•  +91-7701868845
  •  cannibalsdigital

10 Best MLM Statistics (Multi-Level Marketing) You Need to Know

August 22, 2022 in Direct Marketing

 Multilevel marketing is a sales technique that depends on individual-to-individual selling goods or services. It includes constructing a team of individuals who work in harmony to convey the commodity’s message directed toward a wide range of prospective customers. The heads of these teams are reimbursed for the commodities they sell and even the commodities their fellow teammates sell. The success rate in multilevel marketing is determined by MLM statistics.

multilevel marketing

MLM has many names, like network marketing, multilevel marketing, and consumer sales. Regardless of the term, these are businesses where the most straightforward entrepreneurs can achieve success – and even get their expected outcomes.                                                                                                                         

10 Best MLM Statistics You Need to go Through

You must have come across the terms like multilevel marketing, network marketing, direct selling, pyramid marketing, and various other names at some point in time. Mostly, these are portrayed in an optimistic way that creates a great impression of them like these are the best ways of earning $$. And you might even have heard some success stories somewhere, but that’s just the upper part of the iceberg.

The MLM network model can sometimes be devastating. No worries! These MLM statistics will assist you in analyzing the associated risks and outcomes before joining the network. 

See Also: Affiliate Marketing vs. Network Marketing: Which One is Best?

 Currently, 6.21 million Americans are Multilevel Marketers

The MLM statistics by DSA suggest that nearly 6.2 million Americans actively participate in direct selling. The number is not even 2% of the total American population, which showcases the descending rates of MLM enthusiasts with each new year.

An Estimated 1/4th of MLM Marketers Earn a Profit

The Federal Trade Commission(FTC) states that 99 of 100 multilevel marketers face a loss. But that is not the entire story. 

earn profit

According to survey research conducted by AARP, 1/4th of the participants earned a profit, while nearly 1/4th experienced a break-even. Just ½ of them faced a loss. The study further revealed that out of those who made a profit-14% earned less than $5,000, 6% earned about $5,000-$9,999, 3% earned between $10,000-$24,999, 3% earned nearly $25,000+ while just 0.05% made $100,000 or more.

Nearly 1/13th of the American Adult Population is Engaged in MLM 

While the data is quite astonishing, nearly 8% of American citizens participate in multilevel marketing to some extent. 

About 52% of those Engaged in MLM State that the Company doesn’t Accurately Represent Profitability

MLM has gained a negative impression thanks to the media depicting schemes involving investment by people in hopes of earning a profit but receiving low-grade products that are tough to sell. Though the vital scenario isn’t that harsh, it’s not even that appealing. An AARP study revealed that 52 out of 100 MLM investors accepted that the company’s prediction regarding the profit associated with direct sales was misleading. At the same time, 43% felt it was relatively justified. 

MLM Costs the Participants Nearly $25 000+ Annually

 In the research on multilevel marketing for FTC, Dr. John M. Taylor appraised that aspiring MLM participants generally spend a minimum of $25,000 annually. These expenses include advertising, incentives, products, and travel.

mlm costs the participants nearly $25 000+ annually

To urge these statistics, Dr. Taylor joined a recruitment-based company and worked full-time there for a year, doing each task he was assigned.

The MLM Industry Generated $35.4 Billion in Revenue in 2018

Despite the increasingly unpopular opinions regarding MLM, the MLM statistics prove this industry’s strength. The Direct Selling Association (DSA) estimated the worth of the MLM business to be more than $35 billion, which was nearly 25 billion in 2009. While the WFDSA study reveals that direct selling is a $193 billion industry.[1]

Healthcare and Personal Care are the Most-Selling Sectors in MLM

Yes! You guessed it right! Healthcare and Beauty products/personal care are the most popular direct selling. In 2019, the wellness sector made about 33.2% of the total sales, and beauty products were 31.2% of the direct selling products. 

Nearly Half of those Engaged in MLM Quit Within a Year

Most people join MLM in hopes of earning more money in a short period, and most quit within 12 months primarily due to not being able to earn as expected.

nearly half of those engaged in mlm quit within a year

An AARP study revealed that more than half of the participants quit within 12 months of joining, while 9/10th stayed no longer than 10 years. On the other hand, 1/3rd of the small businesses pull through more than ten years.

33/50th of Multilevel Marketers Incur Expenses Less than $1000

One of the factors that MLM companies conduct various incentive programs is the low investment by the candidates. As per the survey conducted by AARP, nearly 33/50th multilevel marketers spend less than $1000, 12/50th of these spend $1000-$4,999, 11% spend more than $5000, while 23% weren’t able to recall the amount they paid. Just 4 people in the survey invested more than $50,000.

 65% of the Multilevel Marketers Stated They Wouldn’t Join the Same 

The AARP MLM statistics suggested that 39% of those engaged in MLM found pitching to acquaintances awkward, 36% found their income not up to their expectations, and 35% did not like selling all the time. 

See Also: What are the 8Ps of Marketing? The 101 Guide

FAQs

Does Multilevel Marketing Help People Earn Money?

No. Only those in the top tier. The system is built to funnel wealth upwards at the outlay of the people who join late, usually those who already have fewer resources than the others profiting from them. Of course, it is plausible to earn a bit of money through it. But if you do so, you might be scamming your acquaintances or other strangers.

What is the Working Algorithm of Multilevel Marketing Companies?

MLM companies usually generate a massive captive audience that not just purchases the commodities but also provides money to join, provides money for seminars and conferences provide, money for training, provide money for online access per month, pays for training and marketing materials, and pays inflated shipping and handling fees all from their pocket. And also gets the occasional odd customer who is not associated with the opportunity.

Which Multilevel Marketing Ventures can Lead to Failure?

First of all, multilevel marketing is a business, not a scheme. If your assumption regarding MLM is like this, then indeed, it's not your piece of cake. But if you have a complete understanding of the model, and it's working, if you are confident that you can meet the required expectation, you genuinely love doing the job, and you don't feel pressured or uncertain about it, then you are on the right path. Every business involves selling may be directly or indirectly. So if you are willing and don't have any problem with selling the commodities, you won't fail.

Conclusion

Whenever you hear the terms like MLM or network marketing, those TV jokes and marketing chains and pyramids generally come to your mind. But that’s not all about MLM. Whether it be MLM or any other job, it is crucial to research before you opt for a new role or investment. It would be best if you study each and every aspect of MLM, like the sales levels, what you need to do to earn a sufficient sum, checking whether the company is a member of the DSA or not, and many other factors.

Hope these MLM statistics will help you!

Author Image
Radhika Gupta More posts by Radhika Gupta