When considering a network marketing company to join one point that consistently comes up is whether the company is a start up company or an established network marketing company. There are significant advantages and disadvantages to getting involved in each type of company.
So what is a start-up company? A start-up company is a network marketing company that is newly established. It typically has been around for less than 10 years. Whereas an established network marketing company is a company that has been around for a decade or more.
Start Up Network Marketing Companies Advantages
A start-up company is newly established, typically less than 10 years old.
One of the primary advantages of getting involved in a start up network marketing company is the ability to be “first to market.” There is a significant advantage to being early to a trend that is going to take off.
For example, some of the top distributors in Xango were able to capitalize on the fact that the company was first to market with a juice based on the Mangosteen fruit. As a result, many of these network marketing distributors now earn six and even seven figure annual incomes.
Network marketing is a unique industry in that when you get involved in a company that doesn’t just compete with companies in its industry. The company also competes with other network marketing companies, even companies outside of its product industry.
As a result, if you are able to position yourself in a start up company early and that company takes off, it’s only natural that other distributors from other companies will start to take a look at your company. When that happens you have the potential to attract heavy hitters from other companies into your distributor organization.
Disadvantages to Joining a Start-Up Network Marketing Company
Of course this advantage is also the biggest disadvantage of getting involved in a start up network marketing company. Most start up companies fail within the first 5-10 years.
If you are involved in a start-up company, there is a risk that all of the work you are investing will be wasted because the company may go out of business. Building a start-up company can also be a very rocky road. Compensation plans can get changed midstream, thus affecting your check.
The company might have a poor infrastructure which affects your ability to get the product to your customers. You have to be prepared to deal with practically anything when involved in a start up company.
Established Network Marketing Companies Advantages
When you get involved in an established network marketing company, you are typically freed of many of the distractions that come with a start up.
The company has been around for a number of years so there are a lot of challenges that you simply will not have to worry about. In most cases you don’t have to worry about the company being shut down by the government because that probably would have already happened in the first 5-10 years.
The business model is usually solid at this point so you don’t have to worry about not getting paid your commissions. In addition because the company has been around for a while, it has a bigger brand name that you can leverage to your advantage. As people become more familiar with a concept they tend to be more receptive to it.
Disadvantages to Established Network Marketing Companies
The disadvantage of getting involved with an experienced network marketing company is that some of the growth opportunities might not be as lucrative as they were earlier. This is a natural cycle in business and as a product line reaches a level of maturation it’s just not as profitable as it was when it first came out. You also have a lot more competition in an established company and may find the market is saturated with network marketing distributors all trying to sell the same products.