I can see your point. Personally I don’t agree with leaders who make money from selling books and tools. However, I still believe personal development, training and self-improvement is a very big part of network marketing. I have also seen a lot of leaders offering training for free and selling tools at cost price, which I highly admire. That is what I am aiming to do as well.

Although network marketing is all about referral and recommendation, but at the end of the day, it is still a business. To be successful in business, you need personal development. This is a common trait of all successful people or entrepreneurs. History has proved this point.

Whenever you have a big group of people involved, you need a leader. It is human nature and that is how society works, people look for leadership. A leader will make the most money in whatever they do, not just in network marketing. Of course people can simply recommend products to friends and make a few hundred dollars a month, if that is what they want. However, if you want to be rich and make 5-6 figure a month, you need to be a leader people look up to.

Furthermore, I believe sharing products in network marketing is different from sharing a good movie or restaurant. There is more skill involved in network marketing. Try recommending a restaurant which you are also a shareholder, it is not as simple as people think. At the end of the day, regardless of what business, industry or job we are in, we get paid for the “extra value” we offer. If a network marketing products can spread using simple “commission-less” word of mouth recommendation, then as network marketers, we have nothing extra to offer and we lost our “value”.

Obviously we have different opinion and may be we just have to agree to disagree :)

Thank you for sharing. I give higher value to get retention on point 2 you mention. For point 1,3,4,5. there are possibility like some Amway team where training become their main source of income.

Network market should be as simple as possible, I find many enroller over train their newbie. I thought networker just need to refer people to the company and ask the friends to do the same. With good value products that people need, I dont have to worry about high attrition.

Mark Yarnell sell MLM training books, of course he would say network marketing is personal development.

I am starting a new website for mlm discussion soon.

Retention is a multifactorial thing. It depends on:

1. If the compensation plan rewards early effort
2. If the product is really good that people will continue to use it even if they stop the business.
3. If you have a team and proven system which can help newbies get some reward ASAP.
4. If your team has a good culture and community effect and people just want to be part of the team.
5. If your team have such good education and development program that people feel that they are learning and progressing even if they are not making money yet.

As Mark Yarnell said, network marketing is all about personal development. There will be people who don’t make money initially because they don’t have the ability or quality to do so initially. If they have the right mindset, they will stay put and keep learning until they make it.

So I would say it is a 50:50 ratio. 50% deoends on the company and 50% depends on the team effort (in term of community, support and training).

Just my 2 cents.

Ket

Actually, I look for these number, group volume, individual volume. number of new and dropout members and gather as much fact/figure as possible. Of course, there might be company try to lie about the figure, but a monthly paycheck report is quite accurate. I feel it is better to spent time to find a good company that to hurt myself and other who join you later.

I disagree retention based on human effort. If the products is expensive, storing up too much inventory, unable to breakeven after a long period of time. High drop out rate can allow wear out a person too, getting discourage and eventually drop out too. No amount of motivate can keep a person if the opportunity does not work out for him/her. Maybe the human effort come in the part of due deligence check before joining.

Thank you for your sharing.

Low attrition rate and high reorder rate are my 2 most important factor I consider for a good residual income.

Let say a network of size 1000, attrition 50% after a year(members left within a year), reorder rate 20%. Will residual income secure?

If you have a 5 figure per month with high attrition, it mean many people are getting hurt along the way.
But if your 5 figure per month and many still not earn as much but they are still happily reordering…you got yourself a great company to be with.

If distributors willing to continue to order the products month after month wthout making a lot of $, I see value in the poducts, I see residual income.