Network Marketing By the Numbers

We are exploring the world of network marketing in a series of posts. To get a clearer picture of what network marketing is, take a look at our first post.

In order to get a clearer picture of how network marketing could benefit you, and if it’s even the right fit, here are a few key facts and figures to consider.

Being Successful in Network Marketing

First, some real talk about success rates. Jon M. Taylor, Ph.D. conducted comprehensive research and analysis of the compensation plans of over 400 various MLM companies and presented his findings in his e-book, The Case (For And) Against Multi-Level Marketing.

Here is what the statistics say about staying power within network marketing organizations:

  • In the first year of operation, a minimum of 50% of representatives drop-out.
  • After five years of operation, a minimum of 90% of representatives has left the company.
  • By year 10, only those at or near the top have not dropped out – making it safe to say at least 95% of representatives have dropped out.

These numbers are sobering, to be sure. But for some perspective on the entrepreneurial life in general, 95% of all small businesses fail in the first 5 years. So in trying and failing, you are in good company. Any sort of failure can be a learning experience. Understanding the odds is some real talk, but knowing what you’re up against can put you in the right mindset from the start. You can try it out and if it’s something you are passionate about, be one of those who break through those statistics to the other side.

The Money

There are huge upsides to network marketing. Here are some statistics about what you stand to gain financially from network marketing

  • According to Robert Kiyosaki, network marketing has made more millionaires than any other industry
  • Network marketing has also made more women millionaires than any other industry.
  • Network marketing is one of the few places where there is little to no gender pay disparity.

The People

Who gets into network marketing? Here are some demographic data about the people that make up the network marketing workforce.

  • In 2018 there were over 1 million full-time MLM sellers, and another 5.2 million part-time direct sellers.
  • The population of network marketing sellers by gender is 75% women and 25% men.
  • If you are thinking about getting into network marketing, you are in good company. Warren Buffett owns 3 network marketing companies: Pampered Chef, The Kirby Company (vacuums and accessories), and World Book.

Motives of Network Marketers

Let’s dig a little bit deeper. So, the earning potential is there, but so are the challenges. What are the main motives that bring people to network marketing, and more importantly, what makes people stick with it?

  • Some people just love the product and want to serve as advocates. A discount on products does not hurt.
  • There is a low barrier to entry. The average network marketing company costs well under $1,000 to get started.
  • The flexibility in lifestyle that network marketing affords is one other reason people are motivated to get involved. Students, stay-at-home parents, freelancers, and many others love the flexibility to add as much or as little direct sales into their life as they want to.
  • Others are motivated by the entrepreneurial spirit. Along with the flexibility of lifestyle comes the flexibility to add network marketing to your portfolio of ventures. What you get out of it depends on the tenacity and hustle you put into it.

Click here to review source for motive data

Like anything else, network marketing will be what you make of it. Our hope is that this kind of data can help you determine if network marketing is right for you. Lots of people dip their toe in the water and decide to pursue other ventures. But if you do stick with it, network marketing can provide big rewards, financial and otherwise.