The success rate of MLM’ers is less than 5%, so teruk ah?
Posted April 27, 2009on:
Some put the failure rate at even higher. Then they go on to say that we should never try MLM. What they don’t say is that there are also failures in traditional businesses. The US Bureau of Labour Statistics says that 56% of small businesses fail in the first 4 years.
In his article, 10 reasons why small business fail, Azlan Abu Bakar, a journalist who writes about the World of Malaysian SMEs makes a very important point.
The primary reasons why the failure rate of MLM independent distributors is so high can be attributed to :-
a) A Low entry barrier
Almost anyone can be a MLM distributor. Hardly any qualification or filtering criteria is applied. The investment costs are also low, sometimes even laughable. So the quit rate is high, since there is little financial which is at stake.
In traditional businesses, where the level of investment would be higher, there is far greater commitment to try to make the business profitable.
b) Lack of Knowledge
Many of the distributors go gung ho into the business with little or insufficient knowledge and appreciation of the key success factors of the business. They hope or plan to learn along the way. Lack of knowledge of Networking, prospect identification, marketing, product and compensation plans create the high initial rejection rates. Dejected, many drop off.
c) Unrealistic Expectations
Many enter the MLM business expecting “000s of RM from week one. A lot of this is due to the heavy overselling of the business opportunity by their sponsors. The business growth does not take place immediately. It takes time to grow and nurture. But very few have the patience and commitment to carry on plodding through the lean times.
In conclusion, failures are everywhere. The fact that there is only one World Cup champion does not stop the countries of the world to try to qualify for the finals. Tremendous efforts and resources are poured into the attempts to win the World Cup.
Picture of a failed dragon fruit plantation. This picture was taken when my wife and I were coming back to Seremban from KLIA.
The same with MLM. It is not just as simple as talking to your friends and expect them to line up to buy or to sign up. We have to get and use the required knowledge, skills, determination, hard work and commitment.
But the rewards can be all worth it!
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It’s SCORE A, an online educational portal that now allows our children to score in their exams!!! And for us to score RM!!!
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Thank you for reading this post.