MLM Companies May Tumble in 2009
Unless the economy improves and their strategies changed, we may see MLM companies following the debacle that most banks, financial institutions and other business are doing; closing shop. It is obvious that today, people are hesitant to spend or shell out cash and for traditional MLM practices, people cannot afford to spend money on high priced distributor kits just for the opportunity to make money. They have better things to spend their money on like food or rent. It is to risky.
Secondly the lag time between the time you get paid with most MLM compensation pay plans is to long. People need money up front and they need it now. They will not stick around long enough to grow their businesses overtime if it isn’t going payout well enough.
It is true that many MLM companies require distributors to purchase what they call distributor kits in order to earn higher commissions. These distributor kits range in prices but are usually priced around $100 to $500. The idea is to then resell the products at retail. This could prove to be difficult to accomplish in a bad economy. People are more cautious than ever on what they’re spending money on and it may prove difficult convincing people to buy products they’ve never heard of no matter what the benefits may be.
The time frame from when you are paid with most traditional MLM compensation pay plans is 30 days after your first month in business. This can prove very stressful on people’s finances as most MLM companies require it’s distributors to purchase product on auto-ship. New distributors would be billed two additional times for products before they’ve received their first commission check and if they were not able to resell the products at retail themselves, they would be out significantly. Fast start bonuses may not be enough to keep people in business. You can expect a high rate or attrition during these tuff economic times.
With that said, a new plan of action must be done. Otherwise, MLM will just be another thing of the past as with companies which have folded already.
(Source) Web Wire
I’m not saying you’re wrong, but your comment runs against what I’m reading from others. They seem to think that the recession is increasing the impetus for people to explore alternative streams of income ala MLM.
I have recently joined an MLM. Can someone please give me some feedback as to if you think I made the right decision? I realize that we are still only in Pre-Launch or Ground Floor or whatever you call it. But How long should it take for something to really start bringing in some cash? I make about $400 a month which is not bad but it has been about 4 months already. When do the BIG BUCKS start rolling in? I want the STOCK OPTIONS! Thats why I got into this.. but I must hurry and move up some more “Ranks” so I can get my BMW bonus. Can anyone give me a little feedback on how long it should take to get a strong downline going? I only have about 150 people under me in 3-4 months. Please help!
I guess it all depends on how you generate leads for you MLM company.
You need to take action and use social media and the power of web 2.0 to generate leads. Online tactics should help you generate 20-50 Leads a day.
It’s all about social bookmarking and networking (plus SEO).