Oh MonaVie, MonaVie, MonaVie, by the gods of Network Marketing what has happened to you?
For those of us lucky enough to have attached their wagon to a mega hyper-growth MLM money machine like MonaVie this is supposed to be the time where you sail off into the sunset and send postcards back to old prospects who never joined you telling them you are sorry they missed the boat.
I actually knew one guy who would drip on his old prospects by sending them envelopes with small quantities of beach sand and a note telling them it was too bad they couldn’t be with him on the beaches of the world.
Well as the wreckage and empty lifeboats started to float back to shore it is became pretty obvious that that ship sank.
So what happened to the MLM success story of the decade?
In a recent company review I did on MonaVie I cited them as an almost textbook case of the type of Viral Hyper-growth that is legendary in the network marketing industry. I mean let’s face it, MonaVie was a rocket ship that blasted from zero to over a billion dollars in sales in about 5 years.
That explosive growth curve AKA “Momentum Growth Curve” ,is what is always spoken about in hushed revered tones by the MLM leaders after the big opportunity meetings as they ponder the future of their company.
Yes it’s that rapid growth that creates fortunes in our industry for the lucky ones who got in early, and it keeps the rest of us pounding the phones ignoring the painful rejection form our friends and family because we know our turn is next.
But is it?
It seems that even if you have a reserved seat on that rocket it can explode and crash back to earth on you just like any other business.
That brings us to the painful discussion about the Myth of “Walk Away Residual Income”.
I know that this is heresy to speak of this, and it’s even stranger that it comes from a 7 figure earner who loves the MLM industry and who has in fact ridden those rockets.
Look if you are going to bet the proverbial ranch on your success in this industry, I feel that you deserves to know the facts not the myths.
Network marketing is a business just like any other business and as such is not immune to the laws of business gravity. You can’t go straight up forever, once you have tapped all your easy market and reached a certain point of saturation (I hate that word) generally at about $1 Billion in sales in the US market or approximately 1 million distributors, most companies will plateau and then fall back by 15% to 25% and then stabilize.
However in some cases that fallback can be much worse.
Now that does not mean it’s over, there is still growth especially on the international front but the go-go days of 35% monthly check increases are pretty much gone.
Then there is that ugly word “Attrition”.
That’s where your traitorous downline abandons ship and promptly jumps to other deals, taking your income with them. This is what is referred to as the “Leaking Bucket” effect that I wrote about in my review of the infamous Coffeehouse Letter, called “Is network Marketing Dead?” and why the Top Tier MLM business model has become so popular in the MLM industry.
Even if a company is years away from stability there is always attrition, it happens as people lose faith in the business or just burn out, and it happens at regular intervals: 30 days, 60 days, 6 months, 1 year, 10 years, etc, etc.
Because of this effect your residual income is not stable no matter how successful you are. The truth is that if you walk away after building a successful network marketing business at some point your income will start to fall. To maintain the level of income you want you will need to keep building year after year.
But wait you say! I was told this was get rich quick and then retire!
Sorry, it’s actually a business and you have to pay attention to it and continue to run it.
But back to the main issue….
What did happen with MonaVie?
Well of course they hit the magic ceiling at about $1 Billion dollars and then began to stabilize and after a fallback that should have been it. However there were a couple of factors that made their business model unique that came back to haunt them and make the fallback very severe.
First, the MonaVie growth or duplication model was heavily product based and recruiting distributors through tasting parties was the mainstay.
Because of this and the way they positioned customers into becoming distributors they ended up with a huge base of distributors who were really not in the business. I believe that when the economy hit the skids recently and consumers lost jobs and had to cut back, the MonaVie superjuice got dumped.
The other factor was the aggressive product give away strategy that pretty much every business builder promoted, of buying huge volumes of the juice every month and telling everyone to give away one bottle a day.
Some MonaVie leaders it’s rumored pushed their teams to sign up for autoships of $1000 per month to feed this sampling model.
This promotional effect swelled their volumes and once again, I believe that when things started to stabilize and fall back there was no reason for the business builders to maintain that huge monthly ordering volume since recruiting volumes slowed so much and they cut back also.
The result was the ultimate double whammy!
Alas, the market giveth and the market taketh away.
From all evidence, it appears that within about 18 months of hitting their peak MonaVie had a huge unraveling of volume.
MonaVie’s Future Prospects?
Now I don’t want to give you the wrong impression here, MonaVie is still alive and kicking and by all accounts doing very well in a number of international markets, and there are a boatload of top MonaVie distributors that followed the money tree overseas and are now learning Korean, and other interesting languages.
So what did we learn class?
Well there are several conclusions you can draw from this:
- Network marketing is a business (a very high paying one) and just like any other business and you have to run it and pay attention to it.
- You should probably take a close look at the product, the market, and the duplication model rather than just base your decision on photo copies of your upline’s checks. Different types of products have different growth cycles and some work a lot better than others in the MLM universe.
- No matter what you do, when you are raking in the bucks, don’t spend it all. Keep your lifestyle the same and build your bank account for that rainy day. (OK so buy a sexy car or huge flat screen TV but keep it under control OK?) Too many top earners in MLM spend like drunken sailors and if the money flow stops, they’re broke.
- There are different business models in network marketing and each has a particular building style and set of benefits. (i.e. Standard MLM, Top Tier MLM, etc.). Understand your options before you make your choice.
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