Pros & Cons of joining a publicly traded Network Marketing Company

If you are having second thoughts about joining publicly traded or private MLM, this might help you make your decision. While every company is different, there tend to be significant contrast between those that are privately owned and those that are publicly owned and traded on the stock market. Different management structures, different compensation packages and different routes for career advancement are among the dissimilarities. Also, in the past decade several MLM companies decided to go public. Some of them are Wor(l)d Global Network, Avon, Herbalife, Nu Skin, USANA health, Natural Health and few more.  These network marketing companies are big enough to be publicly trade on the stock markets. MLM companies make millions of dollars each year from their members buying and selling products, and there are investors demanding these stocks to the point they can increase in price over time. Going public or selling shares of stock to the public is one of the most important events in company’s life. The new capital raised in a successful public offering can dramatically increase a company’s potential for growth, supplying funds for technology, research, new product development, construction, expansion into new markets, and acquisitions. A publicly owned company has stockholders. It has shares that can be traded on a stock market. Anyone can buy or sell ownership of 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 small group of individuals. They make the decision as to what is best for the company and remain in control of the company.

    Let’s start with the pros and cons of a publicly traded MLM company. The major advantage is that they have a strong financial backing and a strong management team. Also they are highly regulated and watched closely by the SEC. They have to reveal their financial information and have lots of strict rules to follow. The major disadvantage is that the company is typically more concerned about keeping the stockholders happy, rather than the distributors. The management team as at the whim of the stockholders.

     Privately companies also have advantages and disadvantages. The major two disadvantages are insufficient capital and an inexperienced management team, or no team at all. Many privately owned MLM companies have insufficient capital for future growth, and a management team with limited experience. These two factors are the most common reasons so many network marketing companies fail. On the other hand, 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 afford to pay out more in commissions to their distributors. This is a big advantage.

     However, what you decide is up to you. Both types of companies have advantages and disadvantages.

Clarence Green--312.498.5975 holisticstaffers

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