Why Majority Of Network Marketing Are Not Going To Work
Why Majority of Network Marketing Are Not
Going to Work in The Long Run?
Do you know what network marketing is? It is used to be called Multi Level
Marketing (MLM) and sometimes called Direct Marketing, Pyramid Scheme
and now Network Marketing. Now does that sound familiar to you?
Well to make you understand further, current Network Marketing business
make you try to avoid friends whom have turned into a Network Marketer.
This friend that you know for many years (but haven’t called you for eons!)
suddenly called up, being nice and insist on meeting up. Do suspect something
and be careful! Nonetheless they are harmless (in fact you are encouraged) to
listen to them first. Everyone needs an audience..
Network Marketing also is famous to making people believe “if you are
assertive enough and truly devoted into the system and methods you will
become successful and you will lead a happier life”. And it seems every one of
us can a Network Marketer regardless who you are.
Some of you that currently a high flyer in a Network Marketing business I
congratulate you for being successful. Well you must have worked really hard
and sacrificed (money, time and friendship) a lot before getting there. On the
other hand I don’t think many of successful Network Marketer will read this
because the title alone is extremely discouraging.
For anyone that thinking to venture in Network Marketing to look for passive
income, free money, extra salary or whatsoever; it is wise to think again. That
is why you spend RM 10 to buy this article for a simple reason; to know what
the risks are if you join a Network Marketing business and rest assured your
one time RM 10 for this article would have saved you few hundred bucks!
We will share with you some real life examples – to ensure the message is
delivered. At the same time we will also suggest to you what do you have to do
and how to react when you receive a Network Marketer call or meeting
Now ‘Why Majority of Network Marketing Are Not Going to Work in The Long
1. One Way Street
How many of you have experienced Network Marketing business where they
ask your expertise and want you to contribute back into the business?
For example assuming you are an IT expert and you joined ABC Network
Marketing business selling healthcare products. Few months after that ABC
Network needs to upgrade their IT system and therefore is looking for an IT
What is the chance they will approach you and agree to pay you ‘X’ amount to
provide the service? Unlikely to happen because they don’t even know who
you are and what your background is. They are only interested in your money
and not your worth.
2. Not Genuine
It is perfectly alright to be positive but we should be gentleman in doing
business. One of my friends received a call for his ex-school mate (not even a
class or dorm mate!) few months ago. They remembered each other and finally
met up. This friend of mine is confused but since the other insisted on a
meeting, so they met. The other friend is now a Network Marketer, let’s called
Steven starts to rekindle some school memories and friend of mine (called
Joshua) doesn’t understand why. Simply because they were just school mate
and they were 250 school mates in that batch! Finally Steven the Network
Marketer said he had left his permanent job of 6 years to join this Network
Marketing business and would like Joshua to join him as part time Network
Marketer. Joshua refused and an argument started where Steven called Joshua
not so smart, not opportunistic, and lame, beggars can’t be choosers and all
the negative phrases.
For those who ‘kena’ (experienced it) before would know what I meant. Joshua
was frustrated because Steven switched from an ex-school mate to ex-friend.
Joshua hasn’t heard anything from Steven ever since.
3. High Demanding Job
While being selective is good, most people who have experienced a Network
Marketing business will usually advised to start their prospecting with the
people they know first. To get the blitz and momentum going, most fresh
Network Marketer will do that. The first break is always crucial and very
important. It sets the tone of the day or the week or month.
Unfortunately the world of Network Marketing is not so forgiving. As many as
90% of people they approached within their circle rejected them. Who are
these people? Best friends, girl friends, boy friends, neighbours, uncles and
aunties, nephews, parents, siblings and teachers included. However some of
these events fuelled the Network Marketer spirit further. They decided to go
public. Everywhere they go they pitch about Network Marketing business and
if someone tells you its easy and can do part time, they are not being truthful.
Do you want to live that kind of life?
4. Petty and Calculative
If a Network Marketer thinks you are not worth their money to spend on even
after they persistently called, consistently insisted on meetings, endlessly give
you the follow up call and when the moment of truth comes (where you tell
them you are not interested), they will give it straight to your face; you will get
“don’t waste my time” gesture from them.
Assuming Jeffrey the Network Marketer is pursuing Stacy the Prospect
suggested a meeting to discuss business opportunities. They met up and
Jeffrey told Stacy and persuaded her to join. Usually Stacy rejected and said,
“Network marketing is not my cup of tea”. Jeffrey the Network Marketer
replied, “Sometimes, you got to drink it Stacy,”. Jeffrey the Network Marketer
continued to persuade and push her but Stacy was adamant.
Please be mindful, this event is quoted from a true story. During that pitch
Jeffrey the Network Marketer claimed to earn 5-figure income and showed
some bank transfer slips, but the moment Stacy the Prospect not interested
Jeffrey walk off. Just like that! Stacy ended up had to foot the bill for Jeffrey’s
lunch and a glass of orange juice. How would you react if you are in Stacy’s
5. You Are Not the King
How many of you have been treated like ‘Customer is King’ upon joining a
Network Marketing business? Or majority of you think you are being treated
more like ‘moron and secondary class’ staff? To be honest most Network
Marketing business is like that. They are only interested in your sales and the
moment you stop contributing, you will be forgotten!
In most cases we only got to know about a particular Network Marketing
business not during the launching stage. Even you know about it early you are
doubtful to join because of security reason; things might go awry who knows.
Suddenly that Network Marketing business jumped you scramble to join. So
now you are ‘pulled’ to join the Network Marketing business. Because of this
you will only listen to them and they became ‘the King’.
The biggest pain is you will always look up them for direction and advises.
There is no structured way for you to move up the rank. It is highly dependable
if you have the biggest sales or the closest to ‘the King’. If you think you are a
highly motivated person and MLM is your best fit, think again. You are likely to
be the victim of this ‘the Follower and the King’ relationship.
To make things worse in a research done previously, only less than 0.5% of
MLM Network Marketer makes it to the very top. Very top means that drive
luxury cars, travels around the world and make the most money (not
necessarily with the smartest brain!). This includes some of very big MLM
Network Marketing business. How many Network Marketing businesses are as
successful as Amway? (please refer to http://www.best-mlm-
6. Not Effective Business Model
It is true that MLM has a unique business model i.e. personal retailing that
builds relationship. The problem is this model only works for a limited time and
to limited people and it is a double edged sword. If you are lucky you will get
more clients else you will make a lot of enemies and have very little friends.
Because it is personal retailing you can only meet up limited number of people
to sell you products and the money you earn still smaller than closing a
distributor. Eureka One! The main goal of MLM is not to sell the product but to
have as many distributors as you can. Eureka Two! Since the product is not so
important you can come up with any product with nice product packaging and
inferior quality (sometimes hazardous!) and launch it with bang and make
A point to consider, how long can you survive selling that kind of products? I’ve
yet to meet a distributor who has lived the last 30 years as Network Marketer
from a single company. Practically majority Network Marketer jumps from one
company to another with the same skill set and has only one goal; to make the
most money in the shortest time possible and the easiest way. And their target
7. Shallow Thoughts
Do we eat to live or live to eat? Most of us will say ‘eat to live’ but it does not
reflected in our life activities. We spend much of our time thinking how to
make more money so we can buy more things and eat more food. We missed
out a lot of elements in life.
When you join MLM Network Marketing business you are told to sacrifice your
life for a while. Your scarification involves family relationship, friends,
colleagues and children. Practically you are on your own and your MLM
friends. What kind of life is that?
Assuming you took up the challenge, armoured with positive thoughts and
some savings to make it to the top of MLM business. You sacrifice just like they
told you, quit your current job or university and start the journey. What will be
your utmost motivation? What is your purpose of life?
Most MLM only has one sacred goal; to make the most money in the shortest
time with the easiest way.
Your MLM ‘uplines’ will tell you the amount of money you potentially earn, the
house or car you will likely buy, the place you can travel, what you would look
like when you are the top and how your social acquaintance will talk about you
and etc.. Perhaps you want to re-read the previous sentence again. Did you
notice all of them are consistently pitched in most MLM business and there are
materially driven? Do you have the desire to gain more knowledge? Do you
have the desire to be loved and have a happy family? Why parents still their
children to school? Do you want to have a group of friends that have no
economic intention and will just enjoy each other presence no matter what?
Come on get a life!
8. Limited Market
If you are already a Network Marketer in a Network Marketing business, the
people in your group are not your target customers because they are already
the distributors. Therefore your likely target group is the non-distributors.
How many of you have at least 1,000 contact numbers stored in your mobile
phone? The answer is not many. Most of us stored around 500 numbers. Most
of these numbers are family members and close friends which can become the
‘natural prospects’ in MLM business. Now let’s assume you contacted a third
of these natural prospects; say around 150 people. If you successful convert
5% (8 people) of them you are considered lucky! But still you will not becoming
millionaire doing business with just 8 people.
Therefore your biggest market actually is the public and non-distributors. Well,
the fact that you purchase this article is because you are still doubtful about
network marketing. Do you think it is easy for you to do business? Well even a
Network Marketer will never say it’s going to be easy.
Let say after you had that MLM rah-rah training, you are ready to roll! Now
let’s do the math. If your conversion rate from the people you know stored in
your mobile phone is 5%, is 2% a fair conversion rate for the public and non-
distributors (your target customers)? Ok, now let say you make RM 100 per
converted customer. Your goal is to earn RM 5, 000 a month.
How many people do you have to meet and convert? The math is; you need to
meet 2, 500 people and convert minimum 50 people to earn RM 5, 000 a
month. Let say you are super hard working and you work 30 days a month.
Therefore you need to meet at least 90 people a day to meet your goals. To
achieve that you need to meet at least 2 people every 30 minutes non-stop
The joke is even if you meet your goal, RM 5, 000 a month you will only be
making RM 60, 000 a year and it will take you 17 years to make your first
9. Not An Entrepreneur
One observation made by our colleagues, super majority of MLM Network
Marketer associated themselves as entrepreneurs. Many organisations that
use the word ‘entrepreneur’ and ‘innovation’ are likely to be flooded with
Network Marketers. This so called phenomenon also can be traced in websites,
social networking sites and online communities.
In one simple test, we created an online page in a popular social networking
site that carries the word ‘entrepreneur’, the site alerted many Network
Marketers and now 85% of them are members of the page! Like it or not, now
that page is bombarded with multiple MLM products and advertisements
because every one of them claimed to be better than the other. It’s a so much
cluttered site that it was once.
The question is how to penetrate those clutters and sell your product? And if in
every channel you go you face this bombardment and clutters and all your
potential customers shy away from these channels, how can you do business?
A correct definition of entrepreneur is someone that comes up with original
ideas and undertakes the risk to market it to the target group. Entrepreneur
usually not material or money motivated. They are usually very good and
highly skilled people. They are so good that not many people can imitate their
skill and therefore they are special.
Why many Network Marketers called themselves entrepreneur? Unfortunately
they are not entrepreneur; they are joiners of a complex hierarchical
organisation, have no control over the system, blind followers of rigid business
strategy which divide and control its members and only favoured ‘the King’
who is the owner of the system. An MLM Network Marketer never owns the
business is not an entrepreneur; they are just a Network Marketer.
Perhaps you want to ask your MLM Network Marketer friend whether he can
give suggestion to change the commission scheme even when he founds it
unfair. Most likely he won’t be welcomed!
10. A Lot Less
I know someone that feel a lot worse about himself after joining a Network
Marketing/MLM business. How that happened? Wouldn’t they should feel a
lot better after all those investment made, highly-charged motivational talk by
their upliners and seen the super cars driven by their colleagues when they
achieved highest amount of sales (or rather conversion of distributors!)?
Like aforementioned that to be in this kind of business, the success rate is only
0.5% for you to get to the very top. This is assuming there is no dreadful
competition in the market, high discipline and never get sick for at least few
years. Someone might come up and say “Yes, MLM business will train us to
become a more disciplined and organized human being.” Well I don’t deny that
but can you take those values into your employment? Do you think your
colleague will say because you joined MLM they respected you because you
are discipline and organize?
Coming back to this someone I know.
He joined few Network Marketing/MLM businesses 5 years ago and until last
month he still unable to buy me a drink whenever we met. He also contacted
my family members and tried to convince them but only one of them was
convinced out of sympathy. So this man rejoiced and thinks his business grows.
Unfortunately that’s not what happened because he forgets family members
and close friends are natural prospects and you either convince them to join
your business or they will forever say bye-bye to you because you are too
pushy. He told few of us he will come back and prove us wrong when he
becomes a millionaire, of course we wish him well without regret. This man is
my uncle, we called him Robert.
Robert spent lots money and time selling and converting distributors. He
managed to secure few businesses but mostly out of sympathy or from
someone who doesn’t have any idea what they are getting into. Surprisingly in
Malaysia they are many of those people especially in both urban and non-
urban areas. The need and greed for money blind us all. Even for high profile
people in the country also involved and conned by this business. The amounts
sometimes are in millions.
One day Robert felt lost because he hasn’t achieved his target and thus not
qualified to earn anything. This is more pressing when the distributors he
recruited only a one time distributor or passive ‘shop lot’. He met them
patiently and sometimes he threw his tantrum. Some of his distributors think
Robert set unrealistic targets.
But what some people don’t realize that actually Robert borrowed money from
the bank to boost his own sales. Now he has to repay the loan and without
income it is not possible for him to do that. Robert still needs money to pay his
utilities, car and house. He felt very bad economically and emotionally and this
has been going on for the last few months. He took a part time job as a tutor in
a private university because he has a Master Degree.
Robert can’t speak English well and 40 year old of age. He has no intention to
learn English and comfortable with his Chinese mother tongue and some
Bahasa Malaysia. Because of that he finds it difficult to work in private
companies. To make it worse because he has been in Network Marketing/MLM
business for 5 years, he doesn’t have any track record and appointment letters
to prove he has gain experience and knowledge. He is as good as ‘lost from the
job main stream’ for the last 5 years. Truthfully 5 years are a long time to
disappear and a lot of things have changed in technology and work structure.
Now Robert is a full time executive in an insurance company. His passion for
selling and experience direct selling helped him a lot to convert clients. In some
months when he doesn’t achieve his sales he still has some basic salary. When
he is down, he always have his manager around to help and colleagues to
listen to him.
Robert feels he has a lot more now than before.
Many people has somehow experienced the above or maybe heard from
someone else, but majority still fall in the trap of ‘groupthink’. Groupthink
refers to faulty decision-making in a group. Groups experiencing groupthink do
not consider all alternatives and they desire harmony at the expense of quality
decisions. Groupthink occurs when groups are highly cohesive and when they
are under considerable pressure to make a quality decision. That’s the reason
why Network Marketing/MLM business requires fast decision and invites you
to join the talk. If you think you are safer in talk where there are lot of people,
think again. In fact in the talk, it’s even riskier because you are exposed to
greater pressure and groupthink. In short you are making decision because
others make that decision.
It is alarming because this type of business didn’t generate real economic
growth. It takes away jobs from the market and didn’t generate jobs either. It
makes our students resigned from study to chase more money. It makes our
friends run away from us because we ‘love to share’. It ruins motivation in the
long run because we may not be using our main strengths to work. It hides our
true potential to be great human because we are busy make money. It makes
the society poorer because it takes away sincerity in helping others.
Most of all it contributes to nation-collapsing because we will have less
doctors, engineers, lawyers, teachers, lecturers, technicians and many more
jobs in the future because many joined this laissez-faire business that only
thinks for itself and not others.
In short the above are the reasons why majority of network marketing are not
going to work in the long run.
Mike Entreprenovator is a pseudonym. He uses this name to be able to take neutral stand on issues and
minimize biasness. Nonetheless what he writes come from conspicuous events he observed, critical mind he
possessed and strong intuitions he acquired from his interventions with the society. Please write to
email@example.com for brickbats!