Gary Vaynerchuk believes the old MLM stereotypes.
That’s the gist of one section of a Q and A livestream he did on September 22. Only a small percentage make money and the far majority don’t.
Noted network marketing trainer Ray Higdon wrote about this, and his reaction, in a recent blog post. He still supports 96% of whatVaynerchuk says regarding the need to hustle and to work hard. He’s bought Vaynerchuk‘s books and written blog posts promoting them.
However, he can’t stand by while Vaynerchuk repeats the standard myth that network marketing is about recruiting people to do all the work and recruit for you, while you lay on the beach raking in the passive money because you’re at the top of the tree. That, to Vaynerchuk, is not a sustainable business model. While some people pull it off, he cannot.
Top Performers Don’t Gloss Over the Hard Work
Ray Higdon points out that, while it’s true some network marketers promote their businesses as Vaynerchuk describes, that doesn’t fairly represent how the real professionals in the industry pitch their opportunities. All of the big money-earners he knows, including he and his wife, tell recruits they must work hard.
Vaynerchuk Forgot About the Customers and That Most Small Businesses Never Grow Big
The goal of the networking marketing company is, of course, to make money by selling its products. That’s why they have distributors. Some of the distributors who do not make the big money were never interested in the business opportunity to begin with. They simply wanted to benefit from using the products. As a distributor, they pay less for their own products, and that’s all they want.
Other distributors would like to make money, but just don’t. Most small businesses fail. Does that mean nobody should ever try? Higdon points out that few kids ever become professional athletes. Does that mean they should never play in sports?
Hustling Beats Out Sitting at the Top of the Tree
Higdon points out that when he and his wife were top earners in their company, they were 1100 levels below the company, far from the “top of the tree.” Yet they out-earned their upline by out-hustling them. And, he says, that is far from unusual. Most of network marketing’s top earners simply outlearn and outwork their upline.
Besides, earning money from the efforts of others is not an invalid business model. Agents for Keller Williams get paid on the commissions earned by other agents they refer. Many life insurance agents earn money from the commissions of agents they refer. Is Vaynerchukcondemning all those examples?
Higdon explains that it’s not a good idea to pitch prospects on the idea they should just recruit a few rock stars, and then they can retire to the beach.
If Network Marketing is Not Sustainable, Why is Amway Still in Business?
Richard DeVos and Jay Van Andel started Amway in 1959. It is still the largest network marketing company, doing $9.5 million in 2015 despite being 60 years old. Higdon doesn’t mention Shaklee, but that company is 60 years old. Although many network marketing companies do fail, that’s true of all industries.
Vaynerchuk‘s Success is Still an Inspiration, But Don’t Pitch the Way He Claims You Do
Higdon says Vaynerchuk‘s advice on how to build a business is useful. You do need to work hard and out-hustle the competition. He advises network marketers to follow that advice, and not to sell their business opportunity as a way to live off the work of other people. Higdon wants to drive the “fast buck” opportunists out of network marketing.
After graduating from college, Vaynerchuk took over the marketing for his father’s discount liquor store. By 2005 he grew it into a $50 million per year business using Internet marketing. He continued to grow it using daily videos on YouTube. He’s now one of the most famous and respected Internet marketers.
Ray Higdon is a former Florida real estate investor who lost everything in the 2008-2009 financial crisis. Despite having dabbled in, and failed at, network marketing before, he joined another company. He and his wife made over a million dollars at the company. Recently he sold his position to focus on training all network marketers. He’s been a speaker at network marketing events, and has shared the stage several times with Vaynerchuk.
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