You may have heard about the 80/20 rule during a high school economics class or a college-level business class. While it probably didn’t seem relevant to your success at the time, if you are now in the MLM game and want to make it big then knowing what the 80/20 rule is, and how you can apply it to virtually everything you do in MLM is one of the best ways to increase your earnings with MLM and enjoy an overall high level of success.
What is the 80/20 Rule?
The 80/20 rule was formulated by a professor of economics Vilfredo Pareto who was teaching and the University of Lausanne in Switzerland. While doing various research he noticed that 20% of the people in Italy owned 80% of the private real estate holdings. This meant that 80% of the citizens owned only 20% of real estate, a shocking reality when you take into consideration the socialist economic system that Switzerland and so many other European companies utilize.
Upon further research, Pareto noticed that the 80/20 applied to just about every area in his life. For example, he noticed that 80% of the peas in his garden were being produced by just 20% of the available pea pods. This shocking revelation got Pareto thinking about, and he finally devised a definition for the 80/20 rule, which is as follows: “For many events, roughly 80% of the events are a result of only 20% of the causes.” There are thousands of examples of the 80/20 rule being used in business, real estate, MLM and numerous other activities in daily life.
How 80/20 Rule Applies to MLM
After reading this far you’re probably wondering how the 80/20 rule fits in with MLM and network marketing. In reality, it’s very simple – 20% of the people in MLM are earning 80% of the profits, which means 80% or 4/5 of the people in MLM are only earning 20% or 1/5 of the profits. This phenomenon can help explain why so many people have negative attitudes towards MLM networks in general. Because 80% of the people probably barely broke even during their MLM venture, it’s no wonder they have negative attitudes towards MLM.
Overcoming the Odds: Defying the 80/20 Rule
Obviously your goals and intentions of joining any type of MLM company or network marketing opportunity are to earn additional income and help people by selling them products or services they will need. Being faced with the overwhelming truth of the 80/20 rule can cause despair, loss of confidence, and general hopelessness for anybody that was previously amped up and ready to get started with their MLM company or program opportunity.
Beating the odds and becoming one of the 20% in MLM that earns at least 80% of the income can be difficult, but entering this 20% class will ensure you are making as much money as possible. It takes hard work, knowledge of lead generation, motivation and dedication to making your way towards the top.
Now it’s your turn!
Do you use the 80/20 rule in your business? If so, how? Please leave your feedback in the comments section and I look forward to reading them!
It applies to all businesses, not just MLM.
Only I think it is 90/10.
Good post. Should enlighten a lot of people.
I agree, it does apply to all businesses, not just one particular industry or niche. Thank you for stopping by and giving your feedback. 🙂
The 80/20 rule shows up in two ways in my business (I write fiction and occult ebooks). One is that 80 percent of my income comes from maybe 20 percent of the writing I do (erotica writing). The other way is that there is a vast difference in how much money a lot of writers make…the 20 percent are making 80 percent (or even more) the money that the whole profession makes.
Very cool. Thank you for sharing. Just shows that it applies to other industries as well. Thank you for the comments!
Interesting post…20% of your time creates 80% of your results.
Sure does! Thank you for the comments!
I have also heard the 80/20 rule applied to blogs. 80% of the posts should be real content, and 20% can be used for recruiting. Another 80/20 approach I’ve heard is 80% of a blog post is content, and about 20% of the post can be a call to action toward gaining leads.
Great comments! Thank you!
Words of truth, so few make it ‘big’ in MLM, so many choose to stop trying after a few knock-backs. So many great products are available, but with the prices so heavily loaded to cover the compensation that needs to be paid out, people can get what they need from other sources without the mark up. 🙂
If you noticed this specific blog post has nothing to do with the comments you made.
While you made the comment, I will respond to what you you said. It’s not entirely true. You are only looking at it from “your” perspective only.
I realize that comments you made, you may not understand the business model fully that is why you made the comments. There are other moving parts that make up the entire Network Marketing opportunity, not just the products. The thing is that you don’t see the value behind what it stands for.
I wouldn’t be quick to judge on one experience you may have had in the past.
Appreciate the comments! 🙂
Nate – Being a marketing professional myself, I can identify with what you’re saying. Specifically in a function like Marketing where everyone expects results / value with constrained resources..application this concept will be very effective. Thanks for sharing. Nischala
Awesome! Thank you for the feedback!
This prompts me to think about ways to support the 100% while reserving my personal time for the 20%. Thanks for this!
~ Ann Covey
Great! Glad it helped! Thanks Ann!
Nice history lesson on where the 80/20 Rule came from. I too remember the Economist from my economics class in college. I use the 80/20 in closing my prospects. 80% of my time comes from meeting prospects, and spend 20% of my time closing them. Also, I believe people do not achieve more success in MLM is because they do not develop the skills on how to be a closer. Now that I am thinking about it, this article will have me look at my activity and see where I spend more time on closing more new business. Thanks for the article Nate.
You’re welcome Karl. Thanks for the feedback!
The 20% are the cream that comes to the top by showing up at meetings and trainings, calling me to ask questions and get help. I focus my individual attention on these who have earned it. The 80% I take care of through emails and getting them into the team facebook group where they get general motivational information and direction as to how to grow their businesses.
Great stuff Nomusa. Looks like you’re making great use of it! Thanks for the feedback!
Keep at it! The quickest way to enter the 20% is to work like yourself, day after day, churning out good, usable content for your target market.
Keep up the great work man!
Thanks Ryan! Appreciate it!
I’m new member in network marketing, nut i really want to build a successful organisation that will put me in that 80% of the earners.
So i want to understand the 80/20 rule.