The article below was originally written by David Curtis, creator of US Home Work Force and is completely credited to him. The original can be found here http://100grandamonthclub.com/empower-networks-over-saturation-imminent-demise/
I felt it was important to share it here because it is 100% accurate and true, yet it leaves some unanswered questions. While it’s true that between 1% and 5% of any Network Marketing company make real, residual, livable and sustainable income and 95% make very little or nothing. (Actually the numbers are more like 3% and 97%) The article doesn’t offer any solutions. And while I know there is more to come from the article I also know that David will offer US Home Work Force as well as probably affiliate marketing as the solutions to the pitfalls of MLM.
And while I fully endorse US Home Work Force as one of the best free work from home and online businesses there is. It does have one shortcoming. It’s not residual. So as great as USHWF is for allowing anyone to create an online income without having to invest anything, it also shares the same problem as most MLM’s as not being sustainable long-term. If you stop marketing, or if you run out of free ways to market to enough people, your income stops. But this time there IS a solution. It’s called the Passive Profit Network and Profit Clicking. It truly is the ONLY solution that I have found that solves ALL of the pitfalls and shortcomings of MLM’s, affiliate marketing, and CPA marketing. PPN requires NO money up front (actually they even give you $10 to get started). It requires no continuous marketing, or none at all really. And it requires no recruiting or referring anyone. But yet it generates a consistent, residual and sustainable long term income. It really IS the ONLY solution. You can learn more at www.Passive-Profit-Network.com after reading David’s informative article.
Here is David’s original article:
Empower Network boasts 70,000 blogs, 22,000 active members, and has paid out over 20 Million dollars in commissions. Its top 300 spot in Alexa.com’s ratings has been cemented. With all of these impressive facts, one might wonder why I used the words “Imminent Demise” in the title of this series of articles. There are a number of reasons, which we will discuss honestly and forthrightly in this series of articles, but the chief reason is over saturation. We will return to that point later.
First we must take a look at some hard facts that apply to every MLM company, without exception. It always ends with over saturation. Here is why. 99% of the people in an MLM cycle out within the first two years. The ONLY ones that remain loyal to the MLM beyond the 2 year barrier are the top 1% earners. All one needs to do is look at Empower Networks Earnings Disclaimer link at the bottom of every page on their site to see that they are well on their way to this same destiny, that the top 1% earners are the ONLY ones that make enough money on a monthly basis, to cover all the expenses of an average families monthly budget.
Empower Network has only made two people millionaires; their names of course are David Wood, and David Sharp, its co-founders. Exactly what percentage of the $20 million dollars in commissions Wood and Sharp have personally made, I suppose only they will ever know for certain… An educated guess is that these two men have earned well over 25% of all the money ever made by Empower Network; Frankly I believe that is an extremely conservative figure. The last week of September they made a cool million off a single product release to the network during a convention in San Diego. Then we have the beauty pageant top runners up: the notorious Empower Network’s top 10. I call them beauty queen contestants in an allegorical way not derogatorily, because these 10 individuals are showcased before the world as vessels to sell the MLM’s pipe dream.
The truth behind all MLM’s including Empower Network, after we brush aside the smoke and mirrors, and all the conventions and yacht rides, is that just 5% earn 95% of all the money in an MLM, and most of that is made by the top 1% earners, and the other 95% are all bottom feeders.
Those people ultimately fail, and cycle out of the MLM once the delusional power of the pipe dream wears off after a few months of hard work and disappointment. When that happens, the residual income that the top 7-2% earners had worked so hard to build begins to diminish. Eventually the top 7-2% percent’s residual income begins to decrease faster than they can replace it with new people. That is why only the top 1% survive the 2 year barrier, they do so by continuing to replace the previous cycle of people with people who will become tomorrow’s top 7-2% who in turn help them replace those who ultimately become tomorrow’s 95% bottom feeders. Each cycle, has fewer over all people in the MLM, than the previous cycle.
A short while ago Empower Network boasted of over 50,000 active members, yesterday I watched a video in which David Wood stated that as of November 2012, there were now only 22,000 active members. What I just described is already taking place within Empower Network. The bottom feeders are cycling out, many of the middle class earners are starting to see their residual income slipping faster than they can replace it. It’s only a matter of time, until many of these middle class earners will begin to cycle out as well. Meanwhile the top 1% will go on making money, and selling the pipe dream.
How are the top 1% able to continue making money? Chuck Marshall for instance, a $158,000 per month earner in Empower Network pays large sums for magazine ads. The top earners continue to reach new people, by marketing fresh new fields, that the common person is unable to afford to advertise in. The average person that relies on free advertising methods is being sold a lemon, because the free advertising market place has already been oversaturated by the 70,000 people that came before them.
Just this morning I read this comment on a post by an Empower Network enthusiast.
“It seems like everywhere I looked, people were already in Empower Network, or had seen those red ugly capture pages time and time again.” Stacey Scott – on IBOToolBox.com
Her blog post went on to say that the only saving grace she could find after months of failure was joining a paid advertising co-op offered by Empower Network. Which makes perfectly good sense, because the only way to sign up new people when over saturation occurs, is to do paid advertising and reach new market places.
So what are the hard facts? 99% of all people that join an MLM company, WILL cycle out within the first 2 years. Long term residual income that will last for years and years is nothing more than a pipe dream. The only ones that truly get rich are the owners of the MLM, and the only ones that make large sums of money besides the owners are the top 1% earners. The only ones that survive the 2 year barrier are generally the top 1% earners.
People that have bought into the pipe dream will no doubt want to put their fingers in their ears, and wish all of this was not true, and will wish they never heard any of this. They will want to go on continuing to believe that they will make residual income for years and years from now. That is nothing more than wishful thinking, because 99% of the people that provide them with residual income today will have cycled out within the next two years. Every MLM for 50 years has proven that to be a cold hard inescapable fact.
Bottom feeders have only one function in an MLM from a business point of view. The 95%, the bottom feeders, are there to make the other 5%, especially the top 1% earners money, and that is it. That is their only real purpose. Some of them will make some money for a while, but none of them will ever get rich within the MLM. That is only a pipe dream. In fact most of them will never make enough money to sustain their family’s monthly budgets.
Two months ago, I listened in on a call hosted by David Sharp co-founder of Empower Network. During this call Sharp boasted that the top 100 people in Empower Network all made at least $3000 a month., I thought that was extremely insightful. What that told me, is out of the then 50,000 active Empower Network members at that time, 49,900 of them were making less than $3000. That is why when you look at the Empower Network Earnings Disclaimer page, that the four top earning categories are all filled by only 1% of the people in the network. Its actually less than 1%.
MLM’s are inherently flawed, regardless of what new twist they make to them, the flaw is unavoidable, and is caused by over saturation. Over saturation by its very nature turns the majority into bottom feeders;and bottom feeders always cycle out.
MLM’s are NOT able to make everyone equally rich. No matter how you cut the pie, whether it is paid matrixes, or Empower Networks 2nd, 4th, 6th, and every other 5th pass up compensation plan, regardless of what the MLM payout plan, the first people, the pioneers, the founders who joined in the beginning, stand the strongest chance of becoming the top 1%. If 100 people all paid $25 a month, and if everyone was paid out equally, then all 100 people would only make $25, and just break even. That is why it is impossible for MLM’s to make everyone equally rich. MLM’s only make the top 1% rich, and that is it.
Time creates a pyramid within the MLM, with only a small handful at the top making any real wealth. Once an MLM has been around long the market place (Facebook, craigslist etc.) become over saturated, and once that has happened it is too late for someone just starting out to raise among the ranks and become one of the top 1%, unless that person is able to do some serious PAID ADVERTISING, and market the MLM into new unchartered territories where it has not been heard of before.
When it comes to MLM’s no one company no matter how big and mighty stays king forever! In fact most MLM’s seldom stay in existence longer than just a couple of years. Today you found out why. Over saturation will always bring the mightiest MLM crumbling to the ground just as quickly as it first rose.
There is a solution. As impossible as it may sound after everything that you just read, yes, their truly is a solution. For now I will give you a teaser that explains what the solution is. The solution is right there in the salesmen’s motto, “you are either green and growing or ripe and rotting.” It is obvious to any thinking person that knows all the facts, that a company with 50,000 active members that drops down to 22,000 active members in just a couple months as Empower Network has done, is now in the ripe and rotting stage. Some will sail this ship for as long as they possibly can, while massive numbers of people have already begun jumping over board and cycled out.
The top 1% will continue to make a great deal of money through empower network for a while. However the hand writing on the wall is plainly written. The glory days for bottom feeders, in Empower Network, have come and gone, and without the base, without loyal foundation of bottom feeders, MLM’s always reach their demise.
Here is what I propose, an MLM ought to be approached for what it is, a short term massive money making machine. No pipe dreams, just reality from day one. An MLM cannot be the end game, rather it must only be a tool, a short term tool with a much bigger picture in mind. Few MLM’s if any, have ever started with that vision in mind. They all envisioned themselves as lasting forever. Most of them ended in massive disappointment for everyone involved with the exception of the top 1% earners who enjoyed the ride as long as it lasted. Well, they may be disappointed that it came to an end, but at least they became wealthy, unlike everyone else.
Those top 1% earners become the next generation of “Internet Guru’s” The frustrating thing that most people may or may not be aware of is, that the top 1% earners, these gurus, are the only ones that ever truly keep making themselves richer, at the expense of the masses that follow the pipe dream into the next venture with them.
We are about to discuss the real purpose of why I wrote this article, so I hope you are still paying attention, if not I hope you will focus harder now than ever.
Ever since I started US Home Work Force, I strove to stay far away from MLM’s I could have joined Empower Network the first week of January when I first learned about it. But I knew the road they take most people. So for all of 2012 I have watched as the masses joined the MLM rat race, and followed Internet Guru’s. All the while I was shaking my head with serious frustration, asking myself don’t these people understand? The gurus are only gurus, because they have bottom feeders who loyally follow them, who loyally keep making them more and more money over and over again. Frustrated because there was nothing I could do about it, other than sit back mind my own business, and watch it all unfold just as it has a thousand times before.
In order to succeed in the MLM, you need to be the first to join it, and you need to work it with great passion, especially in the beginning. Once over saturation is reached, It no longer is a good investment of time and energy to join the MLM. I truly wish that there were legitimate ways to help 100% of the people that join a MLM earn 10k a month or more. The reality is that there is not. A cup can only pour out a cup. The people that join the MLM first generally always take the biggest gulps. Eventually over saturation makes it impossible for everyone to make 10K a month, regardless of how great the MLM is. The only real solution to this problem is for the MLM to constantly remain in the “green and growing” faze. It must constantly continue to evolve and change, and present fresh new opportunities. To Be Continued….