Network marketing Vs The traditional Self-Employed Business model

Can you really make it in MLM 10-panel drug testing (Multi-Level Marketing), or Network marketing? What is your real chance of success? Have you heard people complain that only a few make it in MLM? Or heard people complain that it is a pyramid, and only the people at the top make all the money? I have been involved in network marketing with the same company for 8 years now. I also run a small business for the last 30 years (a chiropractic and acupuncture practice in Los angeles, CA). I am self-employed in two separate businesses. I cannot be fired. I control my own destiny.Suntory PepsiCo Thailand Wins “Best Employer in Thailand 2022” Award

Let’s look at the traditional small business, my health practice. I started this business in 1980, and have had as many as 10 employees and as few as one. My overhead typically runs at least 50% of my income. The cost to start my business in 1980 with borrowed money was $80, 000. Here are some statistics from the SBA Office of Advocacy. Only half of small businesses survive for 5 years. Only a third get to 10 years and only one-quarter get to 15 years. Based on those statistics and the fact that the average owner investment and bank credit for new small businesses coincidentally averages $80, 000 a year in today’s money, wouldn’t one sound the alarm of the dangers of starting a small business. Furthermore, of the 15. 5 million individuals whose primary occupation was self-employment, the median personal marginal federal tax rate in 2008 was 10%. That means half were making less than $8, 025 per year if single or $16, 050 per year if married. Based on the foregoing shouldn’t we all be screaming at the dangers of self-employment and opening a small business? As for the top earners, only 4. 1% or the 15. 5 million self-employed were in the 33% tax bracket in 2008, with annual incomes of $164, 000 if filing single or $200, 000 if filing married. So only 4% get rich and 75% fail in the first 15 years. Sounds like a hard life doesn’t it?

Now let’s contrast this with an MLM or Network marketing business. I will use the 26-year-old billion dollar company traded on the NYSE that I have been working with for the last 8 years as an example. In our U. S. Market we have about 100, 000 distributors of which only about 13, 000 are active and earning commission checks. To earn a commission check you have to be personally purchasing at least $100 of product per month for personal use, or to resell, and you must have at least one other person you have sponsored or sold to purchasing any amount of product per month. So 87, 000 in this company either use no product personally at the $100 level, or they have no one they have sponsored purchasing products. The other 13, 000 do. Of those 13, 000, about 4, 500 have at least $2, 000 of product sales per month, earning higher rates of commissions. The other 8, 500 earn lower rates of commissions. So we have three groups here: 87% do nothing, 8. 5% earn lower commission rates, and 4. 5% earn higher commission rates.

I submit that the 87% generally have invested nothing in terms of capital or time into their business, so i would classify them as at the most casual customers, who were signed up as distributors purely for the ability to buy at wholesale rates or to have the possibility of sponsoring someone else (most of these probably thought this business was like a lottery, sign up and get rich by doing nothing). The other 13, 000 are actually engaged in the business of running a business. So of those 13, 000, 34% (or 4, 500) are building businesses with a customer base of at least $2, 000 per month in sales (in my estimation, not an excessive amount of sales on a monthly basis for a small business). Average 2010 annualized income of the 4, 500 is as follows: fifty-seven per cent made an average of $5, 607 for the year, 20% made an average of $9, 980, 12% made $16, 133, and 6. 5% made $39, 503 for the year. The top earners in this company comprised 4. 5% of the 4, 500 and earned an average income of $385, 198 for the year 2010.

So in the traditional model outlined above 4. 1% were in the 33% tax bracket with taxable income in the $164, 000 to $200, 000 range and in the MLM model outlined above 4. 5% grossed $385, 198 per year, and even with deductions, surely ended up in the higher tax brackets as well. So what does this all mean? It means that regardless of the model, the vast majority of people fail, or never even try, while a smaller percentage actually work their businesses, and some even go on to make fortunes.

It is time to quit whining about the vehicle one uses to build wealth, and start taking responsibility for one’s success or failure. Personally, I would much rather start an Mlm business with the low start-up cost, generally in the $100’s of dollars, rather than the tens of thousands of dollars, like traditional businesses, and put in the same sweat equity to build success.

I have been an active network marketer since 2003 with the same company. My past experiences with the MLM industry were in the late 1980’s and early 1990’s. At that time the three companies I was involved in collapsed before I could realize any real profit. As a result I shied away from network marketing for the next 15 years.

Then i was introduced to a technology, products, and a company that seemed too good to be true, but as a result of my decision to re-engage in the world of networking, I have had the opportunity to find financial success and a vehicle to ensure time freedom and increased security for myself and my family.

Finding the right company, the right products or services, the right team to partner with, and the right time in your life are the ultimate challenges for almost anyone in this business. Once you commit and operate from a place of really wanting to improve the lives of those whom you come in contact with on this journey of life, I truly believe that our industry, network marketing, provides one of the last hopes of a true business opportunity for the common person. It matters not what your background or education, you can succeed with minimal financial investment. You have the ability with this industry to change your life forever. Best wishes for your ultimate success.

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