MLM and Market Saturation

MLMs depend on two main revenue streams, the sale of the products and the recruitment of new MLM members. There has always been the challenge of trying to find new leads in a market. While the internet has opened some markets, there is still some problem with market saturation. And if saturation is severe the MLM can start losing members who are no longer earning a good income.

Local Markets

If the local market is considered a regional area, then as more members of a MLM are working in the region, then more leads will be used up and the pool of leads shrinks. The problem is that not only are different MLMs competing with each other in the same market, but often sellers for the same MLM are competing in the same market. It is not unusual to have two or three Avon representatives all located in the same few city blocks. There have even been instances where MLM sellers were coworkers at the same firm and thus in competition with each other for the other employees’ sales. When too many sellers are in one region, it can eventually lead to market saturation, and some of the sellers will drop out of the MLM.

Expanding Markets

With the internet MLMs were able to fight market saturation by using online functions to reach new potential prospects and recruits in new markets outside their region. They could send out email marketing letters to people hundreds of miles away. Their online MLM sites also attracted new prospects outside their regional market. And many regions who were rarely contacted by any MLM seller were now considered viable markets to sell in. But just as the local market eventually can suffer market saturation, it is possible that the newly opened market will be saturated too.