For this issue, it is best to look at two phases of MLM companies, start up and maturity.

Although many things can go wrong in a startup direct selling company, two factors are repeated with frequency for the failure to launch. The first factor is inability to recruit. This business is based on recruiting a successful sales force to market products. (Obviously, there are many important factors ranging from logistics to personnel to technology to quality control to distribution… and all these can go wrong as well.) It should be noted that the need for capital is in inverse proportion to the ability to recruit. A MLM company that can recruit is often positioned for fast growth and may even become a cash cow. If the company does not have that native ability, it needs sufficient capital to hire the talent to make it happen. And in the absence of the recruitment asset, a company should plan on a much longer trajectory to profitability.

And the recruitment challenge dovetails with the second major reason that companies fail at the onset: lack of adequate capital or funding. Many companies start the business without adequate capital to allow for a one or two year run to become profitable. In fact, many companies assume that they will be profitable within months or that they will not need capital for growth. The lack of buffer capital to survive the early unprofitable days of a company is a prescription for early failure.

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Merchant accounts, or payment processing solutions, are actually very important. This industry is difficult enough as it is. It’s often difficult to obtain merchant accounts because of prior track records, charge backs, etc.

Companies often obtain one merchant account, thinking they have it made, only to find out that their merchant account processors and the banks are spooked when there is a sudden spike in sales and they see rapid growth. Overnight, companies are told their reserves are going to be increased. Companies are told that their money will be held longer, their rates will rise, or sometimes, they will get cut off completely. We always tell companies that they should have two, three or four merchant accounts. It is essential to your future because once you are unable to pay the commission payments to your distributors or pay your vendors, you are out of business.

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Although AtHome America has not made any official statement on their website, the Direct Selling Association has reported that the company has gone out of business. The phone number posted on the company’s website – 1.800.928.4663 – is no longer active. Apart from the Direct Selling Association’s mention, no other information is available.