For the most part people get excited about the potential of mlm income, but generally haven't done much, if any, research and don't know the real scoop. And they go "ga-ga" about publicly traded companies based on glowing information from the companies trying to recruit them, and through them, others.
By day I am a 401(k) specialist at a large financial company. I was there for all the fall-out from the Enron/Worldcom fiasco.
Enron was a publicly-traded company, subject to SEC rules and regulations ... yet, they STILL cooked the books. Same for Worldcom. If you can't really trust the information released in legal documents put out by publicly traded companies, how much stock can you put in the self-serving promotional statments put out by OTHER companies?
MLM companies, for instance, give out totally ridiculous numbers about sales and retention rates and the amounts being made by distributors. You can't just innocently believe what they say. No doubt some of them tell the truth. But many don't.
When a company quotes "retention rate," there are a hundred different ways to figure retention rate. It stands to reason that a company will figure it in a way that yields the result they like best. The safest thing for you to do is to choose a company based on results that YOU can see or that YOU can actually verify.
When you dedicate your life to building your business with a company, you should actually interview a number of distributors with that company and ask about the work they do and the system they use and their actual earnings. Your best plan is to read any company-published promotion with a grain of salt.
A lot of people start in network marketing with the idea that they want to get in position to make a lot of money. They've heard of people earning 7 figures a month. And it's true. It has happened. However, the key is to understand the numbers.
A few years ago, a report was published about the accountant statements of 7 well-known, publicly-traded MLM companies. This report showed that what these companies pay out to the distributor base ranged from a low of 25% of gross income to a high of about 42% of gross income.
Think about this. You'll always have just a portion of profits to the distributor base. Let's be generous and call it 40%. If you have a heavy hitter at that company making $1 million a month, what does that mean? Well, it's for their work. If that company pays out 40% of the gross, the fact is, the LESS that heavy hitter is paid, the MORE that the part-timers get paid. And those folks account for 95% of everybody in MLM, and they are the ones who have the dream.
People get so excited when someone gets a huge paycheck. In real life, it's often a very bad indicator for your potential to be successful in that company.
These subjects are covered in more depth in the ebook "Success In 10 Steps" by Michael Dlouhy. After years on the market and a ton of downloads, this ebook is now a staple which many MLMers use as a lead-generator to build their business.
Part of the problem with buying leads is, you never know for sure what you are getting, and mistakes can be very expensive. You quickly learn to generate your own leads with "Success In 10 Steps", targeting current MLMers who aren't satisfied with their results.
Network marketers love the MLM stories, and it has become very popular. Plus, the author never talks about any specific company or product, so it has become a great lead generator for people with many different MLM companies, including me.
You can get a free copy of the classic "Success in 10 Steps" ebook at http://michaeldlouhy.net website.
Wendy has been in network marketing for ten years. She mentors people to gain the skills necessary to be successful in network marketing and does this for free. Known as the "Singing Network Marketer", she writes and performs parodies and original songs to illustrate some of the lessons.
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