Today, I want to take some time and talk about the pros and cons of privately owned MLM Companies versus publicly traded MLM Companies. As a quick disclaimer, you can succeed or fail in either type of company. Both types of companies are legitimate. All views in this article are just my own opinion. Yes, I’ve worked with both types of MLM Companies in the past.
A publicly owned company has stockholders. It has shares that can be traded on a stock market. Anyone can buy or sell ownership into the company. A publicly owned company has a board of directors and stock holders to answer to.
On the other hand, a privately owned company is typically owned by an individual, or a group of individuals. They make the decisions as to what is best for the company and remain in control of the company.
Now that we have that out of the way, let me explain why I think privately owned MLM Companies are a better deal for distributors than publicly owned MLM Companies.
Let’s start with the pros and cons of a publicly traded MLM Company. The major advantages of a publicly traded MLM Company are that they have a strong financial backing and a strong management team. It’s a big deal just to go public. There are a lot of hoops to jump through. They are highly regulated and watched closely by the SEC. They have to reveal their financial information and have lots of rules to follow.
On the flip side of the coin, the major disadvantages of a publicly traded MLM Company are that they have a board of directors who control the company. Normally this board of directors doesn’t have experience in the field as a distributor.
The other major disadvantage is that the company is typically more concerned about keeping the stockholders happy, rather than the distributors. In other words, they have to share the profits with the distributors and the stock holders.
Privately owned companies also have advantages and disadvantages. Normally, there aren’t as financially secure as a publicly traded company, although they can be. They typically aren’t as “established” either. That being said, the owners have more control over the company and can do as they please. Since they don’t have to worry about stock holders and dividends, they can frequently pay out more in commissions to their distributors.
Personally, I would not (myself) join a publicly traded MLM Company as a distributor. I’m not telling you what to do. This is just my opinion, based upon my experience and beliefs. I just do not want to have to compete with stockholders for the payouts (as a distributor). I also like the idea of the business owner having control of the company, not a board of directors who don’t have experience as distributors.
However, what you decide to do is up to you! Both types of companies have advantages and disadvantages. I would tell you what I tell everyone else. Before you join ANY network marketing company, do your homework and research. Ask a lot of questions. And compare at least three different companies before you join one. That way you have something to compare it to.
What are your thoughts about privately owned MLM Companies vs. publicly traded MLM Companies? Which type do you prefer? Leave a comment below to let me know what you think and why. I look forward to hearing from you.
Chuck HolmesWebmaster, OnlineMLMCommunity.com
Phone: (352) 503-4816
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