Ninety per cent of the more than 20 million Americans who join or have participated in multilevel marketing (MLM) companies believe they did so to make money. According to new research released by the AARP Foundation, nearly half (47%) lose money and a quarter (27%) make no money. The AARP Foundation paper, “Multilevel Marketing: Research, Risks, and Rewards,” investigates the mindset, expectations, and experiences of Americans who participate in MLMs, or network marketing schemes. Two-thirds of participants stated they would not join the same or another MLM organisation again, indicating that interested persons should educate themselves as much as possible before signing up. Today, the AARP Foundation launches an educational effort to assist consumers to understand more about the benefits and drawbacks of MLM opportunities.
“The multilevel marketing sector is worth $36 billion. People are drawn to the prospect of making money, but our study reveals that they rarely do. In fact, many people lose money,” said Amy Nofziger, the AARP Foundation’s director of fraud initiatives. “Many of our clients have joined these organisations, frequently at their own expense. We want people to be more informed about MLMs before investing significant time and resources.”
Consider Following Tips Before Approaching a Network Markting Business Opportunity:
Set your expectations and be aware of the costs. Recognize that MLMs necessitate patience, persistence, and a financial and time investment. Make sure you understand what you anticipate getting from joining an MLM, as well as what the MLM expects of you.
Sixty-three per cent of MLM participants join to make money by selling the product or service to others.
One-quarter (25%) made a profit. More than half (53 per cent) of those who earned money earned less than $5,000.
You should think about the following: When you anticipate profit from a network marketing business opportunity,
Do your research.
Make sure you do your homework on the Network Marketing opportunity for your business before committing to it See whether there are any complaints against the MLM company on the Better Business Bureau and Federal Trade Commission websites. As well as talking to your contact, you should also speak to current reps and recent participants If you’re curious about what others have to say about the company, do a Google search for the company’s name. This will help provide a more realistic picture of what participating in that particular MLM is really like.
Two-thirds of participants said knowing what they know now, they would not join the same MLM Company again and 62 per cent said they would not join another one.
Of the 10 respondents, 41% said that the company misled them about their possibilities of financial success in the survey.
Get comfortable with selling.
The second network marketing business option is selling. Reaching out to your network is an important aspect of MLM. Make a self-inventory and ensure that you are comfortable having sales and business talks with close friends and family. Most MLM organisations advise direct salespeople to first target their friends and relatives as possible clients and recruits. Friends recruited 34% of MLM participants, while family members recruited 14%.
In addition, 39% dropped out because it felt difficult to pitch to friends and relatives. Consumers can see an executive summary of the research and learn more about network marketing awareness article by visiting the AARP Foundation’s website at www.aarp.org/MLMaware. Individuals and groups can also access resources from an educational toolbox meant to help them make educated decisions concerning MLMs.
“Just like an entrepreneur beginning a new business, one must commit substantial money, time, and energy to grow a direct sales firm,” Nofziger noted. “However, even with hard effort and dedication, money or success are not assured. We advise people to do their homework beforehand to ensure that this is the perfect opportunity for them and their families.”
Conduct qualitative and quantitative research to better understand the demographics, psychographics, and behaviours of adult Americans who have participated in at least one multilevel marketing organisation throughout the course of their lives. The research employed both qualitative and quantitative methodologies. Four focus groups were held, with men and women who worked as MLM direct sellers either currently or within the last seven years taking part. The analysis of focus group transcripts aided in the creation of an online poll that was distributed to over 1,000 people. The study had 1,016 participants, including 601 Americans who were direct sellers for an MLM organisation in the past and 415 who had never participated in an MLM previously.
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