Disadvantages of working for a Multi Level Marketing/Network Marketing Company

1). Negative stigma

You also have this negative stigma associated with this industry. While there are some bad apples, it not representative of the entire industry. Yet the stigma exists due to pyramid schemes and the negative experiences people have had. Unfortunately, bad news travels a lot faster than good news. So this is something that you have to deal with when interacting with potential customers and recruits.

2). People business

Multi-level marketing is more of a people business. Not people as customers, but people as a commodity when it comes to recruiting. In order for you to truly succeed in network marketing, you have to focus on recruiting because selling the product alone will not make you rich. As a recruiter, you become a people manager. You are constantly looking for new people, hoping to find a superstar. But until then, you are managing the one hit wonders and trying to keep them motivated. So when you think about multi-level marketing, recruiting is a big part of it.

3). You don’t own it

While the company may give you the option to eventually own your book of business, you do not own the company. Your name is not on it. You have no control over the prices or the product line. You have to run your business within the parameters set by the parent company.

4). Old school marketing

The marketing methods used by many MLM companies are simply outdated. They still focus heavily on face to face interactions, when we have moved into the technology age. They do not have a lot experience when it comes to social media and content marketing. While building in-person relationships is important, it is also very limiting when it comes to your time. You can only be in one place at one time and the lack of advancements limit your earning potential.

5). It’s harder to brand yourself

There are a lot of MLM superstars, but they are only superstars within their respective organizations. Many of them don’t know how to extend their brand beyond the company. I think that this is an issue for a few reasons. One is the negative stigma that I mentioned before. Network marketing companies don’t get the respect they deserve, their expertise is not deemed as valuable. The other reason is the lack of knowledge. They don’t know how to brand themselves as experts and the MLM industry does not teach them how to do this. Oftentimes, you spend your career focused on one company, without thinking about the other opportunities for expansion that are available.

6). Most people don’t get rich through network marketing.

The truth is that most people don’t even make a part-time income through network marketing. The problem is that there are no territorial restrictions on most MLM organizations. If you want to be a representative, then pay the fee and you become a representative. This creates competition pockets that saturate markets with the represented goods or services and limits profitability.

7). Most network marketing sales are face-to-face.

Less than 6% of MLM sales occur on the internet. In comparison, about 80% of sales happen on a face-to-face meeting. Many people who enter the network marketing field for the first time aren’t used to being able to talk to strangers or discuss the pros and cons of their product. That’s why a majority of representatives sell to their families and no one else.

8). It takes time to grow.

Network marketing might seem like an easy way to make money, but as an independent representative what you’re basically doing is creating your own business without it officially being your own business. You get promotional materials, access to an experienced team, and maybe even a customized website, but the best product in the world won’t sell if people don’t know about it. It takes time to grow a network marketing presence just like it does any other business and that is time some people may not have.

9). There is a lot of rejection involved.

Many people will tell you “no” when you first start network marketing. That negative response is going to continue on and on… and on. The average person who is first getting started with this challenge may have a conversion rate of 1%. That means out of 100 people who are approached for a sale, 99 of them are going to turn the opportunity down. For those who get discouraged by such negativity, the rejection can cause a good network marketing opportunity to go away.

10). There are many network marketing scams.

It can sometimes be difficult to determine when something is real or if something is just a scam with modern network marketing. If there is a tangible product or service being sold, then the opportunity is usually safe. If investments are being requested for no real return at all except for “information,” then that is something to be avoided. Alienation is easy with any network marketing opportunity and being involved in something that has any appearance of a scam will ruin this business opportunity.

11). Sponsors aren’t always good mentors.

It’s a dog-eat-dog world out there and any new blood coming into a network marketing opportunity is a potential threat. If you’re good at sales and are proceeding up the chain of command with your own downline, that sponsor who helped you when you first got started may no longer want to be your mentor. Some sponsors don’t even bother with mentorship at all. You don’t often get a choice in your sponsor either, which means the success of your business may hang on uncertainties that are outside of your control.