What Is Front Loading ?

There are lots of network marketing or home business opportunities out there in the world. However, not every legitimate business opportunity is considered to be a feasible one. At times it may even fall into a grey area where the business is legal by FTA (Federal Trade Association) standards but unethical in business building.

Knowing the truth about an opportunity is the first step towards preventing you from making a big mistake. Above all, you must understand the concept of front loading and why you must be careful of front loading companies.

Firstly, front loading is known as having a high entry level to join a network marketing opportunity. How high the entry level or starting investment for the inventory varies from company to company.

Of course, investing in a lot of inventory or getting your downline to invest in inventory is not wrong per se. The problem is not with the amount of the inventory but how you manage your business with regards to the product.

For example, if you are required to invest $75 to $200 in order to start a business this is considered low entry level. But if you are required to invest $30,000 in order to gain a significant advantage over the $75 entry level, then a good judgment call is required on your part should you consider the consequences of high investment. Consider this:

Can you afford it? Would it require you to cut off an arm or a leg or take personal loans in order to finance your business? If you succeed faster, then fine… if you fail, then what happens next?

Does a low entry level mean that there is virtually no way for you to succeed in the company compared to a high entry level? If the company requires every single distributor to front load, then you have to be careful. You must realize that a plan than runs on high volume and very little repeat sales is a company that isn’t sustainable once they reach the ‘tipping’ point.

On the same token, would you be able to make full use of the products or are you merely investing in the products just to get a higher ‘rank’? You have to be discerning here. A litmus test of a good company will reveal this fact – if the company shuts down next month, is your first instinct the desire to find where else can you get more of this product or how quickly can you get rid of the products in order to cover your investment?

These are important questions to consider but as a general rule of thumb, try and avoid extremely high front loading companies.

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