Outstanding unlimited growth potential for MLM ?
A million dollar income?


The WFDSA (World Federation of Direct Selling Association) has published the worldwide sales figures for its member companies [8-12] for the years 1988 to 2001 on its website [1] . Looking more closely, it shows that instead of superior growth, sales have fallen markedly.


Why do MLMs and their self employed dealers so often claim to have an "outstanding growth potential", when the figures tell a completely different story? Could it be that the statistics were manipulated, or better said "fudged"?

That is indeed the case. Even Insiders accuse the WFDSA of latterly including more and more sales of non-member companies in order to make the numbers look better!


Quotation from the German magazine "Network Press", issue 40, page 62:

"For the first time in the long history of direct selling, the World Federation of Direct Selling Association (WFDSA) had to announce a negative sales trend for their worldwide organized member companies. It also leaves a bitter taste that they try to manipulate their sales figures!"

"If WFDSA hadn't added the sales of 'non member companies', a massive drop of sales would have been seen."

"Without this manipulation, the member companies would have had to declare a sales drop of more than 10 billions dollar worldwide."


But why is this the "first-time"?

The FIRST drop of sales took place in 2000, the one in 2001 was already the SECOND consecutive one!

The WFDSA has also published the worldwide number of direct selling distributors [2] for the years 1988 to 2001.

The chart shows a significant improvement. The number of network-marketers increased. It increased for more than 15 percent. That is impressive!... An increase of more than 5 million networkers. Just in one YEAR! In 2001!

That is really a positive signal, isn't it?

A positive signal? For whom? For the MLM companies of course, because every MLM-Newbie generates an entry business volume income for 'his' MLM company !

But is this although a positive signal for each individual MLM distributor?

Let's now have a look at the development of an average MLM distributor's business volume during the last few years. We divide the yearly turnover by the number of networkers for the same year.


The result isn't really surprising, that when sales (chart 1) drop and the number of distributors goes up (chart 2) the individual distributors will earn fewer and fewer...

Quotation from the German magazine "Network Press", issue 40, page 62:

"Parallel to the breakdown in sales, the amount of alleged world-wide active distributors continuously rose, which means nothing else than that the sales per head dramatically sank. This could also be an indication for the increasing presence of network firms, because the traditional direct sale normally works with a lower number of partners and thereby generating higher sales per head."


According to the "Network Press", the sales per head within traditional direct sales is higher than in MLM because of the fewer number of dealers required per company to achieve the turnover. This means that the per head sale for the many MLM companies must be even worse than what is shown above. Despite this, MLM is often presented as the superior form of marketing in comparision with direct selling.

Please note the fact that the average per head sales of the MLMers have constantly fallen since 1992 - even when your so-called "sponsors" will present them differently from the plain truth represented above. If he ever bothers to tell you anything about it and if he really knows...

Ask him. Find out if he knows what the sales trends are and what he knows about the market place. The truth is, most distributors don't know anything about these facts. Does your "sponsor" really know? How much has he voluntarily told you?

And what? And how? Maybe he doesn't know or he just tells you some lies. How can you trust someone who might not know the vital basics of this business and might even be intentionally misinforming you, his contractual partner... His answer could be a slick and simple lie. Examples can be found at the

Anyway, the WFDSA doesn't publish the average annual sales per networker. Wonder why...?

However it's not sufficient to exclusively look at the annual sales per networker because the sale is just the sum of the money taken in. By selling goods one receives the selling price for the merchandise. However, one must account for the purchase price for the goods sold - and doing this, the biggest part, 50 to 95 per cent of the money taken in is gone.

In our example we assume a sales commission is a cushy 30 per cent:

This 30 per cent and ONLY these 30 per cent turns out to be the unadjusted earnings of your sales activity.


These pitiful percentages can be seen with the help of a magnifying glass in the expanded chart below. 

Does your company pay higher commissions? If so, you are in a much better position than many others. Their commission is only about 10 or 20 per cent. Their results are EVEN WORSE.

We can't really say that this result is fine, can't we? Specially because the average pro head income for a whole year of hard work amounts approximately 540 dollar! Or do you see that differently?


The stupid thing this that this average pro head income is gross income and not net income. From your gross income you need to subtract your expenses before you can actually calculate a net profit.

Normal operating costs for a MLM business outside of entertainment costs include office space, telephone, seminars, company functions, advertising, computer costs, books, catalogs, transportation expenses, insurance. The cost of the MLM magazine "Network Press" is $40/year. All of these are costs.

The type and size of these expenses are dependent on the type of products marketed and the individual companies. Estimating a $100/ month in business expenses, on the basis of 1988, the expenses are a know and small yearly amount. Because inflation this amount was incremented 3 per cent linear per year.

We set the monthly operating expenditures at $100. In practice however $2,700/month for operational expenses per month are not unrealistic - and found valid by the Finance Court Nürnberg Germany.

The numbers so far were pitiful, but at least positive, now they are dark red...

As we see, the (average) networker can't live from his (average) sales figures in the red. And he couldn't even live from his (average) sales figures with 50 per cent commissions.

But, he also receives commissions from the sales of his downline, i.e. from all these independent dealers he recruited before. So how many downliners must he have at all then to reach the break even?

Before we begin with calculating, we will take a closer look at the negative average annual overall result:

The average commission for distributors of your team - and thus of your recruits - reported by the magazine "Network Press" was 6 per cent:

Quotation from the German magazine "Network Press", issue 41, page 30:
"Additionally you should assume that within your organization the average sales will not be higher than about 100 Euro per head. With an average commission of six per cent you will then earn six Euro per month per distributor."


As shown in chart 3, the average yearly pro head sales of distributors were about $1,798.81 in 2001. Because of the negative development it might be even less now, in 2003... According to the figures published by "Network of the Press" the amount is only 1,200 Euro.

In 2001 every MLM distributor received 6 per cent commissions out of the average 1,798.81 dollar sales volume of his recruits, i. e. 107.93 dollar. This was for each recruit, one time, for the whole year.

But that was 2 years ago... If you look, the "Network Press" now publishes just 72 Euro per year!

In order to adjust the average yearly deficit of 1,260.36 dollar, your downline in 2001 had to consist of at least 12 coworkers (1.260,36 ./. 107,93), and this assumes no additional operating costs are incurred as estimated above.

This was valid in 2001. Now, in 2003, it looks devastating:

This means today you need at least 20 coworkers within your downline!   (1,513 : 79.20)


According to the "Network Press" magazine the average distributor recruits less than 3 new distributors.

Quotation from the German magazine "Network Press", issue 41, page 30:

"... never calculate that one of your distributors will recruit  more than three new persons - calculate with fewer."


That is pretty clear wording!

That means that you must recruit at least 7 new people by yourself. If some of them quit you will have to of course replace. It will be a problem if your MLM only allows a tripple-matrix, because you can't recruit more than 3 wide.

Also consider the fact that month for month thousands of networkers quit and leave the business and have to be replaced!

Quotation from the German magazine "Network Press", issue 41, page 3:
"Thousands quit each month because they can't take the pressure from the public..."


Ergo: You need a bonus plan, which permits sufficient levels of recruited distributors for every sponsor and you have to enlist 7 legs, which actively sell and recruit.

In order to reach the break even point your downline must be developed to at least 20 coworkers! Can you do this?

But, you didn't sign up for all this hard work so that you could only breakeven, did you? After a long month of hard work you shouldn't have earned enough money to buy a loaf of bread?

A million dollar income?

Let's stay realistic. But, you should earn at least as much as the cashier in the corner supermarket, right?

The average German salesperson grosses, with their union agreement, 1,673.50 Euro per month [3]. This corresponds to yearly gross earnings of about $22,100 (1,673.50 x 12 + 10 %). However, we have to add an additional 82 per cent [ 4 ], which the employer has to spend for employee such as social security, unemployment insurance, health care, etc...

The Networker however is an independent business person and must pay the employers portion of social security as well as his own health benefits. To develop the same potential benefits and income the networker must instead earn $40,204 per/year.

In order to obtain the income of at least a store salesperson, you would have to enlarge your downline to at least 508 people!
And you need 20 just to breakeven. In addition 528 recruits!
Can you really achieve this?

Actually you should earn more than a cashier in the supermarket. Because aside selling your MLM products your main job is predominantly being a personal manager for 528 downline business owners. That's why you should earn at least the average German income.

The average German gross income is presently 2,376.50 Euro per month. When one includes the overhead and benefit costs that is $57,093.04/year

In order to obtain the average German income, you have to enlarge your downline to at least 721 downline business owners! You need 20 to break even, and now you need 741 recruits just to make an average wage. Do you really think you can manage this 741 downline business owners permanent?

Take a closer look at your compensation plan. How deep to they pay downline commissions?

Finally let's have a look to this issue from another point of view. How about those meetings where they award one of those over sized, poster board checks for their "leaders"? On those checks you can see amounts such as "100,000 Euro". It is implied that EVERYONE can do that, if they really want to...

But life isn't so easy... let's compare the 100,000 Euro with the number of downliners for the "leaders".

Strangely enough this number is often revealed. That is to show, how successfully these "the leaders" really are. Because they have SO MANY distributors, and because they motivate all these people they are called leaders.

100,000 Euro out of a downline with 10.000 distributors means 10 Euro per head. If there are 16.000 distributors it's only 6 Euro per head - and that is exactly the actual number published by the "Network Press".

Thus everything fits together. One only has to find the right numbers and know what they mean...

Could it not be possible that it is much more than the simple explanation above? Could it be the naked reality of the situation and the hard waking up out of a world of dreams after the financial crash, and the realization of a lot of wasted money? The distributor may decide to GO NO FURTHER, to cut his losses and save what there is to save rather than continuing on a path of self destruction.

Let's look at the numbers one more time and take a look at the operating costs. In order to break even, a networer has to recruit 20 members into his downline. If we use the 2003 figures of an average networker, every one of them has operating costs of $1,909 per year. Just costs, there are no products as compensation. It is a pure loss...

This means 21 x $1,909 = $40,089 for the complete downline. More than FOURTYTHOUSAND dollar in operational costs just to enable the top of this pyramid to reach the break even, to have ZERO, to have nothing...

And now "the leader", the one with this 100,000 Euro check, the general... pardon, the diamond, with the tremendous downline of 16,000 recruits. He causes costs of 16,000 x 1,909 dollar per year. $30,544,000 dollar! Pure costs! Costs without a single product as counter-value. More than $30 million! What a gigantic waste of money...!

Wouldn't it be better if each of these 16,000 downliners would pay a tribute of $79,20 dollar to his king? Instead of a $1,513 loss, there would only be a 79,20 dollar loss. And no work at all, no risk, no hurrying around, no sleepless nights, no divorces and no troubles with friends and relatives...

...and one can still look at yourself in the mirror....


In summary here again the used numbers:

Year Sales in billions
Networkers in millions
Annual business volume
per networker
pro rata
Operating costs
Annual unadjusted
1988 33,32 8,48 3.929,25 1178,76 1.200,00 -21,24
1989 40,15 9,27 4.331,18 1299,36 1.245,00 54,36
1990 44,74 10,46 4.277,25


1.285,00   -1,84
1991 48,14 11,32 4.252,65


1.325,00 -49,19
1992 62,91 12,93 4.865,43


1.370,00   89,62
1993 61,67 14,91 4.136,15




1994 67,57 17,67 3.824,00




1995 74,90 21,00 3.566,67




1996 79,32 24,88 3.188,10




1997 80,47 30,90 2.604,21




1998 81,87 33,56 2.439,51




1999 85,44 35,94 2.377,30




2000 82,26 38,71 2.125,03




2001 78,86 43,84 1.798,81




2002 85,76 47,18 1.817,72














1.320 [6]


1.909 [7]


The row for 2002 was added in 04/2005 with figures published by the DSA.

Addendum December 2004:
Here are some specific figures, published by mlm companies. Please compare their annual business volumes per networker with our projected results...

Amway Germany:

Year Sales in billions Networkers Annual business volume
per networker


0,111 €


1.305,88 Euro

Avon Germany

Year Sales in billions Networkers Annual business volume
per networker


0,193 €


2.388,61 Euro

LR International:

Year Sales in billions Networkers Annual business volume
per networker


0,250 €

> 190.000

1.315,78 Euro

Karsch-Downline - Tianshi

Year Sales in billions Networkers Annual business volume
per networker


0,004 €

> 9.000

444,44 Euro

Forever Living Products

Year Sales in billions Networkers Annual business volume
per networker


2,1 €


215,38 Euro


Year Sales in billions Networkers Annual business volume
per networker


0,009 €


766,67 Euro

Nature's Sunshine Products

Year Sales in millions Networkers Annual business volume
per networker


331,1 $


519,78 Dollar


Year Sales in millions Networkers Annual business volume
per networker


652 €

> 1.500.000

434,66 Euro

Mary Kay Inc.

Year Sales in millions Networkers Annual business volume
per networker


1.800 $

> 1.300.000

1.107 Euro



Please read Jon M. Taylor's study
Who Profits from Multi-Level Marketing*?
Preparers of Utah Tax Returns Have the Answer.




Website WFDSA:


Website WFDSA:


Tarifvertrag des Einzelhandels von


Europäische Lohnnebenkosten


Website Bundesministerium für Gesundheit und Soziale Sicherung:


"Network Press", Ausgabe 41, Seite 30: 1.200 plus. 10% dollar conversion


linear increased with 3% rise in prices and rounded


Memberlist national section WFDSA USA:


Memberlist national section WFDSA South Africa:


Memberlist national section WFDSA Malaysia:


Memberlist national section WFDSA Canada:


Memberlist national section WFDSA Taiwan:


Document endorsed: 14.06.2005