Network Marketing Disadvantages

There are Network Marketing Disadvantages. Now that we’ve discussed the advantages of low startup cost, let’s address the question of why so many people fail in Network Marketing. Not surprisingly they fail for the same reasons that their brick and mortar counterparts fail in business.

The three biggest reasons are lack of planning, understanding of the opportunity and their market potential.

LACK OF PLANNING: We already know that the NM plan calls for the distributor to sell to close-in relationships – people they know and meet. Typically the average person comes in contact with about 160 people on a regular basis. Out of that number about 40-60 are people they could call friends, 10-15 are good friends. From there you would end up with maybe 2 or 3 that would actually bail you out of jail at 3AM on Wednesday morning (not really something that you should try).

Now the plan calls for you to sell to these people. But the question is what do you do when you have exhausted these leads? The average distributor heads off to their church, civic groups and even restaurants to convince others they need what is being sold. In short they sell rather than market...and very few of us want to be sold.

The number one network marketing disadvantage - quickly exhausting their market. They become disappointed and unsure what to do next; eventually fading off into the sunset with their failed dream of Getting Rich Quick. If you look at NM as an industry you will find that the average distributor will sponsor three people and sell almost enough to recoup their investment – then they are done.

Who owns responsibility for this failure? The distributor for not asking enough questions or taking the time to create a business plan and the sponsor for not providing the training and management necessary for them to succeed. Let’s talk more about that.

UNDERSTANDING OF THE OPPORTUNITY: Many times failure begins before the opportunity begins. Sponsor tells the new distributor things like:

• No selling involved in our system – simply share with friends (how many friends do you have)
• We have the best product with no competition (every product has competition)
• Our product sell itself
• Everyone needs us

The second Network Marketing Disadvantage - the sponsor also fails to mention that it is a cold hard world out there populated with negative thinkers that would dismiss a cure for cancer because it would put hospitals and pharmaceutical companies out of business.

Sponsors also lure potential distributors into the business based on the social aspect the opportunity brings – not with customers but other distributors. These people come to weekly meetings to hang out with new friends because they had few friends before. Now, if their span of influence was limited prior to joining, who is it that they are going to market the opportunity to? It can't be their new friends as they all already in the program. You can begin to see the flaws in the traditional system.

Is it because they got in on the ground floor? Obviously those that did enter in the beginning and were successful did well. But ground floor opportunities are tough because the organization has no history and startups are seen as unstable. Plus problems with marketing influence remain the same regardless of the point of entry – so we don’t find our answer here.

Is it because they have so many friends? Using this line of thought let’s assume someone has 300 friends, more than twice that of the average person. If they convinced 10% of their friends to become distributors, that would give them a down-line of 30 people. But we see distributors that have sponsored hundreds of people. So friendship can’t be the major factor of their success. However this is a great spot to stop and consider how the story of Noah parallels your desire to build an Network Marketing Team.

The third Network Marketing Disadvantage - we could go on but let me tell you the root of the problem...the traditional NM strategy doesn’t work because you don’t personally know enough people to make this system work. That's the bad news.

The good news is that the population of the United States is approaching 304 million people – many of those have a need and want to buy your product!