Dealing with Network Marketing Risk

There are risks to network marketing and ways to deal with them.

In case you haven’t already heard, a network marketing business is a business just like any other business, and there are risks. Let’s face it, if you are going to make money then there are risks of losing money too. Just look at the stock market or real estate. You can see examples of where people made it big and where people lost everything.

Network marketing doesn’t usually go to those extremes for most people. It is just something you need to be aware of.

The Risks of Network Marketing

In most cases you aren’t going to lose your shirt starting network marketing business because it really doesn’t take a huge investment. The company I am with costs less than $50 to join even after you add in taxes and shipping on the business kit. There are risks though.

The biggest risk is that the company could fail. You will have spent all of your time to build your business and have a decent income just to see it disappear over night. Variations of that might be that the company gets shut down for violations, the decide to drop network marketing and sell their products through another method, or they get bought out.

Another risk with similar results is that they decide for some reason to kick you out. I have heard that is a possibility. There could be rules violations and I’ve heard rumors of some companies getting greedy. It is usually in the contract that either side can dissolve the agreement without warning.

The final major risk is that you fail to make a go of it and decide to quit. Hopefully in this case you haven’t lost much money. Keep in mind that if this happens, it isn’t the company’s fault. If one person can be a success with an opportunity then anyone can if they do the same things.

Mitigating Network Marketing Risk

One way to reduce these risks in network marketing is to choose a company that has been around for awhile. An established company has a track record, a history of how they operate. If a company has been around for 3 decades then you know that they have a product that sells and a compensation plan that has kept distributors over the years.

It is also possible to do more research on an established company. You can find out things about how much debt they carry, how many complaints have been registered against them, what is their retention rate with established distributors? You can’t find this kind of information about upstart companies because they haven’t been around long enough to establish a history.

There is also the statistic that most new businesses fail in the first 3 to 5 years. If a network marketing company is 30+ years old, then you know that they have withstood the test of time.

Brand Yourself

The second way to mitigate risk when joining a network marketing company is to build your own name, not your network marketing company’s. With the Internet it is very possible to establish yourself as an expert in something relevant to the business that you are building, even if you aren’t exactly an expert in network marketing yet. Are you good at getting appointments with people, establishing relationships, do you know how to create a blog or website that gets traffic. You have some skill that you are really good at.

The benefits of creating a brand around yourself is that people will join you and be loyal to you. If something happens to the network marketing company that you are working with, then you still have a name that attracts people. You just have to find a new company to plug in on the back end. You don’t have to start over.

To summarize, like with building any business, there are risks to building a network marketing business. You can control a lot of those risks by researching and joining an established company. To further reduce your risks, you can build a brand around your name so that if something happens to the company, you still have value in your name and not have to start from scratch.

I hope you found this to be valuable information. Please share any insights you have in a comment below. I would love to hear what you have to say. Go ahead and use the button above and below to share this post with your followers on the social networks.

Wayne Woodworth

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