iLearningGlobal - A Repeat of Network Marketing History?

MLM Companies who do away with their pay plan and terminate all distributors are uncommon. iLearningGlobal is one of two major companies who have done just that in 2010. On March 17, iLG announced to its independent representatives that it was no longer a network marketing company.

This article is not written to condemn the company, but to help those who are considering a career in network marketing gain a better understanding of the industry and allow them to make better long term decisions.

The decision was a shock to the many independent representatives who had put their belief, faith, trust and energy into the company for their future. It's also bad for the entire MLM industry as many will lose confidence in it as a vehicle.

It's uncanny that the fledgling company suffered the same fate as the majority of startups. It did not survive the first two years.

iLearningGlobal's product, unlike conventional MLM products, was not a consumable. It was completely intangible - it was personal development education. In an open letter to all of its distributors, iLG stated its main reason for terminating the MLM pay plan was they couldn't compete with how cheaply knowledge, even in high definition, was being delivered over the internet anymore.

You can't stay in business for long when other people are offering essentially the same products for free.

While iLG's decision is very unfortunate and traumatic for the people promoting it, the company had every legal right to terminate the contracts of all of it's independent representatives. The reps were warned in the company's policies and procedures.

The policies and procedures clearly stated that the company had the right to terminate all agreements with their independent representatives with a 30 day written notice if it decided to go out of business or stop doing direct sales. They followed through on that policy, just like any company would when they felt the need to.

If you intend to be a professional network marketer, you must read and understand your company's policies and procedures.

In my opinion, if a company has this clause in their contract, it's fairly clear evidence that the company does not intend to remain as it is for the long haul.

History certainly repeats itself in the network marketing industry. There have been several MLM companies whose products were knowledge and education, rather than the daily consumable products. They failed in a similar fashion.

In the late 1990's, The People's Network (TPN) merged with Pre-Paid Legal. For had it not merged, TPN would have failed and dissolved as a company, and the hard work of all distributors who built the company would have vanished overnight.

At BetterNetworker.com, Daegan Smith tells his story about how the two personal development MLM companies that he had built to the top level, Financial Freedom Society and Success University, failed under similar circumstances. Daegan paints a very clear mental picture of how his 3 years of hard work vanished right before his eyes.

Personal development is an important part of your growth as an entrepreneur. However, it doesn't stand up well as an MLM product by itself. History as shown us that.

Consumable products will always have a place in the network marketing industry. They may be a bit mundane, not so glamorous, not so slick, but people will buy consumable products like shampoos, soaps and nutritionals for the foreseeable future.

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If all you ever learned from iLearningGlobal's failure in MLM is to read your contract, I've done my job. Looking for success in network marketing? I struggled for 2 years before stumbling upon the right answers. Let me freely share them with you.

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