Why Are Top MLM Companies Losing Distributors to Top Tier Direct Marketing
Why are all these MLM distributors heading over to top tier direct marketing? The MLM / network marketing industry has gone through a lot of changes in the last couple of years. The internet has changed things dramatically. Now industry is full of hype with new start-ups and marketing methods promising quick easy money if you start now! What has not changed is some of the issues that have plagued MLM / network marketing for a long time. 97% of people involved in a MLM will never see positive cash flow. Where is the proper MLM training? This and the fact that attrition rates in MLM are not slowing down has a lot of people rushing over to top tier direct marketing to find a realistic six figure annual salary. So what is the difference between the two?
One of the major issues is the difficulty people are having achieving positive cash flow. The number that are commonly quoted is around 3%, but I have seen some estimates stating that it is less than 1% that they are actually making money. Unfortunately, in an industry where a lot of people are told that their warm market is the hottest source of leads this means that 97% of your friends and family will lose money if they choose to partner with you. A fact that not only affects your bank account but your relationships.
With top tier direct marketing this issue can be avoided with little effort. The higher ticket products and sales ladder that are generally utilized in these type of opportunities provide sufficient of a profit per sale to not only fund advertising but leave a fair chunk of cash in the bank account as well. With the combination of a large ticket item and responsibilities often above 50% it is not unreasonable to think that someone can replace their existing previous income quickly allowing them to get out of the job that they wanted in a short time. Sometimes in less than a month. This also enables people to build large monthly incomes in a reliably short time.
With most MLM and network marketing programs the idea of leveraging a large team is often heralded as the key to financial success and freedom. This can be true, but there are two sides to that coin. Often it can work against you. When starting out with MLM or network marketing companies you do not have access to this lease because you have not yet built a team. However, your sponsor does have a team. And so does their sponsor, and their sponsor, and their sponsor … anyway you get them idea. All of these people are getting a chunk of your sale or distributor leaving you with another small cheque looking for a way to cover your next minimum purchase.
The difference in the way you get paid in a MLM / network marketing company and can easily demonstrated in a quick example. If you are selling a $ 150 product and you receive even a 20% commission (which I have never received in MLM) that would leave you with $ 30 dollars monthly. It would take you 14 years of continued autoship to receive $ 5,000 dollars in agreements. Or you would need to sell 167 per month of these products in order to create a $ 5,000 monthly income. This of course does not take into account that fact that 50% of new products users will stop their purchases within the first 3 months, or the fact that 90% of distributors will quit within the first year. This means that you will have to constantly have to recruit and sell in order to reach that lifestyle you have always wanted.
In top tier direct marketing with the larger agreements and larger ticket prices it is not uncommon to be able to make $ 1,000 to 12,000 dollars in a single sale. This is money in your pocket that you will not be affected by the regular attrition of an MLM / network marketing downline and customer base.