MLM Analyst

I’ve recently suggested there might be better ways of measuring the appeal of a network marketing company & their opportunity. Most new network marketing members I know make the decision to join a particular company based on emotion, typically fueled by questionable information. But when a distributor is looking for a new opportunity, shouldn’t they be most interested in a company’s momentum – their recent and ongoing growth?

Why Growth & Momentum?

If a distributor joins with a company whose market share is shrinking, they’ll find it increasingly difficult to win team members, make sales and otherwise succeed.

So, I decided to look at growth & momentum. Since no network marketing companies regularly publish audited revenue numbers, we can’t use those. Plus, revenue lags momentum in this industry so it would be a late indicator.

How to Measure MLM Growth & Momentum

I think the best indicators of most trends today are found in online data. Here’s why:

1. Most people use the internet to research products & companies they are interested in.
2. There are very reliable 3rd-party services that monitor website and search traffic over time.

Every online data source has some flaws, but intelligently combining reliable sources provided me with some interesting findings. I wanted to see which MLM companies are experiencing momentum built on long-term growth.

The Results

The results might surprise you. First the chart with companies in alphabetical order:

MLM Company Momentum Comparison

And here are the results sorted by rank:

Methodology

First, to ensure I was comparing apples to apples, I had to focus my scope of companies to the largest segment in network marketing-namely those companies marketing primarily nutritional products. So I didn’t include those focused on technology or broad consumer product lines. I’ll try to find a good way to tackle those segments later. I chose 15 popular nutritional product MLMs.

I looked at website and search traffic growth over the past 3 months. You wouldn’t want to measure just 1 month since a lot can happen online to cause only a momentarily spike in a site’s traffic. But 3 months gives a good view of immediate trends = momentum.

Besides just immediate trends, it’s important to look at what companies are growing overall. A few companies I looked at were actually decreasing over the past year so their short-term growth looked more like an element of recovery than momentum building on long-term growth.

Reaching back to my past statistics training, I combined the 3 month and 1 year website traffic & search data for each of the 15 companies by standardizing their growth percentages and then giving a slightly higher weight to the 3 month score. I used data from the following services: Alexa, Compete Inc, and Google Trends.

Conclusion

I’ll admit, I was fairly surprised at the results. At the top you have some more established companies like Xango and Shaklee generating buzz and building momentum, next to, and sometimes above, newer companies like Vemma, Zrii and Agel. I wonder why.

Could it be new product launches, company marketing & support, the elusive “critical mass?” What do you think? Like any research, there is more to dig into here. Maybe I can expose the drivers if I look at search engine keywords, traffic patterns, product launch activity, etc.

Whatever the drivers happen to be, this seems to be the type of data I’d be relying on if I was considering joining an MLM company and building a successful network marketing business – partly because it’s the sort of market growth data that successful traditional businesses rely on when they launch into new markets.

FYI: Here is the full article on MLM Companies with Momentum with some revisions.

In my last post, Why I’m Blogging About Network Marketing, I mentioned hearing about the MLM 500 Top Earners list from a soccer teammate. He was excited because it seemed to be evidence that the MLM company he’s associated with was one that produced an inordinate number of top earners. It made me suspicious. So I decided to look into it.

Here’s some of what I’ve found so far. The people producing the list are certainly not doing so for altruistic reasons. You can see from their site that accessing it now requires a subscription. That’s fine. Capitalism is a good thing. But did they purposely disseminate inaccurate information in order to create an uproar and then profit from it? Don’t know. More on that later.

I found the list posted elsewhere. Right at first glance you can see some issues. Of the top 20, 9 are from MonaVie and 6 are from Amway.Those 2 companies have produced 15 of the top 20 earners? Really? Want to guess how many of the top 65 are from MonaVie? Why, 46 of course.

Is it at all disconcerting that from number 29 through 65, every earner is from MonaVie? Umm, yes. Consider the block of Amway distributors that monopolize all but 3 of the 60 positions from #77 to #137. Statistically speaking, how does that happen?

Is there any possible way that this data could be legit? I’m pretty sure there’s not – partly because while I was viewing the list my college statistics professor came back from the grave and began screaming at me to close my web browser before he died a second death.

Even without a ghostly visit, or a college degree, or a 7th grade math class for that matter, any rational person would toss the list out as meaningless.

Still, I couldn’t help but notice a few more oddities:

• Usana shows up only 4 times in the top 150?
• There’s only 1 Herbalife distributor in the top 100?
• There are only 2 Xango distributors in the top 100?
• Nu Skin only shows up 6 times out of 500 and not until #158.
• There is only 1 Melaleuca distributor in the entire top 500?

Ok. So the list is clearly bogus. The people putting it together either didn’t even try or perhaps had ulterior motives. I think that deserves some analysis.

Uh oh, I think I just felt my ethics professor roll over in his grave. Gotta run. I’ll be back with more later.

My analysis of the top MLM earners list continues in this post about motivations behind such a list.

If you wonder, like I do, why an MLM company would publish their top earners’ numbers, and why a typical distributor would publicize that, you might find this article interesting: Which MLM Comp Plans Screw the Typical Distributor?.