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It is an unfortunate fact that a great many people fail in the multi-level marketing industry. Many people blame the multi-level business model, and unfortunately, this is why multi-level marketing has developed somewhat of a stigma over the years. Many people blame themselves, and see themselves as incompetent or poorly suited for this type of business. These are not the real reasons people fail at multi-level marketing, and the fact is that these things could not be farther from the truth. These are merely convenient scapegoats used to explain a negative outcome that isn't always understood. That said, let's examine the real reasons people fail in multi-level marketing, and determine what is required to build a successful MLM business.

There are countless people who fail in business—ALL kinds of businesses—not just multi-level marketing. In fact, more people fail than succeed when starting a new business in non-MLM industries. The reason failures in MLM seem more notorious is that most people don’t really think of multi-level marketing as a real business where they actually have to work. They get all wrapped up in the hype of making easy millions, and don’t stop to consider essential business principles before they make the commitment to get involved.

There is a certain combination of factors required for business success in any industry, including multi-level marketing. Those who fail in business simply haven’t attended to all the necessary success factors, or they don’t have the right mix or balance of them all. The elements required for business success include having the right product at the appropriate price, time, and place; employing suitable people; using effective promotion techniques; and possessing sufficient capitalization.

PRODUCT

By far, product is the most critical factor in determining the success of a business. Having the ‘right product’ means that you have a product or service that sufficient people are willing, or even obligated (as in the case of automobile insurance), to buy. There must be an inherent need or demand for your product. If no one wants or needs your product, your chances of success are greatly reduced, though not entirely eliminated. If you have sufficient financial and intellectual resources to create an artificial demand for your product via advertising and promotion, you might possibly succeed, but this is an expensive and difficult proposition. Few small business people and network marketers have the resources to pursue such a course. In any case, no one makes money until product is sold, so it is critical that your product be marketable, and have a large enough market to support your business.

Another factor to consider when selecting a product is whether it is a consumable product or a durable good. Durable goods have a relatively long lifespan, and tend to have a higher price tag. This means that the initial buying decision is more of a commitment, and the higher price tag makes the decision to buy all the more difficult. It also means that individual consumers will buy fewer of these goods, and may only need one or two, so you will be required to continually find new customers day in, and day out, in order to maintain an income stream. It is possible to have a successful business based on durable goods, but the amount of effort required to sustain a successful business is increased.

If you are looking to maximize your income and minimize the effort required to create a residual stream of income, it is imperative that you choose to provide a product that is consumable within a reasonably short period of time, or a service that is required repeatedly on a regular basis. This way, you can continue selling to the same customers month after month. If this is the case, your marketing expenditures will drop over time, and the amount of effort expended in acquiring new customers can be reduced once you have established a loyal customer base.

Another crucial factor in product selection is whether or not you actually believe in the product. If you are like most people, you must understand and appreciate the benefits of your product or service and feel confident about its appropriateness and usefulness to the consumer in order to project genuine enthusiasm. You should feel positively, even passionate, about what you represent in order to motivate yourself to talk to people about your product and/or your business opportunity on a daily basis. If you feel passionate about what you do, and the products you represent, your task of marketing and presenting your product and opportunity will be all the more pleasant, and it will seem less like work. Your natural appreciation and passion for your products will be transmitted in every word you say, and make it easier for your prospects to feel excited about it too.

If you feel awkward, or have doubts about the value of your product, you will, more than likely, be reluctant to talk to people about it, and be hesitant in presenting it. If you aren’t willing and eager to go forth regularly to market your product, you will probably not do well in your business venture. Even if you are strong-willed and able to overcome your natural reluctance, and do venture forth daily to market a product you don’t believe in, you will probably grow to hate your work, and as a result, feel quite dissatisfied with your life. Human beings, by nature, want to feel valuable and honorable, so there isn’t a lot of merit in pursuing a way of life that compromises your integrity.

It is particularly advantageous to represent a product that you personally use and can benefit from, because you will experience first-hand the benefits of the product and be able to give a personal testimonial for the product. Alternatively, if you genuinely understand the product and know others who are honestly benefiting from it, you will also be able to convincingly convey the product benefits to prospective customers. So, if possible, try the products first, and be a customer if you can, before committing to any business opportunity. If you have a good experience with the product and the company, chances are, your future customers will too.

One more thing to consider when vetting a product is whether you have regular access to the target market your product is geared toward. If not, you may end up talking to a lot of unqualified prospects for both your product and business opportunity, and get discouraged rather quickly, or you may have to spend a lot of money on advertising trying to reach your target audience. Chances are, if you can’t afford the product comfortably, many of your friends, family and acquaintances won’t be able to either, which means you may not be able to successfully develop your warm market. If possible, select a product that you and your warm market can generally afford and use. It will increase your chances of success, and minimize your long-term expenditures.

Clearly, if you are trying to develop a new business, and have limited resources, you should pursue products and services for which there is an existing need or established desire, and for which you feel a genuine appreciation or passion. You should also give preference to products which are consumable, and for which you personally have a use, especially if you are required to make regular purchases, as is the case with most multi-level marketing opportunities. You should also consider whether your social circle of friends and acquaintances would be inclined to buy it, so you will be able to develop your warm market more easily. Even if you do find such a product or service, it is still relatively easy to fail in a business venture if you don’t integrate the remaining success factors.