When you listen to MLMers / Network
Marketers, you're often told that MLM is the big thing, it's "experiencing record growth", it's "amassing fortunes for millions of people each year", it's "#1 millionaire producing industry", big companies are going MLM, and so on and so forth.
They'll dazzle you with numbers such as
- Every week 150000 people join network marketing around the world (but how many quit?)
- Worldwide sales of MLM is estimated to be 90 billion (still less than 1% of world economy)
- DSA estimates 200 million new distributors in next 10 years (again, how many quit?)
Is MLM actually growing that much, when compared to other industries? Let's look a little closer.
Is MLM the "next big thing"?
Claims have been made since the 1990's that MLM is the next big thing. Back in 1990, Richard Poe wrote in Success magazine that network marketing is "the most powerful way to reach consumers in the 90s". He also wrote a few books, specifically, Wave 4. This quote was reproduced ad infinitum by various MLMers trying to legitimize their own little niche. You can see this example where the author changed it to "21st century economy".
Basically, they've been saying it for THREE DECADES (going into FOURTH) and it STILL haven't come true.
Those claims had not come true. Internet soon surpassed network marketing as the way to reach consumers, with online shopping, and ready access to review sites, peer reviews, and more.
E-Commerce is a 289 BILLION dollar industry in 2012. For comparison, direct sales and network marketing is a 31.6 Billion industry in 2012, as per DSA. (see below)
One more point of comparison...
Total US retail for 2012 is $4.9 TRILLION. That makes direct sales 0.64% of stuff sold. It's a niche market, and it's not growing much, and hadn't done so for decades.
Is MLM "experiencing record growth"?
A lot of places repeat big words like "record growth"...
The problem is... relative to what? DSA itself reports that sales has been down since 2006 and only just recovered in 2013 or 2014 (not counting inflation). See for yourself (all graphs
courtesy of DSA.org):
1991 to 2000
2008 to 2012 (latest data from DSA)
So "record growth"... In relation to what, exactly? It's now 2014 and they probably did break their old 2006 record... but that just means they are not as recession proof as they claimed to be...
