Monthly Archives: November 2010

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This article is intended for those of you that are already involved in network marketing, or perhaps you have been in the past. You’ve spent countless hours doing all of the things your upline has instructed you to do, setting goals, attending presentations, making a list of people you know, 3-way phone calls, books, DVD’s, webinars, you name it. But still you are having trouble building your business. You have debated on quitting but you truly do believe in the concept of MLM. Well, I’m about to tell you the number one reason why people quit MLM. It will probably surprise you because the reason network marketing people quit is the same reason that some will say is critical for long term success. Are you ready to hear it? Well, before I tell you, first let me say that there may be a few of you that will argue with my assessment. That’s ok, just promise to read this entire article so that you will hear my full argument.

Ok, so now are you ready to hear the #1 reason why people quit MLM?

Here it is… Autoship! Yep, you heard me right, it’s Autoship. I can already hear so many of you experienced network marketers telling me that I’m crazy and that without Autoship, no one would ever make consistent income and without Autoship, company volume would go down and companies would go broke, and all the other arguments against my claim. But wait, allow me to explain.

Most companies require consultants to purchase or sell a minimum of $100 worth of product or service each month in order to remain “active”. This is the company’s way of making sure they have guaranteed sales each and every month. Seasoned MLM’ers will say that a company must have consumable products so that people will use them and then reorder every month automatically (the fundamental basis of autoship). So I won’t battle the traditional wisdom here… At least not too much… But here’s the huge problem.

Very few people will actually sell the $100 worth of products they have to buy every month. Not only will they not sell them, they will not even use them anywhere near fast enough before guess what? The next shipment arrives. Now whether we are talking about vitamins, juice, cosmetics, skin care, or cleaning supplies, the bottom line here is that 90% of the distributor force will not use them as fast as they accumulate them. So guess what happens next? One day, Mr. or Mrs. Distributor goes to the cupboard, opens it up, and sees 3-4 month’s worth of product. Product that they will most likely never use, product that will probably expire and be worthless within a few month to a year, and product that cost them hundreds of dollars. Now, if they are one of the lucky ones that is making $1000 or more each month, this may not bother them. But if they are barely making enough to cover the cost of the autoship order (or perhaps not even that much), then conventional logic kicks in and they decide that they really don’t want to receive any more shipments and they cancel the autoship order. This, my friends, is the beginning of the end. Now, it is just a short matter of time before the distributor quits completely and the entire system breaks down. This, my friend, is the biggest reason why network marketing people fail- forced autoship leading to resignations and attrition.

But perhaps your company has a service as its product. It could be internet service, wireless service, phone service, satellite service, a web based shopping service, or many of the other types of services out there. The problem here is that usually no one uses the service other than people who are trying to build a business. So if the distributor has a difficult time recruiting people (as is usually the case), they soon realize that they are paying for a service which is really supposed to make them money, but instead it is costing them money. A few months of this and they cancel the service.

The inherent problem here is that people are forced to buy a product or a service that usually costs more than a similar item out there in the marketplace. They do it, however, with the hopes of being able to make money. When the money doesn’t come, they start looking at the monthly charge on the credit card bill and decide that they are paying for something that provides little, if any, benefit so they quit.

How do you avoid this?

You really need to step back and take a close look at your company and the direction you are heading. Ask yourself one simple question… Does anyone ever get on autoship with my company if they are NOT building a business? If that answer is “no”, then sooner or later you will fail if you ever stop recruiting. If you want low attrition rates and stability, then you must find a company with a product that people other than distributors will buy every month, a product that people get excited about, and a product that people will keep ordering every month even if it piles up on their shelves or if they can not sell it. Sound impossible? Well, it’s tough, but it’s not impossible. You just need to do your research and due diligence if you want to avoid that #1 reason why people quit MLM.