In today’s post, I want to write what I consider to be the status of the network marketing Industry as of 2021.
You should know three things upfront.
- I am a rep in the industry and I love the industry.
- This is just my opinion and we can agree to disagree.
- I spend four to eight hours a day building my network marketing business, writing about the industry, interviewing people in our industry, and studying the industry. I have committed most of my adult life to this industry.
Our industry is HUGE. It is expected to surpass sales of $67 BILLION in the USA in 2021 alone. While the industry isn’t growing at large rates in the USA, it is exploding internationally. People are hungry to work for themselves, create financial independence, and reclaim their lives.
To put things in perspective, here are some stats I found from the Direct Selling Association website.
- 77% of Americans are interested in flexible, entrepreneurial income earning opportunities (2020).
- Direct Selling has a broad appeal here in the USA, with a breakdown of 48% women, 35% millennial, and 20% African American (2020).
- More than 37 million customers in the USA buy from direct sellers (2019).
- Wellness, services, and home & family care are the largest three product categories (2019).
Status of the Network Marketing Industry
While our industry is huge, and has steady growth, we are dealing with some SIGNIFICANT issues on the internet right now. The internet is both a blessing and a curse for our industry. Keep reading and you will see why.
Here are some of the major issues the internet has caused our industry.
# 1: Anti-MLM Websites
I understand and respect freedom of speech, and I am not against negative websites. Even though I enjoy focusing on the positive in things, I understand many people enjoy focusing on the negative side of things. To each their own.
However, there is always more than one side to a story. There is always a story behind the story: your side, my side, and the truth.
There are TONS of anti-MLM websites online. Type in any company’s name along with the word scam, and you will find hundreds, maybe even thousands of pages of negative stuff. On the flip side of the coin, this is not exclusive to our industry. Many industries have haters, although our industry has more haters than most.
That being said, a lot of anti-MLM websites have an agenda, and it’s not just to reveal facts. In many cases, they bash our industry in order to sell a product or service. Or, someone writes a negative review about one company to promote their own company. Sometimes, bloggers get paid to write negative articles about companies. Even worse, the owners of these websites are not required to disclose their status or agenda.
Most websites are simply someone’s opinion, not facts. These websites hurt the industry because the prospects do not know the difference between fact and opinion. They see something negative online and just believe it is true, without verifying the information. I believe all of these websites should be required to give some type of disclaimer, but I don’t see that happening any time soon.
# 2: eBay and Amazon
First off, I love these two websites. I shop on both websites every week and buy a majority of my household items on these websites.
I am also an eBay seller and Amazon seller. To clarify, I do not sell my MLM Company’s products on either of these websites. Instead, I sell books, antiques and vintage items.
The problem with these two websites (for network marketing) is that many current and former distributors sell their excess inventory online.
You can go to either website, type in the name of any MLM Company, and in most cases you will find hundreds of the company’s products for sale. Typically, you can buy the products at a CHEAPER price on these websites than you can as a distributor.
This makes it VERY difficult for distributors to find customers and sponsor new people into their business. After all, why would a prospect buy a product from you if they can get the same exact product on Amazon or eBay at a cheaper price, and with free shipping?
I would like to see all MLM Products removed from these two websites, although I doubt that will ever happen. Back in the day, MLM Reps had exclusive distribution rights on their company’s products. Now, we all have to compete with the big corporate companies. It makes life more challenging for us.
# 3: Increased Competition
Competition is a good thing. That’s how America was built. That’s what capitalism and free enterprise are all about.
Back in the day, there were only a few MLM Companies to choose from. Now there are thousands. Every time a company closes its doors, it seems like five new companies open up! Sadly, most of these new companies don’t survive.
With so many companies competing for the same pool of people, it’s difficult to sponsor people and even harder to keep them in the business. Many people in our industry are simply chasing the next shiny object. I can’t speak for you, but I get at least 10-20 emails per day promoting new business opportunities.
I can’t tell you how many people I’ve sponsored who switched to a new MLM Company in less than 30-days after teaming up with me. And within another 90-days, these same people have been in three or four different deals.
These shiny objects, combined with the “instant gratification” mentality of most Americans have created a revolving door in our industry.
# 4: Recruiting Other Network Marketers
I don’t have any stats to support this claim, but I believe it to be true. I don’t see a lot of new people joining the industry. Instead, it seems like recruiters are simply recruiting other network marketers into their business.
As a result, many reps join new companies every few months. These folks have a hard time committing to one company and typically think the company itself is the solution to their problems. They are the MLM Junkies and they plague our industry.
The Positive Things About the Internet
While I focused on a few negative things about how the internet has affected our industry, it has also helped us.
# 1: Level Playing Field
Now, it doesn’t matter if you live in a small town or a big city. It doesn’t matter what country you live in. The internet gives you instant access to the entire world.
# 2: Access to More Information
Now, any distributor can go online and visit websites and get a free virtual mentor. YouTube alone can teach you everything you need to know about this industry. You can also visit popular blogs to learn cutting edge tips. You aren’t restricted to your upline.
# 3: Technology to Work Smart
Social media, auto-responders, sizzle call lines, websites, online ads, videos, and other technology allow us to free up our time and work smart. We can automate parts of our business, so we can get good results, but have more time with our families. You can even do your selling online, so you don’t have to do home parties.
We are quite perhaps the ONLY industry in the world that is loved and hated by so many people.
People are either passionate about MLM or passionate about hating it.
It’s almost like a religion.
To be honest with you, all industries have people who fail and people who succeed. What most industries don’t have is a large amount of people who fail, and then go online and create websites saying that industry is a scam.
My Advice for MLM Companies
I believe there are some basic things network marketing companies could do a better job at to improve the reputation of the industry. This includes:
# 1: Stop Nickel and Diming Your Distributors
Get rid of the sign up, website, renewal and membership fees. You don’t need to nickel and dime your distributors to death. If you’re selling business tools and promotional materials, sell them at cost, so your distributors can get what they need at a fair price.
Pay your distributors, and pay them well, for moving your company’s products and services. And GIVE them the resources, training, and support they need to make that happen.
# 2: Treat Us Like Independent Contractors, Not Employees
Understand that reps are INDEPENDENT BUSINESS OWNERS, not employees. Get rid of your cross-recruiting and non-compete rules. In addition, loosen up your internet marketing policies.
The internet is here to stay. We are not in the stone age or 1980s anymore. Don’t suppress your distributors and keep them from building online. Realize that you need us more than we need you!
# 3: Stop Frontloading
Get rid of the $500, $750, $1,000 and $2,000 sign up packages. No one should have to spend that much money to get started with a MLM Company. It shouldn’t even be an option. These packages are how people lose money and get stuck with a bunch of stuff they can’t sell or use.
# 4: Be Proactive
Be diligent about terminating distributors who sell products on eBay and Amazon. Be diligent about terminating distributors who make income claims, do unethical things, and ruin the reputation of your company. If you only did one thing on this list, this would be what I would focus on.
# 5: Mandatory Ethics Training
Every new distributor in every company should be required to go through several HOURS of ethics training BEFORE they are allowed to recruit other distributors or retail products. This training could be done online as part of the sign-up process. This would help reduce the hype, income claims, and crap our industry deals with.
# 6: Lower Your Prices
If you want your reps to be able to compete with Amazon, you must price your products similar to Amazon’s prices. Offer free shipping too. Make your website easy for your customers to use and make sure you do lots of cross-promotion and up-sells during the check out process.
My Advice for MLM Distributors
# 1: Get More Customers
Get more customers. Show every rep on your team how to acquire at least two to five customers before they recruit their first distributor. If the products don’t make sense, neither will the business.
# 2: Focus on the Little Money
Teach people how to get their products for free and how to make $200 to $1,000 per month, rather than focusing only on the big money. This will be more appealing to more people. Besides, someone won’t make $20k a month until they’ve made their first $100 in a month.
One of the reasons our industry gets a bad name is because people only talk about the big money, yet very few people make big money.
# 3: Change Your Mindset
The average American spends more time planning their yearly vacation than they do planning their life. The average person can’t think past their next pay day. The average person is short-sighted and lazy.
Start thinking long-term. Start thinking like an entrepreneur. Get rid of your “instant gratification” mentality. Get rid of your lottery mentality. Treat your business like you have ONE MILLION DOLLARS invested in it and you have one year to earn it back.
Commit to one company and realize this is a two to five-year plan, not a two-day or two week plan to financial freedom.
# 4: Be an Ambassador to the Industry
Stop bashing other companies and other reps. Realize that everything you say and do affects everyone in your company and everyone else in the entire industry. Be a true professional at all times. Get rid of the hype, pressure, and drama. Treat everyone you talk to as well as you would treat your best friend.
# 5: Give People Realistic Expectations
Don’t tell people it will be easy. Don’t talk about getting rich quick. Let people know it will be the hardest thing they ever do, but it will be worth it, if they can get it built.
Let people know that it typically takes a couple of years just to make a profit in a traditional business. Let people know there will be struggles, setbacks, and disappointments.
You might lose some people initially by telling them the truth, but I’d rather lose someone because of it, than have someone join the business, get disgruntled, quit, and then set up a negative website about our industry.
The Future of the MLM Industry
No one can predict the future, so these are simply my thoughts on the future of network marketing.
First off, we are in a GIG economy. I don’t see that changing in the near future. Good jobs with good benefits are hard to find and keep. Almost everyone wants and needs some extra cash, over and above their job income. As a result, just about everyone has a side hustle these days, even many professionals.
I believe fewer and fewer people will choose our industry as a side hustle or business. Instead, we will attract more customers, but fewer distributors.
Let’s face it, there are easier ways to earn an extra few hundred dollars per month than doing our industry. You could sell items on eBay or Amazon, walk dogs, drive for Uber, get a part-time job, etc.
However, our industry will continue to attract distributors who see the big picture of what our industry offers: time and money freedom. We are the only industry I know of where you can truly build a leveraged, residual income. In fact, the top earners in our industry have the best quality of life of any profession I know of.
I believe our industry will continue to thrive internationally, but will decline in the USA. Most Americans don’t realize how good we have it compared to the rest of the world. Our standard of living is so high compared to most other countries. In America, you can be broke, but still have the newest smart phone, a roof over your head, three meals a day, and a new car in your driveway. Other countries don’t have the options and entitlements we Americans have.
If companies want to grow, and the industry wants to expand here in the USA, they must become more CUSTOMER focused. Consumers have so many choices in today’s world. They want to get a good deal and they want the item shipped quickly. More companies will need to adopt the “Amazon prime” type mindset if they really want to grow.
In review, this is the status of the network marketing industry in 2021 as I see it. Our industry is great, but yes, we have problems just like any other industry. What we really need to do is police ourselves internally and make a few minor changes for the better.
I believe both companies and distributors have a responsibility to do this. What do you think? What do you think is the status of the network marketing industry? Leave a comment below to share your thoughts. I look forward to hearing from you.
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