So far 249 readers responded to the survey last week. Here are the results:
Is MLM a Buyer’s Club or Financial Opportunity? Kim Klaver Survey
The results are interesting from many perspectives. Of the 249 who responded:
1. The great majority of MLMers say it’s the product, not the money, keeps them in the business. ( See Q 1.) 61.4% stay because of the product. Only 22.9% for the money. You’re invited to read the comments, too.
2. Companies and upline clearly make significant income from the monthly minimum forced product orders. Nearly ALL (79%) respondents (Q 3) reported they had to make a minimum product purchase each month to qualify to get paid on any possible sales activity.
3. The majority (50.2% – Q 4) said they spend more on the minimum monthly purchases than they earn in sales commissions. 45% said they didn’t.
4. A whopping 81% (Q 7) say the products alone are worth being part of the business. Clearly buying the products trumps earning income. And that is a very good thing for the companies and upline.
Observations. We all know that most folks aren’t making money (they spend more than they earn) in their MLM business. The fact that 81% think that’s ok is a good thing for the companies and the recruiters. Because the company and everyone up the line benefits from those monthly orders.
So why complain about the fact that most MLMers don’t make money? Most don’t seem to care all that much. They’re in it for the product. Whether that’s a rationalization or whether it’s just how it is, who cares? They say they’re not in it for the money. At least not anymore.
So, shall we stop complaining about why so many folks are not earning much income in MLM?
Seems that is not the reason most networkers stay in the business. They may have come for that reason, but it’s not why they say they’re staying in. Sodden thought:
Should we reposition the business to new people based on this information? So they’re not so discouraged when they don’t earn the promised quick and easy income?
P.S. Of course, it may be my readers who are peculiar. Perhaps another cross-section of MLMers from 40-50 companies would respond differently. Who knows?
Counterpoint: I know of a trainer who claims he has asked several hundred people this question: If you could have $100 bill or $100 worth of mlm wonderpills right now, which would you choose? He says they all go for the money. How do you reconcile that with your survey results?
I have a hunch that the “product”, not the money, is more or less a rationalization, or else why would one consider it to be a BUSINESS.
Yes, the product is importantant, but I am willing to bet it isn’t why people sign up.
Too often, a sponsor drops the ball; does not follow thru with training or support–or even bother to check in and say ‘hello’ on occasion. This just leads to an unwanted replication down the line.
We do not represent a company. We ARE our own “company” if we are truly in business. Unfortunately, there is too little formal training or a structured approach to all aspects, including tax matters, proper handling of expenses, etc., but by working these problems out together with one’s upline can make a huge difference!
It’s just too bad we cannot choose our upline!
When a casual use customer becomes a wholesale buyer, the immediate recruiter loses out tremendously. You’ve lost someone who’s a raving fan of your product and a ready referer for your services. Bye bye free advertising. IMHO, it’s much better to offer the option to join with an alternative of free product or service if they refer you to new customers or builder prospects. When a casual customer joins the company, they service themselves. This limits the possibilities for your relationship greatly. When they become your raving fan, OTOH, there are a host of possibilities. Don’t sacrifice those for the sake of $20 per annum commissions.
Hey Glenn: You write:
“Counterpoint: I know of a trainer who claims he has asked several hundred people this question: If you could have $100 bill or $100 worth of mlm wonder pills right now, which would you choose? He says they all go for the money. How do you reconcile that with your survey results?”
Two things to consider. The folks who are saying here that the products alone are worth it have already experienced their product. They already love them. No one in the room you described had any idea what “mlm wonder pills” are. Even the name “mlm wonder pill” implies that they’re kind of scammy.
Second, if someone is chooses the $100 they can go buy the wonder pills, or not, their choice.
So without knowing what the wonder pills are, and who they’re for, I’d take the money too. I can always buy the wonder pills if I want.
Paul – You write:
“Unfortunately, there is too little formal training or a structured approach to all aspects, including tax matters, proper handling of expenses, etc., but by working these problems out together with one’s upline can make a huge difference!”
Too bad they don’t start getting folks ready for the difficulty of selling before they sign people up…
We don’t know what a sponsor is until after a couple of deals, huh?
THEN we learn to choose…
Thank you, Kim!
For casting some more light on NWM. It’s a complicated situation, but I believe your survey results–most people want to represent products they can be proud of.
Even if we’re a Wal-Mart clerk, most of us don’t want to sell c-_-_-p. Improving skill sets is huge for most of us trying to fit it into our lives. And we usually find products we like and take despite not making (much or) any money.
Keep up the good work, you provide a much needed perspective and influence! 🙂
Interesting comments about products versus money.
If so many people are in it for the product, why not ask your upline to send money downline to you and others. In other words, share the wealth.
I’ve never seen that happen in my many different MLM ventures. In fact, I found it difficult for many of them to buy coffee or donuts at hotel meetings. Yet they promise you the world if you would only follow their lead.
Who is kidding who here?
Ever wonder why MLM products sell so effectively on sites like eBay, even sometimes for MORE than one would pay if purchased from their OWN distributorship/store? I have often wondered about this.
For ALL small business – 1/3 loose money, 1/3 just break even, and 1/3 make *some* degree of profit. I don’t see the statistics for NM that much different.
I love my product and company, but I wish it’s sales leaders would be more up front with people about how much it costs and how long it might take someone to break even on their cash flow. The cost and risk exposure are so minimal compared to other small businesses, but they are real.
My company publishes an income disclosure statement and it has an explicit policy that the statement must be used anytime income opportunity is discussed, but our sales leaders could (in my opinion) do more to help potential recruits understand what they are getting into.
I have to say that my dream and goals keep me stay in the business. external factors are only influence us 5%, the rest of 95% is how we RESPOND to that external factors.
You can find thousands of similar products and everyday you will see a new-born MLM company.
Very interesting survey results Kim! I would be curious though to see what the results would be if another web site offered the poll. You are well renowned for your product focused training and I suspect that many of your survey respondents are those who lean toward that philosophy as well.
I would also be interested in knowing what the response would be if you survey only people who are actually making a PROFIT every month from their business. Let’s say $500 or more a month profit (meaning after product orders, web site, meetings, etc).