Friday, October 3, 2014

new vs ground floor direct selling companies

When it comes to direct selling/network marketing business opportunities, the term "ground floor" has multiple meanings, depending on whom you ask. Some direct sales directories for advertising purposes does not allow a company to be listed under ground floor if it's older than 2 years old. I've also heard some distributors consider "ground floor" opportunities as a company having less than 100,000 consultants.

Depending on whom you ask, you'll get different responses. Perhaps it's more about saturation. But let's consider new companies (just getting started within a year or less) and ground floor (10,000 reps or less).

Pros and cons of new companies

Do you have any idea how many new direct selling companies that start and close before you even hear about them? Lots! In fact, the stats is down right scary yet it doesn't stop people from joining a brand new company.

If you join a new company, be prepared to go through many ups and downs typical of all new companies. You're signing up to do your part (recruit and sell to build your individual business) but you're also putting your faith in the new company and hoping they do their part to grow the company.

The latter can be tricky as no one really knows what goes behind the scenes with a start up. You have faith they have the capital to grow the business, hopefully well trained staff to handle customer service, shipping, daily operations. And hopefully, the company leaders know what they're doing. It's a risk you take when you partner with a new company.

From my experience watching so many companies launch and close, one of the biggest challenges is attracting leaders that have the contact and experience that could help a new company grow.

The upside of joining a brand new company is being at the forefront, working closely with corporate, having some input, recruiting opportunities, and other perks as one of the early adopters.

The downside is dealing with instability, lack of growth, lack of product choices, slowness in releasing new products, inability to attract new recruits, shipping delays, website issues, and so forth. But perhaps one of the biggest red flags is lack of capital to market and grow the business long term.

Pros and cons of ground floor companies

I believe everyone has a different definition of what ground floor opportunities mean. Because top leaders with thousands of reps on their teams will tell you there's plenty of opportunity even with a company with 100,000+ reps. They'll tell you saturation is a myth.

If I'm assessing a ground floor opportunity, I'll look at the number of leaders in the company and the levels of activity of consultants. Even with 10,000 reps, most aren't building a business. There are shoppers, casual consultants, or people that work the business periodically. This means there's plenty of opportunity for you to join a ground floor company vs a new company.

There's still plenty of opportunity to grow your business minus all the hiccups and instability of a new company. But the key to your success is not your position but your activity. You can join a new company, be the first consultant but if you do nothing, your business is still nothing. Ultimately, it's your activity that determines your success.

Although, I definitely see some perks and potential with new companies depending on key factors such as capital, leadership and product uniqueness. But I'd be more cautious with new companies given my first hand experience with them.

If you're looking to build long term with a company that already has a proven success track record and want to stick around for years to come with a stable company, I'd go with a ground floor.



P.S. This is a brief write up on the pros and cons of new companies vs ground floor. If you're considering a long term business, I'd encourage you to do your research and take your time to find the best fit for YOU. 

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