This article explains how you won’t get rich in multi-level marketing. The more accurate headline is that you won’t make any money.
The survey found that most people were making less than 70 cents an hour in sales, and that was before deducting their business expenses.
Nearly 60 percent of respondents said they earned less than $500 over the past five years.
“Our conclusions show that most participants could earn significantly more money in exchange for a lot less time and money invested if they were employed in a minimum wage job,” reported Brittney Laryea, a writer at MagnifyMoney.
Why do people make so little? They claim you can make unlimited amounts of money, that it’s a product that practically sells itself, and that you make 50 cents of every dollar you sell. But the reason why there are no profits is simple:
- Product is difficult (if not impossible) to sell at a price that earns any significant gross profit
- Expenses eat away at what little profits you potentially might make
- So the money is really in recruiting a large downline and making a small amount from each of those people (if they purchase a ton of products)
- It’s difficult to recruit enough people to make significant commissions
- Participants often end up spending lots of their own money on products they don’t need just to advance or maintain a rank
And lots of people go into debt. “Nearly 32 percent of multilevel-marketing participants said they financed their involvement in the business using a credit card, according to the survey.” I bet the real number is much higher than 32%.