Chad Hatten Chad Hatten Kansas City

A survey conducted by MLM-TheTruth.com in Utah County, United States, where MLM is most concentrated, showed that only 1.1% of households actually made purchases from an MLM company and 4.6% actually joined. What does these figures mean? It means that in a city of 1 million people, only 46,000 will join an MLM network. Even assuming that your company is the only MLM operating in the city, this means that your city will be saturated by Level 6, possibly within 6 months. And if you have to split the total MLM distributor market among 3–4 companies, saturation would be reached even faster.

To top it all up, MLM products are almost invariably overpriced. Because of product differentiation (differences in product features, real or imagined), it is not possible to compare apple to apple (i.e. the prices of its products with other products), unless you are an expert in that particular field. Since MLM companies require every of its distributors to maintain a certain minimum sales volume every month, it has a ready captive market. As such, prices are set well above market value, such that after rebate, it is still usually more expensive than what you can get for similar products in the supermarkets. It is a lose-lose proposition for distributors all the way.

So is network marketing a scam? To me, it doesn’t matter whether it is legit or it is not. Point is you won’t make much money, if any, out of it.

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