I was in the military), and the ones that out ranked me were not even thinking about ways to make extra money to supplement their income in ways other than getting a second job.

Then there was the “Three foot Rule” which states that you talk to anyone that comes within three feet of you about your network marketing business. For me that was almost as tough as buying leads and calling them on the phone. I did everything I possibly could not to pick up the phone and call a complete stranger and try to get him or her to join me in business. When I did pick up the phone and called, I learned quickly why it was called “Cold Calling.” Then there were network marketing opportunity meetings at home that no one showed up for but me and my sponsor. Then there were the opportunity meetings in hotel conference rooms and other locations that people said they were going to show up for and never did. Talk about frustration!

The Network Marketing Industry will challenge all the insecurities that you have; and if you’re not a strong person to begin with, you will probably do like most that come into this industry and just quit. If you’re not prepared to step out of your comfort zone and do the things that are required of you, you will never make it in this industry.

Because of the low start up cost to join most Network Marketing Companies many people don’t put forth the effort that they probably would if they were paying the franchise fee to operate a brick and mortar business. Most people come into this industry with little or no business training and believe that they can make money without doing anything. That could be for several reasons, but the biggest is because they were told that it was easy to make money if you just listened to and did what your sponsor tells you to do. That did not work for me, and it did not work for a lot of other network marketers that I have talked to or listen to when they told their story about how they got started and what worked and what didn’t.

This industry requires that you learn a unique set of skills in order for you to become successful. There is about a one to three years learning curve and there is no shortcut to success. Unfortunately, most people only last about three months in this industry before they give up and quit.

All of the factors listed above help contribute to the high failure rate in the Network Marketing industry, but the two biggest reason most people fail is because they don’t make enough or any money to cover their expenses, and they don’t have enough leads or prospects to convert into paying customers.  Another reason so many people fail is they treat their business like a hobby and don’t take the necessary steps to build a successful business. Place your name and email address in the form on the right and download a free copy of “7 Steps to Network Marketing Success” and make sure you set up your business for success.

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{ 1 comment… read it below or add one }

small business grants November 29, 2010 at 9:08 PM

What a great resource!

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