Why People Really Join MLM, Direct Selling and Party Plan Companies


If you run an multi-level, networking marketing, direct selling or party plan company, you need to be tapped into your distributor force. You need to know what makes them tick and what it will take to keep them in the business. Every distributor is different, but there are some common reasons that people sign up. Let’s look at four of the most common reasons people join to get an idea of the underlying dynamics that drive distributor behavior.


The simplest reason people join is because they believe in the product. They use it and they’re passionate about it so they choose to be part of the company that sells it. If the product is a distributor’s primary motivator, you can count on him to buy it and to say nice things about it to others. But the highly-successful distributors in an organization are rarely motivated only by their passion for the product.


Many distributors sign up because they want to earn more money. Job security has gone down for the average person and corporate employees tend to change employers every few years. Even if someone likes their job, chances are that they don’t feel like they make enough money doing it. As a distributor, you have control over what you make. You’re motivated by what you’re making now, and by your potential earnings. A conscientious distributor can see the relationship between their efforts and the financial reward they receive.

A lot of people wonder how much money is enough to keep distributors involved in a network marketing company. Through some forward-retention research, we have discovered that people who make $100–200 per month will stay. Over a 6-month period, the retention rate for people making that much is around 96%. It’s worth mentioning that often a distributor’s commission check is not included in the “family” budget the way a traditional salary is. For many, it’s supplemental income that they can spend on whatever they want—it is their “own” money. This is a powerful motivator. $100–200 of personal spending money seems to make a meaningful difference for most people.


Self-improvement is another reason people sign up. Traditional companies typically give employees the minimum training required for the job. Network marketing organizations—with their motivational rallies, training media, seminars, and mentoring structures—provide much more. A Mary Kay beauty consultant, for instance, may not become rich beyond her wildest dreams, but she’ll receive the same kind of training that only corporate managers get in traditional companies.

A network marketing organization might say to its people, “our mission is to make you more than you are. Our commitment to you extends beyond the products we sell.” One successful MLM CEO describes his company as a “self-improvement company with a compensation plan.” An organization that prioritizes its members’ personal goals has powerful appeal.


The last reason people join is for the community. Successful MLM companies become an important community for their distributors—something the distributors believe in and identify with. I believe this unique community nature of the direct selling industry is critical. It is a tremendous advantage but it is also one of the most challenging aspects of this type of business because passion cuts both ways. When people are passionate about a community, that passion can switch from love to hate. If they feel that the company deceived them, or that they were set up to fail, or that other members are allowed to break the community rules, then the more passionate they were, the louder and angrier they become. Being tapped in to your distributor community is crucial. 

Establish and foster your company’s mission and culture with all four common distributor motives in mind. Work to satisfy the needs of your product lovers, community joiners, income supplementers, and self improvers. Make your efforts to serve those needs clear in both explicit and implicit communication. And consider the characteristic response of each distributor type when creating and modifying your operations and your commission structure.