Reasons Why Network Marketing Fails

Financial freedom has become most people’s long-term goal in life. There are various methods through which the ordinary person tries to achieve this vital item in life; the most common being network marketing. In the business sector, network marketing is one of the best trades of which one can get a high return. This is basically because it requires very low capital. On the other hand, with perfect training and mentorship the business will obviously grow at a very first rate. However, even with these components many still fail. Statistics show that 95% of small network marketing companies collapse within the first five years of operation. There are a couple of factors that can be attributed to this.

 

The most common one is lack of commitment. This applies to all kinds of businesses. Commitment goes hand in hand with commitment and without it, nothing can run the way it is supposed to. As a matter of fact, lack of commitment is the main reason why many people quit. If such people were really committed to the business, then they would struggle on and on until the business is finally stable instead of giving up that easily. 

 

Another common reason why network marketing fails is lack of money or capital. As the name suggests, 70% of network marketing involves marketing. This basically includes moving around talking to potential clients and contacting them as well. As a result of all these activities, one tends to spend a lot of money in the process. On the contrary, if you do not have enough funds to perform all these activities then you are forced to limit your transactions with the clients. In the long run, you end up not marketing enough and even for the few clients you get; you provide them with services that are below par. This will completely ruin your business just like it has done for too many. 

 

Finally, lack of knowledge and skills is another very common reason why many network marketing companies fail. The most common qualification for starting a network marketing company today is to have graduated with a degree in business. This is necessary, but there are some vital features that are not highlighted in formal schools. Take for example some marketing techniques such as communication skills, this are very vital yet not taught in our schools. As a result of this, the business begins depriving gradually and within no time it is added onto the list of fallen companies. Look for mentors to guide you through the entire process and be willing to learn.