There are MANY myths and misconceptions about network or multi-level marketing.
Myth: mlm is taught at Harvard Business School.Fact: Harvard has actually sent out formal letters asking network marketing companies to stop perpetuating this myth -- network or multilevel marketing is NOT taught at Harvard. However, it IS taught at the University of Illinois, by Dr. Charles King, who has a doctorate in Business from Harvard Business School. Click here to see a flash presentation of Dr. King explaining why he believes so strongly in mlm.
Myth: Donald Trump went on The Tonight Show (or David Letterman) and said that he would use network marketing to rebuild his empire if he lost all his wealth.Fact: Donald Trump never said this in an interview on late night TV or anywhere else. However, Robert Kiyosaki, best-selling author of Rich Dad, Poor Dad and nine other books, said this about networking: "If I had to do it over again, rather than build an old style type of business, I would have built a network marketing business." One of Kiyosaki's books, "The Business School for People Who Like Helping People," is about the power of mlm and the significant opportunity that it provides the average person."
Myth: More millionaires have been created from network or multilevel marketing than any other industry or career path in America. 20% of the millionaires in this country have come from mlm.Fact: This one is rediculous. Anyone ever heard of real estate and the stock market? Network Marketing has produced lots of financially independent people -- probably hundreds of thousands -- but not more than the other two industries, and certainly not 20% of this country's millionaires. However, here's an interesting -- albeit somewhat dated -- fact: a study done in the late 90's and reported by Upline Magazine, a now defunct industry trade journal, found that 50% of fulltime network marketers made $50,000 per year from their business. Even better, 10% made $100,000 per year!
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Myth: Network Marketing or mlm is easy -- anyone can do it.Fact: While in theory anyone can do it, in practice this is far from the truth! A very successful corporate executive once described multi-level marketing as "the hardest thing I have ever done." We think that describes it very well. Like any business, network marketing is very difficult. Not only that, but there is no guarantee of success. The majority of people who start networking businesses fail, just like the majority of all business owners. However, there IS much lower risk in mlm, as the average investment is typically a couple hundred dollars, rather than tens of thousands. What's more, there IS a greater chance of success. According to the Small Business Administration, better than 90% of new businesses fail in the first few years. However, our company is more than sevenyears old, and more than 30% of the business owners who started with us during the first year are still active. That's more than 3x the average success rate of new businesses!
Myth: Everyone will be involved in network or multi-level marketing at some point in the future.Fact: This is another rediculous, hype-driven statement. There is no one thing that everyone will do (but, as the old saying goes, die and pay taxes!). In America, 5% of households still rent their phone from the phone company! Only 58% of adults have cell phones! The idea that everyone, or even a majority of people, is going to get involved in business for themselves when so few do so now is just not realistic. However, those critical of mlm are just as ignorant in dismissing optimistic projections as their counterparts are in exaggerating them. The fact is that the multi-level marketing career is growing by leaps and bounds, both in terms of the number of partiicpants and the sales of the firms! Here are the facts, according to the Direct Selling Association (DSA):
- Between 2001 - 2005, the number of Americans who own mlm businesses increased 15.5%, from 12.2 million to 14.1 million. Nearly 2 million of these individuals spent more than 30 hours per week building their home-based network marketing business.
- Between 2001 - 2005, the sales volume of network marketing companies in the U.S. grew 14.1%, to $29.43 billion.
- In 2005, 42% of those involved in mlm were college graduates, and another 32% had some college or trade school education.
- In 2005, participants in mlm spent the largest amount of their time, nearly 44%, selling the product. Only 15% of time was spent recruiting other business owners.
These stats certainly fly in the face of the critics view of the industry! Most critics of mlm claim that all those involved in mlm are scammers; and that no real product is sold. But the numbers above prove that view wrong. The fact is that network marketing is a legitimate industry -- one that is growing fast because it offers real value. That's why the number of the number of mlm business owners doubled between 1996 & 2005.
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Myth: All network or multi-level marketing business opportunities are scams.Fact: As much as the critics would like this to be true, it's patently false. The numbers above clearly demonstrate that multilevel marketing is a legitimate industry. The Federal Trade Commission is a government agency charged with regulating business opportunities, including the network marketing industry. Here's a direct quote from the FTC website on this topic.
"Some people confuse pyramid and Ponzi schemes with legitimate multilevel marketing. Multilevel marketing programs are known as MLM's, and unlike pyramid or Ponzi schemes, MLM's have a real product to sell. More importantly, MLM's actually sell their product to members of the general public, without requiring these consumers to pay anything extra or to join the MLM system. MLM's may pay commissions to a long string of distributors, but these commission are paid for real retail sales, not for new recruits."
Critics are certainly free to claim, even in the face of the industry numbers detailed above, that mlm doesn't work. They are entitled to their opinion, no matter how erroneous! However, they cannot claim that all multilevel marketing programs are illegal or pyramid schemes, because, as you can see above, the government agency charged with regulating the industry says that's not true! There are many legitimate network marketing companies that provide real opportunity. Your job is to pick a good one and work very hard!
Myth: Most people join mlm to get rich and are disappointed when they don't.Fact: Most network marketers are part-time, and look to earn a few hundred dollars each month. In fact, while you learned earlier that nearly 2 million network marketers classify themselves as full-time, and study has shown that half of these make $50,000 per year or more, this is still only about 10% of multilevel marketers in America. The average network marketing representative considers his or her business successful if it generates $300 or more per month. At this income level, study has shown that people stay in the industry long term. At less than this amount, they quit. While it doesn't seem like a great deal, it can be. We know of one part-time representative who used this type of income to retire his wife, upgrade his home twice, and become "a full-time dad," remaining employed part-time to secure health benefits. It's not just what you make, it's what you do with what you make that counts!
Most: Most multilevel marketing leaders are masters of deception, looking to "trick" unsuspecting Americans into making ill-advised investments.Fact: Most network marketing leaders are very hardworking, honest people who see mlm as a real way to help themselves and others. And, rather than being the perpetrators of deception, they are much more likely to be the victims of it. By whom? Consider what the average network marketing leader hears from potential business partners and new representatives daily: "Yes, I'm interested in hearing more!" (But they never make the time to look)
"I'll meet with you tomorrow" (But they don't show up)
Call me tomorrow @ 2 pm -- I'll give you my decision then." (But they don't answer their phone)
"I'm going to join!" (But they never do)
"I'm going to take this seriously." (But they don't)
"I'm going to be a top-producer." (But they never do anything)
"No one is interested in these products." (But they haven't spoken to anyone)
"I want my money back -- this business isn't what you said it was!"
In other words, the average leader deals with people who waste his or her time daily, who don't follow through, who lie, and then don't take responsibility for their actions! Being a network marketing leader is often a thankless job! While we agree that unethical and deceptive practices in mlm MUST be stopped, and perpetrators prosecuted to the fullest extent of the law, these people are relatively rare, and protections are in place. The typical network marketing leader loses a great deal more time and money being victimized by unscrupulous people than does the new representative or potential business partner!
Click Here to learn how to become one of our 500 millionaires!
or
Click Here for one last piece of documentation -- an incredible presentation from a Harvard-educated professor on the power of mlm.
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Most myths are extreme. Some believe that it is taught at Harvard Business School (wrong!), while, at the opposite end of the spectrum, others believe that ALL mlm opportunities are scams (rediculous!).
This page is designed to address some of the more common misconceptions. If you're wondering about our bias, as stated in other areas of the site, we are very successful network marketers who believe very strongly in the industry. However, we also believe that all of the hype and misleading information supplied by a vocal minority in our industry is very harmful. So, we want to set the record straight!
Click Here to learn how to become one of our 500 millionaires!
or
Click Here for one last piece of documentation -- an incredible presentation from a Harvard-educated professor on the power of mlm.
“I had a very successful career in government, and was considering a run for mayor of my city. However, I decided to walk away from that career – and the six-figure income it generated for me – after 5 months with this business. That was 3 years ago, and it is the BEST financial decision I’ve ever made. The income and time freedom this business gives me is unparalleled. Anyone who is serious about their goals, and willing to work hard, can achieve the same or greater success than I have!”
- WF, former government executive | |
