Today, I want to take a few moments and educate you about the difference between an established MLM Company and a Ground Floor MLM Opportunity. We’ll talk about the advantages and disadvantages of both types of network marketing companies, so you can make an informed decision about which type of company is a better fit for you.
Let me start by saying that all established MLM Companies were once a ground floor opportunity! You have to start somewhere. I get that.
That being said, any new business venture is risky, regardless of the industry. Building a successful business of any kind is very hard to do, and the failure rate among MLM Companies is pretty high (just like all other businesses).
Very few network marketing companies make it past the two year mark, let alone the five or ten year mark. And only a few companies in our industry have ever made it really big ($100 million or more per year in revenue).
Why am I telling you all of this? Because building a successful network marketing business as a distributor is tons of hard work. And it typically takes minimum three to five years to build a substantial sized organization and check, and sometimes even longer.
You want to make sure you partner up with a company that will be around for the long haul, so you can truly have long-term residual income. There’s no point building up a big team, only to have the company close down in a few years.
To keep thing simple, I define an established MLM Company as a company that has been in business MINIMUM five years. Ten years is even better. Twenty years is even better than that. And I consider a Ground Floor Opportunity as any network marketing company that is less than two years old. These are my definitions for the purpose of this article.
In my own opinion, I think joining a ground floor MLM opportunity is a big mistake. I’m not saying that to be negative, or tell you not to do it. I just know that it comes with a considerable amount of risk. By partnering with a new company, you’re putting your financial well being and trust in a company that has not yet proven itself. And personally, I think that is a foolish thing to do.
On the other hand, working with an established company just makes sense to me. I’d rather partner with a company that has been time tested and has a high likelihood of still being in business another 20 to 30+ years from now. How about you?
The Benefits of an Established MLM Company
Here are some of the benefits of partnering up with an established MLM Company, as I see it.
- Proven track record
- Strong financial backing
- Products that have been tested and are in demand in the marketplace
- Name brand recognition
- High likelihood of future success
- Company has worked out most of the kinks and problems
- Solid training program in place
The Drawbacks of an Established MLM Company
Here are a few of the drawbacks of an established MLM Company, as I see it.
- Not new or sexy
- Most people have heard the name before
- You probably missed the momentum phase
The Benefits of a Ground Floor MLM Opportunity
Here are some of the benefits of joining a Ground Floor MLM Opportunity, as I see it.
- Excitement
- Very few people know about the company; mystique
- Get in early, before momentum hits
- Ride the wave through its growth
The Drawbacks of a Ground Floor MLM Opportunity
Here are the drawbacks of partnering up with a Ground Floor MLM Opportunity, as I see it.
- High likelihood the company will go out of business
- Could be financial or leadership problems with company and its leadership
- Products are not proven or tested
- All of your work would be for nothing if the company closed down
- Many prospects are skeptical of new companies
Additional Insights
- You could succeed or fail in either type of company
- No company is easier to build; both require lots of hard work and commitment
- Any company could potentially go out of business
- You could lose your downline and commission if the company goes bankrupt
Final Thoughts
The bottom line is that there are advantages and disadvantages of working with either type of network marketing company. Ultimately, you need to be a smart business owner and do your due diligence ahead of time. Ask a lot of questions, do your research, try out the products, talk to successful distributors and then make an informed decision.
What are your thoughts? Which type of network marketing company do you think is better and why? Leave a comment below to let me know what you think. I look forward to hearing from you.
Sincerely,
Chuck Holmes
Network Marketing Professional (21+ years)
Top Recruiter & Top Rep
mrchuckholmes@gmail.com
I am very for joining an established MLM company as opposed to a ground floor MLM opportunity. Personally, it comes down to security, stability, and reputation. You want to know you can trust the organization since you’ll be investing money and time with the company. With a ground floor MLM company there is no track record and so you can’t really guage if that company is going to offer you stability or do business well.
I’m a big fan of established companies myself.
I firmly believe that joining an established MLM company is much wiser than diving in to a new company. With that being said, new MLMs would not grow if no one was joining. I suggest if you are considering joining a ground floor opportunity, you research and do your homework to make sure their odds of staying in business are good.
Great post Chuck.
Yes, do your homework first. You can succeed or fail in either type of company. At the end of the day, we are all different and must do what is best for us. Just be informed!