“Loss Rate” in MLM and How to Avoid It

What is Loss Rate? Many critics of Multi Level Marketing define it as the percentage of failures occurring when monthly incomes do not cover the monthly expenses incurred while a participant of an Multi Level Marketing opportunity. From studies, this rate has been estimated at more than 90%, but closer to 99% depending on who you speak to and their predisposed judgment of the industry. Many times it is not first-hand knowledge but, that of second hand information gathered from family, friends, and others through those person’s experiences.

When does it occur? In the Multi Level Marketing opportunity there are two basic lines of incomes, retail from customer sales and residual from a team that was built. Every month a requirement must be met to stay active in the Multi Level Marketing opportunity someone is a part of. Through their own purchases and that of customer purchases points are tabulated, reached, and the required PV (personal volume) of being active is met. This can also be done from the building of a “team” and the required GV (group volume) is used to meet the monthly requirement needed to stay in an active status. Assuming you made a goal of 12-18 months with your Multi Level Marketing opportunity. You have done everything to stay active through your purchases but, have not had much success with attaining customers or building a team and you begin to review your efforts. You start to add up products bought, sales materials purchased, and any other costs that were incurred during this time. You determine that none to very little income was made, and the resulting costs far out way the benefits and you decide to not continue.

Now you become a statistic in the continued “Loss Rate” that critics love to use against Multi Level Marketing opportunities to continue to warn people against us. However, once you have the idea of self-direction and being able to make that extra money it will never leave you. So, what is the solution? The solution is finding a need and filling it!

So, to avoid “Loss Rate”, I just need a product that does not lose its value that I can introduce to everyone. Now, to attain a “loss rate” of zero, how much would it be worth to you? Could it cost 100′s of dollars or maybe hours of research? No, in 10 minutes you can find this out, and it will be a revelation to many.

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