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What is wrong with Multi-Level Marketing?

Guest post by: Justin Yong

Article Overview: Exactly what is wrong with Multi-level Marketing that is making 95% or more reps eventually fail. Let’s take a more in-depth look at some factors that cause this to occur.

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What is wrong with Multi-Level Marketing?

Multi-Level Marketing (MLM) is currently the fastest growing networking business know to us, yet it is also one of the most misunderstood business scheme around. One of the most common questions posed is what is wrong with Multi-Level Marketing? Why do statistics show that more than 95% of MLM reps eventually fail? Let's take a look at some factors.

Pyramid structure

First up, we have the renowned pyramid structure. Most MLMs are designed to recruit many levels of people. Each level will eventually recruit even more levels and such process is repeated infinitely.

Members mainly earn from commission when they invite more people into the loop. Members eventually then develop the tendency to focus on recruiting instead on selling products and services. With this infinite cycle, MLM then ignores that fact we have limited resources. By simply adding levels of new members and not creating any kind of actual value, available resources are eventually soon to dry out. This is one of the major aspects of what is wrong with Multi-Level Marketing...

To offer a scenario, let's say we have a regular business. In any business, we need to consider the supply and the demand. If the demand increases then normally the supply would increase. Try to ponder this scenario, if most of the people in your town are suppliers then who else will be left as consumers to create the demand? There's no equilibrium. Eventually, once the demand gets too low and the supply becomes too high, the business will eventually flop.

Market Competition Saturation

One of the major problems in an MLM business is the fact that most of the products that MLMs carry are very similar. Good examples are health drinks, supplements, pills, and generally some consumable product (so that repeat orders can be made).

Therefore, such a situation eventually increases the competition in the industry. If every other company focuses on selling a supplement that is going to improve your health, they are all technically competing in the same niche and with more and more companies sprouting in this niche, the industry then start to face market saturation. Once that occurs, again demand is affected and no more sales can be made.

The above two areas are just a glimpse of a host of facts that specifically answer the question, What is wrong with Multi-Level Marketing?

To learn more about this topic or get some great tips on areas like social media marketing (Web2.0), search engine optimization (SEO), payperclick (PPC), network marketing and internet marketing, check out my blog for more info!

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About the Author: Justin Yong
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Justin yong is a a full-time online entrepreneur who is loving his life and enjoys connecting with like minded individuals. I really enjoy travelling, exercising - sports and feeling free of fnancial worries!

I strive on assisting other entrepreneurs and would-be-entrepreneurs in areas like social media marketing, home based businesses, network marketing and internet marketing. Teaching others exactly how to employ powerful internet marketing strategies to succeed online. It's rewarding seeing others that i help succeed and there's else better!! Check out my blog or Link up with me from the links below!

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Justin Yong
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