The Three Main Reasons You Should Rethink Joining A Brand New Network Marketing Business

Signing up with a new MLM company can be an inviting prospect for both brand new and experienced direct marketers. Everyone has heard eye-opening tales of people who "got in on the ground floor" with well-known and established companies. Those stories as usual start with, "And they got in at the beginning..." and end with, "...and now they're filthy rich."

Of course, the tales of network marketing stand-outs who got into direct selling organizations like NuSkin, Amway, Herbalife, and Shaklee in the beginning and who are now incredibly wealthy inspire and spur on those just getting started in the industry. However is getting in with a start-up all it's cracked up to be?

The Numbers Are Not On Your Side With New Network marketing Organizations

Let's look at the industry figures, shall we? A lot of MLM professionals estimate that 9 out of 10 new direct selling companies go out of business within the first two years. As author and long-time industry coach Rod Nichols states in his book, Successful Network Marketing for the 21st Century:

"This means that if you choose a company that is under two years old, you only have a ten percent chance of success."

When you view the prospect of getting involved with an MLM company from that point of view, it surely makes it much less desirable, doesn't it? But, there are also other risks associated with getting involved with new organizations. Let's study a few to find out if joining a brand new company is really worth the hazards.

Pre-Launch Companies Frequently End Up With Immense Issues

An additional seemingly appealing path to success in MLM is to join a company that is in pre-launch. "Pre-launch" is when a new company allows prospective distributors to pay to sign up before they are even selling their products or services. As Mr. Nichols says in his book, they do this to acquire capital for their official launch.

The difficulty with this is it brings to light the reality that the company is under-capitalized to begin with. And, odds are that they will run out of cash flow at the most unfortunate times; for example, when they are experiencing their initial large growth spurt and have to pay out big commission checks to distributors.

Outrageous Things Happen to Downlines in Pre-Launch...

Additionally, unusual things can happen with downlines in the course of pre-launch. I have an friend who got in during pre-launch with a certain new company that shall remain nameless. She worked hard to grow a downline before launch, despite the fact that all her sign-ups were just on paper.

As it so happened, she hooked a "big fish" by getting a highly successful and experienced network marketer into her downline. This person had a track record of growing huge downlines, so my colleague was sure she would be set when the company launched.

Unfortunately, in order to make the opportunity more appealing to Mr. Big Fish, her upline leader decided to place him quite a few levels above my friend in the company. To say the least, my friend was humiliated, and switched over to another new MLM that has since gone out of business. And to my knowledge, she has most likely left the industry, perhaps for good.

So Is Joining A New MLM Worth The Gamble?

Is it really worth it to join a new Network marketing business? For me, the response is a definite "no". My recommendation is to research any new MLM company scrupulously before joining. Examine at their leadership, ask about their financial backing, examine the products, and then weigh the risks cautiously. There's no sense playing the new network marketing company lottery, unless you are very sure you are holding the prize ticket.