MLM Company Failure and Fast Money

I was reading through some online MLM articles today. If you look at what people are writing about MLM and network marketing, you’ll find a number of popular topics that stand out and are frequently written about.

Some topics seem to encourage a lot of discussion and debate. I’ve clipped two article summaries that touch on a couple of often debated topics related to choosing a good MLM opportunity.

What do you think? The summary of each article is in italics, followed by my comments.

MLM Company Failure Rate

This is the truth – MLM companies start up and go out of business every month. This is one reason why this industry has such a bad reputation. This could also be a reason why it is hard to attract new people to such business opportunities. It’s challenging enough achieving success in MLM type businesses without wondering whether they’ll still be going in a year.

I agree with this. Our industry does have a poor reputation in this area, because of the “startup-fail” cycle repeating so often. Some good companies start out with strong credentials, but are unable to make the cut and fold within a year or two. This can be due to many factors.

Believe it or not, some MLM startup companies fail because they grow too fast and can’t cope with the demand for their products or services. Others suffer from bad management or lack of product quality.

That said, it’s important to note that many MLM companies that come and go quickly are not true, legitimate opportunities to begin with. Many are outright pyramid scams tagged by their promoters as MLM or network marketing to make them seem legitimate. Unfortunately, this casts a poor light on the real opportunities.

Now, scams aside, we know that some true MLM startups have folded. Folks with dreams and good intentions have been burned. Keeping this in mind, let’s examine another popular bit of advice that we see discussed a lot.

Best Chance to Make Money in MLM

If your goal is to earn a large income then joining a network marketing company which has been around for ten, fifteen, or more years may not be a good option. Although these are good and stable companies, they are mature and have already underwent their biggest growth boom. It would be hard to earn a large income with such a company.

There are two sides to this. Many entrepreneurs seeking wealth enjoy the thrill of “getting in on the ground floor” of something new and exciting. The thrill is somewhat like the rush of taking $500.00 to a casino in hope of coming out at midnight with $50,000 for a night’s work. There is always a strong draw toward the excitement and sense of anticipation that surrounds a hot new opportunity.

Now consider the boring old network marketing company that has been around for years. Still going strong, still having lots of people signing up, still having some make the big money. Same pattern as in new startups, without all the glamor. So what’s the deal?

The difference is in the risk.

Let’s say your goal is to earn an extra $20,000 this year. You can join Hot New Opportunity A or Boring Old Network Marketing Company B. If you get out and hustle, you can earn that money with either one.

Let’s say you earned that money in Hot New Opportunity A in six months. You’re on the road to wealth. A year up the road, the company (being new and relatively untested) begins to experience some unforeseen issues. Checks are going out late. The future starts to look uncertain.

In Boring Old Network Marketing Company B, you work your tail off and earn that $20,000, but it takes you a year instead of six months! One year up the road, the company is entering its twelfth year. The company has been tested by time and passed. Your growth continues at a steady pace. Your income may not grow as fast or as big as it could the first year with Hot New Opportunity A. It will, however, continue to grow and produce a nice steady residual income for years.

Take one path, and you gamble and shoot for a bigger payout faster. You’re also expecting to make significantly more money over the long haul because you “got in early”.

Take another path, and your income may build more slowly. You might not be able to make as much money as fast, but you have history and stability on your side. You can feel reasonably assured that what you do make won’t suddenly go away one day.

Which is your choice?