Unless you have not done your due diligence properly and joined a pyramid scheme where you're investing in nothing of value (which as already shown can happen in any industry), it is pretty hard to get burnt in the network marketing industry.
Often you can join your company ranging from a few hundred dollars to a couple of thousand dollars. This usually depends on how much product you want to start with, and often a start-up pack will give you a bit of a discount on the product to start your business. You may also have a business kit and a website cost in this package which is usually less than $50.
So your cost to start your own business as a distributor for a network marketing company is:
1. the cost of buying the products that you use yourself and give samples/sell to others, and
2. the cost of any startup business kit that may involve a website etc
So, you are in business, with a website, with business promotional systems provided, with a product to promote (that you also use), and if you are smart, you will have joined a company and have a global opportunity where you can promote anywhere any time from home.
So how can you possibly get burnt? There are a number of areas to do your due diligence on:
1. If the product is rubbish, you will "get burnt" just like in any other industry. If the "product" is an investment in something that can lose value very quickly - again, a big risk there that you can get "burnt" just like with any high-risk investment.
2. Most ethical network marketing companies will provide FREE training - you just have to be coachable, willing to learn, and follow proven steps! Beware of companies with compulsory expensive training costs - if your network marketing company does not have leaders that provide you with the best training for FREE - then this is a red flag.
Before transitioning to network marketing, I owned five gyms. There was the cost of fit-out, equipment, launch, signage, etc. before I even made one sale. You can certainly end up in hot water doing traditional business when small things go wrong.
The worst-case scenario in network marketing is you do not do anything, you do not make anything, and you consume all of your incredible products. However, you can exit without going bankrupt.
The often bad taste in people’s mouths is the way they were introduced.
If you are prospected by someone with the line: “if you join you will make all of this money” - run a mile!
Remember network marketing is a method of marketing a business and you are paid on product sales, so you cannot join a company and make a heap of money by recruiting more people on the promise of making more money. If someone is doing that, they are partaking in a scam or pyramid scheme as discussed above.
People join people. So if you want to build a business in this industry - you will need to develop and grow into a leader for the company you want to promote. So one of the skills you will learn is how to share the story of your company's product/service so you become a great information broker, so people can make educated decisions to buy your chosen company's product.
In today’s society, people do not accept responsibility for their actions and decisions. 99 times out of 100 people have not been burned from network marketing or their company - more likely they have been over promised and under delivered information from an unethical distributor, and they have not done their due diligence. If they took that same approach in the stock market things could become messy.