The truth about direct sales: why direct sales are more profitable than MLM

After many years of online marketing I have learned one thing. There is business for 95% of the world and there is business for 5%. Most online businesses aim for 95%. These businesses include MLM, affiliate marketing, HYIP, gift programs, and many other spinoffs. The reason these businesses are so popular is that they require very little start-up money (usually less than $300) and preach that you can earn an extra $1,000-$5,000 per month with little effort. Most people love these businesses because all they want in life is a couple of extra bucks every month so they can take the kids to Disneyland. The sad truth is that these businesses have the same success rate as any other business. About 5% will make about 95% of the money. An MLM will traditionally take around 5 years of grueling effort to achieve a 6 figure income. The average person in an MLM earns less than $10 per week. The scariest thing is that 1 in 1000 earns more than $100,000 per year. Does this sound like something that is easy to succeed at? I met a great producer in an MLM not long ago whose team was generating $300,000 per month in sales and his residual income was only $12,000. The point is that these types of businesses rarely produce much profit. Buyers end up jumping from one offer to another in search of the “next big thing.”

Then there are the businesses for 5% of the population. These are direct sales businesses. These companies attract people who are traditionally more successful in their current occupation. They have neighborhood income goals of $100,000-$500,000. These people seek to create more free time to be with the family. They are also looking to generate enough passive income to never have to work again. Direct sales appeal to this group due to higher initial commissions. Direct sales companies usually have 3 products with initial commissions of $1,000, $5,000 and $8,000. Good companies also have a residual income portion in the compensation plan that allows you to build your customer base once and then profit forever. These businesses typically cost around $2,000 to start and require the individual to learn about marketing, communication, and motivating a group. That is why they attract the most intelligent individuals. Smart people know that it takes money, effort, and education to make a business successful. Top producers in direct sales can earn up to $1,000,000 in their first year due to large initial commissions.

If you’re looking to start an online business and you’re debating MLM versus Direct Sales, you need to weigh these statistics. The average MLM customer purchases products for 60 days. How much money does that pay you? The minimum commission in Direct Selling is usually $1000. How many months of MLM shopping would that take? The average MLM associate earns less than $40 per month. The average direct sales representative earns around $30,000 per year. It’s a pretty dramatic difference. The last thing to consider is the level of commitment you will find. It’s easy to walk away from a $300 investment in a business. People treat him with as much respect as a night at the bar. A person who spends $1,500, $8,000 or $13,000 will be much more committed to the success of their business. There is more at stake. This will result in much smarter conversations for you on a day-to-day basis.