What a way to start my blog again, but what the heck, it’s true. Network marketing is in big trouble.
I have spent the last twenty years making a wonderful living in network marketing. I love the idea of the small guys and gals determining their future and earning a commission based on personal effort and determination. I love the industry’s dedication to self-improvement and personal empowerment. We have done so many things right.
So then, why would I take such a hurtful approach to the industry that has brought me so much independence, fulfillment, and life-long friends? Because the facts don’t lie.
For years we have been saying that MLM does its best during times of financial crisis. Well, it’s not doing so well and has not for quite a while. In the third quarter of 2021, most world areas did poorly, including the brightest shining star of network marketing for the past decade, China.
- China is down 30%
- South & Central America are down 13%
- North America is down 11%
The only significant areas to see even modest growth were Mexico and the Asia Pacific.
Before you hate on me too much and say, “Jeff, that’s only one business quarter in the middle of a pandemic. Take it easy brother.”
Well, check out the following graph from Statista.com of the total retail sales since 2012. If you account for inflation, the total sales are virtually the same, even with China killing it for the past ten years. With $1 in 2012 equaling $1.20 today, 2012 sales were even higher than 2020.
Facts are facts; the industry is dying.
“So why all the doom and gloom Jeff, why don’t you perk up little camper?” the foolish, overly optimistic MLMer asks.
I want to think that I’m super optimistic but not blind. Every industry and its leaders must constantly reinvent themselves and improve or find themselves perfectly obsolete. MLM is in that hazardous zone and has been for years. It is becoming obsolete and must learn or vanish.
Here are some ways MLM could move into the new reality of retail sales:
- Stop marketing products up so egregiously.
- MLM company owners must stop marking up products 10X to 12X to justify outlandish commissions to too few “customers.”
- Top field leaders must focus on real customers, not just building a downline of distributors.
- Top distributors must stop expecting massive commissions with so few actual customers purchasing the product. And I am not talking about self-consuming distributors as customers.
- Offer real free shipping options.
- Shipping and handling is an actual profit center for most MLM companies. Distributors can’t get customers without an alternative to Big Tech’s free shipping.
- Some MLM companies have free shipping on orders higher than $100. It’s a start, but Big Tech will continue its dominance with such small gestures.
- Put the customer’s needs above the distributor’s needs.
- Real value compared to Big Tech is the place to start here. MLM companies must ask, “Would a customer pay for this if she had no interest in the opportunity?”
- The modern shopper is too intelligent to buy into some mythical story cooked up to inflate the product’s price.
It’s time that we figure out a happy medium between killing the vendor (Amazon), pleasing the customer (Big Tech), and compensating the salesperson (MLM).
The addiction Big Tech has caused to its frictionless shopping experience is impressive. Shoot, Amazon alone doubled the sales of the entire MLM industry last year and will be even more this year. Even worse news, while MLM is down, this small-business assassin’s sales are through the roof and shows no signs of letting up.
Enough praises about big-bad-tech because it is causing painful deaths to small businesses and mom-and-pop shops everywhere. Sure, there are some small businesses that Big Tech has helped, and they want you to know about those chosen few who will bow to their constantly changing rule book.
Small businesses must be aware that Amazon sells your product but harvests your data, often creates a similar product, and then competes head-to-head against you. Even worse, there is no way to take them head-on alone; they will destroy anyone foolish enough to try.
It’s time somebody took the best of MLM and Big Tech and looked for the shopper that is smart enough to see the negative consequences of only shopping with Big Tech.
Network marketing is dying, but a phoenix can rise from the ashes of this burning industry to take on Big Tech. Somebody has to do it. Big Tech is cutting a large and dangerous swath of politically-correct destruction buoyed by tax advantages and monopolistic aggression.
I believe in the new gig economy powered by visionary and passionate entrepreneurs. And, I am crazy enough to think that somebody can make a dent in Big Tech’s tsunami of extermination using referral marketing.
That somebody is a modern army of savvy entrepreneurs with the courage to take on the oppression of Big Tech Goliaths by providing real value to real customers.