Top 3 Reasons Why You Should Not Join Brand New MLM Companies

Almost everyday I receive an email about the last best pre-launch MLM opportunity, the deal of the decade, or about the launch of a new MLM company. More and more new companies advertise a pre-launch phase to attract their first distributors and it seems to be a real pandemic in the MLM industry these days. Whether you are currently looking for a network marketing business or you are involved in one of those pre launch opportunities, keep on reading because this might open your eyes.

Here are the main 3 points that you should consider as far as new or pre launch MLM companies are concerned.

1. There is only a 10% chance that a new company will still be in business two years from now:

The main reason why people fail in their MLM business is because they get involved in the wrong company. And one key variable to evaluate a company is how long it has been in business. It is important to know that only 10% of new companies ever make it to their 24th month before going out of business. If a company is less than 5 years old, statistically the company is still at great risk of going out of business. You need to understand that partnering with a MLM company younger than 2 years old is exactly like investing in risky hedge funds.

You should also watch out for new divisions of reputable companies and evaluate them by the same time standards as any new MLM company. The reason why the parent company decided to launch a product or service under a new company rather than with its already existing company is often because they want to protect the existing company in case the new division would fail.

You can also find an existing company which has just changed its distribution model from direct sales to network marketing. Again, past experience does not matter. Many successful companies went out of business when they decided to try to use network marketing in their new endeavor.

As far as pre-launches are concerned, it is essential to recognize that on occasion, a brand new business will use a pre-launch as a way of raising much needed cash to fund the opening of the business. And those funds are in such case provided by unsuspecting new distributors very often attracted by hype and false promises. What happens when the company doesn't raise enough funds to sustain the business? It crashes and burns, and the new distributors lose their investment. My advice is you should never pay anything to join a company that has not yet officially opened for business.

2. You would have a very hard time building a downline:

First, brand new MLM companies and especially pre-launches attract all kinds of tire-kickers, definitely not the kind of prospects you are looking for. There are people who join a new network marketing company every other month. They most of the time have a lottery mentality, and are actually permanently looking for some get-rich-quick scheme or easy path to wealth. There is no doubt that you don't want this kind of people in your organization.

Then, sudden or continuous changes by the pre-launch or new company's management, for example with the products or the compensation plan, is not a good signal. These so called product enhancements, compensation plan adjustements or improvements are a proof that the company is still experimenting and that their business model is not strong enough. This should be a red flag. Your downline would also probably consider quitting because they feel the business is not on the right track. After all, everyone is looking for some security and stability.

3. You could lose your biggest asset, your reputation:

If you sign up with a company in its pre launch or launch phase, you have to be ready for the risk of losing your investment, your customer base, your business. But much worse, your reputation could also be permanently damaged. And people will be less inclined to follow you into another business opportunity if the last one you recommended crashed and burned. So ask yourself if you really want to risk damaging your reputation on a highly volatile startup just to make some money. Remember your name is your biggest asset, and make sure you don't turn it into a liability.

As a general rule, until a company has been able to stay in business for at least two years, it should still be considered high-risk, and I would not recommend a startup of any type. There are enough reliable companies out there for you to build a network marketing business without taking any high risks.

After reading Anne Guillot’s article on why you should not join MLM Pre Launch Opportunities, visit her New Solutions For MLM website. When you visit the site, you'll have an opportunity to receive some of her MLM marketing training without spending a dime.

Article Source: http://www.marketingarticlelibrary.com

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