Welcome to the intriguing universe of MLM statistics, where numbers and figures provide insight into an industry that has both passionate proponents and fervent critics.
Network marketing, often referred to as MLM (multilevel marketing), is a business model that has touched the lives of many.
Whether you’ve been pitched by a friend, or a family member, or are actively involved in an MLM company yourself, there’s always more to discover about this industry.
Did you know that the roots of network marketing can be traced back to Nutrilite in the 1940s? Or that the top distributor in Amway, Dexter Yager, once earned a staggering $12 million in a single year?
Well, network marketing isn’t all success stories; it’s also a terrain where many newcomers face challenges.
In fact, statistics reveal that 50% of distributors who embark on an MLM journey abandon it within the first year.
Wait for it.
Join us as we embark on a journey through the captivating world of MLM statistics.
Table of Contents
General MLM Statistics 2024
We will go into MLM statistics that shed light on the complex and sometimes controversial world of multi-level marketing.
These figures offer a sobering perspective, one that encourages us to think twice before embracing the allure of easy riches.
As we navigate the data, we’ll uncover both the potential and pitfalls that await those who venture into the MLM universe.
1. It costs an estimated $25,000 to launch an MLM business.
In a report filed by the Federal Trade Commission, it was forecasted that it would cost $25, 000 to launch a quality MLM business.
While that’s a significant figure, it’s important to consider all aspects of starting an MLM business before making any substantial investments.
Although the $25,000 estimate might be accurate for some ventures, it’s crucial to understand that costs can vary widely depending on numerous factors like Startup fees, marketing and advertising, travel expenses, etc. (Federal Trade Commission)
2. 66% of MLM participants invest less than $1,000.
According to an AARP survey, the investment distribution among MLM participants is as follows:
- Approximately 66% of MLM participants invested less than $1,000, emphasizing the low initial financial commitment for many individuals.
- Around 24% spent between $1,000 and $4,999, indicating a moderate investment range.
- About 11% paid $5,000 or more, suggesting a significant financial commitment.
- A further 23% did not remember how much they invested, underscoring the variability in participant awareness of their financial outlay.
- Only four individuals reported spending over $50,000, representing a small percentage of participants with substantial investments.
This AARP study offers valuable insights into the financial side of MLM participation, revealing a spectrum of investment levels and a complex relationship between effort and income. (AARP)
3. Only 25% of MLM participants turn a profit.
Despite the challenging statistics surrounding MLM, it’s noteworthy that approximately 25% of participants earn a profit, according to Fundera, while an additional 27% manage to break even.
This suggests that many MLM participants do not incur financial losses. Only around half of the participants, approximately 48%, experience financial losses in their MLM endeavours.
4. In 2018, 8% of Americans participated in multilevel marketing.
If nearly 8% of Americans participated in MLM in some capacity in 2018, it does indicate that MLM has had a significant presence in the United States during that period.
Of course, MLM companies often promote their products and business opportunities aggressively, which can lead to a substantial number of people becoming involved in various MLM activities, such as selling products or recruiting others into the multilevel marketing structure.
5. Most MLM participants are women (60%) without experience in commission-based sales.
Interestingly, the AARP Foundation found out in its survey that many MLM participants are women, and many have no prior experience in commission-based sales.
MLM companies often market their opportunities as accessible to a wide range of individuals, regardless of their background or experience.
They may emphasise the flexibility of MLM work and the potential for earning income from home, which can appeal to many people, including those without prior sales experience.
6. Only 10% of MLM participants manage to make over $100
The percentage of people who make a significant profit or sustainable income in multi-level marketing (MLM) companies is generally low. According to some reports backed up by Wikipedia, 10% of MLM people make over $100.
This is because MLMs typically involve a hierarchical structure where a few participants at the top earn significant commissions while many others further down the pyramid may struggle to make meaningful income.
The success or income potential in MLMs depends on various factors, including the specific MLM company, the products or services offered, the individual’s sales and recruitment abilities, and the size and activity of their downline.
7. In China, MLM companies were deemed illegal
MLM companies were deemed illegal in China because of these concerns. To navigate these prohibitions, some MLM companies have sought alternative methods to bring their products to the Chinese market, including direct sales.
As of 2016, 73 companies, both domestic and foreign, had obtained direct selling licenses in compliance with these regulations.
However, some MLM sellers have found ways to circumvent the ban on MLM practices in mainland China.
They do this by establishing addresses and bank accounts in Hong Kong, where MLM is legal, while conducting sales and recruiting activities on the mainland.
8. The top MLM markets globally are — the USA, China, and Korea. With the USA recording the highest sales of 20%, China 19%, and Korea 9%.
In an article published by Times Of India, it was reported that the top MLM markets globally, in terms of sales, are the USA, China, and Korea.
These three countries indeed represent the dominant MLM markets, accounting for nearly half of global sales combined.
While listed here, it’s important to clarify that direct multi-level marketing is illegal in China. However, direct sales with permitted products and licensing exist, making the true MLM presence complex.
According to the data, the USA’s 20% share signifies a significant lead over the other two markets. Understanding the factors behind this dominance – cultural aspects, regulations, specific product niches – could offer valuable insights.
Despite the ban, China’s 19% share indicates a sizable market for permitted direct sales products, potentially holding substantial potential for legitimate businesses.
It’s important to note that the MLM industry can vary significantly from one country to another due to differences in regulations, market conditions, and cultural factors.
The rankings and sales figures for MLM markets may change over time as well. These figures provide a snapshot of the MLM industry’s distribution of sales at the time the data was collected. (India Times)
9. In 2023, the projected value of the direct sales market in the U.S. was $65.2 billion.
This statistic revealed the size of the direct sales market in the U.S from 2016 to 2023. According to Statista, the direct sales market in the U.S. was projected to be worth approximately $65.2 billion in 2023.
The direct selling industry encompasses a wide range of products and services, and it often provides income opportunities for individuals who participate as independent distributors or sales representatives.
While direct sales often face criticism for exploitative practices, it’s important to acknowledge the role it plays in job creation and income generation for a segment of the workforce. Understanding the nature of these jobs and potential income disparities is crucial. (Statista)
10. Amway is the biggest player in the MLM Industry
According to Statista, Amway indeed stands as the most powerful player in the MLM space, boasting significant revenue and global reach of $8.8 billion from 2016 to 2022.
Amway is known for its wide range of products, including health and wellness supplements, cosmetics, and household items, which are marketed through its extensive network of independent distributors.
Thus, Amway’s substantial revenue of $8.8 billion in seven years demonstrates its significant presence and success in the direct selling industry. (Statista)
11. Nutrilite is recognized as the first MLM organization.
Nutrilite is often recognized as one of the pioneering organizations in the history of multilevel marketing (MLM). Founded by Carl Rehnborg in 1934, Nutrilite primarily focused on dietary supplements and vitamins.
The company is notable for being among the early adopters of MLM as a distribution method for its products.
In the 1940s, Nutrilite developed and popularized the concept of network marketing, which is often associated with MLM.
This innovative approach involved building a network of independent distributors or agents who not only sold the products but also recruited and trained others to do the same.
Nutrilite’s network marketing model became a precursor to the MLM industry as it is known today. (SSRN)
12. Utah has the most multi-level marketing companies in the U.S.
Utah is often associated with a significant presence of MLM (multilevel marketing) companies in the United States. According to the information on KUTV website, Utah is home to 15 MLM companies, making it the state with the highest concentration of MLM businesses in the country.
It’s interesting to note the connection between MLM and the state’s culture, particularly the mention of speculations regarding the interplay between Mormonism and network marketing.
The idea that the closely-knit nature of the Latter-day Saints community in Utah might contribute to the success of MLM has been a topic of discussion.
However, as mentioned, there is no concrete evidence supporting this claim, and success in MLM can depend on various factors, including individual skills, marketing strategies, and the specific MLM company involved.
13. There is a 7% chance for MLM participants to declare bankruptcy in their lifetime.
The AARP (American Association of Retired Persons) provides statistics on bankruptcy rates among individuals involved in multilevel marketing and those who are not.
AARP’s research indicates that there is a 7% probability of MLM participants declaring bankruptcy during their lifetime.
Specifically, those who have participated in network marketing face an 18% risk of bankruptcy, in contrast to an 11% risk for those who have not been part of such marketing.
Equally, the statistics highlight that approximately 72% of the surveyed individuals who experienced bankruptcy did so after their involvement in network marketing.
Additionally, around 4% of the surveyed individuals declared bankruptcy while actively participating in network marketing.
14. Only about 48% of Amway’s independent business operators are active.
According to the data gathered from Amway, a global MLM company, less than half of its independent business operators are considered “active.”
Amway defines active business distributors as those who actively participate in the Sales and Marketing Plan.
These individuals are engaged in activities such as making retail sales, attending company or distributor meetings, or receiving bonus payments in a given month.
Among the active independent business operators, the average monthly gross income is estimated to be around $200. This suggests that a significant portion of Amway distributors earn a relatively modest income from their involvement in the business.
Interestingly, it was found that over 50% of Amway distributors primarily purchase products for personal use rather than actively participating in selling or recruiting efforts.
Despite allegations and controversies regarding Amway’s business model, the company has achieved remarkable financial success. In 2018, Amway recorded its best year with sales totalling $8.8 billion, marking a significant milestone in the company’s history. (Amway)
15. Over $600 billion in MLM commissions were paid out between 2009 and 2017
Between 2009 and 2017, distributors worldwide reportedly earned an estimated $600 billion in commissions, while network marketing companies achieved nearly $1.5 trillion in sales.
However, this economic activity comes against a backdrop of criticism regarding ethical practices and earning potential within the industry. (WebFlow)
16. About 46% of Americans accept contact from direct sellers on social media.
The statistics provided by the Direct Selling Association (DSA ) highlight the effectiveness of social media as a platform for generating leads in the network marketing industry.
According to their data, approximately 46% of Americans are willing to accept contact from direct sellers on social media platforms.
This statistic highlights the relevance of social media in connecting with potential customers and recruits within the network marketing field.
It suggests that a significant portion of the American population is open to engaging with direct sellers on social media, often driven by their interest in exploring business opportunities. (DSA)
17. About 90% of decision-makers won’t answer a call, but about 75% of B2B buyers make purchasing decisions based on social media ads.
Approximately 90% of decision-makers are reluctant to answer network marketing calls, suggesting a growing aversion to traditional cold calling methods in the business world.
Interestingly, despite this reluctance to engage with phone calls, a significant portion of B2B buyers, specifically 75%, make their purchasing decisions based on social media advertisements.
This indicates the effectiveness of social media as a platform for reaching and influencing decision-makers and B2B buyers.
18. The United States is home to the top three most profitable MLM companies.
The information gathered from the Title Max website highlights the dominance of the United States in the multi-level marketing industry, with the top three most profitable MLM companies based in the U.S.
That being said, Amway is the leading MLM company in revenue, generating an impressive $8.8 billion. Avon is the second-largest, with annual revenues of $5.7 billion.
More so, Herbalife ranks third among the top MLM companies, with reported revenues of $4.5 billion. Vorwerk, a German company, is among the top five most successful MLM companies, with revenues of $4.2 billion.
Lastly, Mary Kay Europe, another German company, rounds out the top five with annual revenues of $3.5 billion. (TitleMax)
19. A Dutch couple made a lifetime network marketing income of over $135 million.
Andreea Cimbala and Igor Alberts are well-known figures in the network marketing industry and have amassed substantial wealth from their involvement in various business ventures, including network marketing.
While they have achieved considerable financial success, it’s important to note that some of their business associations have come under scrutiny, particularly their involvement with OneCoin, an MLM cryptocurrency business that was later revealed to be a Ponzi scheme.
The exact amount they earned solely from network marketing is challenging to calculate due to their involvement in multiple business ventures.
However, according to Coin Telegraph statistics, they have accumulated over $135 million from the network marketing industry. (Coin Telegraph)
20. There are more than three million network marketing distributors in Japan.
Japan is home to more than three million network marketing distributors, indicating a sizable network marketing community within the country.
The United States, on the other hand, is recognized as the global leader in the MLM industry, boasting the most independent distributors. Japan follows closely as the second-largest market, with approximately 3.3 million sellers.
In 2015, Japan’s MLM sales accounted for approximately 8% of the global turnover in the network marketing industry, reflecting the substantial contribution of Japanese network marketers to the global MLM market.
An interesting statistic is that about 80% of the country’s direct sellers in Japan are women, indicating a significant female presence and participation in the network marketing sector. (Asenshia)
21. In 2019, the United States’ MLM market generated $35 billion in sales.
In 2019, the United States held the title of the largest MLM market globally, generating a substantial $35 billion in sales. This figure reflects the considerable economic impact of the MLM industry within the United States.
Similarly, China is identified as the second-largest MLM market and is rapidly approaching the United States in terms of sales.
In 2019, China’s MLM market generated nearly $24 billion in network marketing sales, indicating significant growth and potential in the Chinese MLM sector. (Statista)
As we delve into the realm of MLM statistics, we discover the resilience of an industry that generates billions in revenue and offers income potential to millions worldwide.
We see the changing face of entrepreneurship, with individuals of all backgrounds embracing network marketing as a path to financial independence.
Yet, the numbers also remind us of the complexities inherent in MLM, where success stories coexist with controversies.
They shed light on the significance of careful research and informed decision-making for those considering participation.
Ultimately, MLM statistics serve as a mirror reflecting the multifaceted nature of this business model, highlighting both its achievements and the areas that demand scrutiny.
In this digital age, one thing remains clear: MLM continues to shape the aspirations and fortunes of many, making it a fascinating subject of study and exploration.