What Are The Risks Of Entering An MLM Business?

what are the risks of entering an mlm businessThis is personally an important post for me to write because there are risks in entering an MLM Business.

In fact, there are risks in starting any business.

However, the MLM Business risks can be quite subtle.

Most people would say that MLM is “low risk” as it typically requires a much lower investment than a franchise. For example, if you invested into a McDonald’s franchise, you would be expected to have (at the very least); $500,000 in assets.

To get started within an MLM business could cost anywhere between $25-$3,000. Possibly more depending on the company but never to the highs of a franchise model (above).

However, the “low barrier” to entry can also be a problem within MLM. Every day, lots and lots of people join an opportunity and expect to be making $10,000 per month in a few short weeks. So, picture this: People are spending a low amount to join and expecting a “high return” in the shortest time possible.

Do you see how the industry has a danger of attracting the wrong people? People who are not prepared to “do the work” for a sustained period of time.

This is one of the main risks to the industry. People you recruit may not have the right perspective on what they are doing.

There are more risks though and I will outline them below.

5 Points: What Are The Risks Of Entering An MLM Business

1. Being Demoralized – Typically, within the companies, there are leaders who are achieving fantastic results. If you “compare yourself” too much to these leaders (who have most likely been around a long time), you will be at risk of getting disappointment when you don’t achieve as much.

Instead, look at what they did when they started rather than what they do now. Try to mimic the strategy they followed and you can achieve their results.

In summary, try to do what they did rather then what they currently do.

2. Blaming Your Sponsor – When people don’t get results, they need someone to blame and it’s easier to blame their up-line rather than themselves.

It is true that there are a lot of bad sponsors out there, but that is no excuse. The point is that your success should never be dependent on one person or source. You should actively seek out valuable training. For example, you can very easily grab the free network marketing success guide below if you have a bad sponsor. 😉

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That guide will help you if you have a bad sponsor. You don’t need to blame them. Just find someone who is achieving results and copy what they are doing. That is a much more positive approach.

3. Listening “Too Much” To The Majority – At all these fancy company events, you are told a lot of information and are given lots of training. Some of this training is very good and some of it is completely wrong.

I suggest that you consider avoiding being part of the “majority” and following a path that is more unique.

At a lot of these events, you will be told the traditional MLM tactics: Prospect your warm market, arrange 3-way calls etc.

These tactics have been in place during the 1950s and the Internet has been born since then!

Rather than follow the crowd, learn how to market on the Internet properly. This will give you the “time freedom” that was probably the reason you joined an MLM business in the first place!

How do you learn to market on the Internet. Well, see my recent amway.com.au YouTube video below to learn some important online strategies.

Follow those 4 tips in the video to rake in lots of leads online.

4. Giving Up – Because there is such a “low barrier to entry” for an MLM business, it makes it “easier to give up” and that is why the attrition rate is so high.

When people invest a low amount of money into a business, it’s very easy for them to simply “dabble” fora few months and then quit if their business hasn’t exploded yet.

Can you imagine a McDonald’s franchise owner giving up after a few months?

No. Because that person has invested real money into a real business. MLM is exactly the same and requires a decent commitment!

For more on this crucial point, see my post here about why a quitter never wins and a winner never quits.

mlm business risksThis post should illuminate to you exactly what are the risks of entering an MLM Business.

There are risks within starting any business and this is no different.

Have you fallen victim to any of the points above?

If so, tell how you have learnt from them.

Please comment below with your thoughts, and share if you have got value.

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